ATA Creativity Global (AACG) 2024年年度報告「NASDAQ」.pdf

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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 20-F(Mark One)REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)OR(g)OF THE SECURITIES EXCHANGE ACT OF 1934ORANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year e

2、nded December 31,2024ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to ORSHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report.Commission fil

3、e number:001-33910ATA Creativity Global(Exact Name of Registrant as Specified in Its Charter)Not applicable(Translation of Registrants Name Into English)Cayman Islands(Jurisdiction of Incorporation or Organization)c/o Rm.507,Bldg.3,BinhuZhuoyueCheng,WenhuaKechuangYuan,Huayuan Blvd.365,Baohe,Hefei,An

4、hui 230051,China(Address of Principal Executive Offices)Ruobai SimaChief Financial OfficerATA Creativity Globalc/o 1/F East Gate,Building No.2,Jian Wai Soho,No.39 Dong San Huan Zhong Road,Chao Yang District,Beijing 100022,ChinaTelephone:+8610-6518-1133Facsimile:+8610-5869-8106(Name,Telephone,E-mail

5、and/or Facsimile Number and Address of Company Contact Person)Securities registered or to be registered pursuant to Section 12(b)of the Act:Title of each class TradingSymbol(s)Name of each exchangeon which registeredAmerican Depositary Shares,each representingtwo common shares,par value$0.01 per sha

6、re AACG Nasdaq Global MarketSecurities registered or to be registered pursuant to Section 12(g)of the Act:NoneSecurities for which there is a reporting obligation pursuant to Section 15(d)of the Act:NoneTable of ContentsIndicate the number of outstanding shares of each of the issuers classes of capi

7、tal or common stock as of the close of the period covered by the annual report:63,995,782 common sharesIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes NoIf this report is an annual or transition report,indicate by check mark i

8、f the registrant is not required to file reports pursuant to Section 13 or 15(d)of the SecuritiesExchange Act of 1934.Yes NoIndicate 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 thepreceding 12 m

9、onths(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 past90 days.Yes NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuan

10、t to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes NoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or an

11、 emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Emerging growth company If an emerging growth company that prepares its financial

12、 statements in accordance with U.S.GAAP,indicate by check mark if the registrant has elected not to use theextended 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 accountin

13、g standard”refers to any update issued by the Financial Accounting Standards Board to its Accounting StandardsCodification after April 5,2012.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control

14、 over financialreporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the reg

15、istrant included in the filing reflect thecorrection of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of theregistrants executive offi

16、cers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S.GAAP International Financial Reporting Standards as issuedby the International Accounting Standar

17、ds Board Other If“Other”has been checked in response to the previous question,indicate by check mark which financial statement item the registrant has elected to follow:Item 17 Item 18If this is an annual report,indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-

18、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 1934subsequent to

19、the distribution of securities under a plan confirmed by a court.Yes NoTable of ContentsiTABLE OF CONTENTS PageIntroduction1Forward-looking Statements2Part I.3Item 1.Identity of Directors,Senior Management and Advisers3Item 2.Offer Statistics and Expected Timetable3Item 3.Key Information3Item 4.Info

20、rmation on the Company72Item 4A.Unresolved Staff Comments103Item 5.Operating and Financial Review and Prospects103Item 6.Directors,Senior Management and Employees119Item 7.Major Shareholders and Related Party Transactions128Item 8.Financial Information128Item 9.The Offer and Listing130Item 10.Additi

21、onal Information131Item 11.Quantitative and Qualitative Disclosures About Market Risk137Item 12.Description of Securities Other Than Equity Securities138Part II.140Item 13.Defaults,Dividend Arrearages and Delinquencies140Item 14.Material Modifications to the Rights of Security Holders and Use of Pro

22、ceeds140Item 15.Controls and Procedures140Item 16.Reserved141Item 16A.Audit Committee Financial Expert141Item 16B.Code of Ethics141Item 16C.Principal Accountant Fee and Services141Item 16D.Exemptions from the Listing Standards for Audit Committees141Item 16E.Purchases of Equity Securities by the Iss

23、uer and Affiliated Purchasers141Item 16F.Change in Registrants Certifying Accountant142Item 16G.Corporate Governance142Item 16H.Mine Safety Disclosure142Item 16I.Disclosure regarding Foreign Jurisdictions that Prevent Inspections142Item 16J.Insider trading policies143Item 16K.Cybersecurity143Part II

24、I.144Item 17.Financial Statements144Item 18.Financial Statements144Item 19.Exhibits145Signature149Table of Contents1INTRODUCTIONExcept where the context otherwise requires and for purposes of this annual report only:unless otherwise noted,all references to years are to the calendar years from Januar

25、y 1 to December 31 and references to our fiscal year or yearsare to the fiscal year or years ended December 31.the“Company”refers to ATA Creativity Global,formerly known as ATA Inc.“we,”“us,”“our company,”“our”and“ACG”refer to the Company and its subsidiaries,as the context requires.the“VIE”refers t

26、o ATA Intelligent Learning(Beijing)Technology Limited,our variable interest entity based in China,and its subsidiary,as thecontext requires.the“WFOE”refers to ATA Education Technology(Beijing)Limited,formerly known as ATA Testing Authority(Beijing)Limited.“Huanqiuyimeng”refers to Beijing Huanqiuyime

27、ng Education Consultation Corp.“ATA Online”refers to ATA Online(Beijing)Education Technology Co.,Ltd.,which was a wholly owned subsidiary of us and was disposed ofby us on August 16,2018.“ATA Online Business”refers to,collectively,ATA Online and its subsidiaries,ATA Learning(Beijing)Inc.,or ATA Lear

28、ning,and ZhongxiaoZhixing Education Technology(Beijing)Limited,which were former subsidiaries of the Company incorporated under the laws of mainland Chinaand holding companies of ATA Online,which we disposed of on August 16,2018.“China,”“Chinese”and“PRC”refer to the Peoples Republic of China.all ref

29、erences to“Renminbi”or“RMB”are to the legal currency of mainland China,and all references to“U.S.dollars,”“dollars,”“$”or“US$”are to the legal currency of the United States.“U.S.GAAP”refers to generally accepted accounting principles in the United States.“PRC GAAP”refers to generally accepted accoun

30、ting principles in mainland China.“PRC law(s)and regulation(s)”refers to the laws and regulations of mainland China.“PRC subsidiary”means any direct and indirect subsidiary of the Company incorporated and domiciled in mainland China.“credit hour”refers to the standard unit we use to measure educatio

31、nal credit for our portfolio training services(as defined below)and othereducational services;each credit hour roughly equals one hour of time committed by our teachers in our portfolio training services and othereducational services.This annual report on Form 20-F includes our audited consolidated

32、financial statements as of December 31,2023 and 2024 and for each of the years inthe three-year period ended December 31,2024,and the related notes.Each of our American depositary shares,or ADSs,represents two common shares.Our ADSs are listed on the Nasdaq Global Market,or Nasdaq,under the symbol“A

33、ACG”.We conduct our business primarily in China,and the majority of our revenues and expenses are denominated in Renminbi.The conversion ofRenminbi into U.S.dollars in this annual report is based on the noon buying rate in the City of New York for cable transfers of Renminbi per U.S.dollarscertified

34、 for customs purposes by the Federal Reserve Bank of New York,as set forth in the H.10 weekly statistical release of the Federal Reserve Board.Unless otherwise noted,all translations from Renminbi to U.S.dollars in this annual report are made at a rate of RMB7.2993 to US$1.00,the noon buyingrate in

35、effect as of December 31,2024.We make no representation that any Renminbi or U.S.dollar amounts could have been,or could be,converted intoU.S.dollars or Renminbi,as the case may be,at any particular rate,or at all.Table of Contents2FORWARD-LOOKING STATEMENTSThis annual report on Form 20-F contains f

36、orward-looking statements within the meaning of the U.S.Private Securities Litigation Reform Act of1995.Such forward-looking statements are based on our current expectations,assumptions,estimates and projections about us and our industry.Allstatements other than statements of historical facts in thi

37、s annual report are forward-looking statements.In some cases,these forward-looking statementscan be identified by words and phrases such as“may,”“should,”“intend,”“predict,”“potential,”“continue,”“will,”“expect,”“anticipate,”“estimate,”“plan,”“believe,”“aim,”“is/are likely to”or the negative form of

38、 these words and phrases or other comparable expressions.The forward-lookingstatements included in this annual report relate to,among others:our goals and strategies;our future prospects and market acceptance of our products and services;our future business development and results of operations;our

39、plans for mergers and acquisitions;projected revenues,profits,earnings and other estimated financial information;our plans to expand and enhance our products and services;the potential market size and growth of our products and services;competition in the market for our products and services;PRC law

40、s,regulations and policies,including those applicable to the education industry,internet content providers,variable interest entity andforeign exchange;the impact of the political tensions between the United States and China or other countries,and the impact of actual or potential internationalmilit

41、ary actions;the impact of the coronavirus disease,or COVID-19,and other pandemics or natural disasters;andassumptions underlying or related to any of the foregoing.These forward-looking statements involve various risks,assumptions and uncertainties.Although we believe that our expectations expressed

42、 in theseforward-looking statements are reasonable,our expectations may turn out to be incorrect.Our actual results could be materially different from ourexpectations.Important risks and factors that could cause our actual results to be materially different from our expectations are generally set fo

43、rth in“Item 3.D.Risk Factors”and elsewhere in this annual report.The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in thisannual report.All forward-looking statements included herein attributable to us or ot

44、her parties or any person acting on our behalf are expressly qualifiedin their entirety by the cautionary statements contained or referred to in this section and under the heading“Risk Factors”below.Except to the extentrequired by applicable laws and regulations,we undertake no obligation to update

45、any forward-looking statements to reflect events or circumstances afterthe date on which the statements are made or to reflect the occurrence of unanticipated events.Table of Contents3PART I.ITEM 1.IDENTITY OF DIRECTORS,SENIOR MANAGEMENT AND ADVISERSNot applicable.ITEM 2.OFFER STATISTICS AND EXPECTE

46、D TIMETABLENot applicable.ITEM 3.KEY INFORMATIONOverviewWe are an international educational services provider focusing on providing quality international educational experiences related to the cultivation andimprovement of students creativity.Currently,our principal product and service are portfolio

47、 training services which we provide to students in China whoare interested in studying art overseas.We believe that we are one of the leading players in the portfolio training market in many regards,includinggeographic coverage,product breadth and student enrollment,among others.To achieve our one-s

48、top service strategy,we also provide research-basedlearning services,overseas study counselling services,in-school art classes through cooperation with high schools and training organizations,junior arteducation and other educational services to our students.We have successfully helped thousands of

