UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

OR

For the fiscal year ended March 31, 2026

OR

For the transition period from to

OR

Date of event requiring this shell company report _____________

Commission file number: 001-42576

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

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

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

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 March 31, 2026, there were 35,550,004 ordinary shares issued and outstanding, par value $0.0002 per ordinary share.

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

☐ Yes ☒ No

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

☐ Yes ☒ No

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

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

☒ Yes ☐ No

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

☒ Yes ☐ No

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

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

† 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:

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

☐ Item 17 ☐ Item 18

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

☐ Yes ☒ No

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

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

☐ Yes ☐ No

TABLE OF CONTENTS

INTRODUCTION

Unless otherwise indicated or the context otherwise requires, all references in this annual report to the terms the “Company,” “we,” “us” and “our” refer to Ruanyun Edai Technology Inc., or Ruanyun, and its direct and indirect subsidiaries, including Soft Cloud Technology Limited, or Soft Cloud, Soft Cloud Smart Technology Company, Formind Global Holdings Sdn. Bhd., and Rollingthunder Technology (Jiangxi) Co., Ltd, or Rollingthunder Jiangxi, or our WFOE, which we define as our “PRC subsidiary”, but not including Jiangxi Ruanyun Technology Co., Ltd., the variable interest entity, which we define as the “VIE” herein or “Jiangxi Ruanyun”, and the subsidiaries of the VIE including Jiangxi Alphabet Technology Co., Ltd., or Jiangxi Alphabet, Jiangxi Huizuoye Technology Co., Ltd, Jiangxi Ruanyun Zhitou Education Consulting Co., Ltd. or Ruanyun Zhitou, Jiangxi Yunxiaotong Technology Co., Ltd., or Jiangxi Yunxiaotong, Gongqing City Yunxiao Bulter Technology Co., Ltd., or Gongqing Yunxiao, Chongqing Huizhi Plan Technology Co., Ltd, or Chongqing Huizhi, and the branch office of the VIE refers to Jiangxi Ruanyun Technology Co., Ltd. (Shenzhen Branch), or Shenzhen Ruanyun. We refer to the VIE, together with its subsidiaries and branch office as “the VIE and its subsidiaries” herein. As a holding company with no material operations of our own, we, Ruanyun, conduct our operations through the VIE and its subsidiaries in China based on certain contractual arrangements with Jiangxi Ruanyun and its shareholders, or the Contractual Arrangements. We have begun international expansion by establishing a subsidiary in Saudi Arabia during fiscal year 2026 and a subsidiary in Malaysia after fiscal year-end. We currently expect certain new international activities to be conducted through these subsidiaries or related platforms, subject to applicable law, local licensing, contractual arrangements and revenue-recognition analysis.

Additionally, unless otherwise indicated or the context otherwise requires, all references in this annual report to:

We have made rounding adjustments to some of the figures included in this annual report. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

Our reporting currency is U.S. dollars. The functional currency of the Company and its subsidiaries incorporated in Hong Kong is U.S. dollars. The functional currency of the Company’s PRC subsidiary, the VIE and its subsidiaries is RMB. The determination of the respective functional currency is based on the criteria of Accounting Standards Codification, or ASC, Topic 830, Foreign Currency Matters. The consolidated financial statements are translated from the functional currency to the reporting currency, USD. We use the average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position, except for equity, respectively. For equity items, we used the historical exchange rate to translate the equity items from functional currency to reporting currency. Translation differences are recorded in accumulated other comprehensive income, a component of shareholders’ deficits. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are re-measured at the exchange rates prevailing at the balance sheet date. Non-monetary items that are measured in terms of historical costs in foreign currency are re-measured using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of operations and comprehensive loss. The consolidated balance sheet amounts, with the exception of equity, at March 31, 2026 and 2025 were translated RMB 6.8998 to $1.00 and at RMB 7.2567 to $1.00, respectively. Equity accounts were stated at their historical rates. The average translation rates applied to consolidated statements of operations and cash flows for the years ended March 31, 2026 and 2025 were RMB 7.1019 to $1.00 and at RMB 7.2163 to $1.00, respectively.

With respect to amounts not recorded in our consolidated financial statements included elsewhere in this annual report, unless otherwise stated, all translations from RMB to U.S. dollars were made at RMB 6.8998 to $1.00, the noon buying rate on March 31, 2026, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. We make no representation that the RMB or U.S. dollar amounts referred to in this annual report could have been or could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all.

Our Corporate Structure and Arrangements with the VIE

We control and receive the economic benefits and absorb losses of the VIE and its subsidiaries’ business operations through the Contractual Arrangements. Based on the Contractual Arrangements, we account for Jiangxi Ruanyun as a VIE. More specifically, we have the power to direct the activities of Jiangxi Ruanyun and become the primary beneficiary of Jiangxi Ruanyun for accounting purposes through such Contractual Arrangements, which are less effective than direct ownership. Our power to direct the activities of Jiangxi Ruanyun and our position of being the primary beneficiary of Jiangxi Ruanyun for accounting purposes are limited to the conditions that we met for consolidation of Jiangxi Ruanyun under U.S. GAAP. Such conditions include that (i) we have the power to direct the activities that could most significantly affect the economic performance of Jiangxi Ruanyun, and (ii) we are entitled to receive benefits and obligated to absorb losses from Jiangxi Ruanyun that could potentially be significant to Jiangxi Ruanyun. Accordingly, we consolidate the accounts of Jiangxi Ruanyun for the periods presented herein, in accordance with Regulation S-X-3A-02 promulgated by the Securities and Exchange Commission, or the SEC, and ASC Topic 810-10, Consolidation: Overall. We believe the Contractual Arrangements are in compliance with the current PRC laws and are legally enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could affect the validity of the Contractual Arrangements or limit our ability to enforce the Contractual Arrangements. Furthermore, the Contractual Arrangements have not been tested in a court of law. As a result, we may be unable to consolidate the VIE and its subsidiaries in the consolidated financial statements. Our position of being the primary beneficiary of the VIE and its subsidiaries also depends on the authorization by the shareholders of the VIE to exercise voting rights on all matters requiring shareholders’ approval in the VIE. As of the date of the filing of this annual report with the SEC, we believe that the agreements on the authorization to exercise shareholders’ voting power are valid and legally enforceable. See “Item 3. Key Information-D. Risk Factors-Risks Related to our Corporate Structure” for further information. We have begun international expansion by establishing a subsidiary in Saudi Arabia during fiscal year 2026 and a subsidiary in Malaysia after fiscal year-end. We currently expect certain new international activities to be conducted through these subsidiaries or related platforms, subject to applicable law, local licensing, contractual arrangements and revenue-recognition analysis.

FORWARD-LOOKING STATEMENTS

This annual report on Form 20-F contains forward-looking statements that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “goal,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. The forward-looking statements and opinions contained in this annual report are based upon information available to us as of the date of the filing of this annual report with the SEC and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Forward-looking statements include statements about:

You should refer to the section titled “Item 3. Key Information-D. Risk Factors” for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this annual report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should read this annual report and the documents that we reference in this annual report and have filed as exhibits to this annual report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

A. Reserved

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

Risks Related to Our Corporate Structure

We depend upon the Contractual Arrangements in conducting our business in China, which may not be effective in providing control over the VIE as equity ownership.

We do not hold any equity interests in Jiangxi Ruanyun, our affiliation with Jiangxi Ruanyun is managed through the Contractual Arrangements. The Contractual Arrangements allow us to have controlling financial interest in Jiangxi Ruanyun (which often holds the licenses necessary to conduct business in the PRC), which may not be effective in providing us with control over Jiangxi Ruanyun as equity control. The Contractual Arrangements are governed by and would be interpreted in accordance with the laws of the PRC. If Jiangxi Ruanyun fails to perform the obligations under the Contractual Arrangements, we may have to rely on legal remedies under the laws of the PRC, including seeking specific performance or injunctive relief, and claiming damages. There is a risk that we may be unable to obtain any of these remedies or that the validity of the Contractual Arrangements could be threatened.

We may not be able to consolidate the operations and financial results of some of our affiliated companies or such consolidation could materially adversely affect our operating results and financial condition.

Our business is conducted through Jiangxi Ruanyun, which is considered a VIE for accounting purposes, and we, through the WFOE, are considered the primary beneficiary, thus enabling us to consolidate our operations and financial results in our consolidated financial statements. In the event that in the future a company we hold as a VIE no longer meets the definition of a VIE under applicable accounting rules, or we are deemed not to be the primary beneficiary, we would not be able to consolidate line by line that entity’s operations and financial results in our consolidated financial statements for reporting purposes. Also, if in the future an affiliate company becomes a VIE and we become the primary beneficiary, we would be required to consolidate that entity’s operations and financial results in our consolidated financial statements for accounting purposes. If such entity’s operations and financial results were negative, this would have a corresponding negative impact on our operating results for reporting purposes.

Because we rely on the Contractual Arrangements for our revenue, the termination of these agreements would severely and detrimentally affect our continuing business viability under our current corporate structure.

We are a holding company and conduct a significant part of our business operations through the Contractual Arrangements. Although Jiangxi Ruanyun does not have termination rights pursuant to the Contractual Arrangements, it could terminate, or refuse to perform under, the Contractual Arrangements. Because neither we, nor our subsidiaries, own equity interests of Jiangxi Ruanyun, the termination or non-performance of the Contractual Arrangements would sever our ability to receive payments from Jiangxi Ruanyun under our current holding company structure. While we are currently not aware of any event or reason that may cause the Contractual Arrangements to terminate, we cannot assure you that such an event or reason will not occur in the future. In the event that the Contractual Arrangements are terminated, this would have a severe and detrimental effect on our continuing business viability under our current corporate structure, which, in turn, would affect the value of your investment.

Contractual arrangements in relation to the VIE may be subject to requirements by the PRC tax authorities and they may determine that we or the VIE owe additional taxes, which could negatively affect our financial condition and the value of your investment.

Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities within ten years after the taxable year when the transactions are conducted. We could face material and adverse tax consequences if the PRC tax authorities determine that the Contractual Arrangements were not entered into on an arm’s-length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust the income of the VIE in the form of a transfer pricing adjustment. The PRC tax authorities could effectively disregard the VIE structure, resulting in increased tax liabilities. A transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by the VIE for PRC tax purposes, which could in turn increase its tax liabilities without reducing our tax expenses. In addition, the PRC tax authorities may impose late payment fees and other penalties on the VIE for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if the VIE’s tax liabilities increase or if it is required to pay late payment fees and other penalties.

We conduct our business through Jiangxi Ruanyun by means of Contractual Arrangements. If these contractual arrangements do not comply with applicable laws and regulations, we will be subject to severe penalties and our business will be adversely affected. In addition, changes in such PRC laws and regulations will materially and adversely affect our business.

There are different interpretations and applications of PRC laws, rules and regulations, including the laws, rules and regulations governing the validity and enforcement of the Contractual Arrangements between the WFOE, Jiangxi Ruanyun and its shareholders. We have been advised by our PRC counsel, Hui Ye Law Firm, based on their understanding of the current PRC laws, rules and regulations, that (i) the structure for operating our business in China (including our corporate structure and Contractual Arrangements with the WFOE, Jiangxi Ruanyun and its shareholders) will not result in any violation of PRC laws or regulations currently in effect; and (ii) the Contractual Arrangements among the WFOE and Jiangxi Ruanyun and its shareholders governed by PRC law are valid, binding and enforceable, and will not result in any violation of PRC laws or regulations currently in effect. However, there are different interpretations and applications of current or future PRC laws and regulations concerning foreign investment in the PRC, and their application to and effect on the legality, binding effect and enforceability of the Contractual Arrangements. In particular, we cannot rule out the possibility that PRC regulatory authorities, courts or arbitral tribunals may adopt a different or contrary interpretation or take a view that is inconsistent with the opinion of our PRC counsel, Hui Ye Law Firm. Therefore, the Contractual Arrangements may be determined by PRC authorities to be inconsistent with the laws and regulations of the PRC, including those related to foreign investment in certain industries.

If any of the VIE and its subsidiaries or their ownership structure or the Contractual Arrangements are determined to be in violation of any existing or future PRC laws, rules or regulations, or any of the VIE and its subsidiaries fail to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities will have broad discretion in dealing with such violations, including:

The imposition of any of these penalties will severely disrupt our ability to conduct business and have a material adverse effect on our financial condition, results of operations and prospects.

If the Contractual Arrangements constituting part of the VIE structure do not comply with PRC laws and regulations, or if these laws and regulations change or are interpreted differently in the future, our shares will decline in value or become worthless if we are unable to assert our contractual control rights over the assets of the VIE that support a significant part of our operations.

The shareholders of the VIE may have actual or potential conflicts of interest with us and as a result may refuse to perform, or may breach, the Contractual Arrangements, which may materially and adversely affect our business and financial condition.

The shareholders of the VIE may have actual or potential conflicts of interest with us. These shareholders may refuse to perform or sign or may breach, or cause the VIE to breach, or refuse to renew, the existing Contractual Arrangements, which would have a material and adverse effect on our ability to effectively control the VIE and receive economic benefits and absorb losses from it. As a result, control over, and funds due from, the VIE may be jeopardized if the shareholders of the VIE breach, or refuse to renew, the Contractual Arrangements. For example, the shareholders may be able to cause our agreements with the VIE to be performed in a manner adverse to us by, among other things, failing to remit payments due under the Contractual Arrangements to us on a timely basis. We cannot assure you that when conflicts of interest arise, any or all of these shareholders will act in the best interests of our Company or such conflicts will be resolved in our favor. Currently, we do not have any arrangements to address potential conflicts of interest between these shareholders and our Company. If we cannot resolve any conflict of interest or dispute between us and these shareholders, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.

Any failure by the VIE or its shareholders to perform their obligations under the Contractual Arrangements, or any unauthorized use of indicia of corporate power or authority, would have a material adverse effect on our business.

If the VIE or its shareholders fail to perform their respective obligations under the Contractual Arrangements or if any physical instruments, such as chops and seals, or other indicia of corporate power or authority, are used without our authorization, we may have to incur substantial costs and expend additional resources to seek legal remedies under PRC laws, including specific performance or injunctive relief, and/or claiming damages, which we cannot assure you will be effective under PRC laws. For example, if the shareholders of the VIE were to refuse to transfer their equity interest in the VIE to us or our designee if we exercise the purchase option pursuant to the Contractual Arrangements, or if they were otherwise to act in bad faith toward us, then we may have to take legal action to compel them to perform their contractual obligations.

The Contractual Arrangements are governed by PRC laws. Accordingly, any disputes would be resolved in accordance with PRC legal procedures. Uncertainties in the PRC legal system and amendments to and enactment of PRC laws could limit our ability to enforce the Contractual Arrangements or could affect the validity of the Contractual Arrangements, and as a result we may not be able to exert financial control over the VIE, and our ability to conduct our business may therefore be materially adversely affected.

Our current corporate structure and business operations may be adversely affected by the Foreign Investment Law.

On March 15, 2019, the National People’s Congress approved the Foreign Investment Law, which took effect on January 1, 2020. Along with the Foreign Investment Law, the Implementing Rules of Foreign Investment Law promulgated by the State Council and the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of the Foreign Investment Law promulgated by the Supreme People’s Court became effective on January 1, 2020. Since the Foreign Investment Law and its current implementation and interpretation rules are relatively new, they do not explicitly classify whether variable interest entities that are controlled through contractual arrangements would be deemed as foreign-invested enterprises if they are ultimately “controlled” by foreign investors. However, it has a catch-all provision under definition of “foreign investment” that includes investments made by foreign investors in China through other means as provided by laws, administrative regulations or the State Council of the PRC, or the State Council. Therefore, it still leaves leeway for future laws, administrative regulations or provisions of the State Council to provide for contractual arrangements as a form of foreign investment. Therefore, there can be no assurance that our control over the VIE through the Contractual Arrangements will not be deemed as foreign investment in the future.

The Foreign Investment Law grants national treatment to foreign-invested entities, except for those foreign-invested entities that operate in industries specified as either “restricted” or “prohibited” from foreign investment in a “negative list”. The Foreign Investment Law provides that foreign-invested entities operating in “restricted” or “prohibited” industries will require market entry clearance and other approvals from relevant PRC government authorities. If our control over the VIE through the Contractual Arrangements is deemed as foreign investment in the future, and any business of the VIE is “restricted” or “prohibited” from foreign investment under the “negative list” effective at the time, we may be deemed to be in violation of the Foreign Investment Law, the Contractual Arrangements that allow us to have control over the VIE may be deemed as invalid and illegal, and we may be required to unwind such Contractual Arrangements and/or restructure our business operations, any of which may have a material adverse effect on our business operations.

Furthermore, if future laws, administrative regulations or provisions mandate further actions to be taken by companies with respect to existing contractual arrangements, we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all. Failure to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect our current corporate structure and business operations.

If any of our affiliated entities becomes the subject of a bankruptcy or liquidation proceeding, we may lose the ability to use and enjoy assets held by such entity, which could materially and adversely affect our business, financial condition and results of operations.

We currently conduct our main operations in China through our Contractual Arrangements. As part of these arrangements, a significant portion of the assets used in our PRC operations is held by our affiliated entities. If any of these entities becomes bankrupt and all or part of their assets become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which could materially and adversely affect our business, financial condition and results of operations. In addition, if any of our affiliated entities undergoes a voluntary or involuntary liquidation proceeding, its equity owner or unrelated third-party creditors may claim rights relating to some or all of these assets, which would hinder our ability to operate our business and could materially and adversely affect our business, our ability to generate revenue and the market price of our ordinary shares. We are also currently planning to expand our business presence in the Middle East and globally, including with the establishment of our Saudi Arabia and Malaysia subsidiaries to spearhead our international diversification efforts.

Risks Related to Doing Business in Jurisdictions in Which We Operate

A significant part of our operations is located in China. Our ability to operate in China may be impaired by changes in Chinese laws and regulations, including those relating to taxation, environmental regulation, restrictions on foreign investment, and other matters, which may cause us to make material changes to our operations, may limit or completely hinder our ability to offer or continue to offer securities to investors, and/or may cause the value of such securities to significantly decline or be worthless.

The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be impaired by changes in laws and regulations in the PRC. For example, the PRC government has recently implemented a series of regulatory measures affecting business operations, including: (1) the Data Security Law and Personal Information Protection Law enacted in 2021, establishing data classification systems and requiring critical information infrastructure operators to store important data domestically; (2) enhanced antitrust oversight in the platform economy sector with the introduction of antitrust guidelines and enforcement actions; (3) updates to the Negative List for Foreign Investment alongside strengthened national security review mechanisms for foreign investments; (4) stricter environmental regulations promoting carbon neutrality goals and corporate disclosure requirements; and (5) capital market reforms involving improved data security review procedures for overseas listings and increased oversight of variable interest entity structures. These policy initiatives aim to balance market development with national security and public interest considerations while imposing new compliance obligations on businesses operating in China.

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

Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations.

A significant portion of our assets and a significant part of our operations are located in China. Accordingly, our business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic and social conditions in China generally and therefore by the significant discretion of Chinese governmental authorities. The Chinese economy differs from the economies of most developed countries in many respects, including the level of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese government also exercises significant control over China’s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or companies. The increased global focus on environmental and social issues and China’s potential adoption of more stringent standards in these areas may adversely impact the operations of China-based issuers, including us.

While the Chinese economy has experienced significant growth over past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growth has been slowing since 2012. Any adverse changes in economic conditions in China, in the policies of the Chinese government or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely affect our business and operating results, lead to a reduction in demand for our services and adversely affect our competitive position. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. In addition, in the past the Chinese government has implemented certain measures, including interest rate adjustment, to control the pace of economic growth. These measures may cause decreased economic activity in China, which may adversely affect our business and operating results.

Although a significant part of our current operations remains in China, we have begun geographic expansion, and plan further expansion, creating a variety of operational challenges.

Although a significant part of our current operations remains in China, our growth strategy involves the further expansion of our operations and customer base internationally. We have begun implementing this strategy, including through the establishment of an operating subsidiary in Malaysia and a regional headquarters and operating subsidiary in Saudi Arabia, and we are continuing to adapt and develop strategies to address international markets, but there is no guarantee that such efforts will have the desired effect. For example, we anticipate that we will need to establish relationships with new partners in order to expand or continue our expansion into certain countries, including Saudi Arabia, and if we fail to identify, establish, and maintain such relationships, we may be unable to execute on our expansion plans. We expect that our international activities will continue to grow for the foreseeable future as we continue to pursue opportunities in existing and new international markets, which will require significant dedication of management attention and financial resources.

Our current and future international business and operations involve a variety of risks, including:

We expect to invest substantial time and resources to further expand our international operations, and, if we are unable to do so successfully and in a timely manner, our business and results of operations could suffer.

If we become subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed China-based companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations and our reputation and could result in a loss of your investment in our ordinary shares, especially if such matter cannot be addressed and resolved favorably.

Recently, U.S. public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting irregularities, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in some cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S.-listed China-based companies has decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on us and our business. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our Company. This situation may be a major distraction to our management. If such allegations are not proven to be groundless, our business operations will be severely hindered and your investment in our ordinary shares could be rendered worthless.

U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.

Any disclosure of documents or information located in China by foreign agencies may be subject to jurisdiction constraints and must comply with China’s state secrecy laws, which broadly define the scope of “state secrets” to include matters involving economic interests and technologies. There is no guarantee that requests from U.S. federal or state regulators or agencies to investigate or inspect our operations will be honored by us, by entities who provide services to us or with whom we associate, without violating PRC legal requirements, particularly those entities that are located within China. Furthermore, under the current PRC laws, an on-site inspection of our facilities by any of these regulators may be limited or prohibited.

The Company’s auditor, Audit Alliance LLP, is PCAOB (defined below) registered and based in Singapore. Under the Holding Foreign Companies Accountable Act, or HFCAA, the Public Company Accounting Oversight Board, or PCAOB, is permitted to inspect the Company’s independent public accounting firm. However, if the PCAOB later determined that it cannot inspect or fully investigate our auditor, trading in our securities may be prohibited under the HFCAA, and, as a result, Nasdaq may determine to delist our securities.

Uncertainties with respect to China’s legal system could adversely affect our business operations.

Since the PRC legal system continues to rapidly evolve, and PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, the legal system in China, including risks and uncertainties regarding the enforcement of laws and that rules and regulations in China can change quickly with little advance notice, and the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties.

In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past three decades has significantly enhanced the protections afforded to various forms of foreign investments in China. However, PRC law still restricts certain foreign investments in China, and such laws are continually evolving. China has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual arrangements and rights, including under the Contractual Arrangements, or tort claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us.

Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until some time after the violation. In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. Further, such evolving laws and regulations and the inconsistent enforcement thereof could also lead to failure to obtain or maintain licenses and permits to do business in China, which would adversely affect us.

Changes in international trade policies, trade disputes, barriers to trade, or the emergence of a trade war may dampen growth in China and may have a material adverse effect on our business.

Political events, international trade disputes, and other business interruptions could harm or disrupt international commerce and the global economy, and could have a material adverse effect on us and our customers, service providers, and other partners. International trade disputes could result in tariffs and other protectionist measures that could adversely affect our business. Tariffs could increase the cost of the goods and products which could affect customers’ spending levels. In addition, political uncertainty surrounding international trade disputes and the potential of the escalation to trade war and global recession could have a negative effect on customer confidence, which could adversely affect our business. We may have also access to fewer business opportunities, and our operations may be negatively impacted as a result. In addition, the current and future actions or escalations by either the United States or China that affect trade relations may cause global economic turmoil and potentially have a negative impact on our markets, our business, or our results of operations, and we cannot provide any assurances as to whether such actions will occur or the form that they may take.

You may experience difficulties in effecting service of legal process, enforcing foreign judgments, including those obtained in the U.S., or bringing actions in China against us or our management based on foreign laws.

We are a holding company incorporated under the laws of the Cayman Islands. We conduct a significant part of our operations in China, and a significant portion of our assets is located in China. In addition, all our senior employees reside within China for a significant portion of the time and most are PRC residents. As a result, it may be difficult for our shareholders to effect service of process upon us or those persons inside mainland China, including our management. In addition, China does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the Cayman Islands and many other countries and regions. Therefore, recognition and enforcement in China of judgments of a court in any of these non-PRC jurisdictions, including the U.S., in relation to any matter not subject to a binding arbitration provision may be difficult or impossible.

We may rely on dividends and other distributions on equity paid by our PRC subsidiary to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiary to make payments to us could have a material and adverse effect on our ability to conduct our business.

We are a Cayman Islands holding company and we rely principally on dividends and other distributions on equity from our PRC subsidiary for our cash requirements, including for services of any debt we may incur. Our PRC subsidiary’s ability to distribute dividends is based upon its distributable earnings. Current PRC regulations permit our PRC subsidiary to pay dividends to its shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, our PRC subsidiary is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Our PRC subsidiary, as an FIE, is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at its discretion. These reserves are not distributable as cash dividends. If our PRC subsidiary incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments to us. Any limitation on the ability of our PRC subsidiary to distribute dividends or other payments to its shareholders could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our businesses, pay dividends or otherwise fund and conduct our business.

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

PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental regulation of currency conversion may affect us using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

Any funds we transfer to our PRC subsidiary, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with relevant governmental authorities in China. According to the relevant PRC regulations on FIEs in China, capital contributions to our PRC subsidiary are subject to the approval of the Ministry of Commerce of the PRC, or MOFCOM, or its local branches and registration with other governmental authorities in China. In addition, (a) any foreign loan procured by our PRC subsidiary is required to be registered with the State Administration of Foreign Exchange, or SAFE, or its local branches, and (b) our PRC subsidiary may not procure loans which exceed the statutory amount as approved by the MOFCOM or its local branches. Any medium-or long- term loan to be provided by us to our PRC subsidiary must be approved by the National Development and Reform Commission, or the NDRC, and SAFE or its local branches. We may not obtain these government approvals or complete such registrations on a timely basis, with respect to future capital contributions or foreign loans by us to our PRC subsidiary. If we fail to receive such approvals or complete such registration, our ability to use the proceeds of our initial public offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand our business.

In 2008, SAFE promulgated the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or SAFE Circular 142. SAFE Circular 142 regulates the conversion by FIEs of foreign currency into Renminbi by restricting the usage of converted Renminbi. SAFE Circular 142 provides that any Renminbi capital converted from registered capitals in foreign currency of FIEs may only be used for purposes within the business scopes approved by PRC governmental authority and such Renminbi capital may not be used for equity investments within China unless otherwise permitted by PRC law. In addition, SAFE strengthened its oversight of the flow and use of Renminbi capital converted from registered capital in foreign currency of FIEs. The use of such Renminbi capital may not be changed without SAFE approval, and such Renminbi capital may not in any case be used to repay Renminbi loans if the proceeds of such loans have not been utilized. On July 4, 2014, SAFE issued the Circular of SAFE on Relevant Issues Concerning the Pilot Reform in Certain Areas of the Administrative Method of the Conversion of Foreign Exchange Funds by Foreign-invested Enterprises,

or SAFE Circular 36, which launched the pilot reform of administration regarding conversion of foreign currency registered capitals of FIEs in 16 pilot areas. According to SAFE Circular 36, some of the restrictions under SAFE Circular 142 will not apply to the settlement of the foreign exchange capitals of an ordinary FIE in the pilot areas, and such FIE is permitted to use Renminbi converted from its foreign-currency registered capital to make equity investments in the PRC within and in accordance with the authorized business scope of such FIEs, subject to certain registration and settlement procedure as set forth in SAFE Circular 36. On March 30, 2015, SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises, or SAFE Circular 19. SAFE Circular 19 took effect as of June 1, 2015 and superseded SAFE Circular 36 and 142 on the same date. SAFE Circular 19 launched a nationwide reform of the administration of the settlement of the foreign exchange capitals of FIEs and allows FIEs to settle their foreign exchange capital at their discretion, but continues to prohibit FIEs from using the Renminbi fund converted from their foreign exchange capitals for expenditure beyond their business scopes, providing entrusted loans or repaying loans between non-financial enterprises. Violations of these Circulars could result in severe monetary or other penalties. SAFE Circular 19 may significantly limit our ability to use Renminbi converted from the net proceeds of our initial public offering to fund the establishment of new entities in China by our subsidiaries, to invest in or acquire any other PRC companies through our PRC subsidiary, or to establish variable interest entities in the PRC, which may adversely affect our business, financial condition and results of operations. While we have successfully completed the necessary SAFE and MOFCOM registrations for approximately $3 million of the IPO proceeds, enabling us to remit such funds into China as shareholder loans, we cannot guarantee that the remaining balance of the proceeds can be transferred into our PRC subsidiaries on a timely basis, or at all. Any future capital contributions or loans will still be subject to NDRC filing/approval, SAFE registration, and compliance with Circular 19’s usage restrictions. Failure to obtain these approvals or registrations for the residual proceeds could continue to limit our ability to capitalize our PRC operations, which may materially and adversely affect our liquidity and expansion plans.

Fluctuations in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.

The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions in China and by China’s foreign exchange policies. On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the Renminbi to the U.S. dollar, and the Renminbi appreciated more than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the Renminbi and the U.S. dollar remained within a narrow band. Since June 2010, the Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. On November 30, 2015, the Executive Board of the International Monetary Fund (IMF) completed the regular five-year review of the basket of currencies that make up the Special Drawing Right, or the SDR, and decided that with effect from October 1, 2016, Renminbi is determined to be a freely usable currency and will be included in the SDR basket as a fifth currency, along with the U.S. dollar, the Euro, the Japanese yen and the British pound. With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system, and we cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the 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 would receive from the conversion. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us. In addition, appreciation or depreciation in the value of the Renminbi relative to U.S. dollars would affect our financial results reported in U.S. dollar terms regardless of any underlying change in our business or results of operations.

Due to interventions or the imposition of restrictions and limitations by the PRC government to the transfer of cash or assets, our ability to utilize the net revenues may be restricted.

The PRC laws impose regulations of the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency into or out of China, which essentially may restrict the ability to transfer funds into or out of China. We receive a significant portion of our revenues in Renminbi. Under our current corporate structure, our Cayman Islands holding company primarily relies on dividend payments from our PRC subsidiary to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE by complying with certain procedural requirements. Specifically, under the existing exchange regulations, without prior approval of SAFE, cash generated from the operations of our PRC subsidiary in China may be used to pay dividends to our Company. However, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use cash generated from the operations of our PRC subsidiary to pay off its debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi.

Certain PRC regulations may make it more difficult for us to pursue growth through acquisitions.

