{"url_path":"/sec/krkr/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 ****KEY INFORMATION**","topic":"sec","document":{"doc_type":"20-F/A","doc_date":"2026-05-19","source_url":"https://www.sec.gov/Archives/edgar/data/1779476/0001104659-26-063497-index.html","accession_number":"0001104659-26-063497","cik":"0001779476","ticker":"KRKR","issuer_name":"36Kr Holdings Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1779476/0001104659-26-063497-index.html","primary_entity_key":"0001779476","primary_entity_name":"36Kr Holdings Inc."},"word_count":35680,"has_tables":true,"body_markdown":"**ITEM\n3.****KEY INFORMATION**\n\n \n\n**3.D.****Risk Factors**\n\n \n\n36Kr Holdings Inc. is a Cayman\nIslands holding company. It conducts its operations in China through its PRC subsidiaries and the consolidated variable interest entity,\nor the VIE. However, we and our direct and indirect subsidiaries do not, and it is virtually impossible for them to, have any equity interests\nin the VIE in practice as current PRC laws and regulations restrict foreign investment in companies that engage in value-added telecommunication\nservices. As a result, we depend on certain contractual arrangements with the VIE to operate a significant portion of our business. This\nstructure allows us to be considered the primary beneficiary of the VIE for accounting purposes, which serves the purpose of consolidating\nthe VIE’s operating results in our financial statements under the U.S. GAAP. This structure also provides contractual exposure to\nforeign investment in such companies. Shareholders holding 99% equity interests of the VIE are also affiliated with our Company or affiliated\nwith certain shareholders of the Company. Investors in the ADSs are purchasing equity securities of a Cayman Islands holding company rather\nthan equity securities issued by our subsidiaries and the VIE. Investors who are non-PRC residents may never directly hold equity interests\nin the VIE under current PRC laws and regulations. As used in this annual report, “we,” “us,” “our company,”\n“our,” or “36Kr” refers to 36Kr Holdings Inc. and its subsidiaries, and, in the context of describing our consolidated\nfinancial information, business operations and operating data, our consolidated VIE, “Tianjin Duoke” refers to Tianjin Duoke\nInvestment Co., Ltd., “Beijing Dake” refers to Beijing Dake Information Technology Co., Ltd., and “Beijing\nDuoke” refers to Beijing Duoke Information Technology Co. Ltd. We refer to Tianjin Duoke and Beijing Dake as the PRC subsidiaries\nin the context of describing of their activities. We refer to Beijing Duoke as the VIE in the context of describing its activities and\ncontractual arrangements with us.\n\n \n\nOur\ncorporate structure involves unique risks to investors in the ADSs. In 2024 and 2025, the amount of revenues generated by the VIE\naccounted for 100% and 100%, respectively, of our total net revenues. As of December 31, 2024 and 2025, total assets of the VIE,\nexcluding amounts due from other companies in the Group, equaled to 92% and 77% of our consolidated\ntotal assets as of the same dates, respectively. As of the date of this annual report, to the best knowledge of our Company, our directors\nand management, the VIE agreements have not been tested in a court of law in the PRC. If the PRC government deems that our contractual\narrangements with the VIE do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these\nregulations or the interpretation of existing regulations change in the future, we could be subject to material penalties or be forced\nto relinquish our interests in those operations or otherwise significantly change our corporate structure. We and our investors face significant\nuncertainty about potential future actions by the PRC government that could affect the legality and enforceability of the contractual\narrangements with the VIE and, consequently, significantly affect our ability to consolidate the financial results of the VIE and the\nfinancial performance of our company as a whole. The ADSs may decline in value or become worthless if we are unable to effectively enforce\nour contractual control rights over the assets and operations of the VIE that conduct a significant portion of our business in China.\nSee “Item 3. Key Information-3.D. Risk Factor-Risks Related to Our Corporate Structure” for detailed discussion.\n\n \n\nWe face various legal and\noperational risks and uncertainties as a company based in and primarily operating in China. The PRC government has significant authority\nto exert influence on the ability of a China-based company, like us, to conduct its business, accept foreign investments or be listed\non a U.S. stock exchange. For example, we face risks associated with regulatory approvals of offshore offerings, anti-monopoly regulatory\nactions, cybersecurity and data privacy, as well as the uncertainty on whether the U.S. Public Company Accounting Oversight Board, or\nPCAOB, will continue to be able to satisfactorily inspect or investigate completely registered public accounting firms headquartered in\nmainland China and Hong Kong. The PRC government may also influence our operations at any time by adopting new laws and regulations as\nthe government deems appropriate to further regulatory, political and societal goals. The PRC government has historically published new\npolicies that significantly affected certain industries such as the education and internet industries, and we cannot rule out the\npossibility that it will in the future release regulations or policies regarding our industry that could adversely affect our business,\nfinancial condition and results of operations. Any such action, once taken by the PRC government, could cause the value of such securities\nto significantly decline or in extreme cases, become worthless.\n\n \n\nAs of the date of this annual\nreport, we do not have cash management policies and procedures in place that dictate how funds are transferred through our organization.\nRather, the funds can be transferred in accordance with the applicable PRC laws and regulations without limitations, subject to satisfaction\nof applicable government registration and approval requirements. Loans by us to our PRC subsidiaries to finance their activities cannot\nexceed statutory limits and must be registered with the local counterpart of SAFE and capital contributions to our PRC subsidiaries are\nsubject to the requirement of making necessary filings in the Foreign Investment Comprehensive Management Information System, and registration\nwith other governmental authorities in China. See “Item 4. Information on the Company — 4.A. History and Development of the\nCompany — Our Corporate History.”\n\n \n\nYou should carefully consider\nall of the information in this annual report before making an investment in the ADSs. Below please find a summary of the principal risks\nand uncertainties we face, organized under relevant headings. In particular, as we are a China-based company incorporated in the Cayman\nIslands, you should pay special attention to subsections headed “Item 3. Key Information—3.D. Risk Factors—Risks Related\nto Doing Business in China” and “Item 3. Key Information—3.D. Risk Factors—Risks Related to Our Corporate Structure.”\n\n \n\n \n\n \n\n \n\nBelow please find a summary\nof the principal risks we face, organized under relevant headings. Please see “Item 3. Key Information—3.D. Risk Factors”\nand other information included elsewhere in this annual report for a discussion of these and other risks and uncertainties that we face.\n\n \n\n**Risks Related to Our Business and Industry**\n\n \n\n·\n*Due to the rapidly evolving market in which we operate, it is difficult to evaluate our business. We\ncannot guarantee historical performance is indicative of future results of operations. For details, see page 4 of this annual report.*\n\n \n\n·\n*We are subject to risks associated with operating in the rapidly evolving New Economy sectors. For\ndetails, see page 5 of this annual report.*\n\n \n\n·\n*The success of our business depends on our ability to maintain and enhance our brand. Negative publicity\nabout us, our services, operations and management, or our affiliates may adversely affect our reputation and business. For details, see\npage 5 of this annual report.*\n\n \n\n·\n*If we fail to provide high-quality content in a timely manner, we may not be able to attract or retain\nusers. If our efforts to attract or retain users are not successful, our business and results of operations will be materially and adversely\naffected. For details, see page 5 of this annual report.*\n\n \n\n·\n*We cannot guarantee our monetization strategies will be successfully implemented or generate sustainable\nrevenues or profit. For details, see page 6 of this annual report.*\n\n \n\n·\n*Our business could suffer if we are unable to retain or hire quality in-house writers and editors.\nFor details, see page 6 of this annual report.*\n\n \n\n·\n*Deterioration or termination of cooperation with third-party professional content providers may have\na material adverse impact on our business and results of operations. For details, see page 6 of this annual report.*\n\n \n\n·\n*Our business, prospects and financial results may be affected by our relationship with third-party\nplatforms. For details, see page 6 of this annual report.*\n\n \n\n·\n*If the content provided on our platform is deemed to violate any PRC laws or regulations, our business,\nfinancial condition and results of operations may be materially and adversely affected. For details, see page 6 of this annual report.*\n\n \n\n·\n*If we fail to develop effective online advertising services, retain or acquire new online advertising\nservices customers, or manage the credit risk of our customers, our financial condition, results of operations and prospects may be materially\nand adversely affected. For details, see page 7 of this annual report.*\n\n \n\n·\n*Our business is subject to complex and evolving laws and regulations regarding cybersecurity and data\nprivacy. For details, see page 7 of this annual report.*\n\n \n\n**Risks Related to Our Corporate Structure**\n\n \n\n·\n*There are uncertainties regarding the interpretation and application of current and future PRC laws,\nregulations, and rules relating to the agreements that establish the VIE structure for our operations in China, including potential\nfuture actions by the PRC government, which could affect the enforceability of our contractual arrangements with the VIE and, consequently,\nsignificantly affect the financial condition and results of operations performance of 36Kr. If the PRC government finds such agreements\nnon-compliant with relevant PRC laws, regulations, and rules, or if these laws, regulations, and rules or the interpretation thereof\nchange in the future, we could be subject to penalties or be forced to relinquish our interests in the VIE. For details, see page 20\nof this annual report.*\n\n \n\n·\n*Any failure by the VIE or its shareholders to perform their obligations under our contractual arrangements\nwith them would have a material adverse effect on our business. For details, see page 21 of this annual report.*\n\n \n\n \n\n \n\n \n\n·\n*We rely on contractual arrangements with the VIE and its shareholders to operate our business, which\nmay not be as effective as direct ownership in providing operational control and otherwise materially and adversely affect our business.\nFor details, see page 24 of this annual report.*\n\n \n\n**Risks Related to Doing Business in China**\n\n \n\n·\n*The approval, filing or other requirements of the China Securities Regulatory Commission or other PRC\ngovernment authorities may be required under PRC law in connection with our issuance of securities overseas, or maintenance of the listing\nstatus of the ADSs, and the PRC government’s oversight and discretion over our business operations could result in a material adverse\nchange in our operations and the value of the ADSs. For details, see page 22 of this annual report.*\n\n \n\n·\n*Substantial uncertainties exist with respect to the interpretation and implementation of the newly\nenacted Foreign Investment Law of the PRC and how it may impact the viability of our current corporate structure, corporate governance\nand business operations. For details, see page 24 of this annual report.*\n\n \n\n·\n*The enforcement of laws, and changes in policies, laws and regulations in China, could adversely affect\nus. For details, see page 26 of this annual report.*\n\n \n\n·\n*Changes in China’s economic, political and social conditions as well as government policies could\nhave a material adverse effect on our business and prospect. For details, see page 26 of this annual report.*\n\n \n\n·\n*Certain judgments obtained against us by our shareholders may not be enforceable in China. For details,\nsee page 27 of this annual report.*\n\n \n\n·\n*Trading in our securities may be prohibited under the HFCAA if the PCAOB determines that it is unable\nto inspect or investigate completely our auditor, and as a result, U.S. national securities exchanges, such as the Nasdaq, may determine\nto delist our securities. For details, see page 27 of this annual report.*\n\n \n\n**Risks Related to the ADSs**\n\n \n\n·\n*We believe that we were likely a passive foreign investment company (“PFIC”) for 2025,\nand due to the current trading prices of the ADSs there is a significant risk that we will be a PFIC for 2026 and possibly future taxable\nyears, which could result in adverse U.S. federal income tax consequences to U.S. investors in the ADSs or Class A ordinary shares.\nFor details, see page 42 of this annual report.*\n\n \n\n·\n*We have not maintained compliance with the minimum bid price requirement of $1.00 per share for continued\nlisting on the Nasdaq. If we continue to fail to meet this requirement and Nasdaq determines to delist the ADSs, the delisting would adversely\naffect the market liquidity of the ADSs and the market price of the ADSs could decrease. For details, see page 36 of this annual\nreport.