49、students in China gain entry into art universities andcolleges in the U.S.,UK,Europe,Japan,Australia and other countries,among which quite some have gained entry into top art universities and colleges insuch countries.While working on developing new international education-related products and servi

50、ces,we are also exploring acquisition opportunities inthe international education sector to broaden our service spectrum.For the fiscal year ended December 31,2024,we had 4,781 students enrolled,of which 58.7%were enrolled in our portfolio training programs and theremainder were enrolled in our othe

51、r programs.Our net revenues were RMB206.8 million,RMB221.6 million and RMB268.1 million($36.7 million)inthe fiscal years ended December 31,2022,2023 and 2024,respectively.The Company is not a Chinese operating company but a Cayman Islands holding company with operations conducted primarily through i

52、ts PRCsubsidiary Huanqiuyimeng and its subsidiaries.The Company,through its wholly owned subsidiary ACG International Group Limited,or ACGIGL,holds69.04%of the equity interests of Huanqiuyimeng.The Company also has the power to direct activities of the VIE through the WFOE and consolidates theVIE in

53、to its consolidated financial statements under U.S.GAAP.As of the date of this annual report,the VIE has no business operations of its own,butholds 30.96%equity interests in Huanqiuyimeng,and 70%equity interests in Beijing Zhenwu Technology Development Co.,Ltd.,or Beijing Zhenwu,aPRC company establi

54、shed in August 2021 for the purpose of developing and marketing our project-based learning services in the form of short-term artcourses but has no business operations as of the date of this annual report.Other than holding equity interests in Huanqiuyimeng and Beijing Zhenwu,theVIE also holds minor

55、ity investments in two PRC companies.Notwithstanding the foregoing,as we are currently considering expanding our online coursesand other services,for which an internet content provision license,or ICP license,may be required under PRC law,we may elect to provide such servicesthrough the VIE in the f

56、uture if and to the extent that an ICP license or any other license or permission not available for foreign-invested companies isrequired.The variable interest entity structure is a structure commonly used to provide contractual exposure to foreign investment in China-basedcompanies where PRC law pr

57、ohibits or restricts direct foreign investment in the related Chinese operating companies,and investors may never be able todirectly hold equity interests in the VIE.This structure involves unique risks to investors,and PRC regulatory authorities could disallow our variableinterest entity structure,

58、which may result in a material change in our operations and/or value of our ADSs,including that it could cause the value of ourADSs to significantly decline or become worthless.See“Item 3.D.Risk Factors Risks Relating to Our Corporate Structure.”for more detaileddiscussions.We operate business prima

59、rily in China and are subject to complex and evolving PRC laws and regulations.Uncertainties in the PRC legal system andthe interpretation and enforcement of PRC laws and regulations could limit the legal protection available to you and us,hinder our ability to offer ourADSs in the future,result in

60、a material adverse effect on our business operations,and damage our reputation,which might further cause our ADSs tosignificantly decline in value or become worthless.See“Item 3.D.Risk Factors Risks Relating to Doing Business in the Peoples Republic of China.”Table of Contents4In recent years,the PR

61、C government initiated a series of regulatory actions and statements to regulate business operations and overseas listing inChina with little advance notice,including cracking down on illegal activities in the securities market,enhancing supervision over China-based companieslisted overseas using va

62、riable interest entity structure,issuing new regulations requiring Chinese companies conducting direct and indirect overseassecurities offering and listing to complete filing procedure,adopting new measures to extend the scope of cybersecurity reviews,and expanding the effortsin anti-monopoly enforc

63、ement.Since these statements and regulatory actions are still new or evolving,it is highly uncertain what existing or new laws orregulations or detailed implementations and interpretations will be modified or promulgated,if any,and the potential impact that such modified or newlaws and regulations w

64、ill have on our daily business operation,the ability to accept foreign investments and list on a U.S.or other foreign exchange.See“Item 3.D.Risk Factors Risks Relating to Regulations of Our Business”and“Item 3.D.Risk Factors Risks Relating to Doing Business in thePeoples Republic of China.”Our Corpo

65、rate StructureThe Company is not a Chinese operating company but a Cayman Islands holding company with operations conducted primarily through our PRCsubsidiary Huanqiuyimeng and its subsidiaries.69.04%of the equity interests of Huanqiuyimeng is indirectly owned by the Company through ACGIGL,awholly

66、owned subsidiary of the Company,and 30.96%of the equity interests of Huanqiuyimeng is owned by the VIE.We,through the WFOE,entered intoa series of contractual arrangements with the VIE and its shareholders,including(i)powers of attorney under which we can exclusively exercise all rightsof shareholde

67、rs of the VIE;(ii)exclusive technical consulting and services agreement that allows us to have sole and exclusive right to provide specifiedtechnical and consulting services to the VIE and receive certain consulting fees from the VIE;(iii)call option and cooperation agreement and loanagreements that

68、 provide us with the option to purchase the equity interest in the VIE;and(iv)equity interest pledge agreements that guarantee theperformance of the VIE and its shareholders obligations under the exclusive technical consulting and services agreement and the call option andcooperation agreement.Under

69、 U.S.GAAP,pursuant to such contractual arrangements,the Company has(i)the power,through the WFOE,to directactivities of the VIE that most significantly impact the economic performance of the VIE;and(ii)the obligation to absorb the losses and the right toreceive benefits of the VIE that could potenti

70、ally be significant to the VIE.As such,the Company is deemed to be the primary beneficiary of the VIE foraccounting purposes and must consolidate the VIE.See“Item 4.A.History and Development of the Company Our Consolidated Variable InterestEntity”and“Item 4.A.History and Development of the Company C

71、ontractual Arrangements with the VIE”.However,these contractual arrangementsmay be less effective in providing operational control than direct ownership as the VIEs shareholders may fail to perform their obligations under thecontractual arrangements and we could incur substantial costs in enforcing

72、these contractual arrangements if we are able to enforce these contractualarrangements at all.Our rights under such contractual arrangements have not been tested in a court of law,and we cannot assure you that a court wouldenforce our contractual rights.There are substantial uncertainties regarding

73、the interpretation and application of current and future PRC laws,regulations,and rules relating to such contractual arrangements,including potential future actions by the PRC government,which could affect the enforceability of ourcontractual arrangements with the VIE,and consequently,significantly

74、affect our financial condition and results of operations.If the PRC governmentfinds such agreements non-compliant with relevant PRC laws,regulations and rules,we could be subject to severe penalties or be forced to relinquish ourinterests in the VIE or forfeit our rights under the contractual arrang

75、ements.See“Item 3.D.Risk Factors Risks Relating to Our Corporate Structure.”Table of Contents5The following diagram illustrates the simplified corporate structure of us and the VIE as of the date of this annual report:Notes:(1)ATA Creativity Global is the entity in which investors hold or can purcha

76、se their interest.(2)As of the date of this annual report,the VIE has no business operations of its own.(3)Beijing Zhenwu was established in August 2021 mainly for purposes of developing and marketing our project-based learning services in the form ofshort-term art courses and has no substantive bus

77、iness operations as of the date of this annual report.(4)We conduct our operations primarily through Huanqiuyimeng and its subsidiaries.Huanqiuyimeng provides most of the portfolio training services,overseas study counselling services and research-based learning services,as well as certain other edu

78、cational services by itself,and also provides someof such services through its wholly owned subsidiaries.As of April 3,2025,Huanqiuyimeng has 11 directly or indirectly wholly owned subsidiaries.(5)Hefei Yimeng was established in June 2024 mainly to preserve the flexibility for potential local operat

79、ions.Table of Contents6Government Regulations and PermissionsAs of the date of this annual report,we believe that the Company,its subsidiaries and the VIE have received all requisite permissions and approvalsfrom the PRC government authorities to operate their businesses in China and offer securitie

80、s to foreign investors,and no permissions or approvals havebeen denied.We have obtained an opinion from Jincheng Tongda&Neal Law Firm,our PRC legal counsel,with respect to all permissions and approvalsnecessary to operate our businesses in China and offer securities to foreign investors.However,as P

81、RC laws and regulations with respect to certainlicenses and permissions are unclear and are subject to interpretations and enforcement of local governmental authorities,we may inadvertently concludethat certain permissions and approvals are not required,but the regulators do not take the same view a

82、s we do.Also,if applicable laws,regulations orinterpretations change,the Company,its subsidiaries and the VIE may be required to obtain additional licenses or approvals.Moreover,there may be newrules,regulations,government interpretations or government policies in China to govern the businesses we c

83、urrently operate.Such new rules,regulations,government interpretations or government policies may subject our business operations to additional license or filing requirements.Below is a table summarizing(i)all permissions and approvals the Company,its subsidiaries or the VIE are required to obtain f

84、rom the PRCgovernment authorities for their business operations in China as of the date of this annual report;(ii)permissions and approvals which we mayinadvertently conclude are not required but the regulators may not take the same view as we do,and(iii)permissions and approvals that are not requir

85、ed asof the date of this annual report but we believe may be required in the future due to changes or passing of applicable laws,regulations,or interpretations,based on information available to the Company.Permissionsand approvalsHolders ofpermissions andapprovalsConsequences for not obtaining suchp

86、ermissions and approvalsPermissions andapprovals theCompany,itssubsidiaries or theVIE are required toobtain from thePRC governmentauthorities for theirbusiness operationsin ChinaBusiness LicensePRC subsidiaries of theCompany and the VIENot applicable as all entities required toobtain such permission

87、s and approvals haveobtained such permissions and approvals.Registration andFiling of Foreign-investedEnterprisesThe WFOE andHuanqiuyimengPermissions andapprovals which wemay inadvertentlyconclude are notrequired but theregulators may nottake the same viewas we doOperating permitfor private schoolor

88、 approvals fornon-academicafter-schooltutoringinstitutions fromlocal competentauthorities(seebelow for moredetaileddiscussion)One of our subsidiariesQingdao Haili EducationConsultation Co.,Ltd.,orQingdao Haili,has obtained anoperating permit for privateschool,but Qingdao Haili doesnot operate any of

89、 our trainingcenters and none of ourtraining centers have obtainedan operating permit orapprovals for non-academicafter-school tutoringinstitutions from localcompetent authorities.Our training centers may be subject to variouspenalties,including fines,orders to promptlyrectify the non-compliance,ret

90、urning courseand service fees collected,paying a multipleof the amount of returned course and/orservice fees to regulators as a penalty,and/orceasing operations,which could materiallyand adversely affect our business,results ofoperations,financial condition,and the valueof our ADSs.Table of Contents