Among other things, the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. Such regulation requires, among other things, that the MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor acquires control of a PRC domestic enterprise or a foreign company with substantial PRC operations, if certain thresholds under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, issued by the State Council in 2008, are triggered. Moreover, the Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress which became effective in 2008 requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the MOFCOM before they can be completed. In addition, PRC national security review rules which became effective in September 2011 require acquisitions by foreign investors of PRC companies engaged in military related or certain other industries that are crucial to national security be subject to security review before consummation of any such acquisition. We may pursue potential strategic acquisitions that are complementary to our business and operations. Complying with the requirements of these regulations to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval or clearance from the MOFCOM, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

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

In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Regulation on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents’ Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, or SAFE Circular 75, which ceased to be effective upon the promulgation of SAFE Circular 37. SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future.

Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore SPVs will be required to register such investments with SAFE or its local branches. In addition, any PRC resident who is a direct or indirect shareholder of an SPV is required to update its filed registration with the local branch of SAFE with respect to that SPV, to reflect any material change. Moreover, any subsidiary of such SPV in China is required to urge the PRC resident shareholders to update their registration with the local branch of SAFE. If any PRC shareholder of such SPV fails to make the required registration or to update the previously filed registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital contributions into its subsidiary in China. On February 13, 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Circular 13, which became effective on June 1, 2015. Under SAFE Circular 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of SAFE.

We cannot assure you that all of our shareholders that may be subject to SAFE regulations have completed all necessary registrations with the local SAFE branch or qualified banks as required by SAFE Circular 37 and SAFE Circular 13, and we cannot assure you that these individuals may continue to make required filings or updates on a timely manner, or at all. We can provide no assurance that we are or will in the future continue to be informed of identities of all PRC residents holding direct or indirect interest in our Company. Any failure or inability by such individuals to comply with SAFE regulations may subject us to fines or legal sanctions, such as restrictions on our cross-border investment activities or our PRC subsidiary’s ability to distribute dividends to, or obtain foreign exchange-denominated loans from, our Company or prevent us from making distributions or paying dividends. As a result, our business operations and our ability to make distributions to you could be materially and adversely affected.

Furthermore, as the interpretation and implementation of these foreign exchange regulations has been constantly evolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant government authorities. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.

We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies, which may have a material adverse effect on our financial condition and results of operations.

On February 3, 2015, the State Administration of Taxation of the PRC, or the SAT, issued the Announcement of the State Administration of Taxation on Several Issues Relating to Enterprise Income Tax on Indirect Transfers of Assets by Non-resident Enterprises, or SAT Bulletin 7, which was partially abolished on December 1, 2017 and December 29, 2017. SAT Bulletin 7 extends its tax jurisdiction to transactions involving transfer of taxable assets through the offshore transfer of a foreign intermediate holding company. In addition, SAT Bulletin 7 has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. SAT Bulletin 7 also brings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets.

On October 17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or SAT Bulletin 37, which was partially revised. SAT Bulletin 37 came into effect on December 1, 2017. The SAT Bulletin 37 further clarifies the practice and procedure of withholding of non-resident enterprise income tax.

Where a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an Indirect Transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets, may report such Indirect Transfer to the relevant tax authority. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.

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

Under the PRC Enterprise Income Tax Law, or EIT Law, if we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.

The PRC Enterprise Income Tax Law and its implementation rules provide that an enterprise established outside of the PRC with “de facto management body” within China is considered a “resident enterprise” and will be subject to the enterprise income tax on its global income at the rate of 25%. The implementation rules define the term “de facto management body” as the body that exercises full and substantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise. In 2009, the SAT issued the Circular of the State Administration of Taxation on Issues Relating to Identification of PRC-Controlled Overseas Registered Enterprises as Resident Enterprises in Accordance with the De Facto Standards of Organizational Management, or SAT Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect SAT’s general position on how the “de facto management body” text should be applied in determining the tax resident status of all offshore enterprises. According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in China; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in China; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in China; and (iv) at least 50% of voting board members or senior executives habitually reside in China.

We believe that we are not a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.” If the PRC tax authorities determine that we are a PRC resident enterprise for enterprise income tax purposes, we could be subject to PRC tax at a rate of 25% on our worldwide income, which could materially reduce our net income, and we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders may be subject to PRC tax on gains realized on the sale or other disposition of ordinary shares, if such income is treated as sourced from within China. Furthermore, if we are deemed a PRC resident enterprise, dividends payable to our non-PRC individual shareholders and any gain realized on the transfer of ordinary shares by such shareholders may be subject to PRC tax at a rate of 10% in the case of non-PRC enterprises or a rate of 20% in the case of non-PRC individuals unless a reduced rate is available under an applicable tax treaty. It is unclear whether non-PRC shareholders of our Company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in the ordinary shares.

There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.

Under the PRC EIT Law and its implementation rules, the profits of a foreign invested enterprise generated through operations, which are distributed to its immediate holding company outside the PRC, will be subject to a withholding tax rate of 10%. Pursuant to a special arrangement between Hong Kong and the PRC, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity interest in the PRC company. Our PRC subsidiary is wholly-owned by our Hong Kong subsidiary. Moreover, under the Notice of the State Administration of Taxation on Issues regarding the Administration of the Dividend Provision in Tax Treaties promulgated on February 20, 2009, the taxpayer needs to satisfy certain conditions to enjoy the benefits under a tax treaty. These conditions include: (1) the taxpayer must be the beneficial owner of the relevant dividends, and (2) the corporate shareholder to receive dividends from the PRC subsidiary must have continuously met the direct ownership thresholds during the 12 consecutive months preceding the receipt of the dividends. Further, the State Administration of Taxation promulgated the Notice on How to Understand and Recognize the “Beneficial Owner” in Tax Treaties on October 27, 2009, which limits the “beneficial owner” to individuals, projects or other organizations normally engaged in substantive operations, and sets forth certain detailed factors in determining the “beneficial owner” status. In current practice, a Hong Kong enterprise must obtain a tax resident certificate from the relevant Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority. As of the date of the filing of this annual report with the SEC, we have not commenced the application process for a Hong Kong tax resident certificate from the relevant Hong Kong tax authority, and there is no assurance that we will be granted such a Hong Kong tax resident certificate.

Even after we obtain the Hong Kong tax resident certificate, we are required by applicable tax laws and regulations to file required forms and materials with relevant PRC tax authorities to prove that we can enjoy 5% lower PRC withholding tax rate. Soft Cloud Technology Limited intends to obtain the required materials and file with the relevant tax authorities when it plans to declare and pay dividends, but there is no assurance that the PRC tax authorities will approve the 5% withholding tax rate on dividends received from Soft Cloud Technology Limited.

Additional factors outside of our control related to doing business in China could negatively affect our business.

Additional factors that could negatively affect our business include a potential significant revaluation of the Renminbi, which may result in an increase in the cost of producing products in China, labor shortages and increases in labor costs in China as well as difficulties in moving products manufactured in China out of the country, whether due to port congestion, labor disputes, slowdowns, product regulations and/or inspections or other factors. Prolonged disputes or slowdowns can negatively impact both the time and cost of transporting goods. Natural disasters or health pandemics impacting China can also have a significant negative impact on our business. Further, the imposition of trade sanctions or other regulations against products imported by us from, or the loss of “normal trade relations” status with, China, could significantly increase our cost of products exported outside of China and harm our business.

The recent joint statement by the SEC and the Public Company Accounting Oversight Board, or the PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially non-U.S. auditors who are not inspected by the PCAOB.

On April 21, 2020, then SEC Chairman Jay Clayton and then PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the risks associated with investing in companies based in, or have substantial operations in emerging markets including China. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets. On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in a “Restrictive Market”, (ii) adopt a new requirement relating to the qualification of management or board of directors for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company’s auditors. On May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company’s auditors for two consecutive years, the issuer’s securities are prohibited to trade on a U.S. securities exchange or U.S. over-the-counter market. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the Holding Foreign Companies Accountable Act.

On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, or the AHFCAA, which was enacted on December 29, 2022 under the Consolidated Appropriations Act, 2023, as further described below, and amended the HFCAA to decrease the number of non-inspection years under the Holding Foreign Companies Accountable Act from three years to two, thus reducing the time period before an issuer’s securities would be prohibited from trading on any U.S. securities exchange or any U.S. over-the-counter market or delisted.

On September 22, 2021, the PCAOB adopted a final rule implementing the Holding Foreign Companies Accountable Act, which provides a framework for the PCAOB to use when determining, as contemplated under the Holding Foreign Companies Accountable Act, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a non-U.S. jurisdiction because of a position taken by one or more authorities in any non-U.S. jurisdiction.

On December 2, 2021, the SEC adopted final amendments to its rules implementing the Holding Foreign Companies Accountable Act. These amendments include the following:

On December 16, 2021, the PCAOB issued a report on its determinations that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by PRC and Hong Kong authorities in those jurisdictions, which determinations were vacated by the PCAOB on December 15, 2022.

On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol, or the SOP, with the China Securities Regulatory Commission and the Ministry of Finance of China. The SOP, together with two protocol agreements governing inspections and investigations, or together, the SOP Agreement, established a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law.

On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB vacated its previous December 16, 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control. Chinese authorities will need to ensure that the PCAOB continues to have full access for inspections and investigations in the future. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in China and Hong Kong, among other jurisdictions. If the Chinese authorities do not allow the PCAOB complete access for inspections and investigations for two consecutive years, the SEC would prohibit trading in the securities of issuers engaging those audit firms, as required under the AHFCAA and the HFCAA.

If the PCAOB in the future again determines that it is unable to inspect and investigate completely auditors in mainland China and Hong Kong, then the lack of access to the PCAOB inspection in China would prevent the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China, and the PCAOB will make determinations under the HFCAA as and when appropriate. As a result, investors could be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China would make it more difficult to evaluate the effectiveness of these accounting firms’ audit procedures or quality control procedures, which could cause existing and potential investors in our stock to lose confidence in our audit procedures and reported financial information and the quality of our financial statements. Moreover, if we are identified as a Commission-Identified Issuer by the SEC pursuant to its rules implementing the Holding Foreign Companies Accountable Act, we may be subject to restrictions under such rules including prohibitions on the trading of our shares, either temporarily or indefinitely.

Marcum Asia CPAs LLP, or MarcumAsia, was our independent auditor during 2023. MarcumAsia was a PCAOB-registered public accounting firm headquartered in New York during the time it served as our independent auditor. Audit Alliance LLP has been our independent auditor since 2023. Our current auditor, Audit Alliance LLP, is a PCAOB registered public accounting firm headquartered in Singapore. Our current and former auditors are both subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess an auditor’s compliance with the applicable professional standards, and have been inspected by the PCAOB on a regular basis. The PCAOB currently has access to inspect the workpapers of our auditor and our auditor was not subject to the determinations announced by the PCAOB on December 16, 2021, which determinations were vacated by the PCAOB on December 15, 2022. However, we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements.

We are subject to potential adverse impacts on our business due to evolving PRC laws and regulations affecting both mainland China and Hong Kong operations.

We face significant legal and operational risks due to our operations in both mainland China and Hong Kong. These risks arise from the complex and constantly evolving legal and regulatory landscape in the PRC. While our Hong Kong-based holding company operates under a different legal system, it is not immune to these risks.

The legal and regulatory environment in the PRC is complex and subject to change. There is uncertainty regarding how recent PRC government statements and regulatory developments may be applicable to our subsidiary in Hong Kong. Any potential shift would subject our Hong Kong operations to the same legal risks affecting our mainland China operations, such as increased regulatory scrutiny, changes in compliance requirements, and potential governmental actions. Furthermore, the operational risks associated with being based in mainland China, including political instability, economic fluctuations, and changes in trade policies, also apply to our Hong Kong holding company.

Risks Related to Our Business and Industry

Our strategic transition and management operating categories may not result in durable revenue growth, margin improvement or separate reportable segments, and may divert resources from our historical business.

We are pursuing a strategic transition beyond our historical SmartExam® and SmartHomework® product lines toward a broader AI-enabled education, campus services and institutional technology platform. Our current management operating categories - Campus & Education Services, International Education & Testing, and AI Applications & Enterprise Solutions - are used for business planning and disclosure discussion purposes only and are not presented as separate reportable segments in this annual report. These categories may change as our business evolves, and there is no assurance that any of these initiatives will become a separate reportable segment or a durable source of profitable growth.

Fiscal year 2026 results reflected a significant shift in revenue mix toward Campus & Education Services, including Smart Campus Services and related campus operations and student-life services. Although this shift contributed to revenue growth, it also contributed to a lower consolidated gross margin. We may be unable to scale higher-margin AI application and international education initiatives quickly enough to offset the lower-margin profile, working-capital requirements or execution risks of Smart Campus Services. Any failure to manage this transition could materially and adversely affect our business, financial condition, results of operations and investor perception of our business.

Our Smart Campus Services business involves operational, accounting, regulatory, margin and working-capital risks that differ from our historical education technology business.

Smart Campus Services may involve campus operations, food-service management, merchant settlement or support, dormitory utilities, student-life workflows, vocational development and related institutional support services. These activities may expose us to risks that differ from our historical SmartExam®, SmartHomework®, content, software and digitalization businesses, including reliance on third-party operators, merchants, schools and service providers; food safety, campus safety, student-safety and service-quality risks; merchant, operator, student or school disputes; licensing, tax, payment, procurement, labor and local regulatory requirements; customer concentration and collection risks; settlement-cycle and working-capital risks; and lower gross margins and different working-capital profiles.

In addition, certain Smart Campus Services arrangements may require significant judgment under U.S. GAAP, including whether the Company acts as principal or agent, whether amounts collected or remitted on behalf of merchants, operators or other third parties should be presented gross or net, whether the relevant entities should be consolidated, and when revenue should be recognized. Changes in these judgments or audit conclusions could materially affect our reported revenue, cost of revenue, gross profit and gross margin without necessarily changing the underlying operating activity. If we are unable to manage these operational and accounting risks, our business, reputation, financial condition and results of operations could be materially and adversely affected.

Our AI application initiatives, including Cogni AI and YeeZo, are subject to commercialization, implementation, data-security, document-processing and output-reliability risks.

We have introduced AI application initiatives such as Cogni AI and YeeZo, and may introduce additional AI application products in the future. These initiatives may not achieve market acceptance or generate material revenue. Customers may require customization, private deployment, integration with legacy systems, data migration, training, support and ongoing maintenance, which may increase costs and lengthen sales cycles. Cogni AI and related document-intelligence products may process confidential enterprise, institutional, educational or government-related documents, and errors in data migration, document recognition, workflow automation, model output or integration with customer systems could result in customer dissatisfaction, liability claims, confidentiality breaches or reputational harm. AI systems may produce inaccurate, incomplete or inappropriate outputs, and any reliance by customers on such outputs could result in dissatisfaction, liability claims or reputational harm. These products may also involve additional cybersecurity, confidentiality, data-protection and compliance risks. If we are unable to manage these risks, our business and results of operations could be materially and adversely affected.

Our international expansion and related-party channel arrangements may not result in material revenue to us and may create conflicts of interest.

Certain of our international initiatives involve subsidiaries, strategic associates, customers or partners outside China, including in Saudi Arabia and Malaysia. Certain arrangements relating to HanLink involve Link Door Smart Company, a Saudi Arabia-based entity owned 75% by Ms. Yan Fu, our chief executive officer, and 25% by Mr. Cong Zhao, our chief technology officer. Revenue generated by a strategic associate or channel partner is not automatically revenue of the Company, and we may receive only license, implementation, support, service, revenue-share or other fees to the extent provided by applicable agreements and recognized under applicable accounting standards. These structures may give rise to actual or perceived conflicts of interest, related-party transaction concerns, foreign regulatory requirements and execution risks. If we are unable to structure, approve, disclose and manage these arrangements appropriately, our business, reputation and results of operations could be materially and adversely affected.

Our student recruitment and international education support services may not generate expected commissions and may expose us to education-agent, enrollment, visa, refund and partner-performance risks.

Our International Education & Testing initiatives may include student recruitment and support services, testing services and other education-related services outside China. These activities may depend on university or school partners, local education regulations, education-agent licensing or registration requirements, student visa and immigration processes, student enrollment and payment, refund or clawback rights, partner performance, and student complaints or disputes. Agreements that provide for per-student commissions or similar fees may not generate minimum revenue, and revenue may be recognized only when applicable performance obligations are satisfied and variable consideration constraints, refunds or cancellation rights have been evaluated. If we are unable to manage these risks, our international education initiatives may not generate material revenue and our reputation, business and results of operations could be adversely affected.

We have a limited operating history. There is no assurance that our future operations will be profitable. If we cannot generate sufficient revenues to operate profitably, we may suspend or cease operations.

We incurred a net loss of $7.91 million and generated revenue of $7.48 million for the year ended March 31, 2026. Given our limited operating history, there can be no assurance that we can build our business such that we can continuously earn a significant profit or any profit at all. The future of our business will depend upon our ability to obtain and retain customers and when needed, obtain sufficient financing and support from creditors, while we strive to achieve and maintain profitable operations. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the operations that we undertake. There is no history upon which to base any assumption that our business will prove to be successful, and there is significant risk that we will not be able to generate the sales volumes and revenues necessary to achieve profitable operations. To the extent that we cannot achieve our plans and generate revenues which exceed expenses on a consistent basis, our business, results of operations, financial condition and prospects will be materially adversely affected.

Our management team has limited public company experience. We have not previously operated as a public company in the United States and several of our senior management positions are currently held by employees who have been with us for a short period of time. Our entire management team, as well as other company personnel, will need to devote substantial time to compliance, and may not effectively or efficiently manage us as a public company. If we are unable to effectively comply with the regulations applicable to public companies or if we are unable to produce accurate and timely financial statements, which may result in material misstatements in our consolidated financial statements or possible restatement of financial results, our stock price may be materially adversely affected, and we may be unable to maintain compliance with the listing requirements of Nasdaq. Any such failures could also result in litigation or regulatory actions by the SEC or other regulatory authorities, loss of investor confidence, delisting of our securities, harm to our reputation and diversion of financial and management resources from the operation of our business, any of which could materially adversely affect our business, financial condition, results of operations and growth prospects. Additionally, the failure of a key employee to perform in his or her current position could result in our inability to continue to grow our business or to implement our business strategy.

We have incurred recurring losses and negative operating cash flows, and future liquidity constraints could adversely affect our ability to continue as a going concern.

As discussed in Note 2 to our consolidated financial statements included elsewhere in this annual report, the accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future.

As reflected in the accompanying consolidated financial statements, the Company incurred a net loss of $7.91 million and recorded cash outflow from operating activities of $9.15 million for the year ended March 31, 2026 and, as of that date, accumulated deficit was $23.48 million. These conditions, together with our operating cash requirements and working-capital needs, raised substantial doubt about our ability to continue as a going concern for the twelve months following issuance of the consolidated financial statements.

Management’s plans to address these conditions include the use of IPO proceeds and existing cash resources, collection of accounts receivable, renewal or replacement of bank loans, cost controls, continued development of Smart Campus Services, AI application and international education initiatives, and, if necessary, additional debt or equity financing. In December 2025, we entered into a purchase agreement pursuant to which we may sell up to $100.0 million of our ordinary shares from time to time over the 36-month period beginning December 17, 2025, subject to the terms of such purchase agreement. In April 2026, we also completed an equity financing for gross proceeds of approximately $1.73 million. In May 2026, we obtained a loan from a bank of approximately $1.4 million to support our working capital needs. As a result, management concluded that cash from operations, existing cash and cash equivalents, and bank loans are sufficient to fund our operating activities, capital expenditures, and other obligations for the next 12 months, though our ability to continue as a going concern remains dependent upon successfully executing these plans, securing additional financing, and achieving profitable operations. Nevertheless, our future liquidity remains dependent on our ability to successfully execute our operating plan, improve profitability, manage working capital, renew or obtain financing and access capital on acceptable terms. If we are unable to do so, our business, financial condition and results of operations could be adversely affected.

The growth and success of our business depend on our ability to develop and commercialize new services and products while maintaining our historical education technology capabilities.

The markets for our products and services are characterized by rapid technological change, evolving customer requirements, changing education and campus operating needs and new product and service introductions. Our future growth will depend on our ability to maintain and enhance our historical SmartExam® and SmartHomework® technologies while also developing and commercializing newer Smart Campus, AI application and international education initiatives. These initiatives may require upfront investments in technology, operations, compliance, localization, implementation support and partner relationships, and they may not achieve expected market acceptance or profitability. If we fail to adapt to changing market requirements or fail to develop and commercialize suitable products and services in a timely and cost-effective manner, our business and results of operations could be materially and adversely affected.

Demand for our historical intelligent-learning products may decline or become less predictive of our future performance as our business mix changes.

We historically operated in the intelligent learning industry, and our SmartExam® and SmartHomework® products continue to support our technology base, data resources and school-facing relationships. However, our fiscal year 2026 revenue mix changed materially as Smart Campus Services and related campus operations became a larger contributor to revenue. As a result, user acceptance of historical intelligent-learning products may be less predictive of our future revenue, gross margin and profitability than in prior periods. At the same time, if schools, students, institutional customers or other users do not continue to accept our historical products or newer offerings, including Smart Campus, AI application and international education products, our business, financial condition and results of operations could be materially and adversely affected.

If we fail to develop and apply our technologies to support and expand our product and service offerings or if we fail to timely respond to the rapid changes in industry trends and users’ preferences, we may lose market share and our business may be materially and adversely affected.

We believe our technologies are critical to our business. Over the years, we have developed a number of core technologies to support our comprehensive suite of products and services. We also rely on technologies to build and maintain our IT infrastructure. The intelligent learning industry is subject to rapid technological changes and innovations and is affected by unpredictable product lifecycles and user preferences. Our technologies may become obsolete or insufficient, and we may have difficulties in following and adapting to technological changes in the intelligent learning industry in a timely and cost-effective manner. New technologies and solutions developed and introduced by our competitors could render our offerings less attractive or obsolete thus materially affecting our business and prospects. In addition, our substantial investments in technology may not produce expected results. If we fail to continue to develop, innovate and utilize our technologies or if our competitors develop or apply more advanced technologies, our business, financial condition and results of operations could be materially and adversely affected.

We may not successfully broaden our monetization channels beyond historical K-12 education technology revenue streams.

We are seeking to broaden our monetization channels by developing Smart Campus Services, AI-based digital technology services, vocational and adult learning applications, international education initiatives and enterprise or institutional AI application products. These efforts may not achieve anticipated results, may require additional capital and management resources, and may have different revenue recognition, margin, cash collection and regulatory characteristics from our historical products. If we fail to convert our technology base, data resources and school-facing relationships into sustainable revenue across these newer channels, we may not be able to increase or maintain revenue growth or improve profitability, which could materially and adversely affect our business, financial condition and results of operations.

We may not be able to improve or expand our product and service offerings in a timely and cost-effective manner, and our business, financial condition and results of operations could suffer.

We regularly and constantly update our existing product and service offerings and develop new products, services and content to meet our users’ demands and evolving market trends. New products, services and content may not be accepted by our users as we expect, and we may not be able to introduce them as quickly as our competitors introduce competing offerings. The development of new products, services and content could be costly and time-consuming and require us to make significant investments in research and product development, develop new technologies, and increase sales and marketing efforts, all of which may not be successful. If we are unsuccessful in improving or expanding our product and service offerings due to financial constraints, failure to attract qualified personnel or other reasons, our business, financial condition and results of operations could suffer.

We may be forced to reduce the prices of our services and products due to increased competition and reduced bargaining power with our customers, which could lead to reduced revenues and profitability.

Our industry in China is developing rapidly and related technology trends are constantly evolving. This results in the frequent introduction of new services and products and price competition from our competitors. We may be unable to offset the effect of declining average sales prices through increased sales volumes or reductions in our costs. Furthermore, we may be forced to reduce the prices of our services and products in response to offerings made by our competitors. Finally, we may not have the same level of bargaining power we have enjoyed in the past when it comes to negotiating for the prices of our services and products, all of which could lead to reduced revenues and profitability.

We generate a significant portion of our revenues from a limited number of major customers and loss of business from these customers could reduce our revenues and significantly harm our business.

For the year ended March 31, 2026, two major customers accounted for 13% and 11% of the Company’s total revenue, and three major customers accounted for 18%, 16% and 12% of accounts receivable. For the year ended March 31, 2025, two major customers accounted for 30% and 14% of our total revenue, and two major customers accounted for 20% and 19% of accounts receivable.

The customer that accounted for 13% of our total revenues for the year ended March 31, 2026 was Jiangxi Wuwei Management Co., Ltd., from our Smart Campus Services. The customer that accounted for 11% of our total revenue for the year ended March 31, 2026 was Nanchang Institute of Science & Technology, a related party, from our Smart Campus Services. The customer that accounted for 30% of our total revenues for the year ended March 31, 2025 was Jiangxi Xinhua Distribution Group Co., Ltd., Education Books Branch, a client in the digital publishing business. Although arrangements with Jiangxi Xinhua Distribution Group Co., Ltd., Education Books Branch, historically generated significant revenue, PRC education policies affecting teaching auxiliary materials and extracurricular reading materials have caused us to reduce this type of business beginning in fiscal year 2025 and shift toward AI-based digital technology services, Smart Campus Services and other initiatives.

Nevertheless, our ability to maintain relationships with major customers, schools, campus operators, institutional counterparties and other channel or service partners is essential to our business. The volume of work performed for a specific customer or counterparty is likely to vary from year to year, and we generally do not have long-term commitments from customers to purchase our services. A major customer in one year may not provide the same level of revenue in a subsequent year. In addition, as our business mix shifts toward Smart Campus Services, AI applications and international education initiatives, our customer-concentration profile may change. The loss of any major customer, school, campus operator, institutional counterparty or important channel relationship could adversely affect our financial condition and results of operations.

Our business may depend on third-party vendors and service providers, and disruptions in those relationships could adversely affect our operations.

For the year ended March 31, 2026, no vendors accounted for over 10% of the Company’s total purchases, and no vendor accounted for 10% of accounts payable. For the year ended March 31, 2025, four vendors accounted for 14%, 12%, 12% and 11% of the Company’s total purchases, and four vendors accounted for 21%, 14%, 12% and 11% of accounts payable. As our Smart Campus Services business grows, we may rely on food-service providers, merchants, utility providers, campus service providers, technology vendors, content suppliers and other counterparties that differ from our historical education technology vendors. Any difficulty replacing key vendors or service providers, or any disruption in their performance, pricing, licensing, compliance or payment terms, could negatively affect our operations, gross margin, working capital and results of operations.

Students, schools, campus partners, institutional customers or other users may decide not to use our products and services, which may adversely affect our business, financial condition and results of operations.

The success of our business depends on our ability to deliver reliable and useful products and services across our historical education technology products and newer Smart Campus, AI application and international education initiatives. We may not always be able to meet the expectations of students, schools, campus partners, merchants, institutional customers or other users due to service quality issues, product performance, perceived lack of improvement in outcomes, operational failures, implementation delays, pricing, regulatory constraints or other factors outside our control. These factors may reduce user engagement, weaken customer relationships and make it more difficult to attract new customers or partners, any of which could materially and adversely affect our business, financial condition and results of operations.

We cannot assure you that we will not be subject to liability claims or legal or regulatory liability for any inappropriate or illegal content, which could subject us to liabilities and cause damages to our reputation.

Although we implement various monitoring procedures to identify and remove inappropriate or illegal content, we cannot assure you that there will be no inappropriate or illegal content included in our content offerings including, for example, our quiz banks and content generated and uploaded to our online platforms by our users and students. We may face civil, administrative or criminal liability or legal or regulatory sanctions, such as requiring us to restrict or discontinue our content, products or services, if an individual or corporate, governmental or other entity believes that any of the content offerings violates any laws, regulations or governmental policies or infringes upon its legal rights. Even if such a claim were not successful, defending such a claim may cause us to incur substantial costs. Moreover, any accusation of inappropriate or illegal content in our content offerings could lead to significant negative publicity, which could harm our reputation, business, financial condition and results of operations.

We face competition which could lead to pricing pressure and loss of market share and materially and adversely affect our business, financial condition and results of operations.

We operate in competitive markets for education technology, campus services, AI applications and international education services. Competition may result in pricing pressures, reduced gross margins, increased implementation or service costs, lost market share or an inability to grow newer initiatives. We compete for customers, schools, campus partners, institutional users, technology talent and channel relationships on the basis of brand, price, service quality, product functionality, implementation capability, regulatory compliance and partner relationships. Many competitors may have longer operating histories, broader customer bases, lower operating costs, stronger relationships with schools, campus operators or government-related counterparties, greater brand recognition or greater financial, research and development, marketing, distribution and other resources than we do. If we fail to maintain our reputation and competitiveness across these markets, demand for our products and services could decline.

In addition to existing competitors, new participants with a popular product or service idea could gain access to customers and become a significant source of competition in a short period of time. These existing and new competitors may be able to respond more rapidly than us to changes in customer preferences. Our competitors’ products may achieve greater market acceptance than our products and potentially reduce demand for our products, lower our revenues and lower our profitability. We face competition from state-owned enterprises.

If we fail to increase our brand recognition, we may face difficulty in obtaining new customers, in which case our business, operating results and financial condition, would be materially adversely affected.

Although our brand has historical recognition in the PRC education technology market, maintaining and enhancing brand recognition across Smart Campus Services, AI application products and international education initiatives may be more difficult and costly than maintaining recognition for our historical SmartExam® and SmartHomework® products. Successful promotion of our brand will depend on our ability to provide reliable and useful products and services, manage campus operations and service quality, support international partners and customers, and maintain compliance with applicable laws and regulations. Brand promotion activities may not yield increased revenue, and any increased revenue may not offset the expenses we incur. If we fail to promote and maintain our brand across our evolving business lines, our business, operating results and financial condition could be materially adversely affected.

Our revenues and results of operations are affected by seasonal trends and changes in revenue mix, and period-to-period comparisons may not indicate future performance.

Our historical government procurement businesses, including SmartExam® and SmartHomework® platform projects, have been affected by seasonality, including procurement activity that often occurs in the third and fourth quarters. As our revenue mix changes, our results may also be affected by campus operating cycles, school calendars, student-life service usage, contract acceptance timing, merchant or operator settlement cycles, and the timing of AI application or international education contracts. In addition, changes in gross-versus-net presentation or revenue recognition timing may affect comparability across periods. As a result, period-to-period comparisons of our operating results may not be indicative of future performance, and we believe it is more meaningful to evaluate our business on an annual basis and in light of changes in our revenue mix.

Any failure to offer high-quality customer support may adversely affect our relationships with our customers, which could adversely affect our reputation, business, results of operations and financial condition.

Our ability to retain existing customers and attract new customers depends on our ability to maintain a consistently high level of customer service and technical support. Our customers depend on our service support team to assist them in utilizing our services effectively and to help them to resolve issues quickly and to provide ongoing support. If we are unable to hire and train sufficient support resources or are otherwise unsuccessful in assisting our customers effectively, it could adversely affect our ability to retain existing customers and could prevent prospective customers from adopting our services. We may be unable to respond quickly enough to accommodate short-term increases in demand for customer support. We also may be unable to modify the nature, scope and delivery of our customer support to compete with changes in the support services provided by our competitors. Increased demand for customer support, without corresponding revenue, could increase our costs and adversely affect our business, results of operations and financial condition. Our sales are highly dependent on our business reputation and on positive recommendations from customers. Any failure to maintain high-quality customer support, or a market perception that we do not maintain high-quality customer support, could adversely affect our reputation, business, results of operations and financial condition.