*\n\n \n\n·\n*The trading price of the ADSs is likely to be volatile, which could result in substantial losses to\ninvestors. For details, see page 35 of this annual report.*\n\n \n\n·\n*If securities or industry analysts do not publish research or reports about our business, or if they\nadversely change their recommendations regarding the ADSs, the market price for the ADSs and trading volume could decline. For details,\nsee page 36 of this annual report.*\n\n \n\n·\n*The sale or availability for sale of substantial amounts of the ADSs could adversely affect their market\nprice. For details, see page 37 of this annual report.*\n\n \n\n·\n*Techniques employed by short sellers may drive down the market price of the ADSs. For details, see\npage 37 of this annual report.*\n\n \n\n \n\n \n\n \n\n**Risks Related to Our Business and Industry**\n\n \n\n**Due to the rapidly evolving market in which\nwe operate, it is difficult to evaluate our business. We cannot guarantee historical performance is indicative of future results of operations.**\n\n \n\nWe commenced our operations\nas a stand-alone company when we were incorporated by Beijing Xieli Zhucheng Finance Information Service Co., Ltd., or Xieli Zhucheng,\nin December 2016. Since then we have achieved rapid growth in terms of user traffic, customer base and revenues. However, due to\nthe rapidly evolving market in which we operate, there is no assurance that we will be able to maintain our historical growth rates in\nfuture periods. Our growth prospects should be considered in light of the risks and uncertainties that the companies in the evolving market\nin our industry may encounter, including, among others, risks and uncertainties regarding our ability to:\n\n \n\n·\nenrich New Economy-focused content offerings;\n\n \n\n·\nmaintain, strengthen and diversify content distribution channels;\n\n \n\n·\nretain existing users on, and attract new users to, our platforms;\n\n \n\n·\noffer comprehensive business services tailored to enterprises’ needs throughout their lifecycles;\n\n \n\n·\nattract, retain and motivate talented in-house content creation teams;\n\n \n\n·\nmaintain stable relationships with third-party professional content providers;\n\n \n\n·\ndevelop and implement successful monetization strategies;\n\n \n\n·\nincrease brand awareness through marketing and branding activities;\n\n \n\n·\nupgrade existing technology and infrastructure and develop new technologies;\n\n \n\n·\nsuccessfully compete with other companies that are currently in, or may in the future enter, our industry;\nand\n\n \n\n·\nadapt to the evolving regulatory environment.\n\n \n\nAll of these endeavors involve\nrisks and will require significant allocation of management and employee resources and capital expenditures. We cannot assure you that\nwe will be able to effectively manage our growth or implement our business strategies effectively. If the market for our platform does\nnot develop as we expect or if we fail to address the needs of this dynamic market, our business, results of operations and financial\ncondition will be materially and adversely affected.\n\n \n\n**We are subject to risks associated with\noperating in the rapidly evolving New Economy sectors.**\n\n \n\nAs a New Economy-focused\ncontent and business services provider dedicated to serving New Economy participants in China, we are subject to risks associated with\nthe rapidly evolving nature of New Economy sectors, including but not limited to technology, consumer, retail, healthcare and enterprise\nservices. Our future business, financial conditions, and results of operations will largely depend on the development of China’s\nNew Economy and the growth of the number of New Economy participants. New Economy in China has experienced periods of rapid expansion,\nand the market size of New Economy-focused online advertising services, enterprise value-added services, and subscription services is\nexpected to grow rapidly. However, there are significant uncertainties with respect to the growth and sustained profitability of China’s\nNew Economy sectors, including changes in general economic conditions in China, New Economy market trends and regulatory environment.\nMost of these factors are beyond our control. For example, adverse regulatory developments in New Economy sectors in China, such as new\nor stricter licensing requirements and restrictive industry policies, could materially affect the result of operations and financial conditions\nof our customers participating in such industries, which may in turn reduce their demand for our services. As a result, our business,\nfinancial condition and results of operations could be materially and adversely affected.\n\n \n\n**The success of our business depends on our\nability to maintain and enhance our brand. Negative publicity about us, our services, operations and management, or our affiliates may\nadversely affect our reputation and business.**\n\n \n\nWe believe that maintaining\nand enhancing our 36Kr brand is critical to our success, especially user and customer acquisition and retention. Unsuccessful marketing\nefforts, low-quality content and service offerings and unsatisfying user and customer experience are likely to harm our brand image and\nvalue.\n\n \n\n \n\n \n\n \n\nIn addition, negative publicity\nabout us, our services, operations and our management may adversely affect our reputation and business. We have received negative publicity\nfrom time to time, including negative Internet and blog postings about our company, our business, our management, our services or our\naffiliates. Certain of such negative publicity may come from malicious harassment or unfair competition acts by third parties. Our brand\nand reputation may be materially and adversely affected, which in turn may cause us to lose market share, users, customers and other third\nparties we conduct business with. As a result, our results of operations and financial performance may be negatively affected.\n\n \n\n**If we fail to provide high-quality content\nin a timely manner, we may not be able to attract or retain users. If our efforts to attract or retain users are not successful, our business\nand results of operations will be materially and adversely affected.**\n\n \n\nWe have experienced significant\nuser growth over the past several years. Our success depends on our ability to generate sufficient user traffic on our platform through\nthe provision of high-quality New Economy-focused content. To attract and retain users, we need to further enrich our content by producing\nand sourcing new high-quality content in a cost-effective and timely manner. Furthermore, we need to anticipate and quickly respond to\nprevailing content formats, changing user preferences, and development in New Economy market trends. If we fail to cater to the needs\nand preferences of our users or deliver high-quality content in an efficient manner, we may suffer from reduced user traffic. In addition,\nif our valuable users no longer contribute their opinions or comments or other forms of interactive content to our platform, we may experience\na decrease in the number of users or level of user engagement. At the same time, spam or excessive advertising could impact user experience\non our platform, which could damage our reputation and deter visits to our platform. If we are unable to grow our user base or increase\nuser engagement, our platform will become less attractive to potential customers, especially online advertising services customers. As\na result, our business, financial condition and results of operations may be materially and adversely affected.\n\n \n\n \n\n \n\n \n\n**We cannot guarantee our monetization strategies\nwill be successfully implemented or generate sustainable revenues or profit.**\n\n \n\nWe currently generate a majority\nof our revenues from online advertising services and enterprise value-added services. Nevertheless, we have been diversifying and may\nfurther diversify our monetization channels by introducing new services, including services with which we have limited or no prior experience.\nWe have been expanding our comprehensive enterprise value-added service offerings to meet various demands of our customers. We cannot\nassure you that any of our newly launched services will successfully achieve wide market acceptance, increase the penetration of our addressable\nmarket or generate revenues or profit. If our business initiatives fail to enhance our monetization abilities, we may not be able to maintain\nor increase our revenues or recover any associated costs, and our business and operating results may suffer as a result.\n\n \n\n**Our business could suffer if we are unable\nto retain or hire quality in-house writers, editors and video producers.**\n\n \n\nWe rely primarily on our\nin-house writers, editors and video producers to create high-quality original content. We intend to continue to invest resources in our\nin-house content production writer and editorial team to maintain and improve content creation capabilities. Nevertheless, the demand\nand competition for talent is intense in our industry, particularly for skilled writers and editors. Therefore, we may need to offer high\ncompensation and additional benefits to maintain a skilled in-house content creation team, which could increase our expenses. If we fail\nto compete effectively for talents, lose existing writers, editors or video producers, or fail to otherwise maintain an in-house content\ncreation team at reasonable costs, our in-house content creation capabilities would be negatively affected. Any deterioration in our in-house\ncontent creation capabilities may materially and adversely affect our business and operating results. If we are unable to offer high-quality\noriginal content in a cost-effective manner, our user experience may be adversely affected, and we may suffer from reduced user traffic.\nOur business, financial condition and results of operations may be materially and adversely affected as a result.\n\n \n\n**Deterioration or termination of cooperation\nwith third-party professional content providers may have a material adverse impact on our business and results of operations.**\n\n \n\nThird-party professional\ncontent constitutes a meaningful part of our content offerings, and we intend to continue to attract and explore new partnership with\nthird-party professional content providers. If we fail to maintain our relationship with them, or they fail to provide content of satisfactory\nquality upon terms commercially acceptable to us, we may lose a significant portion of high-quality content offerings, and as a result\nour brand and operations could be materially harmed.\n\n \n\n**Our business, prospects and financial results\nmay be affected by our relationship with third-party platforms.**\n\n \n\nWe distribute certain of\nour content through our accounts on leading third-party Internet and social networking platforms, including but not limited to Weixin,\nWeibo, Zhihu, Toutiao, Xinhua Net, Douyin and Bilibili. These third-party platforms enable us to effectively extend our user reach and\nenhance our influence. To the extent that we fail to leverage such third-party channels, our ability to attract or retain users may be\nharmed. If our relationship with these third-party platforms deteriorates or is terminated or we fail to establish or maintain relationships\nwith them on commercially viable terms, we may not be able to quickly locate alternative channels. As a result, the aforementioned circumstances\nmay limit our ability to continue growing our user base and have a material adverse effect on our business, financial condition and results\nof operations.\n\n \n\n**If the content provided on our platform\nis deemed to violate any PRC laws or regulations, our business, financial condition and results of operations may be materially and adversely\naffected.**\n\n \n\nChina has enacted regulations\ngoverning Internet access and the distribution of news and other information over the Internet. Under these regulations, Internet\ncontent providers are prohibited from posting or displaying over the Internet content that, among other things, violates PRC laws and\nregulations, impairs the national dignity of China or the public interest, or is obscene, superstitious, fraudulent, violent or defamatory.\nInternet content providers are also prohibited from displaying content that may be deemed by relevant government authorities as “socially\ndestabilizing” or leaking “state secrets” of China. In addition, certain news items, such as news relating to national\nsecurity, may not be published without permission from the PRC regulatory authorities. If the PRC regulatory authorities were to take\nany action to limit or prohibit the distribution of information through our platform or our services, or to limit or regulate any current\nor future content or services available to users on our platform, our business could be significantly harmed.\n\n \n\n \n\n \n\n \n\nIn addition, we operate discussion\nforums, blogs, comment section and user survey for our users to interact on our platform, such as expressing opinions, posting comments\nand discussing with each other, and thereby generating our user interactive content. We have implemented an efficient and thorough content\nscreening and monitoring mechanism which involves both automated filtering and manual review, to timely remove any inappropriate or illegal\ncontent, including interactive content on our platform. However, such procedures may not prevent all illegal or impropriate content or\ncomments from being posted, and our editorial staff may fail to review and screen such content or comments effectively.\n\n \n\nFailure to identify and prevent\nillegal or inappropriate content from being distributed on our platform may subject us to liability. To the extent that PRC regulatory\nauthorities find any content on our platform objectionable, they may require us to limit or eliminate the dissemination of such content\non our platform in the form of take-down orders or otherwise. In addition, PRC laws and regulations are subject to interpretation by the\nrelevant authorities, and it may not be possible to determine in all cases the types of content that could result in our liability as\na platform operator.