91、7 Permissionsand approvalsHolders ofpermissions andapprovalsConsequences for not obtaining suchpermissions and approvals Travel AgencyBusiness License(see below formore detaileddiscussion)None,but as of April 3,2025,one of our subsidiariesBeijing Miusi InternationalEducation Consultation Co.,Ltd.is

92、in the process ofapplying for the travel agencybusiness license for thepurpose of preservingflexibility to conduct relevanttravel agency-related businessin the future.Our PRC subsidiaries that engaged in research-based learning services without obtaining thetravel agency business license may be subj

93、ectto a non-compliance rectification order,confiscation of illegal income from suchbusiness,or fines,which could materially andadversely affect our business,financialcondition,results of operations and the valueof our ADSs.ICP license(seebelow for moredetaileddiscussion)The VIEOur PRC subsidiaries d

94、elivering online coursesservices may be subject to a non-compliancerectification order,confiscation of illegalincome from such business,or fines;or if thenon-compliance is deemed serious by theregulators,may be ordered to suspend businessfor rectification,which could materially andadversely affect o

95、ur business,financialcondition,results of operations and the valueof our ADSs.Permissions andapprovals that arenot required as ofthe date of thisannual report butwe believe may berequired in thefuture due tochanges or passingof applicable laws,regulations,orinterpretationsFiling with theCSRC under t

96、heOverseas Offeringand ListingMeasures(seebelow for moredetaileddiscussion)Not applicableThe PRC subsidiaries of the Company or theVIE may be subject to a non-compliancerectification order,warning letters,or fines,which could materially and adversely affectour business,financial condition,and result

97、s ofoperations,and/or the value of our ADSs,orcould significantly limit or completely hinderour ability to offer or continue to offersecurities to investors and cause the value ofsuch securities to significantly decline or beworthless.Cybersecurityreview clearance(see below formore detaileddiscussio

98、n)Not applicableThe Company,its subsidiaries and the VIEmay be required to suspend relevant business,shut down relevant websites,or face otherpenalties,which could materially andadversely affect our business,financialcondition,and results of operations,and/or thevalue of our ADSs,or could significan

99、tly limitor completely hinder our ability to offer orcontinue to offer securities to investors andcause the value of such securities tosignificantly decline or be worthless.Table of Contents8 Permissionsand approvalsHolders ofpermissions andapprovalsConsequences for not obtaining suchpermissions and

100、 approvals SecurityAssessment ofCross-borderTransfer ofPersonalInformation/PersonalInformationProtectionCertificationNot applicableThe Company,its subsidiaries and the VIEmay be subject to a non-compliancerectification order,warning,confiscation ofillegal income or fines,or if the non-compliance is

101、deemed serious by theregulators,suspension of relevant business andrevocation of relevant business operationpermissions or business licenses,which couldmaterially and adversely affect our business,financial condition,and results of operations,and/or the value of our ADSs.Clearance undertheConfidenti

102、alityProvisions(seebelow for moredetaileddiscussion)Not applicableThe Company,its subsidiaries and the VIEmay be subject to investigation,fines and otherpenalties,and,if any related behavior issuspected as a crime,may be subject tocriminal penalties,which could materially andadversely affect our bus

103、iness,financialcondition,and results of operations,and/or thevalue of our ADSs.Table of Contents9Potential Permissions and Approvals for Business OperationsOperating Permit for Private SchoolAccording to the Law for Promoting Private Education,as amended by the Standing Committee of the National Peo

104、ples Congress of the PRC,or theNPC,on December 29,2018(the“Amended Private Education Law”),and the Amended Implementation Rules for the Law for Promoting PrivateEducation promulgated by the State Council on April 7,2021,which became effective on September 1,2021(the“Amended Implementation Rules”),pr

105、ivate schools are required to obtain operating permits from relevant PRC authorities for carrying out educational activities.Although the AmendedPrivate Education Law generally states that private education institutions are also included in the category of“private schools,”as of the date of this ann

106、ualreport,relevant implementing rules only require private education institutions providing tutoring services on academic subjects for K-12 students andcertain vocational skill education services to obtain private school operating permits.On July 24,2021,the General Office of the Central Committee o

107、f theCommunist Party of China and the General Office of the State Council issued the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education,or the Opinion,which,among others,requires that local government authorities shall(i)classifynon-

108、academic subjects according to the categories of sports,culture and art,science and technology and other non-academic subjects and designate thecompetent authorities responsible for administering such non-academic after-school tutoring institutions,respectively;(ii)formulate standards for differentc

109、ategories of non-academic subjects;and(iii)conduct strict examination before granting any permission.As of the date of this annual report,in order toimplement the Opinion,certain local government authorities,including some of the areas where we have training centers such as Guangdong Province,Jiangs

110、u Province,Yunnan Province,Sichuan Province,Liaoning Province and Beijing,have promulgated rules that require non-academic after schooltutoring institutions in areas for K-12 students,such as art,music,among others,to obtain private school operating permit or prior approvals for non-academic after s

111、chool tutoring institutions from local competent authorities.For example,on August 2,2021,the Department of Education of GuangdongProvince issued a notice which provides that local educational administration authorities shall approve the activities conducted by non-academic afterschool tutoring inst

112、itutions involving non-academic subjects such as physical education,art,etc.,in accordance with the relevant laws and regulations andissue operating permit accordingly;further,on December 9,2022,the Department of Education of Guangdong Province and other government authoritiesjointly issued the Appr

113、oval Procedure Guidance for Operating Permit Application of Non-academic After School Tutoring Institutions(TrialImplementation),which provides that,among others,the non-academic after school tutoring institutions that provide training for primary,middle and highschool students may apply for operati

114、ng permit if meeting the standards provided in the Amended Private Education Law.On November 8,2023,theDepartment of Education of Liaoning Province and other government authorities jointly issued the Management Measures for Non-academic After SchoolTutoring Institutions Targeting Primary and Seconda

115、ry Middle School Students of Liaoning Province,which came into effect on December 1,2023 andprovides that,among others,the non-academic after school tutoring institutions providing art training to primary and secondary middle school students andpre-school children aged three and above shall apply fo

116、r operating permit from local education administration authorities at county level.On March 15,2024,the Beijing Municipal Bureau of Culture and Tourism and the Beijing Municipal Commission of Education issued the Standards for theEstablishment of Cultural and Artistic After School Tutoring Instituti

117、ons in Beijing(Trial),which provides that a cultural and artistic after school tutoringinstitution that targets to provide training to primary and secondary middle school students and pre-school children aged three to six shall obtain theadministrative license from the district level education admin

118、istrative department for the establishment of offline cultural and artistic after schoolinstitutions.However,the interpretation of the foregoing laws,regulations,rules and guidance remain unclear in several respects at this time,and,especially,it is unclear if private education institutions mainly f

119、ocusing on art education for high school and undergraduate students for the purpose ofoverseas study like us are required to obtain private school operating permits or the approval for non-academic after-school tutoring institutions from localcompetent authorities.Since the related regulatory regime

120、 of education industry in the PRC continues to rapidly evolve,the interpretations of relevantregulations and rules are not always uniform,and the enforcement of relevant regulations and rules involve uncertainties,we cannot assure you that ourtraining centers will not be classified as“private school

121、s”and thus be required to obtain the private school operating permits or other relevant approvalfrom local competent authorities by the regulators due to any future and further development,interpretation and enforcement of relevant regulations andrules.Table of Contents10To date,our PRC subsidiaries

122、 operating our training centers have not received any notifications which require them to obtain private school operatingpermits or approvals for non-academic after-school tutoring institutions from local competent authorities.As of the date of this annual report,one of oursubsidiaries Qingdao Haili

123、 has obtained an operating permit for private school,but Qingdao Haili does not operate any of our training centers,and none ofour training centers have obtained an operating permit or approvals for non-academic after-school tutoring institutions from local competent authorities.Ifwe inadvertently c

124、onclude that such permissions are not required,but the regulators do not take the same view as we do,our training centers may besubject to various penalties,including fines,orders to promptly rectify the non-compliance,return course and service fees collected,pay a multiple of theamount of returned

125、course and/or service fees to regulators as a penalty,and/or cease operations.If this occurs,our business,results of operations,financialcondition and the value of our ADSs could be materially and adversely affected.See“Item 3.D.Risk Factors Risks Relating to Regulations of OurBusiness As PRC laws a

126、nd regulations with respect to certain licenses and permissions are unclear and are subject to interpretations and enforcement oflocal governmental authorities,the Company,its subsidiaries and the VIE may be required to obtain additional licenses.”Operating Permit for Travel-related ActivityThe Tour

127、ism Law of the PRC,which was promulgated by the Standing Committee of the NPC and most recently amended on October 26,2018,provides that,among other things,to engage in the businesses of outbound tourism,a travel agency shall obtain the corresponding business permit,and thespecific conditions shall

128、be provided for by the State Council and that when organizing an outbound touring group,or organizing or receiving an inboundtouring group,a travel agency shall,in accordance with the relevant provisions,arrange for a tour leader or tour guide to accompany the touring groupthroughout the whole tour.

129、Regulations on Travel Agencies promulgated by the State Council,amended on November 29,2020,and the ImplementationRules of Regulations on Travel Agencies,provide that,among other things,the travel agency shall mean any entity that engages in the business ofattracting,organizing,and receiving tourist

130、s,providing tourism services for tourists and operating domestic,inbound or outbound tourism;theaforementioned business shall include but not limited to arranging for transport services,arranging for accommodation services,providing services for tourguides or team leaders,providing services of touri

131、sm consultation and tourism activities design.According to the Regulations on Travel Agencies and itsimplementation rules,any tourism agency that engages in domestic and outbound tourism shall apply for corresponding permits to engage in such tourismactivities from the administrative department of t

132、ourism under the State Council,the governments of provinces,autonomous regions,or municipalities.OnNovember 19,2024,the General Office of the Ministry of Culture and Tourism issued the Notice on Promoting the Healthy Development of Travel AgencyResearch-based Tourism Business,providing that travel a

133、gencies shall choose qualified suppliers and partners and shall evaluate the service capabilities ofthe partners,which does not require our PRC subsidiaries to obtain travel agency permits.With respect to our research-based learning services,our PRCsubsidiaries cooperate with third-party travel agen

134、cies which have travel agency permits for our educational travel activities,such as accommodation andtour guiding.We dont think our PRC subsidiaries engaged in such travel-related activities under their cooperation with third party travel are also requiredto obtain travel agency permits under the cu

135、rrent law rules,and such PRC subsidiaries have not received any notifications which require them to obtain atravel agency permit.If we inadvertently conclude that such permissions are not required,but the regulators do not take the same view as we do,therelevant regulators may order such PRC subsidi