Any significant disruption in our technology infrastructure or our failure to maintain the satisfactory performance, security and integrity of our technology infrastructure would reduce visitor traffic and may materially and adversely affect our business, reputation, financial condition and results of operations.

The proper functioning of our technology infrastructure is essential to our business. We heavily rely on our technology infrastructure to operate our business. We may encounter problems when upgrading our technology infrastructure including our online platform, systems and software. The development, upgrades and implementation of our technology infrastructure are complex processes. Issues not identified during pre-launch testing of new services may only become evident when such services are made available to our entire customer base. Therefore, our technology infrastructure may not function properly if we fail to detect or solve technical errors in a timely manner. In addition, our systems are potentially vulnerable to damage or interruption as a result of natural disasters, power or telecommunications failures, air quality issues, environmental conditions, computer viruses or attempts to harm our systems, criminal acts and similar events. These and other events may lead to the unavailability of the interruption of online course delivery, the availability of our tools and services, or other events which would affect our operations. If we experience frequent or persistent service disruptions, our reputation may be damaged and our students or users may switch to our competitors, which may have a material adverse effect on our business, financial condition and results of operations.

Incorrect or improper implementation or use of our services and products could result in customer dissatisfaction and negatively affect our business, results of operations, financial condition, and growth prospects.

We must often assist our customers in achieving successful implementation of our services and products, which we do through our technical support services. If our customers are unable to implement our services and products successfully, or unable to do so in a timely manner, customer perceptions of our services and products may be harmed, our reputation and brand may suffer, and customers may choose to cease usage of our services and products or not to expand their use of our services and products. Our customers may need training in the proper use of and the variety of benefits that can be derived from our services and products to maximize their benefits. If our services and products are not effectively implemented or used correctly or as intended, or if we fail to adequately train on how to efficiently and effectively use our services and products, our customers may not be able to achieve satisfactory outcomes. This could result in negative publicity and legal claims against us, which may cause us to generate fewer sales to new customers and reductions in renewals or expansions of the use of our services with existing customers, any of which would harm our business and results of operations.

Failure to adhere to the regulations that govern our business could result in our being unable to effectively perform our services, which could have a material adverse effect on our business and results of operations.

We are required under various Chinese laws to obtain and maintain permits, licenses and qualifications to conduct our business. Our historical business has involved licenses such as the Publication Business License and the Value-Added Telecommunications Business License of the People’s Republic of China. As our business expands into Smart Campus Services, campus operations, student-life services, AI application products and international education initiatives, we may become subject to additional or different licensing, food-service, campus-service, payment, procurement, data, AI, education-agent, testing, student recruitment or local regulatory requirements in China, Saudi Arabia, Malaysia or other jurisdictions. If we do not obtain or maintain required licenses or qualifications, we may be unable to provide services, recognize revenue, attract customers or partners, or continue certain operations.

If our new enhancements to our services and products do not achieve sufficient market acceptance, our financial results and competitive position will suffer.

We spend substantial amounts of time and money to research and develop new enhancements of our services and products to incorporate additional features, improve functionality or other enhancements in order to meet rapidly evolving demands. When we develop an enhancement to our services and products, we typically incur expenses and expend resources upfront to develop, market and promote the new enhancements. Therefore, when we develop and introduce new enhancements to our services and products, they must achieve high levels of market acceptance in order to justify the amount of our investment in developing and bringing them to market. If our new enhancements to our services and products do not garner widespread market adoption and implementation, our growth prospects, future financial results and competitive position could suffer.

Interruptions or performance problems associated with our technology and infrastructure may adversely affect our business, results of operations, and financial condition.

Our continued growth depends in part on the ability of our existing customers and new customers to access our services and products at any time and within an acceptable amount of time. We may in the future experience service disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors or capacity constraints. In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time. It may become increasingly difficult to maintain and improve our performance as our services and products become more complex. If our services and products are unavailable or if our customers are unable to access features of our services within a reasonable amount of time or at all, our business would be negatively affected.

We may experience interruptions, delays and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions and capacity constraints. Capacity constraints could be due to a number of potential causes including technical failures, natural disasters, fraud or security attacks. In addition, if our security, or that of our data center providers, is compromised, our services are unavailable or our customers are unable to use our services within a reasonable amount of time or at all, then our business, results of operations and financial condition could be adversely affected. In some instances, we expect that we may not be able to identify the cause or causes of these performance problems within a period of time acceptable to our customers. It may become increasingly difficult to maintain and improve our service performance, especially during peak usage times, as the features of our services become more complex and the usage of our services increases. Any of the above circumstances or events may harm our reputation, cause customers to stop using our services, impair our ability to increase revenue from existing customers, impair our ability to grow our customer base and otherwise harm our business, results of operations, and financial condition.

Unauthorized disclosure, destruction or modification of data, through cybersecurity breaches, computer viruses or otherwise or disruption of our services could expose us to liability, protracted and costly litigation and damage our reputation.

Our business involves the collection, storage, processing and transmission of significant amounts of data. An increasing number of organizations, including large merchants and businesses, other large technology companies, financial institutions and government institutions, have disclosed breaches of their information technology systems, some of which have involved sophisticated and highly targeted attacks, including on portions of their websites or infrastructure. We could also be subject to breaches of security by hackers. Threats may derive from human error, fraud or malice on the part of employees or third parties, or may result from accidental technological failure. Concerns about security are increased when we transmit information. Electronic transmissions can be subject to attack, interception or loss. Also, computer viruses and malware can be distributed and spread rapidly over the internet and could infiltrate our systems or those of our associated participants, which can impact the confidentiality, integrity and availability of information, and the integrity and availability of our products, services and systems, among other effects. Denial of service or other attacks could be launched against us for a variety of purposes, including interfering with our services or creating a diversion for other malicious activities. These types of actions and attacks could disrupt our delivery of products and services or make them unavailable, which could damage our reputation, force us to incur significant expenses in remediating the resulting impacts, expose us to uninsured liability, subject us to lawsuits, fines or sanctions, distract our management or increase our costs of doing business.

On August 25, 2023, we had a data leakage incident. During routine system demonstrations, our ElasticSearch database, which contained anonymized student learning data used for machine learning purposes, was exposed due to servers hosted inside of Jiangxi Ruanyun’s external network environment being opened and the database using a default password. As a result, certain data from 2021 to 2022 stored on Alibaba Cloud servers was accessed and downloaded by hackers. The leaked data included district/county, school, grade, student unique ID, question ID, question content, knowledge point ID, difficulty, score, and response time. Although this type of data does not contain personal or sensitive information, in accordance with Articles 27 and 29 of the Data Security Law of the PRC, we took immediate measures to ensure compliance with data security regulations and to prevent further data leakage or loss.

Subsequently, the Cyberspace Affairs Office of Nanchang filed an investigation into the incident. On November 16, 2023, the investigation was completed and the Cyberspace Affairs Office of Nanchang imposed an administrative penalty of a fine of RMB 200,000 (approximately $27,885) on us. As of the date of the filing of this annual report with the SEC, we have paid the above fine in full and implemented network security rectification measures required by the Cyberspace Affairs Office of Nanchang, including but not limited to: (i) we closed the extranet ports and servers of the server involved to avoid another attack on the extranet; (ii) we destroyed the data and hard disk of the server involved to avoid the risk of data processing; (iii) we carried out security rectification of the server room, stopped using the broadband of the extranet involved, emptied servers in the server room, and carried out the security on the cloud and the equal protection evaluation; and (iv) we cooperated with the net information department to do the subsequent investigation and disposal work, such as assisting the Cyberspace Affairs Office of Nanchang in inspecting and accepting our rectification results. As of the date of the filing of this annual report with the SEC, we have not received any further inquiry, notice, warning, sanction, or objection from the Cyberspace Affairs Office of Nanchang or any other PRC governmental or regulatory agency with respect to the data leakage incident.

Importantly, the data leakage incident did not impact our initial public offering approval status in the PRC. In July 2023, we received a notification from the CAC confirming that our initial public offering was not subject to cybersecurity review by the CAC. Our PRC legal counsel, Hui Ye Law Firm, has advised us that this determination remains valid and unaffected by the data leak because (i) the CAC’s decision was based on the information available at the time, and the incident occurred after the notification was issued, (ii) the administrative penalty was imposed under the data security law, which pertains solely to data management compliance and is unrelated to the cybersecurity review, and (iii) the leaked data involved only anonymized student learning information, which did not include any important data or personal information, nor did it raise any national security concerns given its nature and its limited scope, making it unlikely to trigger new cybersecurity concerns or require a reevaluation by the CAC.

Although the data leakage incident did not have a material adverse effect on our financial condition or results of operations – the fine of RMB 200,000 (approximately $27,885) accounting for approximately 0.2% of our total assets and approximately 0.4% of our total revenue for the year ended March 31, 2026 – the unauthorized disclosure or improper use of data, or future cybersecurity breaches, could have severe consequences. This includes reputational harm, decreased customer trust, potential loss of business, increased operational costs for addressing such incidents, and potential penalties or litigation. Despite the completion of the aforementioned investigation and our implementation of the required rectification measures, we cannot assure you that a similar data leakage incident will not occur again in the future.

Our encryption of data and other protective measures may not prevent unauthorized access or use of sensitive data. A breach of our system or that of one of our associated participants may subject us to material losses or liability. A misuse of such data or a cybersecurity breach could harm our reputation and deter customers from using our products and services, thus reducing our revenue. In addition, any such misuse or breach could cause us to incur costs to correct the breaches or failures, expose us to uninsured liability, increase our risk of regulatory scrutiny, subject us to lawsuits, result in the imposition of material penalties and fines under applying laws or regulations.

We cannot assure that there are written agreements in place with every associated participant or that such written agreements will prevent the unauthorized use, modification, destruction or disclosure of data or enable us or our customers to obtain reimbursement in the event we should suffer incidents resulting in unauthorized use, modification, destruction or disclosure of data. Any unauthorized use, modification, destruction or disclosure of data could result in protracted and costly litigation, which could have a material adverse effect on our business, financial condition and results of operations.

Cybersecurity incidents are increasing in frequency and evolving in nature and include, but are not limited to, installation of malicious software, unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and the corruption of data. Given the unpredictability of the timing, nature and scope of information technology disruptions, there can be no assurance that the procedures and controls we employ will be sufficient to prevent security breaches from occurring and we could be subject to manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material adverse effect on our business, financial condition and results of operations.

We are subject to a variety of laws and other obligations regarding data protection, and any failure to comply with applicable laws and obligations could have a material adverse effect on our business, financial condition and results of operations.

We are subject to various regulatory requirements relating to the security and privacy of data, including restrictions on the collection and use of personal information and requirements to take steps to prevent personal data from being divulged, stolen, or tampered with. Regulatory requirements regarding the protection of data are constantly evolving and can be subject to different interpretations or significant change, making the extent of our responsibilities in that regard uncertain. For example, pursuant to the Cybersecurity Law of the PRC which became effective on June 1, 2017, personal information and important data collected and generated by a critical information infrastructure operator in the course of its operations in China must be stored in China, and if a critical information infrastructure operator purchases internet products and services that affects or may affect national security, it should be subject to cybersecurity review by the CAC. Due to the lack of further interpretations, the exact scope of “critical information infrastructure operator” remains unclear. It is possible that those regulatory requirements may be interpreted and applied in a manner that is inconsistent with our practices.

On December 28, 2021, the Office of the Central Cyberspace Affairs Commission and the Office of Cybersecurity Review under the CAC released the Measures for Cybersecurity Review which took effect and replace the existing Measures for Cybersecurity Review on February 15, 2022. The newly promulgated Measures for Cybersecurity extend the scope of cybersecurity reviews to data processing operators engaging in data processing activities that affect or may affect national security, including listing in a foreign country. The CAC also released the Regulations on the Administration of Network Data Security (Draft for Comments), or the Draft Regulations, on November 14, 2021, which reaffirmed such requirement. The Draft Regulations were later replaced by the formal version, the Network Data Security Management Regulations, issued in September 2024 and which took effect on January 1, 2025. The factors to be considered when assessing the national security risks of the relevant activities include: (i) the risk of core data,

important data or a large amount of personal information being stolen, leaked, destroyed, and illegally used or exited the country; and (ii) the risk of critical information infrastructure, core data, important data or a large amount of personal information being affected, controlled, or maliciously used by foreign governments after listing abroad. Further, it is required that any online platform operator with more than one million users’ personal information data shall apply for a mandatory cybersecurity review with the Cybersecurity Review Office prior to its listing in a “foreign country.” The cybersecurity review will also look into the potential national security risks from overseas listings.

As a network platform operator who possesses personal information of more than one million users for purposes of the Cybersecurity Review Measure, we applied for a cybersecurity review with the CAC with respect to our initial public offering pursuant to the Cybersecurity Review Measure. Based on our understanding of the current PRC laws, rules, and regulations and the advice of our PRC legal counsel, Hui Ye Law Firm, the VIE and its subsidiaries qualify as “personal information processors” under the Law on Personal Information Protection, or the PIP Law, because they process personal information authorized by legal owners pursuant to signed agreements, which permit the use of such information to provide services within the authorization period. However, neither we nor the VIE or its subsidiaries is an operator of any “critical information infrastructure” as defined under the Cybersecurity Law and the Regulations on Security Protection of Critical Information Infrastructure (promulgated on July 30, 2021), as none of the entities engage in important public communication and information services, energy, transportation, water conservancy, finance, public services, e-government, defense technology and industry, as well as other important network facilities, information systems that may seriously endanger national security, national economy and people’s livelihood. Subsequently, in July 2023, we received notification from the CAC stating that our initial public offering was not subject to a cybersecurity review by the CAC.

In addition, the Office of the Central Cyberspace Affairs Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Administration for Market Regulation jointly issued an announcement on January 23, 2019 regarding carrying out special campaigns against mobile internet application programs collecting and using personal information in violation of applicable laws and regulations, which prohibits business operators from collecting personal information irrelevant to their services, or forcing users to give authorization in disguised manner. Further, the CAC issued the Provisions on the Cyber Protection of Children’s Personal Information on August 22, 2019, which took effect on October 1, 2019. The Provisions on the Cyber Protection of Children’s Personal Information requires, among others, that network operators who collect, store, use, transfer and disclose personal information of children under the age of 14 shall establish special rules and user agreements for the protection of children’s personal information, inform the children’s guardians in a noticeable and clear manner, and shall obtain the consent of the children’s guardians. We have been taking and will continue to take reasonable measures to comply with such announcement and provisions; however, as the announcement and provisions are relatively new, we cannot assure you we can adapt our operations to it in a timely manner.

The PRC Data Security Law, which was promulgated by the Standing Committee of the National People’s Congress on June 10, 2021 and took effect on September 1, 2021, requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security. If our data processing activities are found not to be in compliance with this law, we could be ordered to make corrections, and under certain serious circumstances, such as severe data divulgence, we could be subject to penalties, including the revocation of our business licenses or other permits.

On July 7, 2022, CAC promulgated the Measures for the Security Assessment of Data Cross-border Transfer, effective on September 1, 2022, which requires the data processors to apply for data cross-border security assessment coordinated by the CAC under the following circumstances: (i) any data processor transfers important data to overseas; (ii) any critical information infrastructure operator or data processor who processes personal information of over 1 million people provides personal information to overseas; (iii) any data processor who provides personal information to overseas and has already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas since January 1st of the previous year; and (iv) other circumstances under which the data cross-border transfer security assessment is required as prescribed by the CAC.

As the VIE and its subsidiaries do not operate any critical information infrastructure, do not process personal information of more than 1,000,000 individuals, have not provided personal information of more than 100,000 individuals or sensitive personal information of more than 10,000 individuals overseas since January 1 of the previous year, and have not processed “important data” under the Security Assessment Measures for Outbound Data Transfer, the VIE and its subsidiaries are currently not subject to the data cross-border security assessment. However, if such assessment is required in the future, we cannot assure you that we will complete the relevant procedures on a timely basis.

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

Any failure, or perceived failure, by us, or by our third-party partners, to maintain the security of our user data or to comply with applicable privacy, data security and personal information protection laws, regulations, policies, contractual provisions, industry standards, and other requirements, may result in civil or regulatory liability, including governmental or data protection authority enforcement actions and investigations, fines, penalties, enforcement orders requiring us to cease operating in a certain way, litigation, or adverse publicity, and may require us to expend significant resources in responding to and defending allegations and claims. Moreover, claims or allegations that we have failed to adequately protect our users’ data, or otherwise violated applicable privacy, data security and personal information protection laws, regulations, policies, contractual provisions, industry standards, or other requirements, may result in damage to our reputation and a loss of confidence in us by our users or our partners, potentially causing us to lose users, advertisers, content providers, other business partners and revenues, which could have a material adverse effect on our business, financial condition and results of operations.

If we are qualified as a tutoring institution under the Opinions on Further Reducing the Burden of Excessive Homework and Off-Campus Tutoring for Students Undergoing Compulsory Education, or the Opinions, in the future, our business, financial condition and results of operations could be adversely affected due to the great uncertainties about how the policy will be implemented.

We are a big data technology company centering on test question database establishment and score evaluation, mainly serving competent authorities of education and public schools (hereinafter referred to as “G terminal”), B-terminal education (technology companies mainly providing API authorization service), and C-terminal students and parent users imported through G/B terminal users. Through AI technology, we can help students and teachers to reduce the burden of teaching and learning, help students reduce the burden of study and after-school tutoring. We do not operate any online or offline tutoring courses, so we are not qualified as a tutoring institution affected by the Opinions. There is no risk factor associated with it currently, but we cannot promise we will not be qualified as such tutoring institution in the future due to lack of detailed rules and plans for policy implementation. If that is the case, our business, financial condition and results of operations could be adversely affected.

We face risks related to natural disasters, health epidemics and other outbreaks which could significantly disrupt our operations.

In recent years, there have been outbreaks of epidemics in various countries, including China. In general, our business could be adversely affected by the effects of epidemics, including, but not limited to, COVID-19, avian influenza, severe acute respiratory syndrome (SARS), the influenza A virus, Ebola virus, severe weather conditions such as a snowstorm, flood or hazardous air pollution, or other outbreaks. In response to an epidemic, severe weather conditions, or other outbreaks, government and other organizations may adopt regulations and policies that could lead to severe disruption to our daily operations, including temporary closure of our offices and other facilities. These severe conditions may cause us and/or our partners to make internal adjustments, including but not limited to, temporarily closing down business, limiting business hours, and setting restrictions on travel and/or visits with clients and partners for a prolonged period of time. Various impacts arising from severe conditions may cause business disruption, resulting in a material adverse impact to our financial condition and results of operations.

We have engaged in transactions with related parties, and such transactions present possible conflicts of interest that could have an adverse effect on our business and results of operations.

We have entered into a number of transactions with related parties, including amounts due to and from related parties, including Ms. Yan Fu, our director and chief executive officer and chief executive officer of Jiangxi Ruanyun, Mr. Cong Zhao, our chief technology officer, Mr. Linhua Wan, a management staff member of Jiangxi Alphabet, and Mr. Xili Huang, a majority shareholder of Jiangxi Yiluyun Technology Co., Ltd., of which a minority shareholder of Jiangxi Ruanyun is an affiliate, Nanchang Institute of Science & Technology, AI Soft Cloud LLC, and Link Door Smart Company. See “Item 7. Major Shareholders and Related Party Transactions-B. Related Party Transactions.” We may in the future enter into additional transactions with entities in which members of our board of directors and other related parties hold ownership interests.

Transactions with related parties present potential for conflicts of interest, as the interests of related parties may not align with the interests of our shareholders. Although we believe that these transactions were in our best interests, we cannot assure you that these transactions were entered into on terms as favorable to us as those that could have been obtained in an arms-length transaction. We may also engage in transactions with related parties in the future. Conflicts of interest may arise when we transact business with related parties. These transactions, individually or in the aggregate, may have an adverse effect on our business and results of operations or may result in government enforcement actions or other litigation.

Our related-party transactions also include revenue and receivables from related parties, including education institution counterparties, and such arrangements may raise additional collectability, approval, disclosure and conflict-of-interest considerations. If these transactions are not reviewed, approved, documented, collected and disclosed appropriately, they could adversely affect our financial reporting, liquidity, reputation and results of operations.

Our future growth depends in part on new products and new technology innovation, and failure to invent and innovate could adversely impact our business prospects.

Our future growth depends in part on maintaining our current products in new and existing markets, as well as our ability to develop new products and services to serve such markets. To the extent that competitors develop competitive products and services, or new products or services that achieve higher customer satisfaction, our business prospects could be adversely impacted. In addition, if regulatory approvals for new products or services may be required, these approvals may not be obtained in a timely or cost-effective manner, adversely impacting our business prospects.

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

We rely on our sales and marketing efforts to enlarge our user base and drive the growth of our paying users. Our sales and marketing activities may not be well received by the market and may not result in the levels of sales that we anticipate. We also may not be able to retain or recruit a sufficient number of experienced sales and marketing personnel, or to train newly hired sales and marketing personnel, which we believe is critical to implementing our sales and marketing strategies cost-effectively. Further, sales and marketing approaches and tools in China’s intelligent learning industry are evolving rapidly. This requires us to continually enhance our sales and marketing approaches and experiment with new methods to keep pace with industry developments and user preferences. Failure to engage in sales and marketing activities in a cost-effective manner may reduce our market share, cause our net revenues to decline, negatively impact our profitability, and materially harm our business, financial condition and results of operations.

We may be the subject of detrimental conduct by third parties such as our competitors, including complaints to regulatory agencies and the public dissemination of malicious assessments of our business, which could have a negative impact on our reputation.

We may be the target of anti-competitive, harassing or other detrimental conduct by third parties including our competitors. Such conduct may include complaints, anonymous or otherwise, to regulatory agencies regarding our operations, accounting, business relationships, business prospects and business ethics. Additionally, allegations, directly or indirectly against us, may be posted online by anyone, whether or not related to us, on an anonymous basis. We may be subject to government or regulatory investigation as a result of such third-party conduct and may be required to expend significant time and incur substantial costs to address such third-party conduct, and there is no assurance that we will be able to conclusively refute each of the allegations within a reasonable period of time, or at all. Our reputation may also be materially negatively affected as a result of the public dissemination of anonymous allegations or malicious statements about our business.

Changes in demand for our products, services and business relationships with key customers and vendors may negatively affect operating results.

To achieve our objectives, we must develop and sell products that are subject to the demands of our customers. This is dependent on several factors, including managing and maintaining relationships with key customers, responding to the rapid pace of technological change and obsolescence, which may require increased investment by us or result in greater pressure to commercialize developments rapidly or at prices that may not fully recover the associated investment, and the effect on demand resulting from customers’ research and development, capital expenditure plans and capacity utilization. If we are unable to keep up with our customers’ demands, our sales, earnings and operating results may be negatively affected.

Our future success depends in part on our ability to retain key executives and to attract, retain and motivate qualified personnel.

We are highly dependent on the principal members of our executive team listed in “Item 6. Directors, Senior Management and Employees” of this annual report, the loss of whose services may adversely impact the achievement of our objectives. Recruiting and retaining other qualified employees for our business, including technical personnel, will also be critical to our success. Competition for skilled personnel is intense and the turnover rate can be high. We may not be able to attract and retain personnel on acceptable terms given the competition among numerous companies for individuals with similar skill sets. The inability to recruit or loss of the services of any executive or key employee could adversely affect our business.

We may need to expand our organization, and we may experience difficulties in managing this growth, which could disrupt our operations.

As of March 31, 2026, we had 128 full-time employees and 4 part-time employees who signed part-time labor contracts with Jiangxi Ruanyun, and all of whom were located in China. As we continue to grow, we also expect to expand our employee base. In addition, we intend to grow by expanding our business, increasing market penetration of our existing products and services, developing new products and services and increasing our targeting of certain markets in China. Future growth would impose significant additional responsibilities on our management, including the need to develop and improve our existing administrative and operational systems and our financial and management controls and to identify, recruit, maintain, motivate, train, manage and integrate additional employees, consultants and contractors. Also, our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. Future growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of our existing or future product candidates. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and grow revenue could be reduced, and we may not be able to implement our business strategy. Our future financial performance and our ability to compete effectively will depend, in part, on our ability to effectively manage any future growth.

Failure of beneficial owners of our shares who are PRC residents to comply with certain PRC foreign exchange regulations could restrict our ability to distribute profits, restrict our overseas and cross-border investment activities and subject us to liability under PRC law.

SAFE has promulgated regulations, including the Notice on Relevant Issues Relating to Foreign Exchange Control on Domestic Residents’ Investment and Financing and Round-Trip Investment through Special Purpose Vehicles, or SAFE Circular 37, and its appendices. These regulations require PRC residents, including PRC institutions and individuals, to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle”, or SPV. The term “control” under SAFE Circular 37 is broadly defined as the operation rights, beneficiary rights or decision-making rights acquired by the PRC residents in the offshore SPVs by such means as acquisition, trust, proxy, voting rights, repurchase,

convertible bonds or other arrangements. SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the SPV, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. In the event that a PRC shareholder holding interests in an SPV fails to fulfill the required SAFE registration, the PRC subsidiaries of that SPV may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the SPV may be restricted in its ability to contribute additional capital into its PRC subsidiaries. Further, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for foreign exchange evasion.

These regulations apply to our direct and indirect shareholders who are PRC residents and may apply to any offshore acquisitions or share transfers that we make in the future if our shares are issued to PRC residents. However, in practice, different local SAFE branches may have different views and procedures on the application and implementation of SAFE regulations, and there remains uncertainty with respect to its implementation. We cannot assure you that these direct or indirect shareholders of our Company who are PRC residents will be able to successfully update the registration of their direct and indirect equity interest as required in the future. If they fail to update the registration, our PRC subsidiary could be subject to fines and legal penalties, and SAFE could restrict our cross-border investment activities and our foreign exchange activities, including restricting our PRC subsidiary’s ability to distribute dividends to, or obtain loans denominated in foreign currencies from, our Company, or prevent us from contributing additional capital into our PRC subsidiary. As a result, the VIE and its subsidiaries and our ability to make distributions to you could be materially and adversely affected. In addition, non-U.S. shareholders may experience unfavorable tax consequences if such non-U.S. shareholders are determined to be a resident enterprise for PRC tax purposes. See “Item 10. Additional Information-E. Taxation-PRC Taxation” for further information.

As of the date of the filing of this annual report, to our knowledge, 27 of our shareholders had registered according to SAFE Circular 37. The registration of foreign exchange return investment has been completed.

Failure to make adequate contributions to various employee benefits plans as required by PRC regulations may subject us to penalties, which could adversely affect our financial condition and results of operations.

Companies operating in China are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of employees up to a maximum amount specified by the local government from time to time at locations where they operate their businesses. The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations.

Currently, we are making contributions to the employee benefit plans based on the minimum standards, rather than based on the actual employee salaries, which may be considered as underpayment under PRC labor-related laws. In addition, we did not make contributions to the plans for our probationary employees. We may be required to make up the contributions for the social insurance as well as to pay a daily late fee at the rate of 0.05% of the outstanding amount of the social insurance fee from the due date, and if we still fail to pay the premiums within the prescribed time limit, we may be subject to a fine of 1-3 times the outstanding amount. In addition, we may be required to make up the contributions for the housing funds, and if we still fail to deposit the funds within the prescribed time limit, we may be subject to the enforcement by the people’s court. As of the date of the filing of this annual report with the SEC, we have not received any notice of warning or been subject to any administrative penalties or other disciplinary actions from the relevant governmental authorities for our shortfall in social insurance and housing fund contribution. However, if we are ordered to make up the underpayment, or subject to late fees or fines or other sanctions in relation to the underpaid employee benefits, our financial condition and results of operations may be adversely affected.

We do not have business insurance coverage. Any future business liability, disruption or litigation we experience might divert management focus from our business and could significantly impact our financial results.

Availability of business insurance products and coverage in China is limited, and many such products are expensive in relation to the coverage offered. We do not currently maintain business liability, disruption or litigation insurance coverage for our operations in China. As our Smart Campus Services business grows, lack of insurance may expose us more directly to losses arising from campus service disruptions, food-service incidents, student or merchant claims, data incidents, operational failures, litigation or natural disasters. Any uninsured loss could result in substantial costs, divert management attention and adversely affect our results of operations and financial condition.

We may require additional financing in the future and our operations could be curtailed if we are unable to obtain required additional financing when needed.

In addition to the proceeds raised in our initial public offering, we may need to obtain additional debt or equity financing to fund future capital expenditures. In December 2025, we entered into a purchase agreement pursuant to which we may sell up to $100.0 million of our ordinary shares from time to time over the 36-month period beginning December 17, 2025, subject to the terms of such purchase agreement. In connection with the execution of such purchase agreement, we issued 1,200,000 ordinary shares as a commitment fee. Sales by us under such purchase agreement could result in substantial dilution to the interests of other holders of our ordinary shares. In April 2026, we also completed an equity financing to issue and sell a total of 1.73 million ordinary shares at the price of $1.00 per share for gross proceeds of approximately $1.73 million. While we do not anticipate seeking additional financing in the immediate future, any additional equity financing may result in dilution to the holders of our outstanding ordinary shares. Additional debt financing may impose affirmative and negative covenants that restrict our freedom to operate our business. We cannot guarantee that we will be able to obtain additional financing on terms that are acceptable to us, or any financing at all, and the failure to obtain sufficient financing could adversely affect our business operations.

Risks Related to Intellectual Property

If we are not able to adequately protect our proprietary intellectual property and information, and protect against third party claims that we are infringing on their intellectual property rights, our results of operations could be adversely affected.

The value of our business depends in part on our ability to protect our intellectual property and information, including our patents, copyrights, trademarks, trade secrets, and rights under agreements with third parties, in China and around the world, as well as our customer, employee, and customer data. Third parties may try to challenge our ownership of our intellectual property in China and around the world. In addition, intellectual property rights and protections may be insufficient to protect material intellectual property rights. Further, our business is subject to the risk of third parties counterfeiting our products or infringing on our intellectual property rights. The steps we have taken may not prevent unauthorized use of our intellectual property. We may need to resort to litigation to protect our intellectual property rights, which could result in substantial costs and diversion of resources. If we fail to protect our proprietary intellectual property and information, including with respect to any successful challenge to our ownership of intellectual property or material infringements of our intellectual property, this failure could have a significant adverse effect on our business, financial condition, and results of operations.

If we are unable to adequately protect our intellectual property rights, or if we are accused of infringing on the intellectual property rights of others, our competitive position could be harmed or we could be required to incur significant expenses to enforce or defend our rights.