\n\n \n\n**If we fail to develop effective online advertising\nservices, retain or acquire new online advertising services customers, or manage the credit risk of our customers, our financial condition,\nresults of operations and prospects may be materially and adversely affected.**\n\n \n\nWe\ngenerate a majority of our revenues from online advertising services. Revenue generated from online advertising services accounted for\n70.2%, 78.2% and 78.8% of our total revenues in 2023, 2024 and 2025, respectively. Our ability to generate and maintain our revenues\nfrom online advertising services depends on a number of factors, including our brand value, our user and customer base and competition\nin the online advertising services market. We cannot assure you that we will be able to retain or acquire online advertising services\ncustomers in the future or maintain or increase the pricing of online advertising services. For instance, if our online advertising services\ncustomers find that they can gain public attention more efficiently elsewhere, or if our competitors provide online advertising services\nthat suit their goals better, we may lose our online advertising services customers. In addition, third parties may develop and use certain\ntechnologies to block the display of our online advertising services customers’ advertisements on our platform. As a result, we\nmay lose our online advertising services customers or be forced to reduce our pricing as our customers’ advertising becomes less\neffective due to more limited reach, which in turn materially and adversely affects our results of operations. Additionally, if our online\nadvertising services customers determine that their advertising expenditure on our platform does not generate expected returns, they may\nbargain with us for lower pricing or reduce or terminate cooperation with us. Furthermore, given most of our online advertising service\nagreements with customers are short-term contracts, our customers may reduce or discontinue cooperation with us easily without incurring\nmaterial liabilities. In addition, if our customers are unable to pay us in a timely manner or any failure in managing such credit risk\nmay adversely affect our liquidity and cash flows, which in turn has an adverse effect on our business operations and financial condition.\n\n \n\n**Our business is subject to complex and evolving\nlaws and regulations regarding cybersecurity and data privacy**\n\n \n\nThe cybersecurity legal regime\nin China is relatively new and evolving rapidly, and their interpretation and enforcement involve significant uncertainties. As a result,\nit may be difficult to determine what actions or omissions may be deemed to be in violations of applicable laws and regulations in certain\ncircumstances.\n\n \n\nNetwork operators in China\nare subject to numerous laws and regulations, and have the obligations to, among others, (i) establish internal security management\nsystems that meet the requirements of the classified protection system for cybersecurity, (ii) implement technical measures to monitor\nand record network operation status and cybersecurity incidents, (iii) implement data security measures such as data classification,\nbackups and encryption, and (iv) submit for cybersecurity review under certain circumstances.\n\n \n\nOn November 7, 2016,\nthe Standing Committee of the National People’s Congress issued the Cyber Security Law, which imposes more stringent requirements\non operators of “critical information infrastructure,” especially in data storage and cross-border data transfer.\n\n \n\nOn December 28, 2021,\nthe Cyberspace Administration of China, together with several other PRC governmental authorities, jointly published the Measures for Cybersecurity\nReview, with effect from February 15, 2022. Pursuant to these measures, (i) operators of critical information infrastructure\nthat intend to purchase network products and services and online platform operators that conduct data processing activities, in each case\nthat affect or may affect national security, and (ii) operators of network platforms seeking listing abroad that are in possession\nof more than one million users’ personal information must apply for a cybersecurity review.\n\n \n\nWe believe, to the best of\nour knowledge, our business operations do not violate any of the above PRC laws and regulations currently in effect in material aspects.\nWe have been taking, and will continue to take, reasonable measures to comply with such laws, regulations, announcement, provisions and\ninspection requirements. However, the interpretation and application of these cybersecurity laws, regulations and standards are evolving.\nWe cannot assure you that governmental authorities will not interpret or implement these and other laws or regulations in ways that may\nnegatively affect us.\n\n \n\n \n\n \n\n \n\n**We may be adversely affected by the complexity,\nuncertainties and changes in PRC regulation of Internet businesses and companies, including limitations on our ability to own key assets\nsuch as our platform.**\n\n \n\nThe Chinese government heavily\nregulates the Internet industry, including foreign investment in the Chinese Internet industry, content on the Internet and license and\npermit requirements for services providers in the Internet industry. Since some of the laws, regulations and legal requirements with respect\nto the Internet are relatively new and evolving, their interpretation and enforcement involve significant uncertainties.\n\n \n\nUncertainties relating to\nthe regulation of the Internet business in China, including evolving licensing practices, give rise to the risk that some of our permits,\nlicenses or operations may be subject to challenge, which may be disruptive to our business, subject us to sanctions or require us to\nincrease capital, compromise the enforceability of relevant contractual arrangements, or have other adverse effects on us.\n\n \n\nDue to the increasing popularity\nand use of the Internet and other online services, it is possible that a number of laws and regulations may be adopted with respect to\nthe Internet or other online services covering issues such as user privacy, pricing, content, copyrights, distribution, antitrust and\ncharacteristics and quality of products and services. The adoption of additional laws or regulations may impede the growth of the Internet\nor other online services, which could, in turn, decrease the demand for our content and services and increase our cost of doing business.\nMoreover, the applicability to the Internet and other online services of existing laws in various jurisdictions governing issues such\nas property ownership, sales and other taxes, libel and personal privacy is uncertain and may take years to resolve. Any new legislation\nor regulation, the application of laws and regulations from jurisdictions whose laws do not currently apply to our business, or the application\nof existing laws and regulations to the Internet and other online services could significantly disrupt our operations or subject us to\npenalties.\n\n \n\nIn\naddition, the PRC regulatory authorities have taken steps to strengthen the regulation on cybersecurity and data protection. On June 10,\n2021, the Standing Committee of the National People’s Congress promulgated the PRC Data Security Law, effective on September 1,\n2021. On August 20, 2021, the Standing Committee of the National People’s Congress promulgated the PRC Personal Information\nProtection Law, which became effective on November 1, 2021. On December 28, 2021, the CAC published the Revised Cybersecurity\nReview Measures, effective on February 15, 2022 and repealed the Cybersecurity Review Measures promulgated on April 13, 2020.\nSuch Measures further restate and expand the applicable scope of the cybersecurity review. Pursuant to the Cybersecurity Review Measures,\ncritical information infrastructure operators that procure internet products and services, and network platform operators engaging in\ndata processing activities, must be subject to the cybersecurity review if their activities affect or may affect national security. In\naddition, network platform operators holding over one million users’ personal information shall apply with the Cybersecurity Review\nOffice for a cybersecurity review before conducting any public offering in a foreign country. On July 30, 2021, the state council\npromulgated the Regulations on Protection of Critical Information Infrastructure, which became effective on September 1, 2021. On\nDecember 31, 2021, the CAC published the Administrative Provisions on Internet Information Service Algorithm Recommendation on its\nwebsite, effective on March 1, 2022. These newly promulgated laws and regulations reflect PRC government further attempts to strengthen\nthe legal protection for the national network security, data security, the security of key information infrastructure and the security\nof personal information protection. See “Item 4. Information on the Company-4.B. Business Overview-Regulation-Regulation\non Cybersecurity and Censorship” for details on regulations over data protection and privacy in the PRC.\n\n \n\nWe have been taking and will\ncontinue to take reasonable measures to comply with such laws, regulations, announcements, provisions and inspection requirements; however,\nas such laws, regulations, announcement and provisions are relatively new, it remains uncertain how these announcements and provisions\nwill be implemented. We cannot assure you we can adapt our operations to it in a timely manner. Evolving interpretations of such laws,\nregulations, announcements and provisions or any future regulatory changes might impose additional restrictions on us generating and processing\npersonal and behavioral data. We may be subject to additional regulations, laws and policies adopted by the PRC government to apply more\nstringent social and ethical standards in data privacy resulting from the increased global focus on this area. To the extent that we need\nto alter our business model or practices to adapt to these announcements and provisions and future regulations, laws and policies, we\ncould incur additional expenses.\n\n \n\nThe interpretation and application\nof existing PRC laws, regulations and policies, the stated positions of relevant PRC government authorities and possible new laws, regulations\nor policies have created uncertainties regarding the legality of existing and future foreign investments in, and the businesses and activities\nof, Internet businesses in China, including our business. In addition, the direct shareholders of the VIE are PRC incorporated entities\nrather than PRC individuals. Therefore, the upward ownership structure and ultimate beneficial parties of such shareholders may vary from\ntime to time, and we or the VIE may not be informed or aware of such variations. If any such change results in direct or indirect foreign\nstake in any of the shareholders of the VIE, the VIE may not be eligible for maintaining certain existing licenses to operate business\nwhere foreign investment is prohibited or restricted.\n\n \n\n \n\n \n\n \n\n**Lack of Internet news information license\nmay expose us to administrative sanctions, which would materially and adversely affect our business, results of operations and financial\ncondition.**\n\n \n\nThe PRC government regulates\nthe Internet industry extensively, including foreign ownership of, and the licensing requirements pertaining to, companies in the Internet\nindustry. A number of regulatory agencies, including the Ministry of Culture and Tourism, or the MOCT, the Ministry of Industry and Information\nTechnology, or the MIIT, the Cyberspace Administration of China, or CAC, the National Radio and Television Administration, or the NRTA\n(previously known as the State Administration of Press Publication, Radio, Film and Television, or the SAPPRFT), the State Council Information\nOffice, or the SCIO, and other governmental authorities, jointly regulate all major aspects of the Internet industry. Operators are required\nto obtain various government approvals and licenses prior to providing the relevant Internet information services.\n\n \n\nThe content provided on our\nplatform, including New Economy-focused industry reports, market updates, flash updates, columns and interviews, may be deemed to be news\ninformation content. Pursuant to the Provisions for the Administration of Internet News Information Services issued by the national CAC\non May 2, 2017 that became effective on June 1, 2017, an Internet news information license shall be obtained for a provider\nof Internet news information services to the public in a variety of ways, including forwarding Internet news information and offering\nof platforms for the dissemination of Internet news information. As such, we may be required to obtain an Internet news information license\nfrom CAC for our business. In practice, competent Internet news information services providers that are not state-owned, such as our company,\nmay need to introduce a state-owned shareholder in order to facilitate the application and approval process for the Internet news information\nlicense. See “Item 4. Information on the Company—4.B. Business Overview—Regulation—Regulation on Internet News\nServices.”\n\n \n\nIn\naddition, according to the Provisions for the Administration of Internet News Information Services, those that apply for a license for\nInternet news information collecting, editing and publishing services shall be news agencies (including the entities held thereby) or\nthe entities under the charge of news publicity authorities. Internet news information services providers should separate their news collection\nand editing services from other operational businesses and non-state-owned capitals shall not engage in services of collecting and editing\nInternet news information. We are not a news agency or a state-owned entity engaging in services of collecting and editing Internet news\ninformation. As such, we may not be permitted to collect and edit Internet news information. As a result, the CAC or its applicable office\nat the provincial level may, at its sole discretion, order us to cease relevant operations, and impose a fine of more than RMB10,000\nand less than RMB30,000; where a crime is constituted, it shall be subject to criminal liabilities.