136、aries to rectify the non-compliance,confiscate the illegal income from such business and impose fines onsuch PRC subsidiaries.If this occurs,our business,results of operations,financial condition and the value of our ADSs could be materially and adverselyaffected.See“Item 3.D.Risk Factors Risks Rela

137、ting to Regulations of Our Business As PRC laws and regulations with respect to certain licensesand permissions are unclear and are subject to interpretations and enforcement of local governmental authorities,the Company,its subsidiaries and the VIEmay be required to obtain additional licenses.”Tabl

138、e of Contents11ICP licenseOn September 25,2000,the State Council promulgated the Administrative Measures on Internet Information Services,or the Internet Measures,whichwas amended in 2011 and 2024,respectively.Under the Internet Measures,commercial internet information services operators shall obtai

139、n an ICP licensefrom the relevant government authorities before engaging in any commercial internet information services operations within the PRC.According to theSpecial Administrative Measures for Market Access of Foreign Investment(Negative List)(2024 Edition),the provision of information service

140、s falls in therestricted category,and the percentage of foreign ownership cannot exceed 50%.Since the outbreak of the COVID-19,we have shifted some of our offlinecourses to online courses and provided them to our students through online platforms of third-party IT service providers.We believe that o

141、ur PRCsubsidiaries providing such online courses are not required to obtain the ICP license as they have not developed their own platforms but delivered suchcourses through third-party online platforms.To date,our PRC subsidiaries have not received any notifications from PRC governmental authorities

142、 torequire them to obtain the ICP license.However,since the enforcement of relevant regulations and rules involve uncertainties,we cannot assure you thatthe regulators will take the same view as we do.If we inadvertently conclude that the ICP license is not required for our PRC subsidiaries,our PRCs

143、ubsidiaries delivering online courses services may be subject to a non-compliance rectification order,confiscation of illegal proceeds,or fines;or if thenon-compliance is deemed serious by the regulators,may be ordered to suspend business for rectification.If this occurs,our business,results of oper

144、ations,financial condition and the value of our ADSs could be materially and adversely affected.To date,none of our PRC subsidiaries have obtained the ICPlicense due to the foreign investment restriction for the ICP license,but the VIE has obtained the ICP license to preserve our flexibility to oper

145、ate relevantbusiness.If the ICP license is required in the future or we choose to provide information services through our own online platform,we will transferrelevant businesses to the VIE to comply with the compliance requirements.See“Item 3.D.Risk Factors Risks Relating to Regulations of OurBusin

146、ess As PRC laws and regulations with respect to certain licenses and permissions are unclear and are subject to interpretations and enforcement oflocal governmental authorities,the Company,its subsidiaries and the VIE may be required to obtain additional licenses.”Table of Contents12Security Assessm

147、ent of Cross-border Transfer of Personal Information/Personal Information Protection CertificationOn August 20,2021,the Standing Committee of the NPC promulgated the Personal Information Protection Law,which took effect on November 1,2021,pursuant to which,personal information processors,who need to

148、 transfer personal information out of mainland China for business and other needs,shall satisfy one of the following conditions:(i)passing the security assessment by the national cyberspace authorities;(ii)being certified by professionalorganizations for personal information protection;(iii)entering

149、 into contracts providing the rights and obligations of both parties with overseas recipientsin accordance with the standard contract formulated by the national cyberspace authorities;and(iv)other conditions specified by laws,administrationregulations and the national cyberspace authorities.The pers

150、onal information processors shall take necessary measures to ensure that the activities of theoverseas recipients handling personal information meet the standards of personal information protection stipulated in the Personal Information ProtectionLaw.If a personal information processor provides pers

151、onal information across the border of mainland China,it shall inform the information owners of thename and contact information of the overseas recipients,the purpose and manner of information processing,the type of personal information,and themanner and procedure for the information owners to exerci

152、se their rights under the Personal Information Protection Law over the overseas recipients,andobtain consent of the information owners.On July 7,2022,the Cyberspace Administration of China,or the CAC,issued the Measures on SecurityAssessment of the Cross-border Transfer of Data(the“Security Assessme

153、nt Measures”),which took effect on September 1,2022.On March 22,2024,theCAC issued the Provisions on Promoting and Regulating Cross-border Data Flow(the“Cross-border Data Flow Provisions”),which took effect on thesame date and shall supersede the provisions under the Security Assessment Measures and

154、 the Model Contract Provisions(as defined below)that are notconsistent with those under the Cross-border Data Flow Provisions.In accordance with the Security Assessment Measures and the Cross-border Data FlowProvisions,the following cross-border transfers of important data or personal information ge

155、nerated from or collected in mainland China should be subjectto a security assessment,which includes:(i)a critical information infrastructure operator to transfer personal information or important data;(ii)a dataprocessor other than a critical information infrastructure operator to transfer importan

156、t data overseas;(iii)a data processor other than a critical informationinfrastructure operator who has,since January 1 of the current year,transferred personal information of more than 1 million individuals overseascumulatively,or transferred sensitive personal information of more than 10,000 indivi

157、duals overseas cumulatively;or(iv)other circumstances under whichsecurity assessment of data cross-border transfer is required as prescribed by the national cyberspace administration.On September 24,2024,the StateCouncil promulgated the Management Regulations on Network Data Security(the“Network Dat

158、a Security Regulations”),which took effect on January 1,2025,stipulating that where it is necessary to provide important data generated or collected by a network data processor during its operation within theterritory of the PRC to overseas parties,such provision shall pass the security assessment f

159、or data cross-border transmission organized by the statecyberspace administration.As of the date of this annual report,the amount of personal information(including sensitive personal information)transmittedby the Company,its subsidiaries and the VIE across the border is relatively small.The data pro

160、cessed in our business does not have a bearing on nationalsecurity and thus may not be classified as core or important data by the authorities.Additionally,none of the Company,its subsidiaries or the VIE hasreceived any notice from the national cyberspace authorities requiring them to conduct a secu

161、rity assessment.However,if the relevant laws,regulations orinterpretations change in the future,and the Company,its subsidiaries and the VIE are subject to a security assessment,we will face uncertainty as towhether any required actions can be timely completed,or at all.Under the Personal Informatio

162、n Protection Law,the Company,its subsidiaries and the VIE may meet the requirements by either completing personalinformation protection certification or entering into the standard contract formulated by the national cyberspace authorities,as the amount of personalinformation we or the VIE transfer a

163、cross the border is relatively small.Table of Contents13On November 4,2022,the CAC and the State Administration for Market Regulation jointly issued the Announcement in relation to theImplementation of Personal Information Protection Certification with an exhibit of Implementation Rules for Personal

164、 Information Protection Certification,according to which,the professional organizations authorized to conduct personal information protection certification shall comply with theImplementation Rules for Personal Information Protection Certification.On February 22,2023,the CAC issued the Provisions on

165、 Model Contract forCross-border Transfer of Personal Information(the“Model Contract Provisions”)with an exhibit of model contract,which came into effect on June 1,2023.According to the Model Contract Provisions and the Cross-border Data Flow Provisions,the personal information processor meeting all

166、of thefollowing four conditions may transfer personal information out of mainland China by way of entering into the model contract:(i)a non-criticalinformation infrastructure operator;(ii)a personal information processor who has,since January 1 of the current year,transferred personal information of

167、more than 100,000 but less than one million individuals overseas cumulatively;and(iii)a personal information processor who has,since January 1 of thecurrent year,transferred sensitive personal information of less than 10,000 individuals overseas cumulatively.Also,the personal information processorsh

168、all conduct a personal information protection influence assessment before transferring any personal information out of mainland China.The personalinformation processor shall file the signed model contract within 10 days after the effective date of such model contract with the local competent authori

169、ty.The Cross-border Data Flow Provisions provides exemptions,under which a data processor that transfers personal information overseas can be exemptedfrom applying for a security assessment,completing personal information protection certification or entering into a standard contract for the outbound

170、transfer of personal information.A data processor that transfer personal information overseas can be exempted when(i)it is necessary to provide personalinformation overseas to enter into or perform a contract to which the individual is a party,such as cross-border shopping,cross-border delivery,cros

171、s-border remittance,cross-border payment,cross-border account opening,flight and hotel booking,visa processing,examination services,etc.;(ii)it isnecessary to provide personal information overseas for cross-border human resource management under the labor rules and regulations and any collectivecont

172、ract executed in accordance with the law;(iii)it is necessary to provide personal information overseas to protect the life,health,or property safety ofnatural persons under emergency circumstances;and(iv)a data processor,other than a critical information infrastructure operator,has cumulativelyprovi

173、ded the personal information(excluding sensitive personal information)of less than 100,000 individuals overseas since January 1 of the current year.That said,a data processor that transfers personal information overseas shall fulfill its legal obligations,such as notifying the relevant individuals,o

174、btaining the individuals separate consent,and completing a personal information protection impact assessment.The Network Data Security Regulationsprovides that a network data processor may transmit personal information abroad if it has completed a security assessment for data cross-bordertransmissio

175、n or personal information protection certification or complied with the provisions in relation to model contract for cross-border transfer ofpersonal information.As the foregoing rules were recently issued and the regulations are still evolving,we are still evaluating and monitoring whether andhow t

176、o complete the personal information protection certification or enter into the standard contract formulated by the national cyberspace authorities.Asof the date of this annual report,we have not received any inquiries,notices,warnings,sanctions,denials,or regulatory objections from the CAC or anyoth

177、er regulatory authority in relation to the foregoing issues.In the event of any failure to comply with the Personal Information Protection Law,the Company,its subsidiaries and the VIE may be subject to non-compliance rectification,warning,confiscation of illegal income or fines,or if the non-complia

178、nce is deemed serious by the regulators,suspension ofrelevant business and revocation of relevant business operation permissions or business licenses,which could materially and adversely affect our business,financial condition,and results of operations,and/or the value of our ADSs.See“Item 3.D.Risk

179、Factors Risks Relating to Regulations of Our Business Failure to comply with regulations relating to information security and privacy protection,breaches or perceived breaches of our security measuresrelating to our service offerings,unauthorized disclosure or misuse of personal data through breache

180、s of our computer systems or otherwise,could result innegative publicity and loss of students,expose us to protracted and costly litigation,and harm our business and results of operations.Additionally,it isunclear whether we will be subject to the oversight of the CAC and how such oversight may impa

181、ct us.”Table of Contents14Potential Permissions and Approvals for Offering Securities to Foreign InvestorsThe Crackdown OpinionOn July 6,2021,the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointlyissued the Opinions on Severe a

182、nd Lawful Crackdown on Illegal Securities Activities,or the Crackdown Opinions.The Crackdown Opinions emphasizedthe need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies.TheCrackdown Opinions proposed to take effect