Our commercial success will depend in part on our success in obtaining and maintaining patents, copyrights, trademarks, trade secrets and other intellectual property rights in China and elsewhere and protecting our proprietary technology. If we do not adequately protect our intellectual property and proprietary technology, competitors may be able to use our technologies or the goodwill we have acquired in the marketplace and erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.

We cannot provide any assurances that any of our patents have, or that any of our future pending patent applications that mature into issued patents will include, claims with a scope sufficient to protect our products, any additional features we develop for our products or any new products. Other parties may have developed technologies that may be related or competitive to our system, may have filed or may file patent applications and may have received or may receive patents that overlap or conflict with our patent applications, either by claiming the same methods or devices or by claiming subject matter that could dominate our patent position. Our patent position may involve complex legal and factual questions, and, therefore, the scope, validity and enforceability of any patent claims that we may obtain cannot be predicted with certainty. Patents, if issued, may be challenged, deemed unenforceable, invalidated or circumvented. Proceedings challenging our patents could result in either loss of the patent or denial of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application. In addition, such proceedings may be costly. Thus, any patents that we may own may not provide any protection against competitors. Furthermore, an adverse decision in an interference proceeding can result in a third party receiving the patent right sought by us, which in turn could affect our ability to commercialize our products.

Though an issued patent is presumed valid and enforceable, its issuance is not conclusive as to its validity or its enforceability and it may not provide us with adequate proprietary protection or competitive advantages against competitors with similar products. Competitors could purchase our products and attempt to replicate some or all of the competitive advantages we derive from our development efforts, willfully infringe our intellectual property rights, design around our patents, or develop and obtain patent protection for more effective technologies, designs or methods. We may be unable to prevent the unauthorized disclosure or use of our technical knowledge or trade secrets by consultants, suppliers, vendors, former employees and current employees.

Our ability to enforce our patent rights depends on our ability to detect infringement. It may be difficult to detect infringers who do not advertise the components that are used in their products. Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor’s or potential competitor’s product. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded if we were to prevail may not be commercially meaningful.

In addition, proceedings to enforce or defend our patents could put our patents at risk of being invalidated, held unenforceable or interpreted narrowly. Such proceedings could also provoke third parties to assert claims against us, including that some or all of the claims in one or more of our patents are invalid or otherwise unenforceable. If any of our patents covering our products are invalidated or found unenforceable, or if a court found that valid, enforceable patents held by third parties covered one or more of our products, our competitive position could be harmed or we could be required to incur significant expenses to enforce or defend our rights.

The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that:

We rely, in part, upon unpatented trade secrets, unpatented know-how and continuing technological innovation to develop and maintain our competitive position. Further, our trade secrets could otherwise become known or be independently discovered by our competitors.

Litigation or other proceedings or third-party claims of intellectual property infringement could necessitate significant time and financial resources, potentially hindering our product sales or impacting our stock price.

Our commercial success will depend in part on not infringing the patents or copyrights, or otherwise violating the other proprietary rights, of others. Significant litigation regarding patent rights and copyright rights occur in our industry. Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our products. We do not always conduct independent reviews of patents issued to third parties. In addition, patent applications in China and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived, so there may be applications of others now pending or recently revived patents of which we are unaware. These applications may later result in issued patents, or the revival of previously abandoned patents, that will prevent, limit or otherwise interfere with our ability to make, use or sell our products. Third parties may, in the future, assert claims that we are employing their proprietary technology without authorization, including claims from competitors or from non-practicing entities that have no relevant product revenue and against whom our own patent portfolio may have no deterrent effect. As we continue to commercialize our products in their current or updated forms, launch new products and enter new markets, we expect competitors may claim that one or more of our products infringe their intellectual property rights as part of business strategies designed to impede our successful commercialization and entry into new markets. The large number of patents, the rapid rate of new patent applications and issuances, the complexities of the technology involved, and the uncertainty of litigation may increase the risk of business resources and management’s attention being diverted to patent litigation. We have, and we may in the future, receive letters or other threats or claims from third parties inviting us to take licenses under, or alleging that we infringe, their patents.

Moreover, we may become party to future adversarial proceedings regarding our patent portfolio or the patents of third parties. Patents may be subjected to opposition, post-grant review or comparable proceedings lodged in various foreign, both national and regional, patent offices. The legal threshold for initiating litigation or contested proceedings may be low, so that even lawsuits or proceedings with a low probability of success might be initiated. Litigation and contested proceedings can also be expensive and time-consuming, and our adversaries in these proceedings may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we can. We may also occasionally use these proceedings to challenge the patent rights of others. We cannot be certain that any particular challenge will be successful in limiting or eliminating the challenged patent rights of the third party.

Any lawsuits resulting from such allegations could subject us to significant liability for damages and invalidate our proprietary rights. Any potential intellectual property litigation also could force us to do one or more of the following:

Any litigation or claim against us, even those without merit, may cause us to incur substantial costs, and could place a significant strain on our financial resources, divert the attention of management from our core business and harm our reputation. If we are found to infringe the intellectual property rights of third parties, we could be required to pay substantial damages (which may be increased up to three times of awarded damages) and/or substantial royalties and could be prevented from selling our products unless we obtain a license or are able to redesign our products to avoid infringement. Any such license may not be available on reasonable terms, if at all, and there can be no assurance that we would be able to redesign our products in a way that would not infringe the intellectual property rights of others. We could encounter delays in product introductions while we attempt to develop alternative methods or products. If we fail to obtain any required licenses or make any necessary changes to our products or technologies, we may have to withdraw existing products from the market or may be unable to commercialize one or more of our products.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed.

We rely on copyright, patent, trade secret, and trademark protection as well as confidentiality agreements with our employees, consultants and third parties, and we may in the future rely on additional intellectual property protection, to protect our confidential and proprietary information. In addition to contractual measures, we try to protect the confidential nature of our proprietary information using commonly accepted physical and technological security measures. Such measures may not, for example, in the case of misappropriation of a trade secret by an employee or third party with authorized access, provide adequate protection for our proprietary information. Our security measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully. Unauthorized parties may also attempt to copy or reverse engineer certain aspects of our products that we consider proprietary. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time-consuming, and the outcome is unpredictable. Even though we use commonly accepted security measures, trade secret violations are often a matter of state law, and the criteria for protection of trade secrets can vary among different jurisdictions. In addition, trade secrets may be independently developed by others in a manner that could prevent legal recourse by us. If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, our business and competitive position could be harmed.

Third parties may assert ownership or commercial rights to inventions we develop, which could have a material adverse effect on our business.

Third parties may in the future make claims challenging the inventorship or ownership of our intellectual property. Any infringement claims or lawsuits, even if not meritorious, could be expensive and time consuming to defend, divert management’s attention and resources, require us to redesign our products and services, if feasible, require us to pay royalties or enter into licensing agreements in order to obtain the right to use necessary technologies, and/or may materially disrupt the conduct of our business.

In addition, we may face claims by third parties that our agreements with employees, contractors or third parties obligating them to assign intellectual property to us are ineffective or in conflict with prior or competing contractual obligations of assignment, which could result in ownership disputes regarding intellectual property we have developed or will develop and interfere with our ability to capture the commercial value of such intellectual property. Litigation may be necessary to resolve an ownership dispute, and if we are not successful, we may be precluded from using certain intellectual property or may lose our exclusive rights in that intellectual property. Either outcome could harm our business and competitive position.

Third parties may assert that our employees or contractors have wrongfully used or disclosed confidential information or misappropriated trade secrets, which could result in litigation.

We may employ individuals who previously worked with other companies, including our competitors or potential competitors. Although we try to ensure that our employees and contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees or contractors have inadvertently or otherwise used or disclosed intellectual property or personal data, including trade secrets or other proprietary information, of a former employer or other third party. Litigation may be necessary to defend against these claims. If we fail in defending any such claims or settling those claims, in addition to paying monetary damages or a settlement payment, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Our computer systems and operations may be vulnerable to security breaches, which could adversely affect our business.

We believe the safety of our computer network and our secure transmission of information over the internet will be essential to our operations and our services. Our network and our computer infrastructure are potentially vulnerable to physical breaches or to the introduction of computer viruses, abuse of use and similar disruptive problems and security breaches that could cause loss (both economic and otherwise), interruptions, delays or loss of services to our users. It is possible that advances in computer capabilities or new technologies could result in a compromise or breach of the technology we use to protect user transaction data. A party that is able to circumvent our security systems could misappropriate proprietary information, cause interruptions in our operations or utilize our network without authorization. Security breaches also could damage our reputation and expose us to a risk of loss, litigation and possible liability. We cannot guarantee you that our security measures will prevent security breaches.

Risks Related to our Ordinary Shares

If we fail to implement and maintain an effective system of internal control, we may be unable to accurately report our operating results, meet our reporting obligations or prevent fraud.

Prior to our initial public offering, we were a private company with limited accounting personnel and other resources with which to address internal controls and procedures. Following our initial public offering, we became subject to U.S. public company reporting obligations, including requirements to maintain disclosure controls and procedures and internal control over financial reporting. Because we are an emerging growth company, our independent registered public accounting firm is not required to provide an attestation report on our internal control over financial reporting for this annual report.

In the course of auditing our consolidated financial statements as of and for the years ended March 31, 2026 and 2025, we and our independent registered public accounting firm identified one material weakness in our internal control over financial reporting as well as other control deficiencies. The material weakness identified relates to our lack of sufficient financial reporting and accounting personnel with appropriate knowledge of the U.S. GAAP and SEC reporting requirements to properly address complex U.S. GAAP accounting issues and to prepare and review consolidated financial statements and related disclosures to fulfill U.S. GAAP and SEC financial reporting requirements. We plan to continue remediation measures, including strengthening financial reporting personnel and outside advisor support, enhancing U.S. GAAP accounting policies and procedures, improving documentation of significant accounting judgments, and providing additional training for finance staff.

In addition, our transition toward Smart Campus Services, AI application products, international education initiatives and related-party channel arrangements may require additional controls over contract review, revenue recognition, principal-versus-agent and gross-versus-net judgments, Smart Campus settlement cycles, collectability, related-party approvals, foreign subsidiary reporting and significant accounting estimates. If these controls are not designed and operated effectively, the risk of material misstatement or delayed reporting could increase.

The implementation of these or other measures may not fully remediate the material weakness or may not prevent future material weaknesses or control deficiencies. Our failure to correct material weaknesses, or our failure to identify and address any other material weaknesses or control deficiencies, could result in inaccuracies in our financial statements, impair our ability to comply with financial reporting requirements and related regulatory filings on a timely basis, reduce investor confidence, adversely affect the trading price of our ordinary shares and expose us to regulatory, litigation or delisting risks.

Upon the closing of our initial public offering, we became a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002 will require that we include a report of management’s assessment on our internal control over financial reporting in our second required annual report after completion of our initial public offering. In addition, once we cease to be an “emerging growth company” as such term is defined under the JOBS Act, 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 public company reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, we may identify and have previously identified other weaknesses and deficiencies in our internal control over financial reporting. In addition, if we continue to fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. Generally, if we continue to fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our consolidated financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, and harm our results of operations. 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.

An active trading market for our ordinary shares may never develop or be sustained, which may impair the value of your shares and your ability to sell your shares at the time you wish to sell them.

An active trading market for our ordinary shares may never develop or, if developed, may not be sustained. The lack of an active trading market may impair the value of your shares and your ability to sell your shares at the time you wish to sell them. An inactive trading market may also impair our ability to raise capital by selling our ordinary shares and entering into strategic partnerships or acquiring other complementary products, technologies or businesses by using our ordinary shares as consideration. In addition, if we fail to satisfy exchange listing standards, we could be delisted, which would have a negative effect on the price of our ordinary shares.

We expect that the price of our ordinary shares will fluctuate substantially. The market price of our ordinary shares is likely to be highly volatile and may fluctuate substantially due to many factors, including:

In recent years, the stock markets generally have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors may significantly affect the market price of our ordinary shares, regardless of our actual operating performance.

In addition, in the past, class action litigation has often been instituted against companies whose securities have experienced periods of volatility in market price. Securities litigation brought against us following volatility in our stock price, regardless of the merit or ultimate results of such litigation, could result in substantial costs, which would hurt our financial condition and operating results and divert management’s attention and resources from our business.

If we fail to meet applicable listing requirements, Nasdaq may delist our ordinary shares from trading, in which case the liquidity and market price of our ordinary shares could decline.

We cannot assure you that we will be able to meet the continued listing standards of Nasdaq in the future. For example, legislative or other regulatory action in the United States could result in listing standards or other requirements that, if we cannot meet, may result in delisting and adversely affect our liquidity or the trading price of our shares that are listed or traded in the United States. If we fail to comply with the applicable listing standards and Nasdaq delists our ordinary shares, we and our shareholders could face significant material adverse consequences, including:

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our ordinary shares are listed on Nasdaq, such securities will be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulations in each state in which we offer our securities.

A significant portion of our total outstanding shares are restricted from resale but may be sold into the market in the near future. This could cause the market price of our ordinary shares to drop significantly, even if our business is doing well.

Sales of a substantial number of our ordinary shares in the public market could occur at any time. These sales, or the perception in the market that these sales may occur, could result in a decrease in the market price of our ordinary shares. 3,750,000 ordinary shares were issued in our initial public offering. The ordinary shares sold in our initial public offering may be resold in the public market immediately without restriction, unless purchased by our affiliates or existing shareholders. As of July 20, 2026, 31,031,794 shares are currently restricted as a result of securities laws, but are able to be sold subject to securities laws. If held by one of our affiliates, the resale of those securities will be subject to volume limitations under Rule 144 of the Securities Act.

Our directors, officers and principal shareholders have significant voting power and may take actions that may not be in the best interests of our other shareholders.

As of July 20, 2026, our directors, officers and principal shareholders holding 5% or more of our ordinary shares, collectively, control approximately 55.75% of our outstanding ordinary shares. As a result, these shareholders, if they act together, will be able to control our management and affairs and most matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions.

In addition, on April 7, 2024, KWest Holdings Ltd, our largest shareholder, and its shareholder, Yan Fu, our director and chief executive officer and chief executive officer of Jiangxi Ruanyun, entered into a Concerted Action Agreement with five other major shareholders holding more than 5% of our shares or voting rights, namely ZC Investment Limited, Four Ocean Holding Ltd, Chao Xian Holding Limited, LBH Hope Investment Limited, and Five Mountains Holding Ltd and their respective shareholders, Cong Zhao, our chief technology officer, Ji’an Zhan, Bin Wang, Baihua Li, and Zijun Chen. The Concerted Action Agreement stipulates that each of the above major shareholders shall adopt the same intention and maintain full unanimity when exercising the right to make proposals to shareholders’ meetings and exercising the right to vote at shareholders’ meetings in respect of major matters relating to the Company’s operation and development. Article 1.2 of the Concerted Action Agreement further requires that, during its term, if any of the parties to the Concerted Action Agreement become members of the Company’s board of directors during its term, they must vote unanimously on all matters requiring approval of the board of directors, not just those related to annual meeting proposals. Moreover, in the event that full unanimity cannot be reached, the decision to act in concert shall be made in accordance with the majority shareholding, whereby the opinion supported by the majority of voting rights among the parties to the Concerted Action Agreement will be binding on all parties to the Concerted Action Agreement, and the other parties to the Concerted Action Agreement must act in accordance with this majority decision. The above persons acting in concert collectively hold 54.85% of our shares as of July 20, 2026, giving them substantial influence over the Company’s strategic direction and operational decisions.

We are eligible to utilize the “controlled company” exemptions under the Nasdaq corporate governance rules as more than 50% of our voting power is held by an individual, a group or another company, specifically the group of shareholders that have executed the Concerted Action Agreement and that collectively hold 54.85% of our shares as of July 20, 2026. However, we currently do not intend to utilize the “controlled company” exemptions under the Nasdaq corporate governance rules.

The interests of these shareholders may not be the same as or may even conflict with your interests. For example, these shareholders could attempt to delay or prevent a change in control of us, even if such change in control would benefit our other shareholders, which could deprive our shareholders of an opportunity to receive a premium for their ordinary shares as part of a sale of us or our assets, and might affect the prevailing market price of our ordinary shares due to investors’ perceptions that conflicts of interest may exist or arise. As a result, this concentration of ownership may not be in the best interests of our other shareholders.

As a “controlled company” within the meaning of the Nasdaq listing rules, we may elect to follow certain exemptions from certain corporate governance requirements that could adversely affect our public shareholders.

As of July 20, 2026, the group of shareholders that have executed the Concerted Action Agreement and that collectively hold 54.85% of our shares will hold more than a majority of the voting power of our outstanding ordinary shares. Under the Nasdaq listing rules, a company of which more than 50% of the voting power is held by an individual, group, or another company is a “controlled company” and is permitted to phase in its compliance with the independent committee requirements. Although we do not intend to rely on the “controlled company” exemptions under the Nasdaq listing rules even if we are deemed a “controlled company,” we could elect to rely on these exemptions in the future. If we were to elect to rely on the “controlled company” exemptions, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, if we elected to rely on such exemptions in the future, during the period we remain a controlled company and during any transition period following a time when we are no longer a “controlled company”, you would not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

We expect to incur significant additional costs as a result of being a public company, which may adversely affect our business, financial condition and results of operations.

We expect to incur costs associated with corporate governance requirements that are applicable to us as a public company, including rules and regulations of the SEC, under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the Exchange Act, as well as the rules of the Nasdaq. These rules and regulations have significantly increased our accounting, legal and financial compliance costs and make some activities more time-consuming. These rules and regulations may also make it more expensive for us to obtain, and maintain if obtained, directors’ and officers’ liability insurance. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. Accordingly, increases in costs incurred as a result of becoming a publicly traded company may adversely affect our business, financial condition and results of operations. As of the date of the filing of this annual report, we have not obtained directors’ and officers’ liability insurance, and there can be no assurance that we will be able to obtain such coverage on commercially reasonable terms, or at all.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

Upon the closing of our initial public offering, we became subject to the periodic reporting requirements of the Exchange Act. Our disclosure controls and procedures are designed to provide reasonable assurance that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.

We have never declared or paid cash dividends. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. As a result, capital appreciation, if any, of our ordinary shares will be your sole source of gain for the foreseeable future.

Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price or trading volume to decline.

The trading market of our ordinary shares will be influenced to some extent by the research and reports that industry or financial analysts publish about us and our business. We do not control these analysts. As a newly public company, we may be slow to attract research coverage and the analysts who publish information about our ordinary shares will have had relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our stock price, our stock price could decline. If one or more of these analysts cease coverage of us or fail to publish reports covering us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline and result in the loss of all or a part of your investment in us.

Economic substance legislation of the Cayman Islands may impact us and our operations.

The Cayman Islands, together with several other non-European Union jurisdictions, have recently introduced legislation aimed at addressing concerns raised by the Council of the European Union as to offshore structures engaged in certain geographically mobile activities which attract profits without real economic activity in the jurisdiction in which they are incorporated. With effect from January 1, 2019, the Cayman Islands Government enacted the International Tax Co-operation (Economic Substance) Act (as amended from time to time), or the Substance Act, introducing certain economic substance requirements for “relevant entities” which are engaged in “relevant activities” and receives “relevant income”. To support the Substance Act, the Cayman Islands Tax Information Authority, or TIA, has issued Guidance in relation to Economic Substance for Geographically Mobile Activities in relation to the Substance Act in accordance with section 5 of the Substance Act, or the Guidance Notes, as amended from time to time. The term “relevant entity” is defined under the Substance Act to mean:

but does not include:

For Cayman Islands law purposes, the Company falls within the definition of a “relevant entity”, as per subparagraph (a) above.

There are nine “relevant activities” under the Substance Act, which are banking business, distribution and service center business, financing and leasing business, fund management business, headquarters business, holding company business, insurance business, intellectual property business, or shipping business but does not include investment fund business. Based on the current structuring of the Company, under the Substance Act, the Company can be classified as conducting “holding company business”. Holding company business means the business of being a “pure equity holding company”. Pure equity holding company means a company that only holds equity participation in other entities and only earns dividends and capital gains. A relevant entity (such as the Company) that is only carrying on a relevant activity that is the business of a pure equity holding company is subject to a reduced economic substance test under the Substance Act. The Company will satisfy this reduced economic substance requirement if the relevant entity (i.e. the Company) confirms that (a) it has complied with all applicable filing requirements under the Companies Act (as amended) in the Cayman Islands and (b) it has adequate human resources and adequate premises in the Cayman Islands for holding and managing equity participation in other entities. The Guidance Notes have interpreted how limb (b) of the reduced economic substance test as applicable to legal entities that conduct holding company business is satisfied. The Guidance Notes makes it clear that a pure equity holding company maintaining a registered office in the Cayman Islands and engaging its registered office service provider in accordance with the Companies Act (as amended) in the Cayman Islands may be able to satisfy these reduced economic substance requirements in the Cayman Islands, depending on the level and complexity of activity required to operate its business. Every company in the Cayman Islands, including the Company, will have a relationship with its registered office and as such is able to satisfy limb (b) in addition to complying with the statutory obligations under the Companies Act (as amended) of the Cayman Islands as required by limb (a). In consequence, the Company would, at present, satisfy the reduced economic substance test as required under the Substance Act.

Since the Company is considered to be a legal entity and conducting a relevant activity it will need to provide information to the TIA. The Company will need to notify the TIA annually of: (a) whether or not it is carrying on a relevant activity, (b) if it is carrying on a relevant activity, whether or not it is a relevant entity, (c) in the case of an entity that is carrying on a relevant activity and is tax resident in a jurisdiction outside the Cayman Islands and if so, shall provide appropriate evidence to support the information provided in the notification as may be reasonably required by the TIA. A relevant entity that is carrying on a relevant activity and receiving relevant income is required to satisfy the substance test must prepare and submit to the TIA an economic substance return annually for the purpose of the TIA’s determination whether the substance test has been satisfied in relation to that relevant activity. Compliance with the reduced substance requirements is unlikely to be onerous for the Company and at present subject to any change in the Substance Act or the Guidance Notes, the Company is complying with the reduced economic substance test.

Although it is presently anticipated that the Substance Act will have little material impact on us and our operations, as the legislation is new and remains subject to further clarification and interpretation, it is not currently possible to ascertain the precise impact of these legislative changes on us and our operations.

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

We are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association (as amended), the Companies Act (as amended) of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take actions against our directors, actions by our minority shareholders and the fiduciary duties 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 and Wales, 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 duties of our directors under Cayman Islands law may be narrower in scope or less developed than they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands have 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 (other than register of mortgages and charges, memorandum and articles of association and special resolutions) or to obtain copies of lists of shareholders of these companies. However, a list of the names of the current directors and alternate directors (if applicable) are made available by the Registrar of Companies of the Cayman Islands for inspection by any person on payment of a fee. Any person, by making payment of the fee specified in the Companies Act, is also entitled to the rights to inspect the particulars set out in Schedule 1A of the Companies Act and the inspection shall be subject to such conditions as the Registrar of Companies may impose. Our directors have discretion under our memorandum and articles of association (as amended) 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 unless required by the Companies Act (as amended) of the Cayman Islands or other applicable law or authorized by the directors or by ordinary resolution. 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. We have elected to follow Cayman Islands home country practice in lieu of the requirements under (a) Nasdaq Rule 5635(d) to seek shareholder approval in connection with certain transactions involving the sale, issuance and potential issuance of our ordinary shares (or securities convertible into or exercisable for our ordinary shares) at a price less than certain referenced prices, if such shares equal 20% or more of our ordinary shares or voting power outstanding before the issuance, and (b) Nasdaq Rule 5635(c) to seek shareholder approval in connection with the establishment or material amendment of a stock option or purchase plan or arrangement pursuant to which stock may be acquired by officers, directors, employees or consultants. Our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.

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 our management, members of our 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 substantially all of our assets are located outside of the United States. A significant part of our current operations is conducted in China. In addition, most 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 an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from requirements applicable to other public companies that are not emerging growth companies, including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 for so long as we remain an emerging growth company. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important.

The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We do not plan to “opt out” of such exemptions afforded to an emerging growth company. As a result of this election, our financial statements may not be comparable to those of companies that comply with public company effective dates.

We qualify as a foreign private issuer and, as a result, we will not be subject to U.S. proxy rules and will be subject to Exchange Act reporting obligations that permit less detailed and less frequent reporting than that of a U.S. domestic public company.

We report under the Exchange Act as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; and (ii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K upon the occurrence of specified significant events. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers also are exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information. As a result of the above, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers.

If we lose our status as a foreign private issuer, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the cost we would incur as a foreign private issuer. As a result, we expect that a loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time-consuming and costly. We also expect that if we were required to comply with the rules and regulations applicable to U.S. domestic issuers, it would make it more difficult and expensive for us to obtain and maintain directors’ and officers’ liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These rules and regulations could also make it more difficult for us to attract and retain qualified members of our board of directors.

As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with corporate governance listing standards.

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempted from certain provisions of the securities rules and regulations in the United States that are applicable to the United States domestic issuers. In addition, as an exempted company incorporated in the Cayman Islands, we are permitted to adopt our home country law for certain governance matters. Certain corporate governance practices in our home country, the Cayman Islands, may differ significantly from corporate governance listing standards. For example, we are not required to have a majority of the board consisting of independent directors, and not required to have a compensation committee or a nominating and corporate governance committee consisting entirely of independent directors. We have elected to follow Cayman Islands home country practice in lieu of the requirements under (a) Nasdaq Rule 5635(d) to seek shareholder approval in connection with certain transactions involving the sale, issuance and potential issuance of our ordinary shares (or securities convertible into or exercisable for our ordinary shares) at a price less than certain referenced prices, if such shares equal 20% or more of our ordinary shares or voting power outstanding before the issuance, and (b) Nasdaq Rule 5635(c) to seek shareholder approval in connection with the establishment or material amendment of a stock option or purchase plan or arrangement pursuant to which stock may be acquired by officers, directors, employees or consultants. Our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.

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

A non-U.S. corporation will be a PFIC for any taxable year if either (1) at least 75% of its gross income for such year consists of certain types of “passive” income; or (2) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income, or the asset test. Based on our current and expected income and assets, we do not presently expect to be a PFIC for the current taxable year or the foreseeable future. However, no assurance can be given in this regard because the determination of whether we are or will become a PFIC is a fact-intensive inquiry made on an annual basis that depends, in part, upon the composition of our income and assets. In addition, there can be no assurance that the Internal Revenue Service, or IRS, will agree with our conclusion or that the IRS would not successfully challenge our position. Fluctuations in the market price of our ordinary shares may cause us to become a PFIC for the current or subsequent taxable years because the value of our assets for the purpose of the asset test may be determined by reference to the market price of our ordinary shares. The composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets. If we were to be or become a PFIC for any taxable year during which a U.S. Holder holds our ordinary shares, certain adverse U.S. federal income tax consequences could apply to such U.S. Holder. See “Item 10. Additional Information-E. Taxation-Passive Foreign Investment Company Consequences.”

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

We are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter. We would lose our foreign private issuer status if, for example, more than 50% of our ordinary shares are directly or indirectly held by residents of the United States and we fail to meet additional requirements necessary to maintain our foreign private issuer status. If we lose our foreign private issuer status on this date, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq rules. As a U.S. listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other expenses that we will not incur as a foreign private issuer, and accounting, reporting and other expenses in order to maintain a listing on a U.S. securities exchange.

The price of our ordinary shares could be subject to rapid and substantial volatility, and such volatility may make it difficult for prospective investors to assess the rapidly changing value of our ordinary shares.

There have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with recent initial public offerings, especially among those with relatively smaller public floats. As a relatively small-capitalization company with relatively small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume and less liquidity than large-capitalization companies. In particular, our ordinary shares may be subject to rapid and substantial price volatility, low volumes of trades and large spreads in bid and ask prices. Such volatility, including any stock-run up, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our ordinary shares.

In addition, if the trading volumes of our ordinary shares are low, persons buying or selling in relatively small quantities may easily influence prices of our ordinary shares. This low volume of trades could also cause the price of our ordinary shares to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our ordinary shares may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our ordinary shares. As a result of this volatility, investors may experience losses on their investment in our ordinary shares. A decline in the market price of our ordinary shares also could adversely affect our ability to issue additional shares of ordinary shares and our ability to obtain additional financing in the future. No assurance can be given that an active market in our ordinary shares will develop or be sustained, and thus holders of our ordinary shares may be unable to readily sell the shares they hold or may not be able to sell their shares at all.

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

Reorganization

On March 11, 2021, Ruanyun was incorporated with limited liability under the laws of the Cayman Islands. On December 24, 2020, Soft Cloud Technology Limited, or Soft Cloud, was established in accordance with the law and regulations of Hong Kong and subsequently became the wholly-owned subsidiary of Ruanyun. Soft Cloud is a holding company and holds all the equity interests of Rollingthunder Technology (Jiangxi) Co., Ltd, or the WFOE, which was established in the PRC on January 19, 2021. Jiangxi Ruanyun Technology Co., Ltd., or Jiangxi Ruanyun, was established on March 27, 2012 under the laws of the PRC. The main operations of Jiangxi Ruanyun include a focus on AI database and testing center development. Jiangxi Ruanyun formed the following subsidiaries subsequent to its establishment:

As a holding company with no material operations of our own, we, Ruanyun, conduct our operations through the VIE and its subsidiaries in China based on the Contractual Arrangements. On April 8, 2021, WFOE entered into a series of contractual arrangements with Jiangxi Ruanyun and its shareholders, which allow Ruanyun to have controlling financial interest in Jiangxi Ruanyun, or the VIE. Under U.S. GAAP, Ruanyun was deemed to be the primary beneficiary of the VIE for accounting purposes and must consolidate the VIE. These contractual arrangements include an Exclusive Equity Interest Purchase Agreement, an Equity Interest Pledge Agreement, Powers of Attorney, an Exclusive Technical Consulting and Service Agreement and Supplementary Agreements to the Exclusive Technical Consulting and Service Agreement, or collectively, the Contractual Arrangements. Ruanyun together with its wholly-owned subsidiary Soft Cloud, and its subsidiary, WFOE and the VIE and its subsidiaries were effectively controlled by the same shareholders before and after the reorganization. Following our IPO, we began implementing an international expansion strategy, including the establishment of a regional headquarters and operating subsidiary in Saudi Arabia and, after fiscal year-end, a global operations company in Malaysia. We currently intend to conduct certain new international activities through these subsidiaries.

Our registered office in the Cayman Islands is located at the offices of WB Corporate Services (Cayman) Ltd., PO Box 2775, Artemis House, 67 Fort Street, Grand Cayman KY1-1111, Cayman Islands. Our principal executive office is located at No. 698 Jing Dong Avenue, ZheJiang University HighTech Campus, Nanchang, Jiangxi, China 330096, telephone no. +86-0791088567739. Our website may be found at http://investors.ruanyun.net. The information on our website is not a part of, and is not incorporated into, this document. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. All of the SEC filings made electronically by Ruanyun are available to the public on the SEC website at www.sec.gov.