\n\n \n\nWe plan to apply for the\nInternet news information license from the CAC through the VIE when it is feasible to do so. As advised by our PRC legal advisor, current\nrequirements for applying the Internet news information license include, among others, having a state-owned shareholder. As of the date\nof this annual report, we are not eligible to apply for such license. We cannot predict when we can be eligible, or when such requirements\nwill be eased so that we can be eligible to apply for the Internet news information license. However, even if we are eligible to apply,\nthere can be no assurance that our application will be accepted or approved by the CAC. In the event we fail to obtain the Internet news\ninformation license, we may be ordered to suspend relevant business, and our results of operations and financial condition could be materially\nand adversely affected. As of the date of this annual report, we are not in the process of applying for the Internet news information\nlicense, and we have not received any notice of warning or been subject to any material administrative penalties or other disciplinary\nactions from the relevant government authorities for lack of the Internet news information license. However, in the past, CAC ordered\ncertain PRC companies to suspend their online content offerings for a certain period of time due to their lack of Internet news information\nlicense. As such, we cannot assure you that we will not be subject to similar or other penalties, such as any warning, investigations,\nsuspension of some or all of our content offerings or other penalties that may materially adversely affect our business, financial condition\nand results of operations.\n\n \n\n**Lack of Internet audio-visual program transmission\nlicense may expose us to administrative sanctions, which would materially and adversely affect our business, results of operations and\nfinancial condition.**\n\n \n\nPursuant\nto the Administrative Provisions on Internet Audio-visual Program Service, or the Audio-visual Program Provisions, which was issued by\nthe MIIT and the State Administration of Radio, Film and Television, or the SARFT (the predecessor of SAPPRFT) on December 20, 2007\nand came into effect on January 31, 2008 and was amended on August 28, 2015, online transmission of audio and video programs\nrequires an Internet audio-visual program transmission license and online audio-visual services providers must be either wholly state-owned\nor state-controlled. In a press conference jointly held by SARFT and MIIT to answer questions with respect to the Audio-visual Program\nProvisions in February 2008, SARFT and MIIT clarified that online audio-visual services providers that had already been operating\nlawfully prior to the issuance of the Audio-visual Program Provisions may re-register and continue to operate without becoming state-owned\nor controlled, provided that such providers have not engaged in any unlawful activities. This exemption will not be granted to online\naudio-video services providers established after the Audio-visual Program Provisions were issued. See “Item 4. Information on the\nCompany-4.B. Business Overview-Regulation-Regulations on Internet Audio-visual Program Services.”\n\n \n\n \n\n \n\n \n\nWe provide our content in\nvarious formats, including audio and video, on our platform and several third party’s platforms. If such content offerings are considered\nas online transmission of audio and video programs, we may be required to obtain the Internet audio-visual program transmission license.\nAs advised by our PRC legal advisor, current requirements for applying the Internet audio-visual program transmission license include,\namong others, being a state-owned or a state-controlled entity. As of the date of this annual report, we are not eligible to apply for\nsuch license. We cannot predict when we can be eligible, or when such requirements will be eased so that we can be eligible for applying\nthe Internet audio-visual program transmission license. We plan to apply for the Internet audio-visual program transmission license when\nit is feasible to do so. If the relevant regulatory authorities find our operations to be in violation of the applicable laws and regulations,\nwe may receive a warning and be ordered to rectify such non-compliance and pay a fine of not more than RMB30,000. In severe cases, we\nmay be ordered to cease transmission of audio and video programs, be subject to a penalty equal to one to two times our total investment\nin the affected business and the devices we used for such operation may be confiscated. Furthermore, according to the Audiovisual Program\nProvisions, the telecommunications administrative authorities may, based on written opinions of the SARFT, and in accordance with the\nrelevant laws and regulations on supervision of telecommunications and Internet, close our platform, revoke the relevant license or filings\nfor the provision of Internet information service and order the relevant network operation entity which provides us signal access services\nto stop such provision of services. As of the date of this annual report, we are not in the process of applying for the Internet audio-visual\nprogram transmission license, and we have not received any notice of warning or been subject to any material administrative penalties\nor other disciplinary actions from the relevant governmental authorities for lack of the Internet audio-visual program transmission license.\nHowever, in the past, the relevant governmental authorities penalized certain PRC companies due to their lack of Internet audio-visual\nprogram transmission license. As such, we cannot assure you that we will not be subject to any warning, investigations into suspension\nof some of our content offerings or other penalties that may materially and adversely affect our business, financial condition and results\nof operations.\n\n \n\n**Lack of Internet publishing license may\nexpose us to administrative sanctions, which would materially and adversely affect our business, results of operations and financial condition.**\n\n \n\nOn\nFebruary 4, 2016, the SAPPRFT and the MIIT jointly issued the Rules for the Administration for Internet Publishing Services,\nor the Internet Publishing Rules, which took effect on March 10, 2016, and prohibit wholly foreign-owned enterprises, Sino-foreign\nequity joint ventures and Sino-foreign cooperative enterprises from engaging in the provision of web publishing services. Under these\nrules, providers of online publications are required to hold an Internet publishing license. However, uncertainty remains regarding the\ninterpretation of relevant concepts, including “online publications” under the current PRC laws and regulations. Although\nwe have not been required by the General Administration of Press and Publication or other relevant authorities to obtain the Internet\npublishing license as of the date of this annual report, we may face further scrutiny by such authorities, and they may require us to\napply for such license or subject us to penalties. In addition, cooperation between Internet publishing services providers and wholly\nforeign-owned enterprises, Sino-foreign equity joint ventures, or Sino-foreign cooperative enterprises within China or overseas organizations\nor individuals engaging in Internet publishing business shall be subject to examination and approval by the General Administration of\nPress and Publication in advance. See “Item 4. Information on the Company-4.B. Business Overview-Regulation-Regulations on\nInternet Publishing.”\n\n \n\n \n\n \n\n \n\nIf the provision of our in-house-generated\ncontent, in the forms of articles, pictures, audio and video clips, on our online platform is considered “online publishing”,\nwe may be required to obtain the Internet publishing license. If the relevant regulatory authorities find our operations without an Internet\npublishing license to be in violation of the applicable laws and regulations, such regulatory authorities may order us to cease relevant\noperations or close our platform or confiscate the devices we used for such operations. If our revenue from such violation is less than\nRMB10,000, the relevant regulatory authorities may impose a fine of less than RMB50,000. If our revenue from such violation is RMB10,000\nor above, such regulatory authorities may impose a fine equivalent to five to ten times of our revenue from the violation. In addition\nto the administrative penalties, our operation without the Internet publishing license may also subject us to civil and criminal liabilities.\n\n \n\nWe are planning to apply\nfor the Internet publishing license for our business operation, and we have been continuously communicating with the competent authorities\nand will apply for it when it is feasible to do so. As advised by our PRC legal advisor, current requirements for applying the Internet\npublishing license include, among others, having a certain number of employees with technical and vocational qualifications for the profession\nof publishing and other related professions as approved by the SAPPRFT. As of the date of this annual report, we are not eligible to apply\nfor such license. We cannot predict when we can be eligible, or when such requirements will be eased so that we can be eligible to apply\nfor the Internet publishing license. However, even if we are eligible to apply, there can be no assurance that the application will be\naccepted or approved by the relevant regulatory authorities. As of the date of this annual report, we are not in the process of applying\nfor the Internet publishing license as our employees are still in the process of obtaining the requisite qualifications and we cannot\npredict when such qualifications will be obtained. In addition, we have not received any notice of warning or been subject to material\nadministrative penalties or other disciplinary actions from the relevant governmental authorities for lack of the license, which have\nhad a material adverse impact on our business. However, we cannot assure you that we will not be subject to any warning, investigations,\nsuspension of some or all of our content offerings or other penalties that may materially adversely affect our business, financial condition\nand results of operations.\n\n \n\n**Advertisements on our platform may subject\nus to penalties and other administrative actions.**\n\n \n\nUnder\nPRC advertising laws and regulations, we are obligated to monitor the advertising content shown on our platform to ensure that such content\nis true, accurate and in full compliance with applicable laws and regulations. In addition, where a special government review is required\nfor specific types of advertisements prior to posting, such as advertisements relating to pharmaceuticals, medical instruments, agrochemicals\nand veterinary pharmaceuticals, we are obligated to confirm that such review has been performed, and approval has been obtained from competent\ngovernment authorities. To fulfill these monitoring functions, we typically include clauses in our online advertising contracts requiring\nthat all advertising content provided by online advertising services customers must comply with relevant laws and regulations. Under PRC\nlaw, we may have claims against online advertising services customers for all damage caused by their breach of such representations. Violation\nof these laws and regulations may subject us to penalties, including fines, confiscation of our online advertising income, orders to cease\ndissemination of the advertisements and orders to publish an announcement correcting the misleading information. In circumstances involving\nserious violations, such as posting a pharmaceutical product advertisement without approval, or posting an advertisement for fake pharmaceutical\nproduct, PRC regulatory authorities may force us to terminate our online advertising operation or revoke our licenses. See “Item\n4. Information on the Company-4.B. Business Overview-Regulation-Regulations on Online Advertising Services.”\n\n \n\nA majority of the advertisements\nshown on our platform are provided to us by third parties. Although we have implemented automated and manual content monitoring systems\nand significant efforts have been made to ensure that the advertisements shown on our platform are in full compliance with applicable\nlaws and regulations, we cannot assure you that all the content contained in such advertisements is true, accurate and legitimate as required\nby the advertising laws and regulations, especially given the uncertainty in the application of these laws and regulations. The inability\nof our systems and procedures to adequately and timely discover such evasions may subject us to regulatory penalties or administrative\nsanctions. Although we have not been subject to material penalties or administrative sanctions in the past for the advertisements shown\non our platform, if we are found to be in violation of applicable PRC advertising laws and regulations in the future, we may be subject\nto penalties and our reputation may be harmed, which may have a material and adverse effect on our business, financial condition, results\nof operations and prospects. See “Item 4. Information on the Company—4.B. Business Overview—Regulation—Regulations\non Online Advertising Services.”\n\n \n\n \n\n \n\n \n\n**We face competition in major aspects of\nour business. If we are unable to compete effectively in the industry we operate, our business, results of operations and financial condition\nmay be materially and adversely affected.