183、ive measures,such as promoting the construction of relevant regulatory systems to deal with the risks andincidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection.As of the date of this annual report,we believe the permission and approval of

184、the China Securities Regulatory Commission,or the CSRC,is not required for the Company,its subsidiaries andthe VIE in connection with our listing on Nasdaq,but as the official guidance and interpretation of the Crackdown Opinions remain unclear in severalrespects at this time,we cannot assure you th

185、at the Company,its subsidiaries and the VIE will remain fully compliant with all regulatory requirements ofthe Crackdown Opinions or any future implementation rules on a timely basis,or at all.If the Company,its subsidiaries and the VIE are unable to obtainsuch permission or approval if required in

186、the future,our securities may be delisted from Nasdaq and/or the value of our ADSs may significantly decline orbecome worthless.See“Item 3.D.Risk Factors Risks Relating to Regulations of Our Business The approval,filing or other requirements of theCSRC or other PRC government authorities may be requ

187、ired under PRC law in connection with our issuance of securities overseas.”Filing with the CSRC under the Overseas Offering and Listing MeasuresOn February 17,2023,the CSRC issued the Trail Implementation Management Measures of Overseas Offering and Listing by Domestic Companies(the“Overseas Offerin

188、g and Listing Measures”),which came into effect on March 31,2023,and provides principles and guidelines for direct and indirectissuance of securities overseas by a Chinese domestic company.Under the Overseas Offering and Listing Measures,the substance rather than the form ofissuance will govern when

189、 determining whether an issuance constitutes“indirect issuance of securities overseas by a Chinese domestic company,”and inthe event any listing or issuance of securities has fallen under this definition,the issuer shall assign one of its related major Chinese domestic operatingentities to make fili

190、ngs with the CSRC within three business days after its initial public offering or any offerings after the initial public offering.As theCompany is a Cayman Islands holding company with nearly all of business operations conducted within the territory of mainland China,we understand theCompanys listin

191、g and issuance of securities on Nasdaq constitutes indirect issuance of securities overseas by a Chinese domestic company under theOverseas Offering and Listing Measures.However,according to the Notice on Management and Arrangement of the Filing of Overseas Offering andListing by Domestic Companies

192、issued by CSRC on February 17,2023(the“Overseas Offering and Listing Notice”),an issuer who has completedoverseas issuance and listing before March 31,2023 like us is not required to file with the CSRC for the offering or listing that is already completed but isrequired to make filings with the CSRC

193、 for its follow-on financing activities involving overseas offering or listing after the effective date of the OverseasOffering and Listing Measures.As such,we and the VIE are not required to make filings with CSRC under the Overseas Offering and Listing Measuresunless we conduct new overseas offeri

194、ngs of securities in the future.As the interpretations and implementation of the Overseas Offering and ListingMeasures still involve uncertainties,we cannot assure you that the Company,its subsidiaries and the VIE can complete the filings with the CSRC if theCompany intends to conduct new overseas o

195、fferings of securities after March 31,2023.In addition,since the regulatory regime of the PRC for securitiesactivities continues to rapidly evolve,we cannot assure you that we will not be required in the future to make filings with or obtain approvals from theCSRC or potentially other regulatory aut

196、horities in order to maintain the listing status of our ADSs on Nasdaq due to changes or passing of applicable laws,regulations,or interpretations in the future.In the event that it is determined that the Company,its subsidiaries and the VIE are required to make filingswith or obtain approval from t

197、he CSRC or any other regulatory authority but fail to make such filings or obtain such approvals timely or at all,the PRCsubsidiaries of the Company or the VIE may be subject to a non-compliance rectification order,warning letters or fines,which could materially andadversely affect our business,fina

198、ncial condition,and results of operations,and/or the value of our ADSs,or could significantly limit or completely hinderour ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.See“Item 3.D.Risk Factors Risks Re

199、lating to Regulations of Our Business The approval,filing or other requirements of the CSRC or other PRC governmentauthorities may be required under PRC law in connection with our issuance of securities overseas.”Table of Contents15Cybersecurity ReviewOn December 28,2021,the CAC published the Measur

200、es for Cybersecurity Review(the“Cybersecurity Review Measures”),which became effectiveon February 15,2022,pursuant to which,(i)critical information infrastructure operators purchasing network products and services that affect or may affectnational security,(ii)internet platform operators engaging in

201、 data processing activities that affect or may affect national security,and(iii)any internetplatform operator possessing personal information of more than one million users and applying for listing on a foreign exchange shall be subject to thecybersecurity review by the CAC.The Network Data Security

202、 Regulations stipulates that where a network data processor carries out network dataprocessing activities that affect or may affect national security,it shall undergo a national security review in accordance with relevant national regulations.We believe the Company,its subsidiaries and the VIE would

203、 not be subject to the cybersecurity review by the CAC,given that the Company,itssubsidiaries and the VIE do not possess a large amount of personal information in our business operations,and data processed in our business does nothave a bearing on national security and thus may not be classified as

204、core or important data by the authorities.However,there remains uncertainty as tohow the Cybersecurity Review Measures will be interpreted or implemented and whether the PRC regulatory agencies,including the CAC,may adopt newlaws,regulations,rules,or detailed implementation and interpretation relate

205、d to the Cybersecurity Review Measures.If the relevant laws,regulations orinterpretations change in the future,and the Company,its subsidiaries and the VIE are subject to mandatory cybersecurity review and other specific actionsrequired by the CAC,we will face uncertainty as to whether any clearance

206、 or other required actions can be timely completed,or at all.If not,the Company,its subsidiaries and the VIE may be required to suspend relevant business,shut down relevant websites,or face other penalties,which could materially andadversely affect our business,financial condition,and results of ope

207、rations,and/or the value of our ADSs,or could significantly limit or completely hinderour ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.As of the dateof this annual report,the Company,its subsidiaries and

208、 the VIE have not received any notice from regulatory authorities requiring us to go through thecybersecurity review by the CAC.See“Item 3.D.Risk Factors Risks Relating to Regulations of Our Business The approval,filing or otherrequirements of the CSRC or other PRC government authorities may be requ

209、ired under PRC law in connection with our issuance of securities overseas”and“Item 3.D.Risk Factors Risks Relating to Regulations of Our Business Failure to comply with regulations relating to information security andprivacy protection,breaches or perceived breaches of our security measures relating

210、 to our service offerings,unauthorized disclosure or misuse of personaldata through breaches of our computer systems or otherwise,could result in negative publicity and loss of students,expose us to protracted and costlylitigation,and harm our business and results of operations.Additionally,it is un

211、clear whether we will be subject to the oversight of the CAC and how suchoversight may impact us.”Clearance under the Confidentiality ProvisionsOn February 24,2023,the CSRC and other PRC governmental authorities issued Provisions on Strengthening the Relevant Confidentiality andArchives Management W

212、ork Relating to the Overseas Issuance of Securities and Listing of Domestic Enterprises(the“Confidentiality Provisions”),whichcame into effect on March 31,2023.According to the Confidentiality Provisions,both“direct issuance of securities overseas by a Chinese domesticcompany”and“indirect issuance o

213、f securities overseas by a Chinese domestic company”(i.e.,issuance of securities by relevant overseas holdingcompany)shall be subject to the Confidentiality Provisions.Domestic enterprises that provide or publicly disclose files and documents that contain statesecrets and work secrets of the authori

214、ties to relevant securities companies,securities service agencies,foreign regulatory agencies and other institutionsand individuals or do so through its overseas listing entities,shall obtain the approval of the competent authorities and file with the competentconfidentiality administrative authorit

215、ies.Although the interpretation and implementation of the Confidentiality Provisions remain substantially uncertain,we tend to believe the Company,its subsidiaries and the VIE would not be subject to clearance under the Confidentiality Provisions as the Company,itssubsidiaries and the VIE do not pos

216、sess any document or file that involves state secrets or work secrets of the authorities.As of the date of this annualreport,the Company,its subsidiaries and the VIE have not received any notice from regulatory authorities requiring them to obtain the foregoing approvalor complete any of the foregoi

217、ng procedures.However,if the relevant laws,regulations or interpretations change in the future,and the Company,itssubsidiaries and the VIE are subject to such clearance,we will face uncertainty as to whether any required approval can be timely obtained and any actionscan be timely completed,or at al

218、l.If not,the Company,its subsidiaries and the VIE may be subject to investigation,fines and other penalties;and if anyrelated behavior is suspected as a crime,may be subject to criminal penalties,which could materially and adversely affect our business,financial condition,and results of operations,a

219、nd/or the value of our ADSs.See“Item 3.D.Risk Factors Risks Relating to Regulations of Our Business The approval,filing or other requirements of the CSRC or other PRC government authorities may be required under PRC law in connection with our issuance ofsecurities overseas.”Table of Contents16Transf

220、er of Cash within Our OrganizationWe adopt a holding company structure,and our holding companies may rely on dividends and other distributions on equity paid by our current andfuture PRC subsidiaries or cash paid by the VIE under the VIE arrangement for their cash requirements,including the funds ne

221、cessary to service any debtwe may incur or financing we may need for operations not carried through our PRC subsidiaries or the VIE.Due to restrictions on foreign exchange placedon our PRC subsidiaries and the VIE by the PRC government under PRC laws and regulations,to the extent cash is located in

222、the PRC or within a PRCdomiciled entity and may need to be used to fund our operations outside of the PRC,the funds may not be available due to such limitations unless and untilrelated approvals and registrations are obtained.See“Restrictions on Foreign Exchange and Our Ability to Transfer Cash Betw

223、een Entities,AcrossBorders,and to U.S.Investors,and Restrictions and Limitations on Our Ability to Distribute Earnings from Our Businesses”for more detailed discussions.The Company may transfer funds to ATA BVI and ACGIGL through capital contribution into or a shareholder loan to such subsidiaries,r

224、espectively.ATA BVI may transfer funds through capital contribution into or a shareholder loan to the WFOE.ACGIGL may transfer funds through capitalcontribution into or a shareholder loan to ATA Creativity Global(Hong Kong)Limited,or ACG HK,which is formerly known as Xing Wei Institute(HongKong)Limi

225、ted,Huanqiuyimeng and Hefei Yimeng,respectively.The WFOE and Huanqiuyimeng may transfer funds to their respective subsidiariesthrough capital contribution into or a shareholder loan to them.The WFOE provides services including comprehensive business support,technical services,and consultancy,in exch

226、ange for service fees from the VIE.The WFOE may also provide loans to the VIE,subject to statutory limits and restrictions.Inaddition,the VIE may also receive dividends from its subsidiaries or investing companies,including Huanqiuyimeng,Beijing Zhenwu,and others.As of the date hereof,we have not in