Share Consolidation

On October 17, 2022, Ruanyun, with the approval of its board of directors and shareholders, effected a 1-for-2 share consolidation of all of its issued and unissued ordinary shares, or the share consolidation, whereby each two ordinary shares of par value of $0.0001 each were consolidated into one ordinary share of par value of $0.0002 each, following which the share capital of Ruanyun was $1,000,000 divided into 5,000,000,000 shares with a par value of $0.0002 each. Any and all fractional shares were rounded up to the nearest whole share.

Contractual Arrangements

In order to comply with the PRC laws and regulations which prohibit or restrict foreign control of companies involved in provision of value-added telecommunication services and other restricted businesses, we operate a significant part of our business through certain PRC domestic companies. As such, Jiangxi Ruanyun is controlled through the Contractual Arrangements, in lieu of any direct or indirect equity ownership by Ruanyun or any of its subsidiaries, which were signed on April 8, 2021.

Despite the lack of equity ownership, Ruanyun controls the VIE’s financial interest through the Contractual Arrangements. The equity interests of the VIE are legally held by PRC individuals, or the Nominee Shareholders. Through the Contractual Arrangements, the Nominee Shareholders effectively assign all their voting rights underlying their equity interests in the VIE to Ruanyun, and therefore, Ruanyun has the power to direct the activities of the VIE that most significantly impact economic performance. Ruanyun also has the right to receive economic benefits and absorb losses from the VIE. Based on the above, Ruanyun consolidates the accounts of the VIE in accordance with Regulation S-X-3A-02 promulgated by the SEC and Accounting Standards Codification, or ASC, Topic 810-10, Consolidation: Overall.

The significant terms of the Contractual Arrangements are as follows:

Exclusive Equity Interest Purchase Agreement

Pursuant to the Exclusive Equity Interest Purchase Agreement entered into amongst Jiangxi Ruanyun, the Nominee Shareholders and the WFOE, the Nominee Shareholders granted the WFOE or its designated party, an irrevocable and exclusive right to purchase all or part of the equity interests held by the Nominee Shareholders in Jiangxi Ruanyun at its sole discretion, to the extent permitted under the PRC laws, at an amount equal to the minimum consideration permitted under the applicable PRC law and administrative regulations. Any proceeds received by the Nominee Shareholders from the exercise of the options shall be remitted to the WFOE to the extent permitted under PRC laws. In addition, Jiangxi Ruanyun and the Nominee Shareholders have agreed that without prior written consent of the WFOE, they will not create any pledge or encumbrance on their equity interests in the VIE, or transfer or otherwise dispose of their equity interests in Jiangxi Ruanyun. The term of the agreement is ten years and can be extended by another ten years by the WFOE.

Equity Interest Pledge Agreement

Pursuant to the Equity Interest Pledge Agreement entered into amongst the WFOE and the Nominee Shareholders, the Nominee Shareholders pledged all of their equity interests in Jiangxi Ruanyun to the WFOE as collateral to secure their obligations. If the Nominee Shareholders breach their respective contractual obligations under the share pledge agreement, the WFOE, as pledgee, will be entitled to rights, including the right to dispose the pledged equity interests entirely or partially. The Nominee Shareholders agreed not to transfer or otherwise create any encumbrance on their equity interests in Jiangxi Ruanyun without prior consent of the WFOE. The Equity Interest Pledge Agreement will remain effective until all the obligations have been satisfied in full. Ruanyun has completed the registration of the pledge of equity interests in the VIE with the relevant office of Administration for Market Regulation in accordance with the PRC Property Rights Law.

Powers of Attorney

Pursuant to the Powers of Attorney entered into by the Nominee Shareholders, each Nominee Shareholder appointed the WFOE to act on behalf of the Nominee Shareholder as exclusive agent and attorney with respect to all matters concerning the shareholding including, but not limited to, (1) calling and attending shareholders’ meetings of Jiangxi Ruanyun; (2) exercising all the shareholders’ rights, including voting rights; and (3) appointing at its sole discretion a substitute or substitutes to perform any or all of its rights. The powers of attorney remain irrevocable and continuously valid from the date of execution so long as each Nominee Shareholder remains a shareholder of Jiangxi Ruanyun unless the WFOE issues adverse instructions in writing.

Exclusive Technical Consulting and Service Agreement

Pursuant to the Exclusive Technical Consulting and Service Agreement entered between the WFOE and Jiangxi Ruanyun, the WFOE, or its designated entities affiliated with it, has the exclusive right to provide Jiangxi Ruanyun with technical support and business support services in return for fees equal to 100% of the consolidated net profits of Jiangxi Ruanyun. The WFOE has sole discretion in determining the service fee charged under this agreement. Without the WFOE’s prior written consent, Jiangxi Ruanyun shall not, directly or indirectly, obtain the same or similar services as provided under this agreement from any third party, or enter into any similar agreement with any third party. The WFOE will have the exclusive ownership of all intellectual property rights developed by performance of this agreement. This agreement will remain effective until it is terminated at the discretion of the WFOE or upon the transfer of all the shares of Jiangxi Ruanyun to the WFOE and/or a third party designated by the WFOE.

On April 2, 2022, Jiangxi Ruanyun and the WFOE signed the Supplementary Agreement to the Exclusive Technical Consulting and Service Agreement, or the Supplementary Agreement. Pursuant to the Supplementary Agreement, consulting fees can be 100% of Jiangxi Ruanyun’s annual profits, and Jiangxi Ruanyun shall provide the WFOE with a report in relation to such consulting fees within three business days after each year in accordance with the Supplementary Agreement.

On October 18, 2022, Jiangxi Ruanyun and the WFOE signed an additional Supplementary Agreement to the Exclusive Technical Consulting and Service Agreement, or the Second Supplementary Agreement. Pursuant to the Second Supplementary Agreement, the WFOE shall be obligated to provide financial support to Jiangxi Ruanyun to ensure it meets the cash flow requirements in daily operation and/or offsets any losses incurred during its operation.

We believe the Contractual Arrangements are in compliance with the current PRC laws and are legally enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit our ability to enforce the Contractual Arrangements. As a result, we may be unable to consolidate the VIE and its subsidiaries in the consolidated financial statements. Our position of being the primary beneficiary of the VIE and its subsidiaries also depends on the authorization by the shareholders of the VIE to exercise voting rights on all matters requiring shareholders’ approval in the VIE. We believe that the agreements on the authorization to exercise shareholders’ voting power are legally enforceable. In addition, if the legal structure and contractual arrangements with the VIE were found to be in violation of any future PRC laws and regulations, we may be subject to fines or other actions. See “Item 3. Key Information-D. Risk Factors—Risks Related to our Corporate Structure” for further information. We believe the possibility that we will no longer be able to control and consolidate the VIE as a result of the aforementioned risks is remote.

Based on the foregoing Contractual Arrangements, we account for Jiangxi Ruanyun as a VIE. We have the power to direct the activities of Jiangxi Ruanyun and become the primary beneficiary of Jiangxi Ruanyun for accounting purposes through such Contractual Arrangements, which are less effective than direct ownership. Our power to direct the activities of Jiangxi Ruanyun and our position of being the primary beneficiary of Jiangxi Ruanyun for accounting purposes are limited to the conditions that we met for consolidation of Jiangxi Ruanyun under U.S. GAAP. Such conditions include that (i) we have the power to direct the activities that could most significantly affect the economic performance of Jiangxi Ruanyun, and (ii) we are entitled to receive benefits and obligated to absorb losses from Jiangxi Ruanyun that could potentially be significant to Jiangxi Ruanyun. Accordingly, we consolidate the accounts of Jiangxi Ruanyun for the periods presented herein, in accordance with Regulation S-X-3A-02 promulgated by the SEC, and ASC Topic 810-10, Consolidation: Overall. Only if we meet the aforementioned conditions to be the primary beneficiary of Jiangxi Ruanyun under U.S. GAAP, we will consolidate Jiangxi Ruanyun and Jiangxi Ruanyun will be treated as our consolidated affiliated entity for accounting purposes. We believe the Contractual Arrangements are in compliance with the current PRC laws and are legally enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could affect the validity of the Contractual Arrangements or limit our ability to enforce the Contractual Arrangements. Furthermore, the Contractual Arrangements have not been tested in a court of law. As a result, we may be unable to consolidate the VIE and its subsidiaries in the consolidated financial statements. Our position of being the primary beneficiary of the VIE and its subsidiaries also depends on the authorization by the shareholders of the VIE to exercise voting rights on all matters requiring shareholders’ approval in the VIE. As of the date of the filing of this annual report with the SEC, we believe that the agreements on the authorization to exercise shareholders’ voting power are valid and legally enforceable. See “Item 3. Key Information-D. Risk Factors—Risks Related to our Corporate Structure” for further information. We have begun international expansion by establishing a subsidiary in Saudi Arabia during fiscal year 2026 and a subsidiary in Malaysia after fiscal year-end. We currently expect certain new international activities to be conducted through these subsidiaries or related platforms, subject to applicable law, local licensing, contractual arrangements and revenue-recognition analysis.

Initial Public Offering

We completed our initial public offering, or IPO, in April 2025, raising gross proceeds of approximately $15.0 million through the sale of 3,750,000 ordinary shares at a public offering price of $4.00 per share. Our ordinary shares are listed on the Nasdaq Capital Market under the symbol “RYET.”

Since the IPO, we have continued to expand our business and global reach. For example, in May 2025, we launched our AI-powered Chinese language learning platform, HanLink, in Saudi Arabia through a pilot program in cooperation with Education & Skills International School in Riyadh. The pilot involved approximately 500 students and achieved an average homework accuracy rate of 80%, oral proficiency scores averaging 75 out of 100 and daily self-study usage averaging 15 minutes per student. We have also established a regional headquarters in Saudi Arabia and a global operations company in Malaysia. For a description of this and certain other recent developments, see “Item 4. Recent Developments.”

Capital Expenditures and Divestitures

Since the beginning of our fiscal year 2022, we have made principal capital investments in the development of our AI infrastructure, cloud platform, and hardware products, including our SmartExam and SmartHomework devices. Capital expenditures during this period totaled approximately $930,904, funded through a combination of internal cash flows and proceeds from our IPO. These investments were primarily concentrated in our operations in mainland China, with more recent expansion into Saudi Arabia.

We have not completed any material divestitures during the past three fiscal years. However, we continue to evaluate strategic opportunities for collaboration, equity investments, or asset acquisitions in adjacent technology and education sectors. As of the date of the filing of this annual report with the SEC, we have no binding agreements for acquisitions or divestitures.

During fiscal year 2026, we also made a $4.2 million prepayment to a third-party service provider for reserving compute, relating to a custom research and development project training large language models. The project is planned through April 2027, subject to assessments on the outcomes of the research. We believe the training may contribute to our existing range of products.

We are currently investing in the localization and deployment of our HanLink platform in Saudi Arabia and exploring broader expansion across the Gulf Cooperation Council region. Capital expenditures for these initiatives are projected to be approximately $1.0 million. These projects are being financed through internal resources, including the remaining proceeds from our IPO and a recent equity financing completed in April 2026.

Following our IPO, we began pursuing an international expansion strategy, including the establishment of a regional headquarters and operating subsidiary in Saudi Arabia and, after fiscal year-end, a global operations company in Malaysia. Our current strategic objective is to increase the contribution of markets outside China to more than 50% of annual revenue by the end of 2027. This objective is a strategic target only and does not constitute financial guidance. Achievement of this objective will depend on, among other things, customer adoption, execution of international contracts, local regulatory and licensing requirements, partner performance, revenue recognition, collectability, financing availability and management execution.

The international revenue target described above represents a strategic objective and is subject to execution of our international initiatives, customer adoption, regulatory approvals, partner performance, revenue recognition and other factors. There is no assurance that this objective will be achieved on the expected timeline or at all.

B. Business Overview

Overview - What is Ruanyun

We are a data-driven artificial intelligence, or AI, technology company that historically focused on K-12 education in China and, during fiscal year 2026, continued transitioning toward a broader AI-enabled education, campus services and institutional technology platform. Our current narrative is anchored by the shift in revenue mix toward Campus & Education Services, while AI Applications & Enterprise Solutions and International Education & Testing remain strategically important but smaller contributors.

For management and investor communication purposes, we currently view our business through three principal operating categories: Campus & Education Services, International Education & Testing, and AI Applications & Enterprise Solutions. These categories are used for business planning and disclosure discussion purposes only. We continue to manage and report our financial results on a consolidated basis and have not presented separate reportable segments in this annual report.

Campus & Education Services is our largest management operating category and includes both historical school-facing products and services and newer Smart Campus Services, campus operations and student-life services, smart campus infrastructure, educational content, examination and assessment services, and AI vocational training. Smart Campus Services is one initiative within this category and should not be read as identical to the entire Campus & Education Services category. International Education & Testing includes HanLink and related language learning, testing, student recruitment and support services. AI Applications & Enterprise Solutions include Cogni AI, YeeZo and related document intelligence, workflow automation and AI application initiatives.

As of March 31, 2026, our online academic exercise question bank had accumulated more than 10 billion data points generated by approximately 15.15 million students in tests from more than 20,000 schools, and included approximately 18.37 million questions covering 15,398 knowledge points. These data resources and related AI-OCR and assessment capabilities support our historical education technology products and are also relevant to our newer Smart Campus, AI application and international education initiatives.

We have initiated international expansion through Saudi Arabia and Malaysia. We established a regional headquarters and operating subsidiary in Saudi Arabia during fiscal year 2026 and established a global operations company in Malaysia after fiscal year-end. These entities are intended to support market entry, partner relationships, localization, implementation support, student recruitment and support services, testing services and other international education and AI-related initiatives. International activities remain at an early stage and may not generate material revenue on expected timelines or at all. Revenue from international customers, strategic associates or channel partners will be recognized only to the extent the Company has contractual rights to consideration and recognition is appropriate under U.S. GAAP.

We value our proprietary technologies and strong research and development capabilities, which we believe differentiate us from other companies in our industry. As of March 31, 2026, we had an intellectual property portfolio consisting of 12 patents and 34 trademarks filed with the PRC State Intellectual Property Administration, 95 software copyrights registered with the PRC State Copyright Bureau, and 20 domain names.

Strategic Transition and Management Operating Categories

The following summary reflects management’s current operating-category classification of fiscal year 2026 revenue based on the Company’s RMB accounting records reviewed by management. These categories are used for business planning and disclosure discussion purposes only and are not reportable segments under ASC 280 unless and until the Company determines, based on the applicable accounting standards and audited financial information, that separate reportable segments are required.

Campus & Education Services: Smart Campus Services, campus operations and student-life services, smart campus infrastructure, educational content, AI vocational training, and examination and assessment services. Fiscal year 2026 revenue contribution: $6.99 million, representing 93.4% of total revenue, with gross margin of 22.7%.

AI Applications & Enterprise Solutions: Cogni AI, YeeZo, AI-OCR, document intelligence, workflow automation, private or institutional deployment, implementation and support. Fiscal year 2026 revenue contribution: $0.40 million, representing 5.3% of total revenue, with gross margin of 61.9%. 

International Education & Testing: HanLink, Chinese language learning, testing, student recruitment and support services, and related international education initiatives. Fiscal year 2026 revenue contribution:$0.09 million, representing 1.2% of total revenue, with gross margin of 52.5%.

Total fiscal year 2026 revenue: $7.48 million, representing 100.0% of total revenue, with gross margin of 25.2%.

Within Campus & Education Services, the largest fiscal year 2026 product-line contributor was Campus Operations & Student-Life Services, which generated $5.72 million, or 76.4% of total revenue, with gross margin of 17.9%. Other product lines included AI Vocational Training & Talent Development ($0.51 million; 6.8% of total revenue; gross margin of 34.4%), Smart Campus Infrastructure ($0.42 million; 5.6% of total revenue; gross margin of 65.2%), Educational Content & Learning Resources ($0.29 million; 3.9% of total revenue; gross margin of 29.4%) and Examination & Assessment Services ($0.05 million; 0.7% of total revenue; gross margin of 67.9%).

Campus & Education Services

Campus & Education Services includes our historical school-facing products and services and our newer Smart Campus Services business. Smart Campus Services supports campus operations and student-life services, which may include campus food-service management, merchant settlement, dormitory utility services, student-life workflows, vocational development and other institutional support services. During fiscal year 2026, Campus & Education Services became the dominant contributor to revenue, generating $6.99 million, or 93.4% of total revenue, with gross margin of 22.7% based on management’s current operating-category classification.

The growth of this category changed our revenue mix and contributed to a lower consolidated gross margin in fiscal year 2026. Smart Campus Services may have lower gross margins, different working-capital requirements, longer or different settlement cycles and additional licensing, operational, principal-versus-agent, consolidation, collectability and audit considerations compared with our historical software, content and digitalization businesses. The presentation of certain campus operations may depend on whether we control the specified goods or services before transferring to the customer or instead arrange for third parties to provide such goods or services.

AI Applications & Enterprise Solutions

AI Applications & Enterprise Solutions includes Cogni AI, YeeZo and related AI-OCR, document intelligence, workflow automation and AI application initiatives. Cogni AI is designed to support document digitization, recognition, automation and related institutional or enterprise workflow applications. YeeZo is an AI workflow and orchestration platform introduced to support AI-assisted content planning and multi-model content production. These initiatives are at different stages of commercialization and may require customer customization, deployment support, integration, data migration, training, support and ongoing maintenance.

International Education & Testing

International Education & Testing includes HanLink, our AI-powered Chinese language learning platform, and related international education, testing, student recruitment and support services. We have established a Saudi Arabia subsidiary and, after fiscal year-end, a Malaysia subsidiary to support international development, market entry, partner relationships, implementation support and related opportunities. Certain HanLink commercialization activities in Saudi Arabia involve Link Door Smart Company, a strategic associate and related party, and revenue generated by Link Door is not automatically revenue of the Company unless and until recognized by us under applicable agreements and accounting standards.

Our Platform and Services

Consistent with our fiscal year 2026 revenue mix, we describe our current services by management operating category rather than only by historical SmartExam® and SmartHomework® product lines. Our current revenue base is led by Campus & Education Services, while AI Applications & Enterprise Solutions and International Education & Testing support the Formind strategy and may have higher-margin characteristics if successfully commercialized.

SmartExam® and SmartHomework® remain important historical product lines and technology foundations. They support our assessment, content, AI-OCR, learning-data, school-facing relationships and product-development capabilities, but they do not by themselves describe our current revenue mix or strategic direction.

Historical SmartHomework® and SmartExam® Foundation

Our SmartHomework® system historically collected homework data through scanning technology and used that data to support teacher review, student practice and personalized learning resources. These capabilities remain relevant to our AI-OCR, assessment and data-processing foundation, but they are no longer the sole focus of our business model.

Personalized exercise books and related services were part of our historical SmartHomework® offering. Due to PRC education policy changes and changes in market demand, this legacy revenue stream is no longer expected to be the primary driver of our growth.

In addition, our AI learning platform provides teachers and students with online services based on homework and learning data. The system helps teachers identify areas where students may require review and provides students with access to historical study data, personalized online courses and adaptive online practice. We believe these tools can support students in reviewing their learning progress and may improve academic performance, although actual outcomes vary by student, school and implementation. We use learning data to analyze student performance characteristics and recommend learning resources based on individual learning needs.

PRC education policies, including the Opinions on Further Reducing the Burden of Excessive Homework and Off-Campus Tutoring for Students Undergoing Compulsory Education, have affected certain historical SmartHomework® and school-facing service activities. These policy changes are part of the reason we have reduced reliance on certain legacy K-12 revenue streams and shifted toward Smart Campus Services, AI-based digital technology services, vocational and adult learning applications, and international education initiatives.

Academic Proficiency Test

China’s Academic Proficiency Test, or APT, is an official assessment across all subjects taught in school. There are eleven subject assessments which include Chinese, Math, English, Physics, Chemistry, Biology, Political Science, History, Geography, Information Technology and General Technology. APT assessments covering these 11 subjects need to be taken both during the secondary, or middle, and high school periods. The secondary school, or middle school, APT assessments would be included as part of the high school admission process, while the high school APT is a pre-requisite for obtaining one’s high school diploma.

We began providing computer-based APT services for the subject of Biology in 2013 and expanded to all eleven subjects in 2017. Our SmartExam® platform supports APT-related test management, test content, certified test center construction, staff training, on-site management and academic proficiency evaluation services. We provide computer-based educational APT assessment services in China across these subjects.

China’s education ministry promoted local education authorities to adopt computer-based APT to replace traditional paper-based exams gradually. Influenced by the “Opinions on Further Reducing the Burden of Excessive Homework and Off-Campus Tutoring for Students Undergoing Compulsory Education”, high school and college admission decisions will take APT grades and multi-dimensional assessment into consideration. In such, for junior or senior high school students, APT scores are required for higher level education admissions. For senior high school graduates seeking to study overseas, official APT grades are widely accepted by institutions around the world.

Test Preparation

Building on the APT assessment services, we have introduced test-preparation books and adaptive practice applications and began to invest in building smart devices that further enhance students’ learning experience and efficiency. This is how we developed APT practices books for each subject and invented Jiangxi Ruanyun Smart-Headset for English assessments. Students who take any mock test in our online practice application have access to video lessons and will receive personalized study resources based on their test results.

Industry Background

The following market context is relevant primarily to our historical education technology foundation and school-facing relationships in China. It should be read together with the fiscal year 2026 revenue mix discussion above, which reflects a broader business model led by Campus & Education Services and supported by early-stage AI application and international education initiatives.

China’s National People’s Congress enacted the PRC Educational Law which sets forth provisions relating to the fundamental education system in China. This includes the school system of preschool, elementary school, middle, or secondary, school and high school (namely, K-12), with grades from one through twelve being compulsory education. The law also stipulates a system of educational certificates, which requires taking a series of tests and passing certain exams. The pinnacle of such exams is the National College Entrance Exam, or NCEE, also known as Gao Kao.

Today, China has the largest K-12 education system in the world. According to Ministry of Education of the People’s Republic of China, as of December 2023, China’s K-12 system had over 188 million students, including approximately 108 million primary school students (grades 1 through grade 7), 52 million secondary school, or middle school, students (grades 7 through 9) and 28 million high school students (grades 10 through 12) across over 211,200 schools.

Over the past 40 years, particularly since China resumed the NCEE in 1977, China’s K-12 educational system has been shouldering the responsibility of both providing public education to the masses as well as training and selecting a large number of qualified professionals. In July of each year, millions of Chinese high school graduates take the NCEE. Their NCEE scores will determine whether the students have the option to continue with their more advanced studies in colleges and universities, or enter into the general workforce, most occupations of which do not have college degree requirements and therefore inadvertently sustain a lesser social and economic status. Hence, the term “one test for life” describes Gao Kao as an existential turning point in millions of young people’s lives each year in China.

From 2019 to 2023, according to the National Bureau of Statistics of China as of December 2023, China’s national financial education expenditure was over 4% of GDP, which represented a higher level of such spending among developing and developed countries alike. Since 2017, China’s educational spending has exceeded RMB 4 trillion (approximately $59 billion) for seven consecutive years. Since 2016, the Education Ministry of China has made various attempts to reform China’s educational system, aiming to rid the “one test for life” reality and to evaluate students’ performance and potentials on a more comprehensive basis. This is a reform of tremendous undertaking and is expected to be carried out to each provincial and municipal level within China. However, in its early stage, China’s well-intended and sometimes heavy-handed approach to such a reform has not been without adverse consequences, which we believe mainly stem from the following issues:

Consequently, competition for educational resources and emphasis on standardized testing remain significant in China, while students and parents increasingly use online tools for learning and academic planning. Central and local governments and education-sector participants continue to seek technology-enabled solutions. Industry and population data cited in this section should be read as historical market context and not as a forecast of our addressable market or future revenue. We seek to expand our AI educational technology services to schools, students and education authorities in China, subject to customer adoption, regulatory requirements and market conditions.

According to Beijing Kaijuan Information Technology Co., Ltd.’s “2023 Book Retail Market Annual Report”, as of December 2023, the retail market size of books in China for 2023 was RMB 91.2 billion (approximately $12.6 billion). With the recent digital transformation ongoing in China’s school system and advanced AI technologies, personalized homework books are introduced to help students study efficiently. Personalized homework books can be in both digital and paper-based format. Such books contain custom-made learning and practice content for each student by classification according to students’ current learning situations and learning abilities. They can be delivered to students online or published and delivered in paper by demand. We believe this new form of publishing is becoming one of the most sought-after models with an approximate RMB 80 billion (approximately $12 billion) in market size in 2022 according to internal Company estimates and calculations. Moreover, we believe the market size is expected to change with the fluctuations in the number of students enrolled in China and the changes in China’s educational policies.

In addition, the computer-based APT is also setting a new trend for the test-preparation market. As the assessment is changing from paper-based to computerized format, the test preparation solutions and smart devices markets are experiencing rapid growth. The computer-based assessment is currently being implemented in one province (Jiangxi) as the pilot project for the China Education Department. According to iResearch, as of August 2024, the educational smart hardware for personal consumption market is expected to reach nearly RMB 100 billion (approximately $13.69 billion) in 2027.

Reorganization

On March 11, 2021, Ruanyun was incorporated with limited liability under the laws of the Cayman Islands. On December 24, 2020, Soft Cloud Technology Limited, or Soft Cloud, was established in accordance with the law and regulations of Hong Kong and subsequently became the wholly owned subsidiary of Ruanyun. Soft Cloud is a holding company and holds all the equity interests of Rollingthunder Technology (Jiangxi) Co., Ltd, or the WFOE, which was established in the PRC on January 19, 2021. Jiangxi Ruanyun Technology Co., Ltd., or Jiangxi Ruanyun, or the VIE, was established on March 27, 2012 under the laws of the PRC. The main operations of Jiangxi Ruanyun include a focus on AI database and testing center development. Jiangxi Ruanyun formed the following subsidiaries subsequent to its establishment:

As a holding company with no material operations of our own, we, Ruanyun, conduct our operations through the VIE and its subsidiaries in China based on the Contractual Arrangements. On April 8, 2021, WFOE entered into a series of contractual arrangements with Jiangxi Ruanyun and its shareholders, which allow Ruanyun to have controlling financial interest in Jiangxi Ruanyun, or the VIE. Subject to the conditions that we have satisfied for consolidation of Jiangxi Ruanyun under U.S. GAAP. Such conditions include that (i) we have the power to direct the activities that could most significantly affect the economic performance of Jiangxi Ruanyun, and (ii) we are entitled to receive benefits and obligated to absorb losses from Jiangxi Ruanyun that could potentially be significant to Jiangxi Ruanyun. Under U.S. GAAP, Ruanyun was deemed to be the primary beneficiary of the VIE for accounting purposes and must consolidate the VIE. These Contractual Arrangements include an Exclusive Equity Interest Purchase Agreement, an Equity Interest Pledge Agreement, Powers of Attorney, an Exclusive Technical Consulting and Service Agreement and Supplementary Agreements to the Exclusive Technical Consulting and Service Agreement, or collectively, the Contractual Arrangements. Ruanyun, together with its wholly-owned subsidiary Soft Cloud, and its subsidiary, WFOE and the VIE and its subsidiaries, were effectively controlled by the same shareholders before and after the reorganization. The consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying consolidated financial statements of the Company.

Following our IPO, we began implementing an international expansion strategy, including the establishment of a regional headquarters and operating subsidiary in Saudi Arabia and, after fiscal year-end, a global operations company in Malaysia. We currently intend to conduct certain new international activities through these subsidiaries.

Share Consolidation

On October 17, 2022, Ruanyun, with the approval of its board of directors and shareholders, effected a 1-for-2 share consolidation of all of its issued and unissued ordinary shares, or the share consolidation, whereby each two ordinary shares of par value of $0.0001 each were consolidated into one ordinary share of par value of $0.0002 each, following which the share capital of Ruanyun was $1,000,000 divided into 5,000,000,000 shares with a par value of $0.0002 each. Any and all fractional shares were rounded up to the nearest whole share. As of July 20, 2026, 37,280,004 ordinary shares of Ruanyun are issued and outstanding. Unless otherwise stated in this annual report, we have retroactively restated all share and per share data for all of the periods presented in this annual report to reflect the share consolidation.

Contractual Arrangements

In order to comply with the PRC laws and regulations which prohibit or restrict foreign control of companies involved in provision of value-added telecommunication services and other restricted businesses, we operate a significant part of our business through certain PRC domestic companies. As such, Jiangxi Ruanyun is controlled through the Contractual Arrangements, in lieu of any direct or indirect equity ownership by Ruanyun or any of its subsidiaries, which were signed on April 8, 2021.

Despite the lack of equity ownership, Ruanyun controls the VIE’s financial interest through the Contractual Arrangements. The equity interests of the VIE are legally held by PRC individuals, or the Nominee Shareholders. The Nominee Shareholders who individually hold more than 5% equity interests of the VIE, including Yan Fu, Cong Zhao, Baihua Li, Bin Wang, and Shanghai Yuyuan Asset Management Partnership (Limited Partnership), collectively own 71.78% of the VIE. Through the Contractual Arrangements, the Nominee Shareholders effectively assign all their voting rights underlying their equity interests in the VIE to Ruanyun, and therefore, Ruanyun has the power to direct the activities of the VIE that most significantly impact economic performance. Ruanyun also has the right to receive economic benefits and the obligation to absorb losses from the VIE that potentially could be significant to the VIE. Based on the above, Ruanyun consolidates the accounts of the VIE in accordance with Regulation S-X-3A-02 promulgated by the SEC and Accounting Standards Codification, or ASC, Topic 810-10, Consolidation: Overall.

The significant terms of the Contractual Arrangements are as follows:

Exclusive Equity Interest Purchase Agreement

Pursuant to the Exclusive Equity Interest Purchase Agreement entered into amongst Jiangxi Ruanyun, the Nominee Shareholders and the WFOE, the Nominee Shareholders granted the WFOE or its designated party, an irrevocable and exclusive right to purchase all or part of the equity interests held by the Nominee Shareholders in Jiangxi Ruanyun at its sole discretion, to the extent permitted under the PRC laws, at an amount equal to the minimum consideration permitted under the applicable PRC law and administrative regulations. Any proceeds received by the Nominee Shareholders from the exercise of the options shall be remitted to the WFOE to the extent permitted under PRC laws. In addition, Jiangxi Ruanyun and the Nominee Shareholders have agreed that without prior written consent of the WFOE, they will not create any pledge or encumbrance on their equity interests in the VIE, or transfer or otherwise dispose of their equity interests in Jiangxi Ruanyun. The term of the agreement is ten years and can be extended by another ten years by the WFOE.