**\n\n \n\nThe New Economy-focused business\nservices market is highly competitive. Our online advertising services face competition from other content-based online advertising services\nproviders as well as technology channels of major Internet information portals, such as Sina and Tencent News. For our enterprise value-added\nservices, we face competition from other New Economy-focused enterprise value-added services providers as well as traditional marketing,\nconsulting and public relation companies. We also compete with paid content services providers and offline training agencies with respect\nto our subscription services. We also face competition from traditional advertising media. If we cannot effectively compete with these\nplatforms and distribution channels for marketing budgets of our existing and potential customers, our results of operations and growth\nprospects could be adversely affected.\n\n \n\nOur competition is primarily\ncentered on increasing user traffic, user engagement and brand recognition, as well as customer acquisition and retention, among other\nfactors. Some of our competitors have longer operating histories and significantly greater financial resources than we do, which may allow\nthem to attract and retain more users and customers. Our competitors may compete with us in a variety of ways, including by offering popular\ncontent, introducing new business services, conducting more aggressive brand promotions and other marketing activities and through investments\nand acquisitions. If any of our competitors achieve greater market acceptance or is able to offer more attractive content and business\nservices than us, our user traffic, customer acquisition and retention, brand value and market share may decrease, which may have a material\nand adverse effect on our business, financial condition and results of operations.\n\n \n\n**If we are unable to conduct our marketing\nactivities cost-effectively, our results of operations and financial condition may be materially and adversely affected.**\n\n \n\nWe\nhave incurred expenses on a variety of marketing and branding activities. In 2023, 2024 and 2025, we incurred RMB127.5 million,\nRMB82.6 million, and RMB66.4 million (US$9.5 million) in sales and marketing expenses, accounting for 37.5%, 35.7% and 29.1% of our total\nrevenues, respectively. Our marketing and branding activities may not be well received, successful or cost-effective, which may lead to\nsignificantly higher marketing expenses in the future. We may also not be able to continue our existing marketing and branding activities.\nFailure to refine our existing marketing strategies or introduce new effective marketing strategies in a cost-effective manner could impact\non our business operations and financial performance.\n\n \n\n**Content provided on our platform may expose\nus to libel or other legal claims which may result in costly legal damages.**\n\n \n\nClaims may be threatened\nand filed against us for libel, defamation, invasion of privacy, intellectual property right infringements and other theories based on\nthe nature and content of the information distributed on our platform. While we screen our content for such potential liability, there\nis no assurance that our screening process will identify all potential liability, especially liability arising from our user interactive\ncontent and content we source from third parties. In the past, there was no claim brought against us which resulted in material liability,\nbut we cannot assure you we will not be subject to future claims that could be costly, encourage similar lawsuits, distract our management\nteam and harm our reputation and possibly our business.\n\n \n\nThe use of generative AI\nmay involve complex intellectual property issues. As the applicable laws and regulations in mainland China are still evolving and subject\nto further interpretation and implementation, AI-generated content could lead to copyright and other legal disputes, which could undermine\nthe effectiveness of AI and subject us to liabilities and potential reputational harm. Although we believe that we have taken necessary\nmeasures according to the applicable laws, we cannot guarantee that we will always meet the regulatory requirements. If we fail to meet\nlegal and regulatory requirements, we may be subject to penalties.\n\n \n\n**If we are unable to manage our growth, our\nbusiness and prospects may be materially and adversely affected.**\n\n \n\nWe have experienced rapid\ngrowth since our incorporation in 2016. To manage our business expansion, we need to continuously expand and enhance our infrastructure\nand technology, and improve our operational and financial systems, procedures and internal controls. We cannot assure you that our current\nand planned personnel, infrastructure, systems, procedures and controls will be adequate to support our expanding operations. We may be\nrequired to spend more on sales and marketing in order to support any such expansion and our efforts may not be effective. If we fail\nto manage our expansion effectively or efficiently, our business and results of operations may be materially and adversely affected.\n\n \n\n \n\n \n\n \n\n**We may face challenges in expanding our\ninternational and local operations.**\n\n \n\nWe rely on our diversified\ndistribution channels to deliver our content to users in a cost-effective and timely manner. Specifically, we collaborate with established\noverseas and local media companies in setting up overseas and local stations. On the one hand, we face risks associated with expanding\ninto new regions and markets in which we have limited or no experience and in which our brand may be less known. We may be unable to attract\na sufficient number of users and other participants through our overseas and local stations. We may face fierce competition from overseas\nand local markets or other difficulties in operating effectively in these new markets. On the other hand, our international expansion\nand local penetration will also expose us to risks such as increased demands on management, operational and financial resources, different\nregulatory compliance requirements and exchange rate fluctuations, among others. One or more of these factors could adversely impact our\ninternational and local operations. Accordingly, any efforts we make to expand our international and local operations may not be successful.\n\n \n\n**Future investments in and acquisitions of\ncomplementary assets, technologies and businesses may fail and may result in equity or earnings dilution.**\n\n \n\nWe may invest in or acquire\nassets, technologies and businesses that are complementary to our existing business. Our investments or acquisitions may not yield the\nresults we expect. In addition, investments and acquisitions could result in the use of substantial amounts of cash, potentially dilutive\nissuances of equity securities, significant amortization expenses related to goodwill or intangible assets and exposure to potential unknown\nliabilities of the acquired business. Furthermore, if such goodwill or intangible assets become impaired, we may be required to record\na significant charge to our results of operations. Such investments and acquisitions may also require our management team to devote a\nsignificant amount of attention. Moreover, the cost of identifying and consummating investments and acquisitions, and integrating the\nacquired businesses into ours, may be significant, and the integration of acquired businesses may be disruptive to our existing business\noperations. In addition, we may have to obtain approval from the relevant PRC governmental authorities for the investments and acquisitions\nand comply with any applicable PRC rules and regulations, which may be costly. In the event our investments and acquisitions are\nnot successful, our results of operations and financial condition may be materially and adversely affected.\n\n \n\n**We have recorded negative cash flows from\noperating activities historically. We may need additional capital, and we may be unable to obtain such capital in a timely manner or on\nacceptable terms, or at all.**\n\n \n\nWe\nhave experienced cash outflow from operating activities in history. We recorded net cash used in operating activities of RMB122.2\nmillion in 2023, net cash used in operating activities of RMB33.0 million in 2024, and net cash provided by operating activities of RMB19.0\nmillion (US$2.7 million) in 2025. The cost of continuing operations could further reduce our cash position, and an increase in our net\ncash outflow from operating activities could adversely affect our operations by reducing the amount of cash available to meet the capital\nneeds for our daily operation and future business expansion. Our ability to obtain additional capital is subject to a variety of uncertainties,\nincluding:\n\n \n\n·\nour market position and competitiveness in the New Economy-focused business services market.\n\n \n\n·\nour future profitability, overall financial condition, results of operations and cash flows.\n\n \n\n·\ngeneral market conditions for capital raising activities by New Economy and other Internet companies in\nChina; and\n\n \n\n·\neconomic, political and other conditions in China and internationally.\n\n \n\nWe may be unable to obtain\nadditional capital in a timely manner or on acceptable terms or at all. In addition, due to future capital needs and other business reasons,\nwe may need to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity or equity-linked securities\ncould dilute our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating\nand financing covenants that would restrict our operations or our ability to pay dividends to our shareholders.\n\n \n\n**If we fail to collect accounts receivable\nfrom our customers in a timely manner, our business operations and financial results may be materially and adversely affected.**\n\n \n\nAccounts receivables are\ngenerally non-interest bearing and are on terms between 90 to 270 days. In some cases, these terms are extended for certain qualifying\nlong-term customers who have met specific credit requirements. We generally make a credit assessment of our customers before entering\ninto an agreement with them. Nevertheless, we cannot assure you that we are or will be able to accurately assess the creditworthiness\nof each customer. Furthermore, the financial soundness of our customers, which is beyond our control, may affect our collection of accounts\nreceivable. Any delay in payment or failed payment may adversely affect our liquidity and cash flow, which in turn has a material adverse\neffect on our business operations and financial results.\n\n \n\n \n\n \n\n \n\n**The continued and collaborative efforts\nof our senior management and key employees are crucial to our success, and our business may be harmed if we lose their services.**\n\n \n\nOur success depends on the\ncontinued and collaborative efforts of our senior management. If, however, one or more of our executives or other key personnel are unable\nor unwilling to continue to provide services to us, we may not be able to find suitable replacements easily or at all. Competition for\nmanagement and key personnel is intense, and the pool of qualified candidates is limited. We may not be able to retain the services of\nour executives or key personnel or attract and retain experienced executives or key personnel in the future. If any of our executive officers\nor key employees join a competitor or forms a competing business, we may lose crucial business secrets, technological know-hows, customers\nand other valuable resources.\n\n \n\n**We may be subject to intellectual property\ninfringement claims or other allegations by third parties for information or content distributed on our platform, which may be expensive\nto defend and may materially and adversely affect our business, financial condition and prospects.**\n\n \n\nOur success depends, in large\npart, on our ability to operate our business without infringing third-party rights, including third-party intellectual property rights.\nCompanies on the Internet, technology and media industries own, and are seeking to obtain, a large number of patents, copyrights, trademarks\nand trade secrets, and they are frequently involved in litigation based on allegations of infringement or other violations of intellectual\nproperty rights or other related legal rights. The validity, enforceability and scope of protection of intellectual property rights in\nInternet-related industries, particularly in China, are uncertain and still evolving. As we face increasing competition and as litigation\nbecomes more common in China in resolving commercial disputes, we face a higher risk of being the subject of intellectual property infringement\nclaims.\n\n \n\nWhile our content screening\nand monitoring mechanism screens are content for potential copyright infringements, we may not be able to identify all instances of copyright\ninfringement, especially those arising from professional content we source from third parties. For example, content providers may submit\ncopyrighted content that they have no right to distribute. In the event we deliver content that violates the copyrights of a third party,\nwe may be required to pay damages to compensate such third party. In addition, our platform allows our users to voice their opinions,\nexpress their views, discuss with each other and provide feedback on our content. Content posted by our users may expose us to allegations\nby third parties of infringement of intellectual property rights, invasion of privacy, defamation and other violations of third-party\nrights. Pursuant to our user agreement, users agree not to post any content that is illegal, obscene or may otherwise violate generally\naccepted codes of ethics. We have also implemented automated and manual reviews of the content on our platform. However, there is no assurance\nthat we can identify and remove all potentially infringing content uploaded by our users. As a result, our business, results of operations\nand financial condition could be materially and adversely affected.