227、stalled written cash management policies that dictate how funds are transferred between us,our subsidiaries,theVIE or investors.However,we have established internal controls and procedures for cash flows within our organization during daily operations,underwhich each transfer of cash between the Com

228、pany,our subsidiaries,the VIE or investors is subject to a stringent internal approval process.Table of Contents17The following diagram illustrates the typical fund flow through our organization(including the VIE).Cash Flow and Assets Transfer Between the Company,Its Subsidiaries,and the VIEThe Comp

229、any received RMB3.2 million from subsidiaries of the Company and paid RMB0.1 million to subsidiaries of the Company,respectively,forthe year ended December 31,2022.See line item of“Cash flows from investing activities-Cash received from inter-companies/Cash paid to inter-companies”in the Condensed C

230、ash Flow Schedule for fiscal year 2022.The Company received RMB2.5 million from subsidiaries of the Company andpaid RMB1.4 million to subsidiaries of the Company,respectively,for the year ended December 31,2023.See line item of“Cash flows from investingactivities-Cash received from inter-companies/C

231、ash paid to inter-companies”in the Condensed Cash Flow Schedule for fiscal year 2023.The Companyreceived RMB9.9 million from subsidiaries of the Company and paid RMB2.5 million to subsidiaries of the Company,respectively,for the year endedDecember 31,2024.See line item of“Cash flows from investing a

232、ctivities-Cash received from inter-companies/Cash paid to inter-companies”in theCondensed Cash Flow Schedule for fiscal year 2024.Cash is transferred from the Company to its subsidiaries through shareholder loan and capital contribution.For the year ended December 31,2023,subsidiaries of ATA BVI rep

233、aid RMB3.6 million of loan borrowed from ATA BVI during the year ended December 31,2019.This cash flow was classifiedas investing activities of ATA BVI and financing activities of its subsidiaries,respectively,and was eliminated within the column of“Subsidiaries of theCompany”of the Condensed Cash F

234、low Schedule for fiscal year 2023.See note 1 to the Condensed Cash Flow Schedule for fiscal year 2023.Table of Contents18To date,we and the VIE have not distributed any earnings or settled any amounts owed under the VIE Agreements(defined below).We and the VIEdo not currently have any plans to distr

235、ibute earnings or settle amounts owed under the VIE Agreements.For the years ended December 31,2022,2023 and 2024 due to the fact that the VIE did not provide material services,the VIE did not generatematerial cash inflows from the delivery of services,and its cash inflows were provided via capital

236、contribution of the nominee shareholders and loanarrangement from subsidiaries of the Company,except for the cash inflow of RMB4,236 resulting from sales of online courses.For the years endedDecember 31,2022,2023 and 2024,the VIE borrowed RMB0.8 million,RMB1.1 million and RMB1.6 million from subsidi

237、aries of the Company,respectively.The VIE repaid nil to subsidiaries of the Company during each of the years ended December 31,2022,2023 and 2024.See line items of“Cash flows from investing activities Cash paid to inter-companies/Cash received from inter-companies”and“Cash flows from financing activ

238、ities Cash received from inter-companies/Cash repaid to inter-companies”in the Condensed Cash Flow Schedule for fiscal years 2022,2023 and 2024.As ofDecember 31,2024,the outstanding payables due from the VIE to subsidiaries of the Company were RMB66.2 million,which was eliminated during theconsolida

239、tion process.See note 1 to the condensed consolidating schedule depicting the consolidated balance sheets as of December 31,2024.These cashflows were classified as investing activities of subsidiaries of the Company and financing activities of the VIE,respectively.The WFOE provided loans of RMB0.9 m

240、illion and RMB0.1 million to Mr.Xiaofeng Ma(Chairman and CEO of the Company)and Mr.HaichangXiong(former General Legal Counsel of the Company),nominee shareholders of the VIE,as initial capital contribution into the VIE in April 2018,respectively.In December 2018,the WFOE provided additional loans of

241、 RMB8.1 million and RMB0.9 million to Mr.Xiaofeng Ma and Mr.HaichangXiong as capital contribution into the VIE,respectively.In April and June 2019,the WFOE provided additional loans in total of RMB36.0 million andRMB4.0 million to Mr.Xiaofeng Ma and Mr.Haichang Xiong as another round of capital cont

242、ribution into the VIE,respectively.In August 2020,the priornominee shareholder Mr.Haichang Xiong transferred his 10%equity shares in the VIE to Mr.Jun Zhang(President and Director of the Company,or“newnominee shareholder”)and paid back the entire RMB5.0 million loan to the WFOE.The WFOE provided a l

243、oan in RMB5.0 million to Mr.Jun Zhang toacquire the 10%equity interests of the VIE.These cash flows were classified as the related subsidiaries investing activities and financing activities of theVIE,respectively.As of December 31,2024,receivables due from Mr.Xiaofeng Ma and Mr.Jun Zhang in the bala

244、nce of RMB45.0 million and RMB5.0million,respectively,were recorded as the receivables due from related parties for the VIE.See note 2 to the condensed consolidating schedule depictingthe consolidated balance sheets as of December 31,2024.Other than the above,no assets were transferred among the Com

245、pany,its subsidiaries,and the VIE for the years ended December 31,2022,2023 and2024.Dividends or Distributions Made to the Company and Tax Consequences ThereofThe Companys subsidiaries and the VIE did not make any dividends or distributions to the Company in the fiscal years ended December 31,2022,2

246、023 and 2024.If any dividend is paid by our PRC subsidiaries to the Company in the future,under the PRC Enterprise Income Tax Law,or the EIT Law,and its implementation rules,dividends from our PRC subsidiaries to its non-PRC shareholders may be subject to a 10%withholding tax if such dividendsare de

247、rived from profits.If the Company or its offshore subsidiaries are deemed to be a PRC resident enterprise(we do not currently consider the Companyor its offshore subsidiaries to be PRC resident enterprises),the withholding tax may be exempted,but the Company or its offshore subsidiaries will besubje

248、ct to a 25%tax on our worldwide income,and our non-PRC enterprise investors may be subject to PRC income tax withholding at a rate of 10%.See“Item 3.D.Risk Factors Risks Relating to Regulations of Our Business Under the EIT Law,we may be classified as a resident enterprise of China.Such classificati

249、on will likely result in unfavorable tax consequences to us and U.S.holders of our ADSs or common shares”and“Item 10.E.Taxation Peoples Republic of China Taxation.”If any payment is made from the VIE to the WFOE pursuant to the contractual arrangements between them,suchpayments will be subject to PR

250、C taxes,including business taxes and value-added tax,or VAT.Dividends or Distributions Made to the U.S.Investors and Tax Consequences ThereofThe Company did not make any dividends or distributions to its shareholders in the fiscal years ended December 31,2022,2023 and 2024.Any futuredetermination to

251、 pay dividends will be made at the discretion of our board of directors and will be based upon our future operations and earnings,capitalrequirements and surplus,general financial condition,shareholders interests,contractual restrictions and other factors our board of directors may deemrelevant.Tabl

252、e of Contents19Under the current laws of the Cayman Islands,no Cayman Islands withholding tax is imposed upon any payments of dividends by the Company.However,if the Company is considered a PRC tax resident enterprise for tax purposes(we do not currently consider the Company to be a PRC residentente

253、rprise),any dividends that the Company pays to its overseas shareholders may be regarded as China-sourced income and as a result may be subject toPRC withholding tax.See“Item 3.D.Risk Factors Risks Relating to Regulations of Our Business Under the EIT Law,we may be classified as aresident enterprise

254、 of China.Such classification will likely result in unfavorable tax consequences to us and U.S.holders of our ADSs or common shares”and“Item 10.E.Taxation Peoples Republic of China Taxation.”In addition,subject to the passive foreign investment company rules,the gross amount of any distribution that

255、 the Company makes to investors withrespect to our ADSs or common shares(including any amounts withheld to reflect PRC withholding taxes)will be taxable as a dividend,to the extent paidout of our current or accumulated earnings and profits,as determined under United States federal income tax princip

256、les.See“Item 10.E.Taxation United States Federal Income Taxation.”Restrictions on Foreign Exchange and Our Ability to Transfer Cash Between Entities,Across Borders,and to U.S.Investors,and Restrictions andLimitations on Our Ability to Distribute Earnings from Our BusinessesWe face various restrictio

257、ns and limitations that impact our ability to transfer cash between our entities,across borders and to U.S.investors,and ourability to distribute earnings from our business,including our subsidiaries and/or the VIE,to the Company and U.S.investors,as well as the ability to settleamounts owed under t

258、he VIE Agreements.The Company is not a Chinese operating company but a Cayman Islands holding company with operations conducted primarily through its PRCsubsidiary Huanqiuyimeng and its subsidiaries and may elect to provide such services through the VIE in the future.As a result,although othermeans

259、are available for us to obtain financing at the Company level,the Companys ability to fund operations not carried through our PRCsubsidiaries or the VIE,pay dividends to its shareholders,or service any debt it may incur may depend upon dividends paid by our PRCsubsidiaries and license and service fe

260、es paid by the VIE.If any of our PRC subsidiaries or the VIE incurs debt on its own in the future,theinstruments governing such debt may restrict its ability to pay dividends to the Company.If any of our PRC subsidiaries or the VIE is unable toreceive all or the majority of the revenues from their o

261、perations,we may be unable to pay dividends on our ADSs or common shares.Due to restrictions on foreign exchange placed on our PRC subsidiaries and the VIE by the PRC government under PRC laws and regulations,tothe extent cash is located in mainland China or within an entity domiciled in mainland Ch

262、ina and may need to be used to fund our operationsoutside of mainland China,the funds may not be available due to such limitations unless and until related approvals and registrations areobtained.The PRC government imposes controls on the convertibility of Renminbi into foreign currencies and,in cer

263、tain cases,the remittance ofcurrency out of mainland China.The majority of our revenue is or will be received in Renminbi and shortages in foreign currencies may restrictour ability to pay dividends or other payments.Under existing PRC foreign exchange regulations,payments of current account items,i

264、ncludingprofit distributions,interest payments and expenditures from trade-related transactions,can be made in foreign currencies without prior approvalfrom the State Administration of Foreign Exchange,or SAFE,as long as certain procedural requirements are met.Approval from or filing withappropriate

265、 government authorities is required if Renminbi is converted into foreign currency and remitted out of mainland China to pay capitalexpenses such as the repayment of loans denominated in foreign currencies.The PRC government may,at its discretion,impose restrictions onaccess to foreign currencies fo

266、r current account transactions and if this occurs in the future,we may not be able to pay dividends in foreigncurrencies to our shareholders or repay our loans.See“Item 3.D.Risk Factors Summary of Risk Factors Restrictions on currency exchangemay limit our ability to utilize our cash and the ability

267、 of our PRC subsidiaries to obtain financing”and“Item 3.D.Risk Factors Risks Relatingto Regulations of Our Business Restrictions on currency exchange may limit our ability to utilize our cash generated from sales of our serviceseffectively and the ability of our PRC subsidiaries to obtain financing.