Equity Interest Pledge Agreement

Pursuant to the Equity Interest Pledge Agreement entered into amongst the WFOE and the Nominee Shareholders, the Nominee Shareholders pledged all of their equity interests in Jiangxi Ruanyun to the WFOE as collateral to secure their obligations. If the Nominee Shareholders breach their respective contractual obligations under the share pledge agreement, the WFOE, as pledgee, will be entitled to rights, including the right to dispose the pledged equity interests entirely or partially. The Nominee Shareholders agreed not to transfer or otherwise create any encumbrance on their equity interests in Jiangxi Ruanyun without prior consent of the WFOE. The Equity Interest Pledge Agreement will remain effective until all the obligations have been satisfied in full. Ruanyun has completed the registration of the pledge of equity interests in the VIE with the relevant office of Administration for Market Regulation in accordance with the PRC Property Rights Law.

Powers of Attorney

Pursuant to the Powers of Attorney entered into by the Nominee Shareholders, each Nominee Shareholder appointed the WFOE to act on behalf of the Nominee Shareholder as exclusive agent and attorney with respect to all matters concerning the shareholding including, but not limited to, (1) calling and attending shareholders’ meetings of Jiangxi Ruanyun; (2) exercising all the shareholders’ rights, including voting rights; and (3) appointing at its sole discretion a substitute or substitutes to perform any or all of its rights. The powers of attorney remain irrevocable and continuously valid from the date of execution so long as each Nominee Shareholder remains a shareholder of Jiangxi Ruanyun unless the WFOE issues adverse instructions in writing.

Exclusive Technical Consulting and Service Agreement

Pursuant to the Exclusive Technical Consulting and Service Agreement entered between the WFOE and Jiangxi Ruanyun, the WFOE, or its designated entities affiliated with it, has the exclusive right to provide Jiangxi Ruanyun with technical support and business support services in return for fees equal to 100% of the consolidated net profits of Jiangxi Ruanyun. The WFOE has sole discretion in determining the service fee charged under this agreement. Without the WFOE’s prior written consent, Jiangxi Ruanyun shall not, directly or indirectly, obtain the same or similar services as provided under this agreement from any third party, or enter into any similar agreement with any third party. The WFOE will have the exclusive ownership of all intellectual property rights developed by performance of this agreement. This agreement will remain effective until it is terminated at the discretion of the WFOE or upon the transfer of all the shares of Jiangxi Ruanyun to the WFOE and/or a third party designated by the WFOE.

On April 2, 2022, Jiangxi Ruanyun and the WFOE signed the Supplementary Agreement to the Exclusive Technical Consulting and Service Agreement, or the Supplementary Agreement. Pursuant to the Supplementary Agreement, consulting fees can be 100% of Jiangxi Ruanyun’s annual profits, and Jiangxi Ruanyun shall provide the WFOE with a report in relation to such consulting fees within three business days after each year in accordance with the Supplementary Agreement.

On October 18, 2022, Jiangxi Ruanyun and the WFOE signed an additional Supplementary Agreement to the Exclusive Technical Consulting and Service Agreement, or the Second Supplementary Agreement. Pursuant to the Second Supplementary Agreement, the WFOE shall be obligated to provide financial support to Jiangxi Ruanyun to ensure it meets the cash flow requirements in daily operation and/or offsets any losses incurred during its operation.

Based on the foregoing Contractual Arrangements, we account for Jiangxi Ruanyun as a VIE. We have the power to direct the activities of Jiangxi Ruanyun and become the primary beneficiary of Jiangxi Ruanyun for accounting purposes through such Contractual Arrangements, which are less effective than direct ownership. Our power to direct the activities of Jiangxi Ruanyun and our position of being the primary beneficiary of Jiangxi Ruanyun for accounting purposes are limited to the conditions that we met for consolidation of Jiangxi Ruanyun under U.S. GAAP. Such conditions include that (i) we have the power to direct the activities that could most significantly affect the economic performance of Jiangxi Ruanyun, and (ii) we are entitled to receive benefits and obligated to absorb losses from Jiangxi Ruanyun that could potentially be significant to Jiangxi Ruanyun. Accordingly, we consolidate the accounts of Jiangxi Ruanyun for the periods presented herein, in accordance with Regulation S-X-3A-02 promulgated by the SEC, and ASC Topic 810-10, Consolidation: Overall. Only if we meet the aforementioned conditions to be the primary beneficiary of Jiangxi Ruanyun under U.S. GAAP, we will consolidate Jiangxi Ruanyun and Jiangxi Ruanyun will be treated as our consolidated affiliated entity for accounting purposes.

We do not hold any equity interests in the VIE, we control the VIE through the Contractual Arrangements, the Contractual Arrangement may not be effective in providing control over the VIE, and which may involve inherent risks and uncertainties including but not limited to: i) different interpretations and changes of the PRC laws and regulations or any future actions of the PRC government in this regard that could disallow the VIE structure, which may cause the Contractual Arrangements to be invalid and unenforceable, and as a result, we may not be able to consolidate the VIE nor be entitled to treat the VIE’s assets, revenue and results of operations as our assets, which would likely result in a material change in our operations and the value of our ordinary shares may depreciate

significantly or become worthless; ii) there are uncertainties regarding the status of the rights of Ruanyun with respect to its Contractual Arrangements amongst Jiangxi Ruanyun, the Nominee Shareholders and the WFOE. We may face difficulties in enforcing the Contractual Arrangements due to changes in relevant laws and regulations, legal uncertainties and jurisdictional limits, as all of our Contractual Arrangements are governed by the PRC laws and any disputes arising from the Contractual Arrangements will be solved through arbitration in the PRC, the relevant PRC authorities and PRC courts may have broad discretion in dealing with the validity and enforceability of the Contractual Arrangements and the disputes thereunder, potentially requiring us to restructure our current ownership structure or operations, imposing conditions or requirements with which we or the VIE may not be able to comply, imposing fines or penalties on us or the VIE, which may severely affect our business operations and financial conditions, and may significantly impair the rights of the holders of our ordinary shares; iii) if we had equity interests in the VIE, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of the VIE, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level; however, we rely on the performance of the VIE and its shareholders to fulfill their obligations under the Contractual Arrangements for us to exert control over and act as the primary beneficiary of the VIE; although Jiangxi Ruanyun does not have termination rights pursuant to the Contractual Arrangements, it could terminate, or refuse to perform its obligations under, the Contractual Arrangements, and the shareholders of the VIE may not act in the best interests of our Company and may also refuse to perform their obligations under the Contractual Arrangements, which would result in the distractions of our management team and incur substantial cost for us to seek for any possible legal remedies to enforce the Contractual Arrangements, and our business operations, financial conditions and future prospects may be materially and adversely affected, and the value of your ordinary shares may significantly decline or become worthless.

See “Item 3. Key Information-D. Risk Factors-Risks Related to our Corporate Structure-We conduct our business through Jiangxi Ruanyun by means of Contractual Arrangements. If these contractual arrangements do not comply with applicable laws and regulations, we will be subject to severe penalties and our business will be adversely affected. In addition, changes in such PRC laws and regulations will materially and adversely affect our business.”

Furthermore, we have been advised by our PRC counsel, Hui Ye Law Firm, based on their understanding of the current PRC laws, rules and regulations, that (i) the structure for operating our business in China (including our corporate structure and Contractual Arrangements between the WFOE, Jiangxi Ruanyun and its shareholders) will not result in any violation of PRC laws or regulations currently in effect; and (ii) the Contractual Arrangements among the WFOE and Jiangxi Ruanyun and its shareholders governed by PRC law are valid, binding and enforceable, and will not result in any violation of PRC laws or regulations currently in effect. However, if any of the VIE and its subsidiaries or their ownership structure or the Contractual Arrangements are determined to be in violation of any existing or future PRC laws, rules or regulations, or if any of our PRC subsidiary and the VIE and its subsidiaries fail to obtain or maintain any of the required governmental permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including:

The imposition of any penalties would severely disrupt our ability to conduct business and have a material adverse effect on our financial condition, results of operations and prospects, and the value of your Class A ordinary shares may depreciate significantly or become worthless. See “Item 3. Key Information-D. Risk Factors-Risks Related to our Corporate Structure-We conduct our business through Jiangxi Ruanyun by means of Contractual Arrangements. If these contractual arrangements do not comply with applicable laws and regulations, we will be subject to severe penalties and our business will be adversely affected. In addition, changes in such PRC laws and regulations will materially and adversely affect our business.”

How Cash Is Transferred Through our Organization

Under the Contractual Arrangements, cash is transferred among the Company, Soft Cloud, our WFOE, and the VIE, in the following manners: (i) dividends or other distributions may be paid by Rollingthunder Jiangxi, or our WFOE, to the Company through Soft Cloud Technology Limited, or Soft Cloud; (ii) Ruanyun Edai Technology Inc., or Ruanyun (the Cayman Islands holding company) transfers proceeds raised through our initial public offering or any other offering we conduct at this level to our wholly owned subsidiary, Soft Cloud Technology Limited, or Soft Cloud, which in turn transfers such proceeds down to its wholly owned subsidiary Rollingthunder Jiangxi, or the WFOE, in the form of capital contributions or shareholder loans, as the case may be, which in turn transfers such proceeds in the form of loans to the VIE pursuant to the Contractual Arrangements for the purpose of conducting business operations; and (iii) funds may be paid by Jiangxi Ruanyun, to our WFOE, as service fees according to the Contractual Arrangements.

In August 2021, Jiangxi Ruanyun paid Rollingthunder Jiangxi a loan of RMB 3,000 (approximately $467) for Rollingthunder Jiangxi to pay bank fees. As of the date of the filing of this annual report with the SEC, this has not been repaid. Other than this, as of the date of the filing of this annual report with the SEC, there were no cash flows among the Company, Soft Cloud, Rollingthunder Jiangxi, or our WFOE, and Jiangxi Ruanyun, or the VIE. As of the date of the filing of this annual report with the SEC, no dividends or distributions have been made to the respective shareholders of such entities.

For the foreseeable future, the VIE intends to keep any future earnings to re-invest in and finance the expansion of our business. As a result, we do not expect to pay any cash dividends in the near future.

We currently do not maintain any cash management policies that dictate the purpose, amount and procedure of cash transfers among the Company, Soft Cloud, our WFOE, the VIE, or investors. Rather, the funds can be transferred in accordance with applicable PRC laws and regulations.

Compliance issues regarding the transfer of foreign exchange between China’s overseas and China

There are no foreign exchange controls or foreign exchange regulations under the currently applicable laws of the Cayman Islands and Hong Kong restricting the Company’s ability to transfer cash between entities, across borders and to U.S. investors.

PRC laws regulate the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. In the fourth quarter of 2016, the People’s Bank of China and SAFE have implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments. Changes in laws and regulations may continue to strengthen capital regulations and the VIE dividends and other distributions may be subject to tightened regulation requirements in the future. The PRC laws also impose regulations on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits. Furthermore, if our subsidiary in the PRC incurs debt on its own in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments.

Under our current corporate structure, to fund any cash and financing requirements we may have, the Company may rely on payments from the VIE under the Contractual Arrangements, and the distribution of dividends to Soft Cloud from WFOE, Rollingthunder Technology (Jiangxi) Co., Ltd. Certain payments from the VIE to WFOE are subject to PRC taxes, including VAT. According to the Contractual Arrangements, WFOE is entitled to 100% of the VIE’s yearly profit by providing exclusive technical consulting services to the VIE. The VIE shall pay the corresponding amount according to the agreement for a period of 10 years from April 8, 2021. Current PRC regulations permit our PRC subsidiary to pay dividends to its shareholders only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. Therefore, WFOE can distribute the income obtained under the Contractual Arrangements to Soft Cloud in the form of dividends, with Soft Cloud in turn distributing such revenues to Ruanyun in the form of dividends.

The Cayman Companies Act (as amended) (the Companies Act) permits dividend distributions, subject to the provisions of the Company’s memorandum and articles of association (as amended), and the payment of distributions or dividends to members may be made out of the share premium account provided that the Company is able to pay its debts as they fall due in the ordinary course of business immediately following the date on which the distribution or dividend is proposed to be paid. With the exception of the foregoing, there are no statutory provisions relating to the payment of dividends or distributions. Based upon English case law, which is regarded as persuasive in the Cayman Islands, dividends may be paid only out of profits. The distributions or dividends of the Company could be distributed to all shareholders respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors or investors in other countries or regions.

Tax liability of VIE’s profit distribution to overseas (non-China) companies

Income of the WFOE comes from the exclusive technical consulting service fee paid by the VIE. According to the “VAT Law of the People’s Republic of China”, the WFOE shall pay 6% value-added tax of this income.

Current PRC regulations permit our PRC subsidiary to pay dividends to the Company only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. For more information on the regulation of dividend policy and dividend tax, please refer to “Dividend Policy.”

Also, according to the current effective laws in Cayman Islands, dividends from its companies are exempt from tax.

However, in accordance with the laws and regulations of the United States, U.S. investors shall pay taxes and fees on dividend income according to regulations after receiving the dividends paid in accordance with the law.

Recent Developments

C. Organizational Structure

The charts and table below summarize our corporate legal structure and identify our subsidiaries, the VIE and its subsidiaries as of the date of the filing of this annual report.

*This subsidiary was formed after March 31, 2026 and is not reflected in the consolidated financial statements included elsewhere in this annual report.

The registered capital of Jiangxi Huizuoye Technology Co., Ltd. will be fully paid by 2030. The registered capital of Rollingthunder Technology (Jiangxi) Co., Ltd will be fully paid by 2050. The registered capital of Jiangxi Ruanyun Zhitou Education Consulting Co., Ltd. will be fully paid by 2029. The equity interests of Jiangxi Alphabet Technology Co., Ltd. were fully paid by 2023. The registered capital of the VIE, Jiangxi Ruanyun, was fully paid by 2019.

Soft Cloud Smart Technology Company was incorporated in Saudi Arabia during fiscal year 2026. Formind Global Holdings Sdn. Bhd. was incorporated in Malaysia after the 2026 fiscal year-end and is not reflected in the consolidated financial statements included elsewhere in this annual report. The establishment of these entities does not change the VIE structure in China.

D. Property, Plant and Equipment

Our principal executive offices are located in Nanchang and Shenzhen, China. We also own one real property in Nanchang City, China with a space that totals 118.09 square meters, or approximately 1,271.11 square feet, which we have ownership of until September 24, 2079. Information on our material leased properties as of the date of the filing of this annual report with the SEC is summarized below:

Our principal executive office is located at No. 698 Jing Dong Avenue, ZheJiang University HighTech Campus, Nanchang, Jiangxi, China 330096, where we lease combined approximately 3047.43 square meters, or approximately 32,800 square feet, of office space. We lease this space under a lease agreement that terminates on December 31, 2026. We also have an office space free use certificate for office premises located at Room 1907, Guangyin Building, No. 38, Futian South Road, Huanggang Port, Futian District, Shenzhen, China 518000, covering approximately 39.76 square meters, or approximately 428 square feet. The period of use for this space terminates on December 31, 2026. We also have office space free use certificates for certain office premises located in Nanchang and Jiujiang, China. The period of use for these spaces terminates on December 31, 2026.

We are entitled to certain lease rights under the lease agreements for each of our lease offices, and our leased facilities are leased from independent third parties. We believe that our existing facilities are generally adequate to meet our current needs and our needs for the immediate future, but we expect to seek additional space as needed to accommodate future growth. We expect that suitable additional space will be available on commercially reasonable terms to accommodate any expansion of our operations.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

A. Operating results

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes appearing elsewhere in this annual report.

This discussion and other parts of this annual report may contain forward-looking statements based upon current beliefs, plans, and expectations that involve risks, uncertainties, and assumptions. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this annual report.

You should carefully read “Item 3. Key Information-D. Risk Factors” of this annual report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

As a holding company with no material operations of our own, we (Ruanyun) primarily conduct our operations through contractual arrangements with our variable interest entity (VIE) and its subsidiaries in China. We have begun international expansion by establishing a subsidiary in Saudi Arabia during fiscal year 2026 and a subsidiary in Malaysia after fiscal year-end. We currently expect certain new international activities to be conducted through these subsidiaries or related platforms, subject to applicable law, local licensing, contractual arrangements and revenue-recognition analysis.

Overview

We are a data-driven artificial intelligence, or AI, technology company historically focused on K-12 education in China. During the fiscal year ended March 31, 2026, we continued a strategic transition toward a broader AI-enabled education, campus services and institutional technology platform. This transition builds on our historical SmartExam® and SmartHomework® solutions, educational content, assessment, AI-OCR, learning data and school-facing service relationships, while adding newer initiatives in Smart Campus Services, international education and language learning, and AI application products.

Our fiscal year 2026 operating results reflect this transition. Revenue increased from approximately $6.69 million in fiscal year 2025 to $7.48 million in fiscal year 2026, representing an increase of approximately 11.9%. The increase was primarily due to the launch and growth of Smart Campus Services and related campus operations and student-life services. At the same time, gross margin decreased from 56.7% in fiscal year 2025 to 25.2% in fiscal year 2026 because a larger portion of revenue was derived from lower-margin campus operations and service activities, while higher-margin AI application and international education initiatives remained smaller contributors during fiscal year 2026.

Following completion of our initial public offering in April 2025, we expanded the personnel, systems and professional support required to operate as a public company, while shifting our revenue mix toward Smart Campus Services and related campus operations and reducing reliance on certain historical K-12 activities. We also began building the organizational and commercial foundation for newer AI application and international initiatives. As a result, fiscal year 2026 included higher public-company, professional, marketing and organizational costs, as well as a materially different revenue, margin and working-capital profile. Certain transition-related expenditures may not recur at the same level; however, public-company compliance costs and the costs of supporting our expanded operations are expected to continue. 

For management and investor communication purposes, we currently view our business through three principal operating categories: Campus & Education Services, International Education & Testing, and AI Applications & Enterprise Solutions. These categories are used for business planning purposes only. We continue to manage and report our financial results on a consolidated basis and have not presented separate reportable segments in this annual report.

Campus & Education Services includes Smart Campus Services, campus operations and student-life services, smart campus infrastructure, educational content, examination and assessment services, and AI vocational training. International Education & Testing includes HanLink and related language learning, testing, student recruitment and support services. AI Applications & Enterprise Solutions includes Cogni AI, YeeZo and related document intelligence, workflow automation and AI application initiatives.

Our historical SmartExam® and SmartHomework® product lines remain foundational to our business and technology base, but they no longer fully describe our current revenue mix or strategic direction. Accordingly, this discussion should be read in light of our transition toward the broader Formind operating model described above.

Since our inception, our online academic exercise question bank has accumulated over 10 billion test data points from approximately 15.15 million students across more than 20,000 schools. Through continuous collection and analysis of students’ online learning data, our AI algorithms are constantly expanding and upgrading, achieving an assessment accuracy rate of 97% (based on our internal calculations only), thereby allowing us to provide students with tailored and effective learning strategies.

Revenue for the fiscal year ended March 31, 2026 was $7.48 million, compared to $6.69 million for the fiscal year ended March 31, 2025, representing an increase of approximately 11.9%. The Company incurred net losses of $7.91 million and $0.52 million for the fiscal years ended March 31, 2026 and 2025, respectively. The increase in revenue was primarily attributable to Campus & Education Services, including Smart Campus Services and related campus operations and student-life services. The change in net loss was primarily affected by the shift in revenue mix, the resulting decrease in gross margin, public company costs, and continuing investment in strategic initiatives.

Campus & Education Services, which includes Smart Campus Services and related campus operations and student-life services, contributed substantially to fiscal year 2026 revenue, representing $6.99 million, or 93.4% of total revenue based on management’s current operating-category classification. Within that category, Campus Operations & Student-Life Services generated $5.72 million, or 76.4% of total revenue, with gross margin of 17.9%. These businesses may have different margins, cash collection, operating, regulatory and accounting characteristics from our historical SmartExam® and SmartHomework® businesses. In particular, certain campus operations involve merchant, student-life, utility, catering, accommodation or service-management arrangements that require evaluation of revenue recognition, principal-versus-agent presentation, consolidation and collectability under U.S. GAAP. Our AI and international initiatives remain at different stages of commercialization and may not generate material revenue on expected timelines or at all.

Key Factors Affecting Our Results of Operations

Our operating results are primarily affected by the following company-specific factors:

Revenue Mix and Campus & Education Services

Our revenue performance for the fiscal year ended March 31, 2026, was materially driven by the rapid expansion of our Campus & Education Services management operating category, which generated $6.99 million, or 93.4% of our total revenue, with a gross margin of 22.7%. This category’s growth was primarily led by our Campus Operations & Student-Life Services, which generated $5.72 million, or 76.4% of total revenue. Because this business line involves high-volume, resource-intensive operations such as campus facilities management and retail services, it delivered a lower gross margin of 17.9%, which was lower than many of our historical software, content, license and AI-OCR based services. Moving forward, ongoing changes in the relative mix among Campus & Education Services, historical SmartExam® and SmartHomework® businesses, AI applications and international education initiatives will continue to affect our revenue growth and gross margin.

Revenue Recognition and Gross-versus-Net Presentation

Our results may be affected by how certain campus operations and support services are evaluated under U.S. GAAP, including whether the Company acts as principal or agent, whether amounts collected or remitted on behalf of merchants, operators or service providers are included in revenue, and the timing of revenue recognition. Any changes in the accounting presentation of these arrangements could materially affect reported revenue, cost of revenue, gross profit and gross margin without necessarily changing the underlying operating activity.

Development and Commercialization of AI Application Initiatives

Cogni AI, YeeZo and related AI application initiatives are intended to extend our AI-OCR, document intelligence, workflow automation and content production capabilities into institutional and enterprise use cases. These initiatives may have higher-margin characteristics than campus operations, but they are at different stages of commercialization and may require customer customization, deployment support, integration, data migration and ongoing service resources.

International Expansion and Partner Arrangements

Our international expansion depends on our ability to localize products, develop relationships with customers and partners, manage related-party and third-party channel arrangements, comply with local laws and licensing requirements, collect payments, provide implementation and support services, and convert pilots, memoranda of understanding and strategic discussions into revenue-generating agreements. Revenue generated by a strategic associate, channel partner or other third party is not automatically revenue of the Company unless the Company is entitled to fees under applicable agreements and revenue recognition is appropriate under U.S. GAAP. International initiatives may also require additional capital, management attention, local staffing, compliance infrastructure and professional support.

Legacy Education Policy Environment

Changes in the PRC education regulatory, procurement and customer environment, which were described as risks in prior periods, continued to affect certain legacy K-12 publishing, digitalization and school-facing activities during fiscal year 2026. In response, the Company reduced reliance on selected legacy revenue streams and focused on Smart Campus Services, vocational and adult-learning applications, AI-enabled products and international education and technology initiatives. This shift contributed to changes in revenue mix, gross margin, operating expense and working-capital requirements. The Company believes its newer business models and products may provide additional growth opportunities, but many remain at an early stage and there can be no assurance regarding the timing or level of future revenue. 

Ability to Manage Operating Expenses, Working Capital and Public Company Costs

Our operating results are affected by our ability to manage cost of revenue, operating expenses, public company costs, accounts receivable collection, supplier payments, bank financing and the cash requirements associated with domestic and international growth initiatives. Smart Campus Services and related campus operations may have different working-capital requirements, supplier or merchant settlement cycles, payment timing and collectability risks from our historical businesses. Public company costs and the costs of implementing and supporting new AI and international initiatives may also affect our results.

Our ability to integrate technology into products and services is a factor affecting our revenue and financial performance. We have developed technologies including OCR, data mining and data analytics and integrate them into our products and services. We expect to continue investing in technology development and product upgrades, although such investments may not result in expected revenue or profitability.

Key Financial Performance Indicators

Our key financial performance indicators, including our revenue, gross profit and gross margin, and operating expenses, are discussed in the following paragraphs.

Revenue

Historically, the vast majority of our revenue was derived from SmartExam® and SmartHomework® product lines. During fiscal year 2026, our revenue mix changed materially as Smart Campus Services and related campus operations and student-life services became a significant contributor to total revenue.

Revenue for fiscal year 2026 was weighted toward the second half of the year. This concentration reflected the timing of project delivery, customer acceptance and invoicing, together with the launch and ramp of Smart Campus Services beginning in September 2025. Because Smart Campus Services operated for only part of fiscal year 2026, management does not currently expect the same degree of first-half/second-half concentration to represent a structural feature of the business going forward. Revenue timing may nevertheless continue to vary between periods based on contract milestones, acceptance procedures, school calendars, customer budgets and invoicing cycles. 

The following table presents revenue by management operating category for fiscal year 2026 based on management’s current classification.

Concurrently, certain revenue balances for the fiscal year 2025 have been reclassified to conform to the current period’s presentation. These reclassifications were made to reflect recent organizational realignments in our product lines and management operating category presentation, enabling consistent comparative analysis across periods. These reclassifications had no impact on previously reported consolidated total revenues and net income.

Campus & Education Services: This category emerged as our primary operational driver, generating revenue of $6.99 million and accounting for 93.4% of total consolidated revenue for the fiscal year 2026. Reflecting the labor- and service-intensive nature of high-volume campus facilities management and retail operations, the category delivered a gross margin of 22.7%.

AI Applications & Enterprise Solutions: This category generated revenue of $0.40 million, representing 5.3% of our total revenue mix. Driven by our proprietary technology layers and software integrations, the category maintained a high-margin profile, delivering a gross margin of 61.9%.

International Education & Testing: This newly expanded business line contributed revenue of $0.09 million, representing 1.2% of total revenue. As an early-stage business line, it achieved a strong gross margin of 52.5%

Total revenue for fiscal year 2026 was $7.48 million, with gross margin of 25.2%.

Management monitors financial performance across our primary operating categories and underlying product offerings. For the fiscal year ended March 31, 2026, the Campus Operations & Student-Life Services product line generated $5.72 million, representing 76.4% of the total revenue and served as the primary driver behind both our shifting revenue mix and the concurrent compression of our consolidated gross margins. Our higher-margin operating categories, specifically AI Applications & Enterprise Solutions and International Education & Testing, constituted a smaller proportion of our total revenue mix during the fiscal year of 2026. Consequently, the stronger profitability profile of these technology lines was insufficient to mitigate the margin-dilutive impact stemming from the expansion of our lower-margin campus service operations.

The following table presents revenue structured under the Company’s current product-line framework. To conform to this current period’s presentation, relevant product-line revenue balances for the fiscal year ended March 31, 2025, have been retrospectively reclassified into these updated categories. This presentation reflects the operational realities and product mix of the business as executed during the fiscal year ended March 31, 2026. Accordingly, these historical metrics should be evaluated in conjunction with the updated management operating category disclosures and analytical commentary provided above.

A significant portion of our revenue is currently generated by our consolidated variable interest entity (VIE) and its subsidiaries. We expect this structure to continue to account for the majority of our revenue for the foreseeable future.

We continue to generate revenue from our historical SmartExam® and SmartHomework® product lines, while also generating revenue from Smart Campus Services, AI application initiatives and international education initiatives.

The legacy SmartHomework® and SmartExam® product lines, which previously served as our primary financial reporting categories, have been retrospectively reclassified into our current product-line framework to maintain historical comparability. Certain legacy operational streams under these categories, including physical platform development, personalized printed exercise books, and digitization services, have become less indicative of our current business mix as we continue to scale our core Campus Operations & Student-Life Services, AI-OCR-based digital technology solutions, advanced AI application initiatives, and international education programs.

Cost of Revenue

Our cost of revenue primarily consists of direct expenditures incurred in the delivery of our products and services, including the cost of materials, hardware equipment and procurement costs for integrated platform development projects, payroll and employee compensation, depreciation of operational equipment, amortization of capitalized software development costs, direct campus operations and fulfillment costs, supplier and vendor settlement fees, and other directly attributable administrative expenses. For the fiscal year ended March 31, 2026, cost of revenue increased to $5.60 million from $2.89 million for the fiscal year ended March 31, 2025, representing a 93.5% increase. This increase was primarily driven by an expansion in our Campus Operations & Student-Life Services, which constituted a significantly larger proportion of our consolidated revenue mix. These campus-based services carry a lower gross margin profile and higher direct infrastructure, material, and operational costs compared to our historical high-margin offerings, such as proprietary software licensing, educational content delivery, and automated AI-OCR digital technology services.

Gross Margin

We utilize gross margin to evaluate the operational profitability of our product and service offerings. Our gross profit margins are subject to fluctuations driven by a variety of factors, including our consolidated revenue mix, vendor and merchant settlement arrangements, operational headcount and labor compensation, shifting market demand, commercial pricing strategies, the timing of formal customer project acceptances, and the relative proportion of hardware, software, licensing, and campus services delivered within our contracts. Our gross margin decreased from 56.7% for the fiscal year ended March 31, 2025, to 25.2% for the fiscal year ended March 31, 2026. This contraction was primarily attributable to a significant volume expansion in our Campus Operations & Student-Life Services product line, which carries a structurally lower gross margin profile than our historical software licensing, educational content, and digitization streams. During the fiscal year ended March 31, 2026, our higher-margin offerings, specifically the AI Applications & Enterprise Solutions (operating at a gross margin of 61.9%) and International Education & Testing (operating at a gross margin of 52.5%), contributed positively to our operating results. However, the commercial scale of these newer technology initiatives was not yet sufficient to mitigate the margin-dilutive impact of our expanding campus services revenue mix.

Operating Expenses

Our operating expenses consist of selling expenses, general and administrative expenses, and research and development expenses. Following our IPO, our operating expenses may be affected by public company costs, professional fees, compliance, investor relations, expansion into new jurisdictions, technology development and the commercialization of new products.

The following table presents the components of our operating expenses for the periods indicated, in absolute amounts and as a percentage of total net revenue:

Our selling expenses primarily consist of marketing expenses, sales personnel compensation, and related expenses. For the years ended March 31, 2026 and 2025, these accounted for 52.0% and 26.7% of our total revenue, respectively. Accordingly, selling expenses did not remain at a consistent percentage of revenue during the two periods. Future selling expense will depend on the pace and effectiveness of commercialization, geographic expansion and customer acquisition.

Our general and administrative expenses primarily consist of compensation and related costs for employees engaged in general corporate functions (including accounting, finance, tax, legal and human resources), third-party professional-service fees and other general corporate costs. For the years ended March 31, 2026 and 2025, these expenses accounted for 60.6% and 23.4% of revenue, respectively. The increase in general and administrative expenses as a percentage of revenue in fiscal year 2026 primarily reflected higher legal, audit, accounting advisory, compliance, investor-relations, personnel and corporate-overhead costs following the IPO and in connection with the Company's broader strategic transition. We expect to continue incurring public-company reporting, governance, compliance and professional-service costs, although the level of general and administrative expense will depend on staffing, external-service arrangements and the pace of the Company's business development.

Our research and development expenses primarily consist of technology infrastructure expenses and compensation and related costs for employees engaged in application development, category expansion and other system support. For the years ended March 31, 2026 and 2025, these expenses represented 10.4% and 13.9% of revenue, respectively, and therefore declined as a percentage of revenue in fiscal year 2026. Future research and development expense will depend on product scope, commercialization priorities, personnel requirements and international deployment needs.