\n\n \n\nThird parties may take action\nand file claims against us if they believe that certain content on our site violates their copyrights or other related legal rights. We\nhave been, and may in the future be, subject to such claims in the PRC.\n\n \n\nIn addition, we operate our\nplatform primarily through the VIE and its subsidiaries, and our ability to monitor content as described above depends in large part on\nthe experience and skills of the management of, and our control over, those consolidated affiliated entities. Our control over the management\nand operations of our consolidated affiliated entities through contractual arrangements may not be as effective as that through direct\nownership. See “Risks Related to Our Corporate Structure—We rely on contractual arrangements with the VIE and its shareholders\nto operate our business, which may not be as effective as direct ownership in providing operational control and otherwise materially and\nadversely affect our business.”\n\n \n\n \n\n \n\n \n\nAlthough we have not been\nsubject to claims or lawsuits with respect to copyright infringement outside of China, we cannot assure you that we will not become subject\nto copyright laws or legal proceedings initiated by third parties in other jurisdictions, such as the United States, as a result of the\nability of users to access our content in the United States and other jurisdictions, the ownership of the ADSs by investors in the United\nStates and other jurisdictions, the extraterritorial application of foreign law by foreign courts, the fact that we sub-licensed content\nfrom licensors who in turn obtained their authorizations from content providers in the United States and other jurisdictions or otherwise.\nIn addition, as a publicly listed company, we may be exposed to increased risk of litigation. If a claim of infringement brought against\nus in the United States or other jurisdictions is successful, we may be required to, upon enforcement, (i) pay substantial statutory\nor other damages and fines, (ii) remove relevant content from our platform or (iii) enter into royalty or license agreements\nwhich may not be available on commercially reasonable terms or at all.\n\n \n\n**We may not be able to adequately protect\nour intellectual property and prevent others from unauthorized use of our intellectual property, which could cause us to be less competitive\nand harm our business.**\n\n \n\nWe rely on a combination\nof copyright, trademark and other intellectual property laws and confidentiality agreements and other measures to protect our intellectual\nproperty rights. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and\nuse our copyrighted content and other intellectual property. Monitoring such unauthorized use is difficult and costly, and we cannot be\ncertain that the steps we have taken will prevent misappropriation. From time to time, we may have to resort to litigation to enforce\nour intellectual property rights, which could result in substantial costs and diversion of our resources. The PRC has historically afforded\nless protection to a company’s intellectual property than the United States and the Cayman Islands, and therefore companies such\nas ours operating in the PRC face an increased risk of intellectual property piracy.\n\n \n\n**We may from time to time become a party\nto litigation, legal disputes, claims or administrative proceedings that may materially and adversely affect us.**\n\n \n\nWe may from time to time\nbecome a party to various litigations, legal disputes, claims or administrative proceedings arising in the ordinary course of our business.\nWe may also get involved in legal disputes, claims or litigation in connection with our major corporate actions. For example, in connection\nwith our reorganization in August 2019, shareholders of Xieli Zhucheng are entitled to designate an entity to subscribe for and/or\nreceive shares of our company reflecting their respective indirect ownership percentages in the VIE before completion of the reorganization.\nA certain shareholder of Xieli Zhucheng, however, has not officially responded to Xieli Zhucheng’s request for such designation.\nAs such, Xieli Zhucheng designated an offshore entity to hold the shares that such shareholders are entitled to receive in the reorganization,\nwhich represents approximately 1.5% of our total outstanding shares as of the date of this annual report, pending further instructions\nfrom such shareholders. We cannot assure you, however, that such shareholder will be satisfied with such arrangement or will not file\nany claim or lawsuit against Xieli Zhucheng or us to claim for damages or even challenge the validity of the reorganization and our contractual\narrangements with the VIE.\n\n \n\nWe cannot predict the outcome\nof any litigation, legal disputes, claims or administrative proceedings. If any verdict or award is rendered against us or if we decide\nto settle the disputes, we may be required to incur monetary damages or other liabilities. Even if we can successfully defend ourselves,\nwe may have to incur substantial costs and spend substantial time and effort in these lawsuits. Negative publicity relating to litigation,\nlegal disputes, claims or administrative proceedings may damage our reputation and adversely affect the image of our brand and services.\nFurthermore, any litigation, legal disputes, claims or administrative proceedings which are not of material importance may escalate due\nto the various factors involved, such as the facts and circumstances of the cases, the likelihood of winning or losing, the monetary amount\nat stake, and the parties concerned continue to evolve in the future, and such factors may result in these cases becoming of material\nimportance to us. Consequently, any ongoing or future litigation, legal disputes, claims or administrative proceedings could materially\nand adversely affect our business, financial condition and results of operations.\n\n \n\n**Our business, results of operations and\nfinancial condition may be harmed by service disruptions, or by our failure to timely and effectively scale and adapt our existing technology\nand infrastructure.**\n\n \n\nWe have experienced, and\nmay experience in the future, service disruptions, outages and other performance problems due to a variety of factors, including infrastructure\nchanges, human or software errors, hardware failure, capacity constraints due to an overwhelming number of people accessing our services\nsimultaneously, computer viruses and denial of service, fraud and security attacks. Any disruption or failure in our infrastructure could\nhinder our ability to handle existing or increased traffic on our platform or cause us to lose content stored on our platform, which could\nsignificantly harm our business and our ability to retain existing users and attract new users.\n\n \n\nAs the number of our users\nincreases and as we continue to diversify into new content formats, we may be required to expand and adapt our technology and infrastructure\nto continue to reliably store, analyze and deliver content. It may become increasingly difficult to maintain and improve the performance\nof our services, especially during peak usage times, as our services become more complex and our user traffic increases. If our users\nare unable to access our platform or we are not able to make information available rapidly on our platform, or at all, users may become\nfrustrated and seek other channels for their New Economy-focused content and may not return to our platform or use our platform as often\nin the future, or at all. This would negatively impact our ability to attract users and maintain high level of user engagement as well\nas our ability to attract online advertising services customers.\n\n \n\n \n\n \n\n \n\n**Our operations depend on the performance\nof the Internet infrastructure and fixed telecommunications networks in China. Any malfunction, capacity constraint or operation interruption\nmay have an adverse impact on our business.**\n\n \n\nThe successful operation\nof our business depends on the performance of the Internet infrastructure and telecommunications networks in China. Almost all access\nto the Internet is maintained through state-owned telecommunications operators under the administrative control and regulatory supervision\nof the MIIT. Moreover, we primarily rely on a limited number of telecommunication services providers to provide us with data communications\ncapacity. We have limited access to alternative networks or services in the event of disruptions, failures or other problems with China’s\nInternet infrastructure or the telecommunications networks provided by telecommunications services providers. With the expansion of our\nbusiness, we may be required to upgrade our technology and infrastructure to keep up with the increasing traffic on our platform. However,\nwe have no control over the costs of the services provided by telecommunications services providers. If the prices we pay for telecommunications\nand Internet services rise significantly, our results of operations may be materially and adversely affected. If Internet access fees\nor other charges to Internet users increase, our user traffic may decline, and our business may be harmed.\n\n \n\n**Privacy concerns relating to our services\nand the use of user information could damage our reputation, deter current and potential users and customers from using our services and\nnegatively impact on our business.**\n\n \n\nWe collect personal data\nfrom our users in order to better study and predict the preferences and demands of our users, and in turn tailor and recommend our content\nofferings accordingly. Concerns about the collection, use, disclosure or security of personal information or other privacy-related matters,\neven if unfounded, could damage our reputation, cause us to lose users and customers and adversely affect our business, results of operations\nand financial condition. While we strive to comply with applicable data protection laws and regulations, as well as our own posted privacy\npolicies and other obligations we may have with respect to privacy and data protection, the failure or perceived failure to comply may\nresult, and in some cases has resulted, in inquiries and other proceedings or actions against us by government agencies or others, as\nwell as negative publicity and damage to our reputation and brand, each of which could cause us to lose users and customers, which could\nhave an adverse effect on our business.\n\n \n\nAny systems failure or compromise\nof our security that results in unauthorized access to or release of our users’ or customers’ data could significantly limit\nthe adoption of our services, as well as harm our reputation and brand and, therefore, our business. We expect to continue to expend significant\nresources to protect against security breaches. The risk that these types of events could seriously harm our business is likely to increase\nas we expand the number of products and services we offer and expand our user base.\n\n \n\nNew laws or regulations concerning\ndata protection, or the interpretation and application of existing consumer and data protection laws or regulations, which are often uncertain\nand in flux, may be inconsistent with our practices. Complying with new laws and regulations could cause us to incur substantial costs\nor require us to change our business practices in a manner materially adverse to our business. See “Item 4. Information on the Company—4.B.\nBusiness Overview—Regulation—Regulation on Privacy Protection.”\n\n \n\n**If our security measures are breached, or\nif our services are subject to attacks that degrade or deny the ability of users to access our services, our services may be perceived\nas not being secure, users may curtail or stop using our services and our business, results of operations and financial condition may\nbe harmed.**\n\n \n\nOur services involve the\nstorage and transmission of users’ information, and security breaches expose us to a risk of loss of this information, litigation\nand potential liability. Our user data is encrypted and saved on cloud-based servers, protected by access control, and further backed\nup in long-distance servers, so as to minimize the possibility of data loss or breach. Upon security breach, our technical team will be\nnotified immediately and diagnose and solve the technical problems. As of the date of this annual report, we have not experienced any\nmaterial incidents of security breach.\n\n \n\n \n\n \n\n \n\nDespite the security measures\nwe have implemented, we may experience cyber-attacks of varying degrees, including attempts to hack into our user accounts or redirect\nour user traffic to other websites. Functions that facilitate interactivity with other mobile applications, which among other things allow\nusers to log into our platform using their accounts or identities, could increase the scope of access of hackers to user accounts. Our\nsecurity measures may also be breached due to employee error, malfeasance or otherwise. Additionally, outside parties may attempt to fraudulently\ninduce employees or users to disclose sensitive information in order to gain access to our data or our users’ data or accounts or\nmay otherwise obtain access to such data or accounts. Any such breach or unauthorized access could result in significant legal and financial\nexposure, damage to our reputation and a loss of confidence in the security of our services that could have an adverse effect on our business,\nresults of operations and financial condition. Because the techniques used to obtain unauthorized access, disable or degrade service or\nsabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these\ntechniques or to implement adequate preventative measures. If an actual or perceived breach of our security occurs, the market perception\nof the effectiveness of our security measures could be harmed, we could lose users and we may be exposed to significant legal and financial\nrisks, including legal claims and regulatory fines and penalties. Any of these actions could have a material and adverse effect on our\nbusiness, results of operations and financial condition.