268、”Table of Contents20PRC legal restrictions permit payments of dividends by our PRC subsidiaries only out of their accumulated after-tax profits,if any,determined inaccordance with PRC GAAP.Each of our PRC subsidiaries is also required under PRC laws and regulations to allocate at least 10%of its aft

269、er-tax profits determined in accordance with PRC GAAP to statutory reserves until such reserves reach 50%of its registered capital.Allocations tothese statutory reserves and funds can only be used for specific purposes and are not transferable to us in the form of loans,advances or cashdividends.In

270、addition,registered share capital and capital reserve accounts are also restricted from withdrawal in mainland China,up to theamount of net assets held in each operating subsidiary.See“Item 3.D.Risk Factors Summary of Risk Factors Restrictions under PRC lawon PRC subsidiaries ability to make payment

271、s to us could materially and adversely affect our ability to grow,make investments or acquisitionsthat could benefit our business,pay dividends to investors,and otherwise fund and conduct our businesses”and“Item 3.D.Risk factors RisksRelating to Regulations of Our Business Because we may rely on div

272、idends and other distributions on equity paid by our current and futurePRC subsidiaries for our cash requirements,restrictions under PRC law on their ability to make such payments could materially and adverselyaffect our ability to grow,make investments or acquisitions that could benefit our busines

273、s,pay dividends to you,and otherwise fund and conductour businesses.”Due to various requirements imposed by PRC laws and regulations on loans to and direct investment in PRC entities by offshore holdingcompanies,we and the VIE may not be able to obtain the necessary government approvals or complete

274、the necessary government registrations orother procedures on a timely basis,or at all,with respect to future loans by us to our PRC subsidiaries or the VIE or with respect to future capitalcontributions by us to our PRC subsidiaries.This may delay or prevent us from using our offshore funds to make

275、loans or capital contribution toour PRC subsidiaries and the VIE,and thus may restrict our ability to execute our business strategy,and materially and adversely affect ourliquidity and our ability to fund and expand our business.See“Item 3.D.Risk Factors Summary of Risk Factors PRC regulations of lo

276、ansand direct investments by offshore holding companies to our PRC subsidiaries and the VIE may restrict our ability to execute our businessstrategy”and“Item 3.D.Risk factors Risks Relating to Regulations of Our Business PRC regulations of loans and direct investments byoffshore holding companies to

277、 their PRC subsidiaries and consolidated variable interest entity may restrict our ability to execute our businessstrategy.”If the Company is considered a PRC tax resident enterprise for tax purposes(we do not currently consider the Company to be a PRC residententerprise),any dividends that the Comp

278、any pays to its overseas shareholders may be regarded as China-sourced income and as a result may besubject to PRC withholding tax.See“Item 3.D.Risk Factors Summary of Risk Factors We may be classified as a resident enterprise ofChina,which may result in unfavorable tax consequences to us and the in

279、vestors,”“Item 3.D.Risk Factors Risks Relating to Regulations ofOur Business Under the EIT Law,we may be classified as a resident enterprise of China.Such classification will likely result in unfavorabletax consequences to us and U.S.holders of our ADSs or common shares”and“Item 10.E.Taxation People

280、s Republic of China Taxation.”In addition,there are substantial uncertainties regarding the interpretation and application of current and future PRC laws,regulations and rulesrelating to VIE Agreements,and the VIE Agreements with the VIE and its shareholders may not be as effective as direct ownersh

281、ip in providingus with control over the VIE.The uncertainty with respect to the validity and enforceability of the VIE Agreements may limit our ability to settleamounts owed under the VIE Agreements.See“Item 3.D.Risk Factors Risks Relating to Our Corporate Structure.”Table of Contents21VIE Consolida

282、tion ScheduleThe following tables present the Companys condensed consolidating schedule depicting the consolidated statements of comprehensive income(loss)for the fiscal years ended December 31,2022,2023 and 2024 of the Company,its subsidiaries,the VIE,and the corresponding eliminating adjustmentsse

283、parately.Year Ended December 31,2024Subsidiaries of the Elimination The CompanyCompanyVIEadjustmentsConsolidated RMB RMB RMB RMB RMBNet revenues 268,055,926 4,236 268,060,162Cost and expenses:Cost of revenues 146,109 126,649,100 126,795,209Operating expenses 6,750,893 176,165,735 1,567,412 184,484,0

284、40Total cost and expenses 6,897,002 302,814,835 1,567,412 311,279,249Other operating income,net 174,931 174,931Loss from operations (6,897,002)(34,583,978)(1,563,176)(43,044,156)Other income 33,082 949,333 331 982,746Investment loss (29,233,857)(438,153)(6,465,269)35,699,126(1)(438,153)Loss before i

285、ncome taxes (36,097,777)(34,072,798)(8,028,114)35,699,126 (42,499,563)Income tax benefit (6,401,691)(6,401,691)Net loss (36,097,777)(27,671,107)(8,028,114)35,699,126 (36,097,872)Net loss attributable to non-controlling interests (6,465,269)(95)6,465,269(1)(95)Net loss attributable to ATA Creativity

286、Global (36,097,777)(21,205,838)(8,028,019)29,233,857 (36,097,777)Year Ended December 31,2023Subsidiaries of theEliminationThe Company CompanyVIE adjustmentsConsolidated RMB RMB RMB RMB RMBNet revenues 221,618,968 221,618,968Cost and expenses:Cost of revenues 74,827 106,886,932 106,961,759Operating e

287、xpenses 5,141,980 150,202,984 839,014 156,183,978Total cost and expenses 5,216,807 257,089,916 839,014 263,145,737Other operating income,net 30,865 30,865Loss from operations (5,216,807)(35,440,083)(839,014)(41,495,904)Other income 25,797 947,489 368 973,654Investment loss (28,469,235)(6,776,600)35,

288、245,835(1)Loss before income taxes (33,660,245)(34,492,594)(7,615,246)35,245,835 (40,522,250)Income tax benefit (6,811,709)(6,811,709)Net loss (33,660,245)(27,680,885)(7,615,246)35,245,835 (33,710,541)Net loss attributable to non-controlling interests (6,825,164)(1,732)6,776,600(1)(50,296)Net loss a

289、ttributable to ATA Creativity Global (33,660,245)(20,855,721)(7,613,514)28,469,235 (33,660,245)Table of Contents22 Year Ended December 31,2022Subsidiaries of the Elimination The CompanyCompanyVIEadjustmentsConsolidated RMB RMB RMB RMB RMBNet revenues 206,820,874 206,820,874Cost and expenses:Cost of

290、revenues 88,930 104,226,926 104,315,856Operating expenses 6,175,519 152,050,480 882,098 159,108,097Total cost and expenses 6,264,449 256,277,406 882,098 263,423,953Other operating income,net 16,515 16,515Loss from operations (6,264,449)(49,440,017)(882,098)(56,586,564)Other income 6,857 754,982 483

291、762,322Investment loss (41,635,317)(6,942,500)48,577,817(1)Gain on deconsolidation of subsidiaries and others,net 1,308,627 1,308,627Loss before income taxes (47,892,909)(47,376,408)(7,824,115)48,577,817 (54,515,615)Income tax benefit (5,921,384)(5,921,384)Net loss (47,892,909)(41,455,024)(7,824,115

292、)48,577,817 (48,594,231)Net loss attributable to non-controlling interests (7,636,896)(6,926)6,942,500(1)(701,322)Net loss attributable to ATA Creativity Global (47,892,909)(33,818,128)(7,817,189)41,635,317 (47,892,909)(1)To eliminate the investment income or loss recognized in the Company derived f

293、rom earnings or losses picked up from its subsidiaries and the VIE,aswell as the investment loss recorded in the VIE with the net loss attributable to the VIE as non-controlling interests recorded in the subsidiaries of theCompany.Table of Contents23The following tables present the Companys condense

294、d consolidating schedule depicting the consolidated balance sheets as of December 31,2023 and2024 of the Company,its subsidiaries,the VIE and corresponding eliminating adjustments separately.December 31,2024Subsidiaries of theEliminationThe Company CompanyVIE adjustmentsConsolidated RMB RMB RMB RMB

295、RMBASSETSCurrent assets:Cash and cash equivalents 4,608,462 31,554,745 360,788 36,523,995Accounts receivable,net 2,712,845 2,712,845Prepaid expenses and other current assets 4,336 27,398,498 27,402,834Inter-company receivables 66,217,253(1)(66,217,253)(1)Amounts due from nominee shareholders for the

296、 VIE 50,000,000(2)(50,000,000)(2)Total current assets 4,612,798 177,883,341 360,788 (116,217,253)66,639,674Non-current assets:Other non-current assets 155,988,099 10,000 155,998,099Goodwill 196,289,492 196,289,492Long-term investments 78,329,251 38,000,000 42,537,827 (120,867,078)(3)38,000,000Total

297、non-current assets 78,329,251 390,277,591 42,547,827 (120,867,078)390,287,591Total assets 82,942,049 568,160,932 42,908,615 (237,084,331)456,927,265LIABILITIES Current liabilities:Accrued expenses and other payables 3,231,601 53,023,439 117,920 56,372,960Deferred revenues and other current liabiliti

298、es 298,122,449 298,122,449Inter-company payables 66,217,253(1)(66,217,253)(1)Total current liabilities 3,231,601 351,145,888 66,335,173 (66,217,253)354,495,409Total non-current liabilities 22,785,664 22,785,664Total liabilities 3,231,601 373,931,552 66,335,173 (66,217,253)377,281,073Shareholders equ

299、ity:Common shares 4,755,623 4,755,623Paid-in capital 15,984,800 50,000,000(2)(65,984,800)(2)(3)Treasury shares(8,201,046)(3)(8,201,046)Additional paid-in capital 547,915,003(120,348,733)120,348,733(3)547,915,003Accumulated other comprehensive loss(36,952,183)58,457,737(58,457,737)(3)(36,952,183)Reta