Other Income (Expenses)

Other income (expenses) consist of (i) government grants, (ii) net interest expense, and (iii) other net (expenses) income.

The following table presents the components of other income (expenses) for the periods indicated, in absolute amounts and as a percentage of total revenue.

Net Interest Expense. Our net interest expense includes interest expense and incidental costs related to bank borrowings, less interest received on bank deposits and interest earned on long-term receivables.

Government Grants. Our government grants consist of subsidies received from the Chinese government.

Other Net Income (Expenses). Other net income (expenses) includes penalty from PRC local government, VAT deductions, less other operating expenses.

Taxation

Cayman Islands

We are incorporated in the Cayman Islands. Under the current law of the Cayman Islands, there is no direct taxation in the Cayman Islands and interest, dividends and gains payable to the Company will be received free of all Cayman Islands taxes. In addition, our payment of dividends to our shareholders, if any, is not subject to withholding tax in the Cayman Islands. The Company is registered as an “exempted company” pursuant to the Companies Act. The Company has obtained an undertaking from the Government of the Cayman Islands to the effect that, for a period of twenty years from September 16, 2021, no law that thereafter is enacted in the Cayman Islands imposing any tax or duty to be levied on profits, income or on gains or appreciation, or any tax in the nature of estate duty or inheritance tax, will apply to any property comprised in or any income arising under the Company, or to the participating shareholders thereof, in respect of any such property or income.

Hong Kong

Our subsidiary incorporated in Hong Kong is subject to the two-tiered profits tax rates regime, which the first 2 million Hong Kong Dollar, or HKD, of profits of the qualifying group entity will be taxed at 8.25% and profits above HKD2 million will be taxed at 16.5%. Under the Hong Kong tax laws, we are exempted from the Hong Kong income tax on our foreign-derived income and there are no withholding taxes in Hong Kong on the remittance of dividends.

PRC

Our subsidiary, the VIE and the VIE’s subsidiaries incorporated in China 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%. For the years ended March 31, 2026 and 2025, Jiangxi Alphabet, Shenzhen Ruanyun, Huizuoye, Ruanyun Zhitou and WFOE were qualified as “Small Enterprise with Low Profit” entities in accordance with PRC tax laws. Jiangxi Yunxiaotong, Gongqing Yunxiao, and Chongqing Huizhi were qualified as “Small Enterprise with Low Profit” entities in accordance with PRC tax laws for the year ended March 31, 2026. These entities received a preferential income tax rate of 5% until December 31, 2027. We are currently subject to value added tax, or VAT, at rates between 6% and 13% on the services and products that we provide, less any deductible VAT we have already paid or borne.

Dividends paid by our wholly foreign-owned subsidiary in China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and receives approval from the relevant tax authority. If our Hong Kong subsidiary satisfies all the requirements under the tax arrangement and receives approval from the relevant tax authority, then the dividends paid to the Hong Kong subsidiary would be subject to withholding tax at the standard rate of 5%.

If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Item 3. Key Information-D. Risk Factors-Risks Related to Doing Business in Jurisdictions in Which We Operate-Under the PRC Enterprise Income Tax Law, or EIT Law, if we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.”

Results of Operations

The following table presents a summary of our consolidated results of operations for the periods indicated, in absolute amounts and as a percentage of total revenue. This information should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this annual report. The results of operations for any period are not necessarily indicative of results that may be expected for any future period.

Comparison of the Years Ended March 31, 2026 and 2025

The following table summarizes our results of operations for the years ended March 31, 2026 and 2025, and provides information regarding dollar and percentage increases or decreases for these years.

Revenue

Our revenue increased from $6.69 million in fiscal year 2025 to $7.48 million in fiscal year 2026, representing an increase of $0.80 million or 11.9%. The increase was primarily attributable to the launch and growth of Smart Campus Services and related campus operations and student-life services during fiscal year 2026, partially offset by decreases or changes in certain historical SmartHomework® revenue streams, including digitalization services, personalized exercise books and other legacy school-facing activities affected by PRC education policy and changes in customer demand. Our fiscal year 2025 revenue has been retrospectively reclassified to conform to the current period’s product-line and management presentation for comparative analysis against these structural changes in our revenue mix.

The following table presents our revenue breakdown for the years indicated, in absolute amounts and as a percentage of total revenue:

Campus and education services:

International education & testing

Revenue from International Education & Testing was $0.09 million for the fiscal year ended March 31, 2026, compared with nil for the fiscal year ended March 31, 2025. The increase primarily reflected the initial launch of the Company's international education, testing and academic-support initiatives. This category remained an early-stage and minor contributor to revenue. Its future growth and margin profile will depend on customer adoption, partner performance, contract execution, regulatory requirements and revenue recognition.

AI application & enterprise solutions

Revenue from AI application & enterprise solutions decreased by $0.45 million, or 53.0%, from $0.84 million in fiscal year 2025 to $0.40 million in fiscal year 2026. The decrease was primarily attributed to a structural transition in our commercial models following the roll-out of our new Cogni AI business line. Under this category, we introduced two distinct commercial frameworks that altered the timing and recognition of our revenue streams: 1) Bundled Transaction Model: Customers acquire full legal ownership of customized hardware devices integrated with a perpetual license to access and operate the Cogni AI software platform. Revenue recognition under this model is heavily dependent on hardware delivery timelines and initial deployment milestones, rather than upfront software licensing fees; 2) Subscription-Based Model: Customers pay a fixed monthly fee to utilize the specialized hardware equipment and gain ongoing access to the hosted Cogni AI software platform.

Management attributes the decrease to the transition in contract structure and revenue-recognition timing from larger upfront software-licensing arrangements toward monthly subscription fees and hardware-linked deployment milestones. There is no assurance that revenue from this category will recover or grow on the anticipated timeline. 

Cost of Revenue. Our cost of revenue increased by $2.71 million, or 93.5%, from $2.89 million for the fiscal year ended March 31, 2025, to $5.60 million for the fiscal year ended March 31, 2026. The significant increase was primarily driven by the growth and commercial roll-out of our new Campus Operations and Student-Life Services business line, which grew to constitute 76.4% of our total consolidated revenue mix in fiscal year 2026. Unlike our historical software licensing, educational content, and legacy digitization services, which carried minimal direct fulfillment costs, the integrated campus management, managed dining halls, and direct retail operations are inherently service and resource intensive. Consequently, this change in revenue mix required substantial increases in direct operating costs, product procurement expenses, campus fulfillment logistics, and third-party supplier settlement fees, thereby driving the year-over-year expansion in our consolidated cost of revenue.

Gross Profit. As a result of the foregoing, our gross profit decreased by $1.91 million, or 50.3%, from $3.79 million for the fiscal year ended March 31, 2025, to $1.88 million for the fiscal year ended March 31, 2026. Our consolidated gross margin decreased from 56.7% for the fiscal year ended March 31, 2025, to 25.2% for the fiscal year ended March 31, 2026. The decrease in gross margin was primarily attributable to a significant shift in our revenue mix, characterized by the rapid expansion of lower-margin operations within our Campus Operations and Student-Life Services product line, which grew to represent 76.4% of total consolidated revenue. Due to the high direct procurement and labor-intensive service costs associated with managing dining halls and campus retail operations, this product line carries a lower gross margin profile than our historical software and educational content lines. Although our next-generation technology offerings, including Cogni AI, HanLink, YeeZo and other AI and international initiatives may have higher-margin characteristics, they were at earlier stages of commercialization during fiscal year 2026 and did not yet materially offset the margin impact of the Campus & Education Services revenue mix.

Operating Expenses. Our operating expenses increased by $4.92 million, or 115.0%, from $4.28 million for the fiscal year ended March 31, 2025, to $9.20 million for the fiscal year ended March 31, 2026. The change in operating expenses was primarily attributable to a substantial increase in public company compliance costs, elevated professional fees (including legal, audit, and advisory services), and administrative expenses directly related to the Company’s transition to a publicly traded entity. The increase was further driven by increases in selling and marketing expenses as we restructured our primary business lines, optimized our sales force, and deployed capital toward initial commercial expansion into overseas markets.

Selling Expenses. Selling expenses increased by $2.11 million, or 118.0%, to $3.89 million in fiscal year 2026 and represented 52.0% of revenue, compared with 26.7% in fiscal year 2025. The increase primarily reflected international marketing and promotional activity, business-development and sales-pipeline costs, and account-management activity associated with Smart Campus Services. Accordingly, selling expense did not remain at a consistent percentage of revenue during the two periods. Future selling expense will depend on the pace and effectiveness of commercialization, geographic expansion and customer acquisition.

General and Administrative Expenses. General and administrative expenses increased by $2.97 million to $4.53 million in fiscal year 2026. The increase included higher legal, audit, accounting advisory, compliance, investor-relations, personnel and corporate-overhead costs following the IPO and in connection with the Company's broader strategic transition. Although certain initial or transaction-specific expenditures may not recur, the Company expects to continue incurring public-company reporting, governance, compliance and professional-service costs.

Following the elevated public-company and professional-service costs incurred during fiscal year 2026, management has begun implementing measures intended to improve operating efficiency and reduce the administrative burden associated with being a public company. These measures include reviewing and, where appropriate, consolidating or renegotiating external professional-service arrangements; strengthening internal finance, disclosure, investor-relations and planning capabilities; improving budgeting and reporting processes; and using technology and specialist support more selectively. These measures are intended to improve cost discipline, but implementation may require additional investment, savings may take time to realize, and the Company will continue to incur costs required for public-company reporting, governance and compliance.

Research and Development Expenses. Research and development expense decreased by 16.7% to approximately $0.78 million in fiscal year 2026. The decrease reflected reduced spending on certain legacy platforms, optimization of personnel and technology infrastructure, and management's increased use of AI-assisted coding, testing, documentation and development workflows for selected engineering activities. Management believes these tools improved the efficiency of portions of the development process and supported continued work on newer initiatives while reducing overall expense. The decrease should not be interpreted as a reduction in the strategic importance of product development. The Company expects the level of future R&D expense to vary with product scope, commercialization priorities, personnel requirements and international deployment needs.

Other Income (Expenses), net. Our expenses increased by $0.54 million, or 1,608.4% from $0.03 million for the fiscal year ended March 31, 2025, to $0.57 million for the fiscal year ended March 31, 2026. The increase was primarily attributable to a $0.74 million penalty charge from the PRC local government, coupled with fluctuations in foreign exchange differences. 

Government Grants. Government grants were $0.21 million in fiscal year 2026, compared with $0.01 million in fiscal year 2025. The increase was primarily attributable to financial subsidies and non-recurring technology-innovation incentives awarded by local government authorities.

Net Loss. As a result of the foregoing, we recorded a net loss of $7.91 million for the fiscal year ended March 31, 2026, compared with a net loss of $0.52 million for the fiscal year ended March 31, 2025.

B. Liquidity and Capital Resources

To date, we have funded our operations primarily through capital contributions, bank loans, shareholder or related-party working capital support, IPO proceeds and, after fiscal year-end, additional equity financing. For the years ended March 31, 2026 and 2025, we recorded net losses of $7.91 million and $0.52 million, respectively, and net cash used in operating activities of $9.15 million and $1.82 million, respectively. As of March 31, 2026, accumulated deficit was $23.48 million. These conditions, together with operating cash outflows and ongoing working-capital requirements, raised substantial doubt about our ability to continue as a going concern. As a result, management concluded that cash from operations, existing cash and cash equivalents, and bank loans are sufficient to fund our operating activities, capital expenditures, and other obligations for the next 12 months, though our ability to continue as a going concern remains dependent upon successfully executing these plans, securing additional financing, and achieving profitable operations.

On April 7, 2025, we completed our initial public offering of 3,750,000 ordinary shares at a public offering price of $4.00 per share and received net cash proceeds of approximately $13.5 million on April 17, 2025. In December 2025, we entered into a purchase agreement pursuant to which we may sell up to $100.0 million of ordinary shares from time to time over a 36-month period, subject to the terms and conditions of that agreement. In April 2026, we completed an equity financing for gross proceeds of approximately $1.73 million. In May 2026, we obtained a loan from a bank of approximately $1.4 million to support our working capital needs. These financing sources may support our liquidity, but sales under the purchase agreement are subject to market conditions, registration, pricing, volume and other limitations, and there is no assurance that we will be able to draw meaningful amounts under the facility or obtain additional financing on acceptable terms or at all.

Management monitors cash balances, accounts receivable collections, bank loans, operating cash flows, use of IPO proceeds and working-capital requirements. Our Smart Campus Services business may have different working-capital requirements, supplier or merchant settlement cycles and collection timing than our historical SmartExam® and SmartHomework® businesses. Our ability to meet our obligations depends on collecting receivables, renewing or replacing bank loans, controlling costs, managing Smart Campus settlement cycles, executing our strategic transition and obtaining additional financing if needed.

As of March 31, 2026 and 2025, our cash balances were $4.08 million and $0.67 million, respectively. As of March 31, 2026, we had gross accounts receivable of $4.27 million from third parties and $0.33 million of net accounts receivable from related parties, of which approximately 18%, or $0.75 million, had been subsequently collected from third parties and approximately 45%, or $0.15 million, had been subsequently collected from related parties as of July 20, 2026. The collectability and timing of accounts receivable are important to our liquidity, particularly as Smart Campus Services may involve different counterparties, payment cycles and settlement arrangements from our historical customer contracts. The remaining balance, net of allowance for credit losses, is expected to be collected within applicable credit terms, although there can be no assurance that all amounts will be collected on the expected timeline or at all.

As of March 31, 2026, our short-term bank loan balance was $4.28 million, compared to $4.41 million as of March 31, 2025. We expect, based on experience and credit history, that we may be able to renew certain existing short-term bank loans, but there is no assurance that renewals or replacement financing will be available on acceptable terms or at all. If bank loans are not renewed, if accounts receivable collection is delayed, if Smart Campus settlement cycles require additional working capital, or if we pursue investments, acquisitions, capital expenditures or international expansion, we may need additional cash resources. We may seek such resources through credit facilities, debt financing, equity financing, sales under our existing purchase agreement or other financing transactions, any of which may not be available on acceptable terms and may result in dilution, increased fixed obligations or other restrictions.

Most of our future revenue in the foreseeable future is expected to be denominated in RMB. Under current Chinese foreign exchange administration regulations, payments under current accounts, including profit distributions, interest payments, and trade and service-related foreign exchange transactions, can be made in foreign currency as long as certain routine procedural requirements are met, without prior approval from SAFE. Therefore, our Chinese subsidiaries can pay foreign currency dividends to us in accordance with certain routine procedural requirements without prior SAFE approval. However, if RMB needs to be converted into foreign currency and remitted out of China to pay for capital expenditures, such as repaying foreign currency-denominated loans, approval or registration from relevant government departments is required.

The following table presents a summary of our cash flows for the periods indicated:

Operating Activities

For the year ended March 31, 2026, net cash used in operating activities was $9.15 million, while the net loss for the same period was $7.91 million. The net change was due to non-cash adjustments of $2.39 million and changes in operating assets and liabilities of $3.64 million. Non-cash adjustments primarily included depreciation and amortization of $0.17 million, share based compensation of $0.45 million, and provision for credit losses of $1.75 million. Changes in operating assets and liabilities primarily included an increase in prepayment and other current assets of $6.61 million, primarily due to the advanced payment of $2.00 million for international marketing and promotional services to accelerate our overseas market expansion as well as the advance payment of $4.20 million for a research and development project, an increase in accounts payable of $0.82 million and an increase of $1.81 million in accrued expenses and liabilities, primarily due to the expanded vendor obligations and increased operational procurement supporting our new revenue streams. The increase was offsetting by a decrease in accounts receivables from third parties of $0.82 million, primarily due to the structural shift in our revenue mix toward shorter-cycle campus operations.

For the year ended March 31, 2025, net cash used in operating activities was $1.82 million, while the net loss for the same period was $0.52 million. The net change was due to non-cash adjustments of $0.64 million and changes in operating assets and liabilities of $1.94 million. Non-cash adjustments primarily included depreciation and amortization of $0.24 million and provision for credit losses of $0.40 million. Changes in operating assets and liabilities primarily included a decrease in deferred revenue of $0.30 million, primarily due to increased Campus and Education services sales and recognized revenues, an increase in accounts receivable of $1.94 million, primarily due to an increase in accounts receivable of $1.92 million and a decrease in provision for credit losses of $0.40 million, and a decrease in accounts payable of $0.73 million, primarily due to increased payments to suppliers 

Investing Activities

For the year ended March 31, 2026, net cash used in investing activities was $0.06 million, primarily attributable to the acquisition of property and equipment of $0.06 million.

For the year ended March 31, 2025, net cash used in investing activities was $0.16 million, primarily attributable to the acquisition of property and equipment of $0.14 million and minority interest of $0.02 million.

Financing Activities

For the year ended March 31, 2026, net cash provided by financing activities was $11.84 million, primarily attributable to $12.19 million of IPO proceeds presented in the statement of cash flows after deducting deferred offering costs and $2.53 million of proceeds from bank loans, partially offset by $2.89 million of bank loan repayments.

For the year ended March 31, 2025, net cash provided by financing activities was $1.56 million, primarily attributable to proceeds from bank loans of $4.71 million, partially offset by repayment of bank loans of $3.15 million.

Contractual Obligations

The following table sets forth our contractual obligations as of March 31, 2026:

Notes: (1) The amount of our contractual obligations for the repayment of outstanding short-term bank loans includes the remaining balance of unamortized guarantee fees deducted as described below, and is comprised of the following bank loans:

In March 2026, Jiangxi Ruanyun entered into a one-year loan agreement with Bank of China for RMB2,000,000 ($0.3 million) at an annual interest rate of 3.00%. This loan was guaranteed by Ms. Yan Fu, our director and chief executive officer and the chief executive officer of Jiangxi Ruanyun.

In May 2025, Jiangxi Ruanyun entered into a one-year loan agreement with Bank of Beijing for RMB10,000,000 ($1.5 million) at an annual interest rate of 3.60%. This loan was guaranteed by Ms. Yan Fu, our director and chief executive officer and the chief executive officer of Jiangxi Ruanyun.

In November 2025, Jiangxi Ruanyun entered into a one-year loan agreement with GanZhou Bank for RMB9,500,000 ($1.4 million) at an annual interest rate of 3.85%. This loan was also pledged with a property of Jiangxi Ruanyun and guaranteed by Ms. Yan Fu, our director and chief executive officer and the chief executive officer of Jiangxi Ruanyun.

In August 2025, Jiangxi Ruanyun entered into a one-year loan agreement with Bank of Communication for RMB8,000,000 ($1.2 million) at an annual interest rate of 3.00%. This loan was guaranteed by Ms. Yan Fu, our director and chief executive officer and the chief executive officer of Jiangxi Ruanyun.

Holding Company Structure

Ruanyun Edai Technology Inc. is a holding company with no material operations of its own. We primarily conduct our operations through our wholly-owned subsidiaries, consolidated variable interest entities (VIEs), and their subsidiaries in China, or the PRC Entities. Therefore, our ability to pay dividends depends on the dividends paid by our PRC Entities. If our PRC Entities or any newly formed subsidiaries borrow in their own name in the future, their debt agreements may restrict their ability to pay dividends to us. Additionally, our PRC Entities can only pay dividends to us based on their retained earnings, if any, as determined under Chinese accounting standards and regulations. Under Chinese law, each of our PRC Entities is required to set aside at least 10% of its after-tax profits, if any, each year to a statutory reserve fund until such reserve fund reaches 50% of its registered capital. Furthermore, our PRC Entities may, at their discretion, allocate a portion of their after-tax profits (as determined under Chinese accounting standards) to a discretionary surplus fund. The statutory reserve fund and discretionary surplus fund cannot be distributed as cash dividends. Dividends remitted from a Wholly Foreign-Owned Enterprise in China are subject to examination by the bank designated by SAFE. Our PRC Entities have not paid dividends, and some of them cannot pay dividends until they generate accumulated profits and satisfy the statutory reserve fund requirements.

We have begun international expansion by establishing a subsidiary in Saudi Arabia during fiscal year 2026 and a subsidiary in Malaysia after fiscal year-end. We currently expect certain new international activities to be conducted through these subsidiaries or related platforms, subject to applicable law, local licensing, contractual arrangements and revenue-recognition analysis.

Trend Information

Management expects fiscal year 2027 comparability to continue to be affected by the shift toward Smart Campus Services and other service-based revenue, the timing and collectability of receivables, expected-credit-loss estimates, working-capital and principal-versus-agent judgments, continuing public-company costs, and the early-stage commercialization of AI application and international initiatives. The Company intends to pursue newer products and business models to support future growth; however, performance will depend on customer adoption, contract execution, revenue recognition, collections, regulatory compliance and access to sufficient liquidity. 

Off-Balance Sheet Commitments and Arrangements

We have no off-balance sheet arrangements, including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support, or other interests. We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts indexed to our shares and classified as shareholder equity, nor have we reflected these contracts in our consolidated financial statements. Furthermore, we do not have any retained or contingent interests in assets transferred to unconsolidated entities that serve as credit, liquidity, or market risk support for such entities. We do not have any variable interests in any unconsolidated entities that provide us with financing, liquidity, market risk, or credit support, or engage in leasing, hedging, or research and development services with us.

Liquidity Risk

As of March 31, 2026 and 2025, we had cash of $4.08 million and $0.67 million, respectively, while total current liabilities were $9.12 million and $6.38 million.

Cash refers to cash on hand and demand deposits with banks that are not restricted as to withdrawal or use and have original maturities of less than three months.

As presented in our consolidated financial statements, we incurred net losses of $7.91 million and $0.52 million for the years ended March 31, 2026 and 2025, respectively. Net cash used in operating activities was $9.15 million and $1.82 million for the years ended March 31, 2026 and 2025, respectively. As of March 31, 2026 and 2025, our accumulated deficits were $23.48 million and $15.63 million, respectively.

The aforementioned facts raised substantial doubt about our ability to continue as a going concern. In assessing our liquidity, management monitors and analyzes cash on hand, accounts receivable collection, bank loan renewals, operating cash flows, working-capital requirements and the availability of financing sources. Management’s plans include using IPO proceeds and other cash resources, pursuing accounts receivable collection, seeking renewal or replacement of bank loans, managing costs and working capital, and developing domestic and international revenue opportunities. We completed our IPO in April 2025, receiving net cash proceeds of approximately $13.5 million, and completed an equity financing in April 2026 for gross proceeds of approximately $1.73 million. In May 2026, we obtained a loan from a bank of approximately $1.4 million to support our working capital needs. As a result, management concluded that cash from operations, existing cash and cash equivalents, and bank loans are sufficient to fund our operating activities, capital expenditures, and other obligations for the next 12 months, though our ability to continue as a going concern remains dependent upon successfully executing these plans, securing additional financing, and achieving profitable operations. Nevertheless, there is no assurance that these plans will be sufficient, that we will be able to obtain additional financing if needed, or that we will achieve profitability on the expected timeline or at all.

As of March 31, 2026, the Company had cash of approximately $4.08 million and short-term bank borrowings of approximately $4.28 million. Management's liquidity plan depends on receivable collections, management of Smart Campus settlement cycles, expense control, renewal or replacement of bank financing and access to additional capital. The Company's equity purchase facility and other financing arrangements are subject to conditions and should not be viewed as committed cash equal to their stated maximum amounts. Execution of the Company's growth strategy may require additional working capital, and financing may not be available on acceptable terms or at all.

The Company is also seeking to improve its financial flexibility and support the expansion of its business through completed and potential capital-raising initiatives. In parallel, the Company is developing its investor-relations, market-communications and capital-markets readiness capabilities, including through cooperation with external advisers, to improve the quality and consistency of investor engagement, increase market understanding of the Company's strategy and enhance readiness for future financing opportunities. These activities do not guarantee that additional capital will be available, and any financing will remain subject to market conditions, applicable approvals, contractual conditions, securities-law requirements and potential dilution. Investor-relations and market-development activities are distinct from securities placement or solicitation activities, which may be conducted only by appropriately authorized parties.

C. Research and development, patents and licenses, etc.

Research and Development

Jiangxi Ruanyun and its subsidiaries invest significant resources in research and development-not only to support our existing business and enhance our service and product offerings-but also to incubate new business initiatives. As of March 31, 2026, the research and development team of Jiangxi Ruanyun and its subsidiaries consisted of 26 full-time employees, which accounted for approximately 20.3% of our total full-time employees. We have invested significant resources to maintain our technological advantages and intend to continue to extensively invest in our research and development capabilities.

Our research and development expense was $0.78 million and $0.93 million for the years ended March 31, 2026 and 2025, respectively. We intend to continue to invest in research and development to support and enhance our existing products and services and to develop future product and service offerings to enhance our position in the market.

Intellectual Property

We develop and protect our intellectual property portfolio by registering our patents, trademarks, copyrights, and domain names. We rely primarily on patent, copyright, trademark and trade secret laws, as well as confidentiality procedures, to protect our proprietary technologies and processes. We have also adopted a comprehensive set of internal guidelines for intellectual property management. These guidelines set forth the obligations of our employees and create a reporting mechanism in connection with our intellectual property protection. We also own the copyrights to the content we develop in-house, and we have entered into standard employment agreements with our faculty members and R&D employees, which provide that the intellectual property created by them in connection with their employment with us is our intellectual property.

We believe that a core aspect of our business is comprised of our intellectual property. As a result, we strive to maintain a robust intellectual property portfolio. Our future revenue growth may depend, in part, on our ability to protect our intellectual property as products and services that are material to our operating results incorporate intellectual property.

We have pursued rights in intellectual property since our founding and we focus our intellectual property efforts in China. Our strategy is designed to provide a balance between the need for coverage in our strategic market and the need to maintain reasonable costs.

We believe our rights to patents, copyrights, trademarks and other intellectual property rights serve to distinguish and protect our products from infringement and contribute to our competitive advantages. We value our proprietary technologies and strong research and development capabilities, which we believe differentiate us from other companies in our industry. As of March 31, 2026, we had an intellectual property portfolio consisting of 12 patents and 34 trademarks with the PRC State Intellectual Property Administration, 95 software copyrights with the PRC State Copyright Bureau, and 20 domain names.

If in the future we have any pending patent, trademark or copyright applications, we cannot assure you that any patents, trademarks or copyrights will be issued from any such pending applications. In addition, any rights granted under any of our existing or future patents, trademarks or copyrights may not provide meaningful protection or any commercial advantage to us. With respect to our other proprietary rights, it may be possible for third parties to copy

or otherwise obtain and use proprietary technology without authorization or to develop similar technology independently. We may in the future initiate claims or litigation against third parties to determine the validity and scope of proprietary rights of others. In addition, we may in the future initiate litigation to enforce our intellectual property rights or to protect our trade secrets. Additional information about the risks relating to our intellectual property is provided under “Risk Factors-Risks Related to 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 that are reasonably likely to have a material effect on our net revenue, income from continuing operations, profitability, liquidity, or capital resources, or that would cause our reported financial information not to be indicative of future operating results or financial condition.

E. Critical Accounting Estimates

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. Our consolidated financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP), which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenue and expenses, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the financial reporting period. The most significant estimates and assumptions include the valuation of accounts receivable, prepayments to suppliers, the useful lives of property and equipment, the recoverability of long-lived assets, provisions for contingent liabilities, and revenue recognition. We continually evaluate these estimates and assumptions, which we believe are reasonable in the current circumstances. We rely on these evaluations as the basis for judging the carrying values of assets and liabilities that are not readily apparent from other sources. Because the use of estimates is an integral part of the financial reporting process, actual results could differ materially from those estimates. Some of our accounting policies require a higher degree of judgment in their application than others. We believe the critical accounting policies disclosed in this annual report reflect the more significant judgments and estimates used in preparing our consolidated financial statements.

Although our significant accounting policies are more fully described in Note 3 to the consolidated financial statements included elsewhere in this annual report, we believe the following critical accounting policies involve the most significant estimates and judgments used in preparing our consolidated financial statements. The following is a description of our critical accounting policies and estimates. They should be read in conjunction with our consolidated financial statements and other disclosures contained in this annual report.

Principles of Consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiaries, variable interest entity (VIE), and the VIE’s subsidiaries for which the Wholly Foreign-Owned Enterprise (WFOE) is the primary beneficiary. All significant intercompany transactions and balances between the Company, its subsidiaries, and the VIE and its subsidiaries have been eliminated upon consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include, but are not limited to, the allowance for doubtful accounts, estimated useful lives and impairment of long-lived assets, and revenue recognition. Actual results could differ materially from these estimates.

Accounts Receivable, Net

Accounts receivable, net primarily represents amounts due from customers and are stated net of allowances for doubtful accounts, if any. The Company, its wholly-owned subsidiaries, the variable interest entity (VIE), and its subsidiaries consider various factors in assessing the collectability of accounts receivable, such as the aging of amounts due, payment history, creditworthiness, and financial condition of the debtor. The Company estimates expected credit losses under ASC 326 using the aging of amounts due, historical loss experience, payment history, creditworthiness, current conditions and reasonable and supportable forecasts. Accounts receivable are written off when management determines that collection is not probable. The Company has no off-balance sheet credit exposure related to its customers. As of March 31, 2026 and 2025, the allowance for credit loss was $3,426,877 and $1,552,580, respectively.

Capitalized Software Development Costs, Net

The Company, its wholly-owned subsidiaries, the variable interest entity (VIE), and the VIE’s subsidiaries recognize their software development costs in accordance with ASC Topic 985, Software (or ASC 985). Software development costs primarily consist of compensation, depreciation, and other administrative expenses incurred by the Company to develop, maintain, monitor, and manage the Company’s, its wholly-owned subsidiaries’, variable interest entity’s (VIE’s), and the VIE’s subsidiaries’ products. Software development costs incurred prior to the establishment of technological feasibility are expensed as incurred and are included in research and development expenses. Once a product reaches technological feasibility, all subsequent development costs are capitalized until the product is available for sale. Technological feasibility is assessed on a product-by-product basis but generally includes technical design and documentation and only occurs when the product has a demonstrated operating capability. The amount of software development costs is amortized over the estimated useful life of the respective product, which has been determined to be five years.

Impairment of Long-Lived Assets

Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be fully recoverable or its useful life is shorter than originally estimated by the Company, its wholly-owned subsidiaries, the variable interest entity (VIE), and the VIE’s subsidiaries. When such events occur, the Company, its wholly-owned subsidiaries, the variable interest entity (VIE), and the VIE’s subsidiaries assess impairment of long-lived assets by comparing the carrying value of the asset to the estimated future undiscounted cash flows expected to be generated from the use of the asset and its eventual disposition. If the sum of the estimated future undiscounted cash flows is less than the carrying value of the asset, the Company, its wholly-owned subsidiaries, the variable interest entity (VIE), and the VIE’s subsidiaries recognize an impairment loss based on the amount by which the carrying value of the asset exceeds its fair value. For the years ended March 31, 2026 and 2025, there was no impairment of capitalized software.