\n\n \n\n**Our current dependence on a limited number\nof customers may cause significant fluctuations or declines in our revenues.**\n\n \n\nA considerable portion of\nour revenues is derived from a limited number of our customers. For details, see Note 4 “Concentrations and Risks” to our\nconsolidated financial statements. Some of our customers may choose to place orders to us via third-party agencies, through which we provided\nadvertising and other services to various enterprises they represent. There are inherent risks whenever a large percentage of total revenues\nare concentrated with a limited number of customers or agencies. It may not be possible for us to predict the future level of demand for\nour services by our largest customers. Actions taken by our largest customers to exploit their comparably superior bargaining position\nwhen negotiating for renewals of services agreements or otherwise could also have an adverse effect on our results of operations. In addition,\nrevenues from the largest customers may fluctuate from time to time for reasons beyond our control. There can be no assurance that we\ncan maintain relationships with our largest customers on commercially desirable terms. If any of the foregoing were to occur, we could\nbe pressured to reduce the prices we charge for our services or risk losing our largest customers, which could have an adverse effect\non our revenues and margins, and could negatively affect our financial position and results of operations and/or trading price of the\nADSs.\n\n \n\n**Our user and customer operating metrics\nand other estimates are subject to inherent challenges in measuring our operating performance, which may harm our reputation.**\n\n \n\nWe regularly review our operating\nmetrics in relation to our users and customers to evaluate growth trends, measure our performance, and make strategic decisions. These\nmetrics are calculated using our internal data as well as third-party platform’s data, have not been validated by an independent\nthird party, and may not be indicative of our future operation results. While these numbers are based on what we believe to be reasonable\nestimates for the applicable period of measurement, there are inherent challenges in measuring how our platform is used across a large\npopulation in China. For example, we may not be able to distinguish individual users who have multiple registered accounts across our\nself-operated platforms and third-party platforms. Errors or inaccuracies in our metrics or data could result in incorrect business decisions\nand inefficiencies. For instance, if a significant understatement or overstatement of active users were to occur, we might expend resources\nto implement unnecessary business measures or fail to take required actions to remedy an unfavorable trend. If online advertising services\ncustomers or investors do not perceive our user or other operating metrics to accurately represent our user base, or if we discover inaccuracies\nin our user or other operating metrics, our reputation may be harmed.\n\n \n\n**If we fail to implement and maintain an\neffective system of internal controls over financial reporting, we may be unable to accurately or timely report our results of operations\nor prevent fraud, and investor confidence and the trading price of the ADSs may be materially and adversely affected.**\n\n \n\nIn the course of auditing\nour consolidated financial statements as of and for the year ended December 31, 2025, we and our independent registered public accounting\nfirm identified one material weakness in our internal control over financial reporting and other control deficiencies. The material weakness\nidentified is our lack of sufficient competent financial reporting and accounting personnel with appropriate understanding of U.S. GAAP\nto design and implement formal period-end financial reporting controls and procedures to address U.S. GAAP technical accounting issues,\nand to prepare and review the consolidated financial statements and related disclosures in accordance with U.S. GAAP and financial reporting\nrequirements set forth by the SEC. We are in the process of implementing a number of measures to address the identified material weakness\nand control deficiencies. However, we cannot assure you that these measures may fully address or remediate the material weakness and control\ndeficiencies.\n\n \n\n \n\n \n\n \n\nAs a public company in the\nUnited States, we are subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404,\nrequires that we include a report from management on our internal control over financial reporting in our annual report on Form 20-F\nbeginning with our annual report for the fiscal year ending December 31, 2020. In addition, when a company meets the SEC’s\ncriteria, an independent registered public accounting firm must attest to and report on the effectiveness of the company’s internal\ncontrol over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover,\neven if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting\nfirm, after conducting its own independent testing, may conclude that our internal control over financial reporting is not effective.\nIn addition, as a public company, our reporting obligations may place a significant strain on our management, operational and financial\nresources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.\n\n \n\nDuring the course of documenting\nand testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify other or more material\nweaknesses or deficiencies in our internal control over financial reporting. In addition, if we fail to maintain the adequacy of our internal\ncontrol over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude\non an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. Generally speaking,\nif we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial\nstatements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial\ninformation. This could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading\nprice of the ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse\nof corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil\nor criminal sanctions.\n\n \n\n**We have limited business insurance coverage\nwhich could expose us to significant costs and business disruption.**\n\n \n\nInsurance companies in China\noffer limited business insurance products. We do not have any business liability or disruption insurance coverage for our operations in\nChina. Any business disruption may result in our incurring substantial costs and the diversion of our resources, which could have an adverse\neffect on our results of operations and financial condition.\n\n \n\n**Our quarterly operating results may fluctuate,\nwhich makes our results of operations difficult to predict and may cause our quarterly results of operations to fall short of expectations.**\n\n \n\nOur quarterly operating results\nhave fluctuated in the past and may continue to fluctuate depending upon a number of factors, many of which are out of our control. Our\noperating results tend to be seasonal. For instance, advertising and marketing activities tend to be less active during the first quarter,\nwhich is Chinese New Year holiday season. As compared to the first quarter, our online advertising services customers tend to increase\nadvertising and marketing spending near the end of each calendar year when they spend their remaining annual budgets. Moreover, as most\nof our online/ offline events are hosted in the fourth quarter of each year, we also experience increase in revenues during the fourth\nquarter of each year for our enterprise value-added services. For these reasons, comparing our operating results on a period-to-period\nbasis may not be meaningful, and you should not rely on our past results as an indication of our future performance. Our quarterly and\nannual revenues and costs and expenses as a percentage of our revenues in a given period may be significantly different from our historical\nor projected rates and our operating results in future quarters may fall below expectations.\n\n \n\n**We have granted, and may continue to grant,\nshare incentives, which may have an adverse effect on our future profit.**\n\n \n\nXieli\nZhucheng adopted a share incentive plan in 2014, or the 2014 Share Incentive Plan and Beijing Duoke adopted a share incentive plan in\nDecember 2016, or the 2016 Share Incentive Plan, to enhance its ability to attract and retain exceptionally qualified individuals\nand to encourage them to acquire a proprietary interest in the growth and performance of us. In September 2019, 36Kr Holdings Inc.\nadopted a share incentive plan, which we refer to as the 2019 Share Incentive Plan. The 2014 Share Incentive Plan and 2016 Share Incentive\nPlan were canceled concurrently upon the adoption of the 2019 Share Incentive Plan, and each participant of the 2014 Share Incentive Plan\nand 2016 Share Incentive Plan received corresponding grants of options under the 2019 Share Incentive Plan. In June 2021, we amended\nthe 2019 Incentive Plan with the approval of the board of directors, pursuant to which the maximum aggregate number of ordinary shares\nwhich may be issued pursuant to all awards under the 2019 Share Incentive Plan is 162,186,000. In March 2026, we amended the 2019\nIncentive Plan with the approval of the board of directors, pursuant to which the maximum aggregate number of ordinary shares which may\nbe issued pursuant to all awards under the 2019 Share Incentive Plan is 296,556,000. See “Item 6. Directors, Senior Management\nand Employees—6.B. Compensation—Share Incentive Plan.”\n\n \n\nIn\n2023, 2024 and 2025, we recorded expenses RMB4.7 million, gains RMB0.2 million and expenses RMB13.4 thousand(US$1.9 thousand),\nrespectively, in share-based compensation expenses. We believe the granting of share-based awards is significant for us to attract and\nretain key personnel and employees, and we will continue to grant share-based compensation to employees in the future. As a result, our\nexpenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations.\n\n \n\n \n\n \n\n \n\n**A severe and prolonged global economic recession\nand the slowdown in the Chinese economy may adversely affect our business, results of operations and financial condition.**\n\n \n\nThe global macroeconomic\nenvironment is facing challenges, including the ongoing trade disputes and tariffs and recent Russia-Ukraine crisis. The growth of the\nChinese economy has slowed down since 2012 compared to the previous decade and the trend may continue. There is considerable uncertainty\nover the long-term effects of the monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s\nleading economies, including the United States and China. There have been concerns over unrest and terrorist threats in the Middle East,\nEurope and Africa. There have also been concerns on the relationship between China and other countries, including surrounding Asian countries,\nwhich may potentially lead to foreign investors closing down their businesses or withdrawing their investments in China and, thus, exiting\nthe China market, and other economic effects. In addition, there have also been concerns on the relationship between China and the U.S.\nfollowing rounds of tariffs imposed by the U.S. and retaliatory tariffs imposed by China. It is unclear whether these challenges and uncertainties\nwill be contained or resolved, and what effects they may have on the global political and economic conditions in the long term. Economic\nconditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the\nexpected or perceived overall economic growth rate in China. Any prolonged slowdown in the global or Chinese economy may have a negative\nimpact on our business, results of operations and financial condition, and continued turbulence in the international markets may adversely\naffect our ability to access the capital markets to meet liquidity needs. Our customers may reduce or delay spending with us, while we\nmay have difficulty expanding our customer base fast enough, or at all, to offset the impact of decreased spending by our existing customers.\nIn addition, to the extent we offer credit to any customer and the customer experiences financial difficulties due to the economic slowdown,\nwe could have difficulty collecting payment from the customer.\n\n \n\nWe are closely monitoring\npotential changes in international trade policy and assessing the potential impact of such trade policy changes on our business operations\nand financial performance, including the use of tariffs by the United States, China and other global trading countries and any related\nretaliatory measures. Broadly speaking, these policies have added increased uncertainty and volatility to the global economy and financial\nmarkets. We believe that such changes to trade policy would not have a material imminent impact on our business operations, but as relevant\npolicies are rapidly evolving, it may be difficult to evaluate their potential future impacts. Geopolitical conflicts like this may also\nlead to volatility in financial markets, fluctuations in currency exchange rates, increased procurement costs and declines in trading\nprices of our ordinary shares and the ADSs. In extreme cases, such conflicts could result in economic downturns that materially and adversely\nimpact our operations.\n\n \n\n**Any catastrophe, including natural catastrophes\nand outbreaks of health pandemics and other extraordinary events, could disrupt our business operation.**\n\n \n\nWe are vulnerable to natural\ndisasters and other calamities. Fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist\nattacks or similar events may give rise to server interruptions, breakdowns, system failures or Internet failures, which could cause the\nloss or corruption of data or malfunctions of software or hardware as well as adversely affect our ability to provide our services.