300、ined earnings(accumulated deficits)(427,806,949)197,597,748(73,362,302)(124,235,446)(3)(427,806,949)Non-controlling interests 42,537,828(64,256)(42,537,828)(3)(64,256)Total shareholders equity 79,710,448 194,229,380(23,426,558)(170,867,078)79,646,192Total liabilities and shareholders equity 82,942,0

301、49 568,160,932 42,908,615(237,084,331)456,927,265Table of Contents24 December 31,2023Subsidiaries of theEliminationThe Company CompanyVIE adjustmentsConsolidated RMB RMB RMB RMB RMBASSETSCurrent assets:Cash and cash equivalents 1,068,177 58,841,837 257,218 60,167,232Accounts receivable,net 2,235,490

302、 2,235,490Prepaid expenses and other current assets 4,272 8,031,305 6,592 8,042,169Inter-company receivables 64,617,353(1)(64,617,353)(1)Amounts due from nominee shareholders for the VIE 50,000,000(2)(50,000,000)(2)Total current assets 1,072,449 183,725,985 263,810 (114,617,353)70,444,891Non-current

303、 assets:Other non-current assets 144,192,170 12,590 144,204,760Goodwill 196,289,492 196,289,492Long-term investments 115,087,677 38,000,000 49,003,096 (164,090,773)(3)38,000,000Total non-current assets 115,087,677 378,481,662 49,015,686 (164,090,773)378,494,252Total assets 116,160,126 562,207,647 49

304、,279,496 (278,708,126)448,939,143LIABILITIES Current liabilities:Accrued expenses and other payables 3,122,258 45,963,258 60,587 49,146,103Deferred revenues and other current liabilities 265,256,398 265,256,398Inter-company payables 64,617,353(1)(64,617,353)(1)Total current liabilities 3,122,258 311

305、,219,656 64,677,940 (64,617,353)314,402,501Total non-current liabilities 21,562,935 21,562,935Total liabilities 3,122,258 332,782,591 64,677,940 (64,617,353)335,965,436Shareholders equity:Common shares 4,730,128 4,730,128Paid-in capital 15,984,800 50,000,000(2)(65,984,800)(2)(3)Treasury shares(8,201

306、,046)(3)(8,201,046)Additional paid-in capital 545,222,465(120,348,733)120,348,733(3)545,222,465Accumulated other comprehensive loss(37,004,507)45,917,853(45,917,853)(3)(37,004,507)Retained earnings(accumulated deficits)(391,709,172)238,868,040(65,334,283)(173,533,757)(3)(391,709,172)Non-controlling

307、interests 49,003,096(64,161)(49,003,096)(3)(64,161)Total shareholders equity 113,037,868 229,425,056(15,398,444)(214,090,773)112,973,707Total liabilities and shareholders equity 116,160,126 562,207,647 49,279,496(278,708,126)448,939,143(1)To eliminate the amounts related to the loans provided by sub

308、sidiaries of the Company to the VIE.(2)To eliminate the loans that the WFOE provided to Mr.Xiaofeng Ma and Mr.Jun Zhang as capital contribution(common shares)into the VIE.(3)To eliminate the Companys equity pick-up from subsidiaries or the VIE under respective equity accounts with corresponding long

309、-term investmentbalances of the subsidiaries or the VIE.Table of Contents25The following tables present the Companys condensed consolidating schedule depicting the consolidated cash flows for the fiscal years endedDecember 31,2022,2023 and 2024 of the Company,its subsidiaries,the VIE,and correspondi

310、ng eliminating adjustments separately.Year Ended December 31,2024Subsidiaries of the Elimination The CompanyCompanyVIEadjustmentsConsolidated RMB RMB RMB RMB RMBNet cash provided by(used in)operating activities(3,887,093)2,038,353(1,496,430)(3,345,170)Cash flows from investing activities:Cash receiv

311、ed from inter-companies 9,934,336 (9,934,336)Cash paid to inter-companies (2,540,662)(1,600,000)4,140,662 Cash paid for property and equipment(20,024,903)(20,024,903)Other cash movements (231,826)(231,826)Net cash provided by(used in)investing activities 7,393,674 (21,856,729)(5,793,674)(2)(20,256,7

312、29)Cash flows from financing activities:Cash received from inter-companies 2,540,662 1,600,000 (4,140,662)Cash paid to inter-companies (9,934,336)9,934,336 Other cash movements (93,699)(93,699)Net cash provided by(used in)financing activities (7,487,373)1,600,000 5,793,674(2)(93,699)Effect of foreig

313、n currency exchange rate changes on cash 33,704 18,657 52,361Net increase(decrease)in cash and cash equivalents 3,540,285 (27,287,092)103,570 (23,643,237)Cash and cash equivalents at the beginning of the year 1,068,177 58,841,837 257,218 60,167,232Cash and cash equivalents at the end of the year 4,6

314、08,462 31,554,745 360,788 36,523,995Year Ended December 31,2023SubsidiariesTheof theEliminationCompanyCompanyVIEadjustmentsConsolidated RMB RMB RMB RMB RMBNet cash provided by(used in)operating activities(1,637,065)11,341,202(952,664)8,751,473Cash flows from investing activities:Payment for acquisit

315、ion of a subsidiary,less cash acquired (417,376)(417,376)Cash received from inter-companies 2,546,883 (1)(2,546,883)Cash paid to inter-companies (1,437,720)(1,050,000)2,487,720 Cash paid for property and equipment(2,240,101)(2,240,101)Other cash movements (1,309,009)(1,309,009)Net cash provided by(u

316、sed in)investing activities 1,109,163 (5,016,486)(59,163)(2)(3,966,486)Cash flows from financing activities:Cash received from inter-companies 1,437,720 1,050,000 (2,487,720)Cash paid to inter-companies (2,546,883)(1)2,546,883 Other cash movements 471,765 (68,326)403,439Net cash provided by(used in)

317、financing activities 471,765 (1,177,489)1,050,000 59,163(2)403,439Effect of foreign currency exchange rate changes on cash 25,418 (26,811)(1,393)Net increase(decrease)in cash and cash equivalents (30,719)5,120,416 97,336 5,187,033Cash and cash equivalents at the beginning of the year 1,098,896 53,72

318、1,421 159,882 54,980,199Cash and cash equivalents at the end of the year 1,068,177 58,841,837 257,218 60,167,232Table of Contents26Year Ended December 31,2022SubsidiariesTheof theEliminationCompanyCompanyVIEadjustmentsConsolidated RMB RMB RMB RMB RMBNet cash used in operating activities (4,509,052)(

319、9,243,485)(861,350)(14,613,887)Cash flows from investing activities:Cash received from inter-companies 3,159,503 (3,159,503)Cash paid to inter-companies (101,614)(830,186)931,800Cash paid for property and equipment (1,618,338)(1,618,338)Other cash movements (871,765)(871,765)Net cash provided by(use

320、d in)investing activities 3,057,889 (3,320,289)(2,227,703)(2)(2,490,103)Cash flows from financing activities:Cash received from inter-companies 101,614 830,186 (931,800)Cash paid to inter-companies (3,159,503)3,159,503Other cash movements 218,943(30,731)188,212Net cash provided by(used in)financing

321、activities 218,943 (3,088,620)830,186 2,227,703(2)188,212Effect of foreign currency exchange rate changes on cash 95,386 461,230 556,616Net decrease in cash and cash equivalents (1,136,834)(15,191,164)(31,164)(16,359,162)Cash and cash equivalents at the beginning of the year 2,235,730 68,912,585 191

322、,046 71,339,361Cash and cash equivalents at the end of the year 1,098,896 53,721,421 159,882 54,980,199(1)For the fiscal year ended December 31,2023,ATA BVI,a subsidiary of the Company,received RMB3.6 million of repayment of loans from itssubsidiaries.These transactions were eliminated as intercompa

323、ny transactions upon preparation of the consolidated information presented under thecolumn of“Subsidiaries of the Company.”(2)Eliminated the amounts of cash inflows or outflows among the Company,subsidiaries of the Company and the VIE,mainly comprised of 1)loansprovided by the Company to its subsidi

324、aries and by the subsidiaries of the Company to the VIE,offset by repayments;and 2)loans provided by theWFOE to nominee shareholders of the VIE,which were injected into the VIE as capital contribution.The transactions of nominee shareholder loanrepayment and issuance were reclassified as financing a

325、ctivities in the Companys consolidated financial statements.Table of Contents27Effect of Holding Foreign Companies Accountable Act and Related SEC RulesOn December 18,2020,the Holding Foreign Companies Accountable Act,or HFCAA,was enacted,according to which,among others,if the U.S.Securities and Exc

326、hange Commission,or the SEC,determines that we have filed audit reports issued by a registered public accounting firm that has notbeen subject to inspection by the Public Company Accounting Oversight Board(United States),or PCAOB,for three consecutive years,the SEC shallprohibit our common shares or

327、 ADSs from being traded on a national securities exchange or in the over the counter trading market in the United States.OnDecember 29,2022,President Biden signed into law the Accelerating Holding Foreign Companies Accountable Act as a part of the ConsolidatedAppropriations Act,amending the HFCAA an

328、d requiring the SEC to prohibit an issuers securities from trading on any U.S.stock exchange if its auditor isnot subject to PCAOB inspections for two consecutive years instead of three consecutive years.On December 16,2021,the PCAOB issued a report on itsdetermination that the PCAOB was unable to i

329、nspect or investigate completely PCAOB-registered public accounting firms headquartered in mainlandChina or Hong Kong because of positions taken by PRC authorities in those jurisdictions.Because our former auditor KPMG Huazhen LLP,or KPMG,who issued our audit report for the fiscal year ended Decembe

330、r 31,2021,is located in mainland China,it was subject to such PCAOB determination.Following the filing of our annual report on Form 20-F for the fiscal year ended December 31,2021,on May 26,2022,the Company was identified onSECs“Conclusive list of issuers identified under the HFCAA”(available at htt

331、ps:/www.sec.gov/hfcaa).On August 26,2022,the CSRC,the Ministry ofFinance of China,or MOF,and the PCAOB signed a Statement of Protocol governing inspections and investigations of audit firms based in mainlandChina and Hong Kong,taking the first step toward opening access for the PCAOB to inspect and

332、investigate registered public accounting firmsheadquartered in mainland China and Hong Kong.Pursuant to the fact sheet with respect to the Statement of Protocol disclosed by the PCAOB,thePCAOB shall have sole discretion to select any issuer audits for inspection or investigation in addition to other

333、 provisions that are intended to provide thePCAOB with complete access.The SEC also indicated in its fact sheet regarding the Protocol that the PCAOB may transfer information to the SEC for allSEC purposes,including administrative or civil enforcement actions.On December 15,2022,the PCAOB determined that it was able to secure complete access to inspect and investigate registered public accountingf