Revenue Recognition

We follow ASC 606, Revenue from Contracts with Customers, or ASC 606, for revenue recognition. ASC 606 establishes principles for reporting the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The core principle requires us to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services when performance obligations are satisfied.

As our business has expanded beyond historical SmartExam® and SmartHomework® product lines, we have reclassified our revenue operating categories to reflect our current operation. Prior period financial information has been retrospectively reclassified into the current product-line and management operating category frameworks. These reclassifications reflect recent organizational realignments in the Company’s operational structures and business models and had no impact on previously reported consolidated total revenues, net loss, or total stockholders’ equity.

1. Campus and Education Services

a. Smart Campus Infrastructure

(i) Testing centers and platform development (SmartHomework® Solution)

The VIE and its subsidiaries contract with schools and local educational bureaus to deliver the integrated SmartHomework® solution for a fixed contract price. This service involves constructing, upgrading, and transforming physical A.I. Study Rooms and providing a perpetual software license to the Company’s proprietary academic evaluation technology, A.I. algorithms, and K-12 question bank content. Additionally, the Company provides ongoing, unspecified software updates on a when-and-if-available basis and cloud-based services, including data collection, cleaning, modeling, and analysis.

Contracts typically contain up to four distinct performance obligations: (1) construction of the physical A.I. Study Room, (2) provision of a perpetual software license, (3) provision of software-related cloud services, and (4) provision of unspecified software updates.

For the construction element, the underlying hardware, software deployment, and installation services are considered capable of being distinct but are not separately identifiable within the context of the contract. The A.I. Study Room functions as an integrated, combined output requested by the customer. Accordingly, these construction components are bundled and accounted for as a single performance obligation.

The fixed transaction price is allocated to each performance obligation based on its relative standalone selling price, or SSP. For deliverables lacking observable inputs, such as cloud services and unspecified updates, management estimates the SSP using judgment and relevant historical data. Revenue allocated to the construction of the A.I. Study Room and the delivery of the functional perpetual software license is recognized at a point in time when the customer executes a formal sign-off and acceptance, marking the transfer of control. Revenue allocated to the software-related cloud services and unspecified updates is deferred and recognized over time on a straight-line basis over the estimated period of performance. These deferred streams were immaterial for the fiscal years ended March 31, 2026 and 2025.

Certain contracts mandate a three-year product warranty. The Company has determined that these warranties represent assurance-type warranties under ASC 606 rather than separate performance obligations. Historical warranty costs have been immaterial, and no liability accruals have been deemed necessary.

(ii) Software Customization and Content Development

The VIE and VIE’s subsidiaries provide software customization and content development services based on customers’ specifications. Contracts of this revenue stream generally do not contain significant financing components or variable consideration. The promised services in each service contract are combined and accounted for as a single performance obligation, as the promised services in a contract are not distinct and are considered as a significant integrated service. The Company recognizes revenue from its software customization and content development service contracts at a point of time when the customers accept the customized software and / or content when the control of such software and / or content is transferred to the customer. Additionally, the Company provides product warranty on customized software. The warranty is not a separate performance obligation because the nature of the warranty is to provide assurance that the software will function as expected and comply with agreed-upon specifications. No warranty is provided for customized content delivered. The VIE and VIE’s subsidiaries have not experienced material warranty costs and, therefore, does not believe an accrual for these costs is necessary.

b. Education Content and Learning Resources

(i) Personalize Exercise (SmartHomework® and MOTK Pro)

The VIE and its subsidiaries offer print-ready versions of the SmartHomework® exercise book, delivering personalized learning materials to students on a daily or weekly basis. Students pay a subscription fee per semester to access these printing services via authorized campus hardware. Revenue is recognized over time on a straight-line basis over the contract term, beginning on the date the student is contractually granted platform printing access.

The Company also offers a premium service tier, MOTK Pro, via annual subscriptions sold directly to students or through nationwide corporate business partners. MOTK Pro provides unlimited, multi-subject cloud-based access from personal mobile devices. Subscription revenue is recognized over time on a straight-line basis over the active subscription period, commencing when the student activates the account and content is made available.

(ii) Digitization Services

The VIE and its subsidiaries provide text-to-digital conversion services to commercial publishers. Each arrangement contains a single performance obligation to deliver completed digital files. Revenue is recognized at a point in time when the digitization project is completed and accepted by the publisher. The Company acts as the principal in these arrangements, maintaining control over production, establishing end pricing, and bearing fulfillment and primary quality risks.

c. Examination and Assessment Services (SmartExam® Solution)

The VIE and its subsidiaries construct computer-based testing centers for schools, businesses, and local educational bureaus for a fixed transaction price, tailored primarily around the Academic Proficiency Assessment Test. The solution integrates A.I. algorithms with specialized hardware (including identity verification cameras and automated seat-assignment devices) and testing-taking software.

Each arrangement contains two distinct performance obligations: (1) the physical construction and technological integration of the testing center, and (2) the provision of a perpetual license to the functional test-taking software.

The physical hardware procurement, software customization, and configuration inputs are combined into a single performance obligation because the VIE provides a highly critical integration service to deliver the completed testing center infrastructure as a unified output. The transaction price is allocated to the construction obligation and the perpetual software license obligation based on their relative SSPs. Revenue for both the construction obligation and the perpetual license is recognized at a point in time when the customer executes a formal project acceptance.

The software license is recognized immediately upon delivery as functional intellectual property because it possesses standalone utility and requires no material ongoing developer support. Ancillary exam services, including localized testing professional support, software tweaks, and physical hardware sales, are evaluated on a contract-by-contract basis. Integrated service bundles are recognized over time using an output method as the testing sessions occur, or at a point in time when physical products or control of completed deliverables are handed over to the client.

d. AI Vocational Training and Talent Development

The VIE and its subsidiaries license academic evaluation technologies, proprietary A.I. algorithms, and educational question banks to third-party educational technology providers. Under these time-based arrangements (typically one year), customers purchase non-exclusive rights to access the cloud-hosted digital content. Revenue is recognized over time on a straight-line basis over the active term of the underlying license agreement.

e. Campus Operations and Student-life Services

The VIE and VIE’s subsidiaries enter into operating agreements with educational institutions to provide integrated food catering, campus operations, and ancillary student services. Additionally, the VIE and VIE’s subsidiaries subcontract designated retail and dining spaces within the campus footprint to independent third-party food vendors. Revenue generated from campus services is derived from two primary models: (i) Direct Sales and (ii) Integrated campus management services.

(i) Direct sales

The VIE and VIE’s subsidiaries directly operate proprietary dining facilities and provide ancillary student services directly to the student population and campus personnel. In accordance with ASC 606-10-25-14, management identifies each distinct meal, beverage item, or individual campus service requested by a customer as a separate performance obligation. A promised good or service is accounted for as a distinct performance obligation under ASC 606-10-25-19 because: 1) The customer can benefit from the food item or individual service on its own or together with other readily available campus resources; and 2) The promise to transfer the specific good or service is separately identifiable from other promises or facilities provided within the campus environment.

Under ASC 606-10-55-37A and ASC 606-10-55-39, the Company identify that it acts as a principal for Direct Campus Sales because it controls the specified goods and services before they are transferred to the end consumer. Control is evidenced by the following key indicators:

1)Primary Responsibility for Fulfillment: The Company maintains primary operational responsibility for satisfying the performance obligation, including managing daily culinary production, quality standards, and facility management;

2)Inventory Risk: The Company bears all direct inventory and operational risks associated with food procurement, storage, obsolescence, and spoilage prior to customer point of sale;

3)Pricing Discretion: The Company retains sole latitude and decision-making authority in establishing prices for menu items, dining services, and ancillary offerings.

As a result, revenues from Direct Campus Sales are reported on a gross basis. In accordance with ASC 606-10-50-12 and ASC 606-10-50-20, revenue is recognized at a point in time upon satisfaction of the performance obligation—specifically when control of the meal or service transfers to the customer at the physical point of sale via mobile wallet settlements or the drawing down of stored-value student campus card accounts.

(ii) Integrated campus management services

The VIE and its subsidiaries enter into institutional service agreements to operate and manage campus facilities, dining spaces, and student-life ecosystems on behalf of educational institutions. Under this model, the Company is contractually engaged to deliver continuous, day-to-day administrative oversight, logistics, and operational services to the campus footprint in exchange for a contractually defined monthly management fee.

In accordance with ASC 606-10-25-14, the Company evaluates its institutional service agreements to identify the promised goods and services. The Company determines that the integrated suite of management and facility services represents a single performance obligation comprised of a series of distinct daily services that are substantially the same and have the same pattern of transfer to the customer. Under ASC 606-10-25-19, these daily operational services are considered distinct because: 1) The educational institution can benefit from the daily management services on their own or together with other readily available resources; and 2) The services are highly interdependent and integrated into a combined output of comprehensive campus management, making the promise to transfer this series of services separately identifiable from other promises within the agreement.

Under ASC 606-10-55-37A and ASC 606-10-55-39, the Company identify that it acts as a principal for in providing the integrated campus management services because it obtains control of the specified services before they are transferred to the educational institution. Control is evidenced by the following key indicators:

1)Primary Responsibility: The Company retains primary contractual and operational responsibility for fulfilling the promise to provide continuous administrative oversight and overall campus operations;

2)Direction of Services: The Company holds the right to direct the underlying facility services and directly manages the labor, logistics, and execution infrastructure required to perform the services.

Accordingly, the monthly management fees earned from these institutional agreements are recognized as revenue on a gross basis. In accordance with ASC 606-10-50-12 and ASC 606-10-50-20, the performance obligation is satisfied over time, as the educational institution simultaneously receives and consumes the economic benefits of the Company’s continuous operational performance as it occurs.

2.International Education and Testing

The VIE and VIE’s subsidiaries operate the HanLink Chinese learning platform, which is an AI-powered online language learning system designed predominantly for institutional education customers, students, and educators in overseas markets outside of the People’s Republic of China. Under these arrangements, customers enter into agreements to purchase non-exclusive rights to access the cloud-based educational content and interactive curriculum housed on the HanLink platform for a specified contract period. The transaction price for these arrangements is primarily determined on a per-access license basis, calculated by multiplying the contractually agreed-upon rate by the specific number of user licenses granted to the customer.

The Company’s performance obligation is to provide continuous access to the hosted HanLink software environment and digital libraries over the contract period. Revenue is recognized over time on a straight-line basis over the license term as the customer concurrently receives and consumes the benefits of the platform access. Upfront cash collections received from customers prior to the commencement or fulfillment of the license term are recorded as deferred revenue within contract liabilities on the Consolidated Balance Sheets and are systematically amortized into revenue over the respective subscription period.

3.AI Application and Enterprise Solution

The VIE and VIE’s subsidiaries operate the AI application and enterprise solution, which is a private-deployment document intelligence platform designed to convert scanned, handwritten, historical, and administrative records into structured, searchable data assets. Revenues generated by Cogni AI are derived from two primary contract models: (i) Perpetual platform licensing and hardware Sales and (ii) Term-based software subscriptions and hardware Leases.

a. Perpetual platform licensing and hardware sales

The Company offers a bundled transaction model where customers acquire full legal ownership of customized hardware devices integrated with a perpetual license to access and operate the Cogni AI software platform for a single, combined transaction price. Contracts under this model contain multiple performance obligations consisting of the transfer of the physical hardware device and the provision of the perpetual software platform license. The Company allocates the single bundled transaction price to each distinct performance obligation based on its relative standalone selling price, determined using management’s best estimate or observed independent market values.

Revenue allocated to the physical hardware device is recognized at a point in time when control of the equipment is transferred to the customer, which typically occurs upon physical delivery, local installation, and formal customer acceptance. Similarly, revenue allocated to the perpetual platform license is recognized at a point in time when the software copy is made available and control of the intellectual property transfers to the customer, which occurs when the electronic software delivery is completed. Because the customer has the right to use the software on its own infrastructure perpetually without ongoing performance obligations from the Company, no revenue for this component is deferred.

b. Term-based software subscriptions and equipment leases

The Company enters into recurring term-based arrangements where customers pay a fixed monthly fee to utilize the specialized hardware equipment and gain ongoing access to the hosted Cogni AI software platform. Under these agreements, ownership of the physical equipment is retained exclusively by the VIE and its subsidiaries, and the equipment is contractually returned at the conclusion of the lease term. These arrangements contain both a lease component governed by ASC 842, Leases, and non-lease service components governed by ASC 606, Revenue from Contracts with Customers.

The Company has elected the practical expedient under ASC 842 to combine lease and non-lease components into a single unit of account when the timing and pattern of transfer are identical. Because the lease component qualifies as an operating lease and the platform services are consumed concurrently by the client, the combined monthly recurring fee is recognized as revenue over time on a straight-line basis over the respective monthly contract term. This reporting methodology accurately reflects the period over which the customer simultaneously receives and consumes the economic benefits of both the infrastructure and the software access.

Income Taxes

We account for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to these temporary differences in the years in which they are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income or loss in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. Uncertain tax positions are recognized as a benefit only if the tax position is “more likely than not” to be sustained during a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized upon examination. No tax benefit is recorded for tax positions that do not meet the “more likely than not” test. Penalties and interest related to underpaid income taxes are classified as income tax expense in the period incurred. We believe that no penalties or interest related to income taxes and no uncertain tax positions were incurred as of March 31, 2026 and 2025.

See Note 3 of our notes to the consolidated financial statements for a further discussion of recently issued accounting standards.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

The following table sets forth information regarding our directors and executive officers as of July 20, 2026. Unless otherwise stated, the business address for our directors and executive officers is that of our principal executive offices located at No. 698 Jing Dong Avenue, ZheJiang University HighTech Campus, Nanchang, Jiangxi, China 330096.

(1) Member of audit committee.

(2) Member of compensation committee.

(3) Member of nomination and governance committee.

Ms. Yan Fu is our co-founder and has served as a member of our board of directors since March 2021 and our chief executive officer since November 2021. Ms. Yan Fu is the founder of Jiangxi Ruanyun, the VIE, and has served as its chief executive officer and president since 2012. She has 14 years of information and software enterprise management experience. Prior to founding our Company, Ms. Fu served as director of quality assurance at IgnitionOne, managing its R&D process and quality assurance department from 2011 to 2012. From 2001 to 2011, she was the principal quality assurance analyst at Manhattan Associates, Inc. (Nasdaq: MANH), a supply chain software company in the U.S., and was responsible for quality control and team management of three software products. She earned a master’s degree in management of information technology, a master’s degree in business administration, and a bachelor’s degree in computer science, all from Indiana University. We believe Ms. Fu’s experience qualifies her to serve on our board of directors.

Mr. Cong Zhao is our co-founder and has served as our chief technology officer since November 2021, and is in charge of product design and R&D. He has over 20 years of software and platform development experience, and is specialized in big data analysis and AI algorithms. From 2004 to 2012, Mr. Zhao co-founded and built up SearchIgnite (later renamed to IgnitionOne), which tracks more than $2 billion in online advertising as well as $30 billion in online sales. From 2003 to 2005, Mr. Zhao was the chief architect of SmartVideo Inc., where he presided over the development of the first mobile TV video software and platform in the U.S. From 2000 to 2003, Mr. Zhao was the senior architect of SimplyHealth Inc. in the U.S., and was in charge of the development of large-scale B2B medical insurance software system. Mr. Zhao previously worked for LHS Communications (Nasdaq: LHCG) as senior developer from 1998 to 2000. In October 2021, he was appointed as a member of our board of directors, and in November 2022, he resigned as a member of our board of directors. He earned a master’s degree in computer science, and another master’s degree in statistics, both from Indiana University. Mr. Zhao also has a bachelor’s degree in mathematics from Nankai University.

Ms. Wei Hu has served as our chief financial officer since November 2021. She has over 10 years of financial management experience. Since November 2014, Ms. Hu has served as the chief financial officer of Jiangxi Ruanyun, the VIE, and is responsible for strategic planning, investment and financing, financial management and internal compliance related work of the company. From 2010 to 2014, Ms. Hu successively held the positions of cashier, cost accountant, general ledger accountant, and financial manager in Guangdong Dikesi Information Co., Ltd. In October 2021, she was appointed as a member of our board of directors, and in October 2021, she resigned as a member of our board of directors. She earned a bachelor’s degree in financial management from Henan University of Economics and Law.

Mr. Liang Jing has served as our chief marketing officer since November 2021. Since February 2019, he has served as chief marketing officer of Jiangxi Ruanyun, the VIE, and is mainly in charge of the development and maintenance of government projects. Since December 2014, Mr. Jing has served in Jiangxi Ruanyun, the VIE, successively as the director of the resource center and the head of the government business department, before becoming the chief marketing officer. He has rich experience in government project development and provincial project service experience. From 2013 to 2014, he worked in Jiangxi Beikang Information Technology Co., Ltd. for technical support in the marketing department. From 2011 to 2013, Mr. Jing worked in ZTE Software Technology Co., Ltd. He earned a master’s degree in computer technology from Jiangxi University of Finance and Economics.

Mr. You Zhan has served as a member of our board of directors since November 2025. Mr. Zhan has over 25 years of experience in securities, investment banking, and corporate senior management. Mr. Zhan most recently served Great Wall Securities Co., Ltd. as the General Manager of the Jiangxi Branch. Since joining the firm in 2013, he has held several key leadership positions, including Deputy General Manager of the Nanchang Business Department, General Manager of the Financial Street Business Department, and Deputy General Manager of the Jiangxi Branch. Prior to 2013, Mr. Zhan served Xinta Chemical from 2008 to 2012 as Vice Chairman and Executive Director, overseeing corporate governance and strategic development. Mr. Zhan holds a bachelor’s degree in investment finance from Jiangxi University of Finance and Economics. We believe Mr. Zhan’s experience qualifies him to serve on our board of directors.

Mr. Wei Wang has served as a member of our board of directors since October 2021. He has nearly 20 years of banking credit, investment and financing related work experience. Since 2013, Mr. Wang has been self-employed and has mainly engaged in asset management, investment management, equity investment, post-investment management and other related consulting work. From 1996 to 2013, Mr. Wang worked in the Shenzhen branch of China Construction Bank, where he was mainly engaged in bank credit, risk management and other related work. He earned a bachelor’s degree in investment finance from Jiangxi University of Finance and Economics. We believe Mr. Wang’s experience qualifies him to serve on our board of directors.

Ms. Menglin Luo has served as a member of our board of directors since November 2025. Ms. Luo possesses profound expertise in financial reporting, auditing, and internal controls, backed by decades of practical experience in managing complex financial systems within the educational sector. She is an expert in financial management and accounting with over 30 years of experience in both administrative finance and academic instruction. Ms. Luo most recently dedicated over three decades to Jiangxi Normal University of Science and Technology (formerly known as Nanchang College of Higher Education). From 2004 until her retirement in 2021, she served as an Associate Professor of Accounting at the School of Economics and Management. During her tenure, she was responsible for high-level academic instruction and research in accounting. Prior to her professorship, she joined the institution in 1990 and was extensively involved in the school’s financial management and administrative operations, gaining comprehensive experience in auditing and corporate finance. Ms. Luo holds a bachelor’s degree in accounting from Jiangxi Normal University. We believe Ms. Luo’s experience qualifies her to serve on our board of directors.

Mr. Liang Zou has served as a member of our board of directors since November 2022. Mr. Zou has nearly 20 years of working experience, with extensive experience in market development, corporate management and investment-related work. In his earlier years, Mr. Zou worked in the investment banking department of the Jiangxi branch of China Economic Development Trust and Investment Corporation From 2002 to 2008, in China Mobile Jiangxi, he was mainly responsible for marketing-related work. He was also a founding team member of Beijing Youbao Online Technology Co., Ltd, the first unmanned retail company in China, has set up Shanghai, Hubei and Jiangxi companies, and is in charge of Zhejiang and Shanghai companies. He is currently the beneficial owner of Shanghai Youhehuo Science and Technology Co. He earned a master’s degree in corporate management from Université de Poitiers. We believe Mr. Zou’s experience qualifies him to serve on our board of directors.

None of the events listed in Item 401(f) of Regulation S-K has occurred during the past ten years that is material to the evaluation of the ability or integrity of any of our directors or executive officers.

Family Relationships

There are no family relationships between our directors or executive officers.

B. Compensation

Employment Agreements, Director Agreements and Indemnification Agreements

We have entered into employment agreements with each of our executive officers, pursuant to which such individuals have agreed to serve as our executive officers for initial terms of 24 months. Per the agreements, such terms will automatically extend for successive 12-month periods, unless the agreements are terminated in accordance with their terms. We may terminate the employment for cause at any time for certain acts, such as conviction or plea of guilty to a felony or any crime involving moral turpitude, negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties. We may also terminate the employment without cause at any time upon 60 days’ advance written notice. Each executive officer may resign at any time upon 60 days’ advance written notice.

Each executive officer has agreed to hold, both during and after the termination or expiry of his employment agreement, in strict confidence and not to use, except as required in the performance of his duties in connection with the employment or pursuant to applicable law, any of our confidential or proprietary information or the confidential or proprietary information of any third party received by us and for which we have confidential obligations. Each executive officer has also agreed to disclose in confidence to us all inventions, designs and trade secrets which he conceives, develops or reduces to practice during his employment with us and to assign all right, title and interest in them to us, and assist us in obtaining and enforcing patents, copyrights and other legal rights for these inventions, designs and trade secrets.

In addition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of the employment and for one year following the last date of employment. Specifically, each executive officer has agreed not to: (i) engage or assist others in engaging in any business or enterprise that is competitive with our business, (ii) solicit, divert or take away the business of our clients, customers or business partners, or (iii) solicit, induce or attempt to induce any employee or independent contractor to terminate his or her employment or engagement with us. The employment agreements also contain other customary terms and provisions.

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

We also have entered into director agreements with each of our directors which agreements set forth the terms and provisions of their engagement.

Compensation of Directors and Executive Officers

For the year ended March 31, 2026, we paid an aggregate of RMB 1.5 million ($0.2 million) in cash to our directors and executive officers.

We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers. Our subsidiaries and the VIE 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. We have accrued all amounts required by law for the year ended March 31, 2026.

Equity Awards

We have not granted any equity awards to our directors or executive officers during the fiscal year ended March 31, 2026, except as set forth below.

Incentive Compensation

On September 7, 2025, the Board of Directors of the Company adopted the 2025 Equity Incentive Plan, which became effective on the same date. The 2025 Equity Incentive Plan authorizes the issuance of up to 6,500,000 ordinary shares and is intended to provide equity-based compensation to employees, directors, and consultants of the Company and its affiliates. Awards under the 2025 Equity Incentive Plan may include non-qualified stock options, incentive stock options, restricted stock awards, and unrestricted stock awards. During the fiscal year ended March 31, 2026, 300,000 ordinary shares were issued to Wei Hu, our chief financial officer, and 300,000 ordinary shares were issued to Xili Huang, a consultant and a majority shareholder of Jiangxi Yiluyun Technology Co., Ltd., as equity-based compensation.

Director and Executive Officer Compensation Table

The following table sets forth information regarding the compensation paid to our directors and our executive officers during the fiscal year ending March 31, 2026.

C. Board practices

Board of Directors

Duties of Directors

Under Cayman Islands law, our board of directors has the powers necessary for managing, and for directing and supervising, our business affairs. The functions and powers of our board of directors include, among others:

Under Cayman Islands law, all of our directors owe fiduciary duties to our Company, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association (as amended). Our Company has the right to seek damages if a duty owed by any of our directors is breached.

Composition of our Board of Directors

Our board of directors currently consists of five directors. Our board of directors is composed of a majority of independent directors. Our board of directors has determined that each of Wei Wang, Menglin Luo, and Liang Zou is an “independent director” as defined under the Nasdaq rules.

Committees of our Board of Directors

Our board of directors has established an audit committee, a compensation committee and a nomination and governance committee, which have the responsibilities and authority necessary to comply with applicable Nasdaq and SEC rules. The audit committee is comprised of Wei Wang, Menglin Luo, and Liang Zou. The compensation committee is comprised of Wei Wang, Menglin Luo, and Liang Zou. The nomination and governance committee is comprised of Wei Wang, Menglin Luo, and Liang Zou.

Audit Committee

Menglin Luo, Wei Wang and Liang Zou serve as members of the audit committee. Menglin Luo serves as the chair of the audit committee. Our audit committee members satisfy the independence requirements of the Nasdaq rules and the independence standards of Rule 10A-3 under the Exchange Act. Our board of directors has determined that Menglin Luo possesses accounting or related financial management experience that qualifies Menglin Luo as an “audit committee financial expert” as defined by the rules and regulations of the SEC and Nasdaq. The audit committee will oversee our accounting and financial reporting processes and the audits of our financial statements. The audit committee will be responsible for, among other things:

Compensation Committee

Wei Wang, Menglin Luo and Liang Zou serve as members of the compensation committee. Wei Wang serves as the chair of the compensation committee. Our compensation committee members satisfy the independence requirements of the Nasdaq rules and the independence standards of Rule 10A-3 under the Exchange Act. The compensation committee will be responsible for overseeing and making recommendations to our board of directors regarding the salaries and other compensation of our executive officers and general employees and providing assistance and recommendations with respect to our compensation policies and practices.

Nomination and Governance Committee

Liang Zou, Menglin Luo and Wei Wang serve as members of the nomination and governance committee. Liang Zou serves as the chair of the nomination and governance committee. Our nomination and governance committee members satisfy the independence requirements of the Nasdaq rules and the independence standards of Rule 10A-3 under the Exchange Act. The nomination and governance committee will be responsible for identifying and proposing new potential director nominees to the board of directors for consideration and for reviewing our corporate governance policies.

The composition of these committees meets the criteria for independence under, and the functioning of these committees will comply with the applicable requirements of, the Nasdaq and SEC rules and regulations. We intend to comply with future requirements as they become applicable to us.

D. Employees

As of March 31, 2026, we had 128 full-time employees and 4 part-time employees who signed part-time labor contracts with Jiangxi Ruanyun, and all were located in China. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We have never experienced any employment-related work stoppages, and we consider our relations with our employees to be good.

E. Share ownership

The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of July 20, 2026:

Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include ordinary shares issuable upon the exercise of options that are immediately exercisable or exercisable within 60 days of July 20, 2026. Percentage ownership calculations are based on 37,280,004 ordinary shares, par value $0.0002 per share, outstanding as of July 20, 2026.

Except as otherwise indicated, all of the shares reflected in the table are ordinary shares and all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. Fractional shares are rounded to the nearest whole share herein. The information is not necessarily indicative of beneficial ownership for any other purpose.

On April 7, 2024, KWest Holdings Ltd, our largest shareholder, and its shareholder, Yan Fu, our director and chief executive officer and chief executive officer of Jiangxi Ruanyun, entered into a Concerted Action Agreement with five other major shareholders holding more than 5% of our shares or voting rights, namely ZC Investment Limited, Four Ocean Holding Ltd, Chao Xian Holding Limited, LBH Hope Investment Limited, and Five Mountains Holding Ltd and their respective shareholders, Cong Zhao, our chief technology officer, Ji’an Zhan, Bin Wang, Baihua Li, and Zijun Chen. The Concerted Action Agreement stipulates that each of the above major shareholders shall adopt the same intention and maintain full unanimity when exercising the right to make proposals to shareholders’ meetings and exercising the right to vote at shareholders’ meetings in respect of major matters relating to the Company’s operation and development. Article 1.2 of the Concerted Action Agreement further requires that, during its term, if any of the parties to the Concerted Action Agreement become members of the Company’s board of directors during its term, they must vote unanimously on all matters requiring approval of the board of directors, not just those related to annual meeting proposals. Moreover, in the event that full unanimity cannot be reached, the decision to act in concert shall be made in accordance with the majority shareholding, whereby the opinion supported by the majority of voting rights among the parties to the Concerted Action Agreement will be binding on all parties to the Concerted Action Agreement, and the other parties to the Concerted Action Agreement must act in accordance with this majority decision. The above persons acting in concert collectively hold 54.85% of our shares as of July 20, 2026, giving them substantial influence over the Company’s strategic direction and operational decisions.

Except as otherwise indicated in the table below, addresses of our directors, executive officers and named beneficial owners are in care of Ruanyun Edai Technology Inc., No. 698 Jing Dong Avenue, ZheJiang University HighTech Campus, Nanchang, Jiangxi, China 330096.

F. Disclosure of a registrant’s action to recover erroneously awarded compensation

Not applicable.

Effective as of July 10, 2025, our board of directors adopted an incentive-based compensation recovery policy, or the Clawback Policy. A copy of the Clawback Policy is filed as Exhibit 97.1 hereto.

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

During the last three years and up to the date of the filing of this annual report with the SEC, we have engaged in the following transactions with our directors, officers, holders of more than 5% of our outstanding shares and other affiliates, which we refer to as our related parties.

The following table summarizes accounts receivable from related party, net as of the dates indicated. These amounts have been included in the consolidated financial statements as current assets - accounts receivable, net - related party. See Note 13 to the consolidated financial statements included elsewhere in this annual report.

As of July 20, 2026, approximately $0.15 million, or 45%, of the accounts receivable from Nanchang Institute of Science & Technology as of March 31, 2026 has been collected.

The following table summarizes amounts due from related parties as of the dates indicated. These amounts have been included in the consolidated financial statements as current assets - due from related parties. See Note 13 to the consolidated financial statements included elsewhere in this annual report.

⁽¹⁾ All balances with the related parties as of March 31, 2026, 2025 and 2024 were unsecured, interest-free and had no fixed terms of repayments.

⁽²⁾ The amounts due from Mr. Cong Zhao were advances made for a business project, which were repaid in full as of the date of the filing of this annual report with the SEC.

⁽³⁾ In November 2025, we issued 300,000 ordinary shares to Mr. Xili Huang pursuant to our 2025 Equity Incentive Plan as share-based compensation for consulting services provided to the Company. Mr. Huang is a consultant to the Company and is a majority shareholder of Jiangxi Yiluyun Technology Co., Ltd., an entity of which an affiliate of Jiangxi Ruanyun holds a minority ownership interest.

The following table summarizes amounts due to related parties as of the dates indicated. These amounts have been included in the consolidated financial statements as current liabilities - due to related parties. See Note 13 to the consolidated financial statements included elsewhere in this annual report.

⁽⁴⁾ The amounts due to Ms. Yan Fu primarily consisted of (1) the operating lease expenses paid on behalf of the Company by Ms. Yan Fu and (2) sales commissions owed her.

⁽⁵⁾ The amounts due to NCIST primarily consisted of utility expenses paid on behalf of Jiangxi Yunxiaotong.

The following table summarizes other related party transactions for the periods indicated. These amounts have been included in the consolidated financial statements as revenue from related party and share-based compensation. See Notes 12 and 13 to the consolidated financial statements included elsewhere in this annual report.