\n\n \n\nOur business could also be\nadversely affected by the effects of Ebola virus disease, H1N1 flu, H7N9 flu, avian flu, severe acute respiratory syndrome, SARS, COVID-19\nor other epidemics. Our business operations could be disrupted if any of our employees is suspected of having abovementioned or any other\ncontagious disease or condition, since it could require our employees to be quarantined and/or our offices to be disinfected. In addition,\nour business, results of operations and financial condition could be adversely affected to the extent that any of these epidemics harms\nthe Chinese economy in general.\n\n \n\n**Risks Related to Our Corporate Structure**\n\n \n\n**There are uncertainties regarding the interpretation\nand application of current and future PRC laws, regulations, and rules relating to the agreements that establish the VIE structure\nfor our operations in China, including potential future actions by the PRC government, which could affect the enforceability of our contractual\narrangements with the VIE and, consequently, significantly affect the financial condition and results of operations performance of 36Kr.\nIf the PRC government finds such agreements non-compliant with relevant PRC laws, regulations, and rules, or if these laws, regulations,\nand rules or the interpretation thereof change in the future, we could be subject to penalties or be forced to relinquish our interests\nin the VIE.**\n\n \n\nForeign\ninvestment in the value-added telecommunication services industry in China is extensively regulated and subject to numerous restrictions.\nThe Special Administrative Measures for Entrance of Foreign Investment (the “Negative List 2024”) provides that foreign\ninvestors are generally not allowed to own more than 50% of the equity interests in a commercial Internet content provider or other value-added\ntelecommunication services provider other than an e-commerce services provider, and the Provisions on the Administration of Foreign-Invested\nTelecommunications Enterprises (2022 Revision) requires that the major foreign investor in a value-added telecommunication services provider\nin China must have experience in providing value-added telecommunications services overseas and maintain a good track record. In addition,\nforeign investors are prohibited from investing in companies engaged in Internet dissemination, Internet content provision, Internet\nnews information services, online publishing businesses, certain Internet culture businesses, Internet audio-visual programs businesses\nand production and operation of radio and television programs. See “Item 4. Information on the Company-4.B. Business Overview-Regulation-Foreign\nInvestment Law”\n\n \n\n \n\n \n\n \n\nWe are a Cayman Islands company\nand our subsidiary in China is currently considered a foreign-invested enterprise. Accordingly, in practice, our PRC subsidiary is not\neligible to provide value-added telecommunication services or conduct other businesses which foreign-owned companies are prohibited or\nrestricted from conducting in China. To ensure strict compliance with the PRC laws and regulations, we conduct such business activities\nthrough the VIE and its subsidiaries. Beijing Dake, our wholly owned subsidiary in China, has entered into a series of contractual arrangements\nwith the VIE and its shareholders, which enables us to be considered as the primary beneficiary of the VIE for accounting purposes. For\na description of these contractual arrangements, see “Item 4. Information on the Company—4.C. Organizational Structure—Contractual\nArrangements with Beijing Duoke.”\n\n \n\nIf the PRC government finds\nthat our contractual arrangements do not comply with its restrictions on foreign investment in the value-added telecommunication services\nand other foreign prohibited services or if the PRC government otherwise finds that we, the VIE, or any of its subsidiaries are in violation\nof PRC laws or regulations or lack the necessary permits or licenses to operate our business, the relevant PRC regulatory authorities\nwould have broad discretion in dealing with such violations or failures, including:\n\n \n\n·\nrevoking the business licenses and/or operating licenses of such entities;\n\n \n\n·\ndiscontinuing or placing restrictions or onerous conditions on our operation through any transactions\nbetween our PRC subsidiary and the VIE;\n\n \n\n·\nimposing fines, confiscating the income from our PRC subsidiary or the VIE, or imposing other requirements\nwith which we or the VIE may not be able to comply;\n\n \n\n·\nrequiring us to restructure our ownership structure or operations, including terminating the contractual\narrangements with the VIE and deregistering the equity pledges of the VIE, which in turn would affect our ability to be considered the\nprimary beneficiary of the VIE for accounting purposes;\n\n \n\n·\nrestricting or prohibiting our use of the proceeds of our initial public offering to finance our business\nand operations in China; or\n\n \n\n·\ntaking other regulatory or enforcement actions that could be harmful to our business.\n\n \n\nAny of these actions could\ncause significant disruptions to our business operations and severely damage our reputation, which would in turn materially and adversely\naffect our business, financial condition and results of operations. In addition, new PRC laws, regulations, and rules may be introduced\nto impose additional requirements, posing additional challenges to our corporate structure and contractual arrangements. If any of these\noccurrences results in our inability to direct the activities of the VIE or our failure to receive the economic benefits from the VIE\nand/or our inability to claim our contractual control rights over the assets of the VIE that conducts substantially all of our operations\nin China, we may not be able to consolidate the entity in our consolidated financial statements in accordance with U.S. GAAP which could\nmaterially and adversely affect our financial condition and results of operations and cause the ADSs to significantly decline in value\nor become worthless.\n\n \n\n**Any failure by the VIE or its shareholders\nto perform their obligations under our contractual arrangements with them would have a material adverse effect on our business.**\n\n \n\nSince PRC laws prohibit or\nrestrict foreign equity ownership in certain kinds of business in China, we have relied and expect to continue to rely on the contractual\narrangements with the VIE and its shareholders to operate our business in China.\n\n \n\nHowever, these contractual\narrangements may not be as effective as direct ownership in providing us with control over our affiliated entities. Any of our affiliated\nentities, including the VIE and its shareholders, could breach their contractual arrangements with us by, among other things, failing\nto conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests. In the event that the\nshareholders of the VIE breach the terms of these contractual arrangements and voluntarily liquidate the VIE, or the VIE declares bankruptcy\nand all or part of its assets become subject to liens or rights of third-party creditors, or are otherwise disposed of without our consent,\nwe may be unable to conduct some or all of our business operations or otherwise benefit from the assets held by our affiliated entities,\nwhich could have a material adverse effect on our business, financial condition and results of operations.\n\n \n\n \n\n \n\n \n\nShareholders holding 99%\nof the registered share capital of the VIE are affiliated with our Company or affiliated with certain shareholders of the Company. Particularly,\nTianjin Zhanggongzi Technology Partnership (L.P.) controlled by Mr. Liu Chengcheng, the Founder and a shareholder of the Company,\nowns 61.56% of equity interest of the VIE, Shenzhen Guohong No. 2 Enterprise Management Partnership (L.P.), an affiliate of one our\nexisting shareholders, owns 23.08% of equity interest of the VIE, and Ningbo Meishan Baoshui Gangqu Tianhong Lvheng Investment Management\nPartnership (L.P.), an affiliate of one our existing shareholders, owns 14.36% of equity interest of the VIE. The enforceability of the\ncontractual agreements between us, the VIE and its shareholders, depends to a large extent upon whether the VIE and its shareholders will\nfulfil these contractual agreements. Their interest in enforcing these contractual agreements may not align with our interests or the\ninterests of our shareholders. If their interest diverges from that of our company and other shareholders, it may potentially increase\nthe risk that they could seek to act contrary to these contractual arrangements. If the VIE or its shareholders fail to perform their\nrespective obligations under the contractual arrangements, we may have to incur substantial costs and expend additional resources to enforce\nsuch arrangements. We may also have to rely on legal remedies under PRC law, including seeking specific performance or injunctive relief,\nand contractual remedies, which we cannot assure you will be sufficient or effective under PRC law. Our contractual arrangements are governed\nby PRC law and provide for the resolution of disputes through litigation in China. Accordingly, these agreements would be interpreted\nin accordance with PRC law, and any disputes would be resolved in accordance with PRC legal procedures. There remain significant uncertainties\nregarding the ultimate outcome of such adjudication should legal action become necessary. In the event that we are unable to enforce these\ncontractual arrangements, or if we suffer significant delays or other obstacles in the process of enforcing these contractual arrangements,\nwe may not be able to be considered the primary beneficiary of the VIE for accounting purposes, and our ability to conduct our business\nmay be negatively affected.\n\n \n\nIn November 2022, Beijing\nCultural Investment Development Group Asset Management Co., Ltd. (“BCI”), made an investment of RMB32,492 in Beijing\nDuoke for 1% of Beijing Duoke’s registered capital. Such minority stake holder is not a party to the contractual arrangements that\nare currently in effect among 36Kr, Beijing Duoke and Beijing Duoke’s other shareholders. As such, despite the fact that we will\nstill be able to enjoy economic benefits and are considered as the primary beneficiary of Beijing Duoke and its subsidiaries, we will\nnot be able to purchase or have BCI pledge its 1% equity interests in Beijing Duoke in the same manner as agreed under existing contractual\narrangements, nor will we be granted the authorization of voting rights over these 1% equity interests. We believe that we will continue\nto be the primary beneficiary of Beijing Duoke for accounting purposes and consolidate its operating results in our financial statements\nunder U.S. GAAP after the issuance of such 1% equity interests.\n\n \n\n**The approval, filing or other requirements\nof the China Securities Regulatory Commission or other PRC government authorities may be required under PRC law in connection with our\nissuance of securities overseas, or maintenance of the listing status of the ADSs, and the PRC government’s oversight and discretion\nover our business operations could result in a material adverse change in our operations and the value of the ADSs.**\n\n \n\nThe Regulations on Mergers\nand Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, purport to require offshore special purpose vehicles\nthat are controlled by PRC companies or individuals and that have been formed for the purpose of seeking a public listing on an overseas\nstock exchange through acquisitions of PRC domestic companies or assets to obtain CSRC approval prior to publicly listing their securities\non an overseas stock exchange. The interpretation and application of the regulations remain unclear. If CSRC approval under the M&A\nRules is required, it is uncertain whether it would be possible for us to obtain the approval, and any failure to obtain or delay\nin obtaining CSRC approval for our future issuance of securities overseas would subject us to sanctions imposed by the CSRC and other\nPRC regulatory agencies.\n\n \n\nFurthermore, we conduct our\nbusiness primarily through our PRC subsidiaries and the VIE in China. Our operations in China are governed by PRC laws and regulations.\nThe PRC government has significant oversight and discretion over the operation of our business, and it may influence our operations, which\ncould result in a material adverse change in our operation and the value of the ADSs. The PRC government has indicated an intent to exert\nmore oversight over overseas offerings and/or foreign investment in China-based issuers like us. For example, on July 6, 2021, relevant\nPRC government authorities promulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities, which emphasized the need\nto strengthen the administration over “illegal securities activities” and the supervision on overseas listings by China-based\ncompanies, and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the\nrisks and incidents faced by China-based overseas-listed companies, although such opinions did not specify the definition of “illegal\nsecurities activities.” Such opinions further provided that the special provisions of the State Council on overseas offerings and\nlistings by those companies limited by shares will be revised and therefore the duties of domestic industry competent authorities and\nregulatory agencies will be clarified.\n\n \n\n \n\n \n\n \n\nAs these opinions were newly\nissued and there are no further explanations or detailed rules and regulations with respect to such opinions, there are still uncertainties\nregarding the interpretation and implementation of such opinions. In addition, new rules or regulations promulgated in the future\ncould impose additional requirements on us, and it is uncertain how the new rules or regulations will be enacted, interpreted or\nimplemented and how they will affect us. For example, it was reported that the CSRC may issue new rules requiring China-based companies\nto seek approval before going public outside of China, including in the U.S. Furthermore, on July 10, 2021, the CAC issued a revised\ndraft of the Cybersecurity Review Measures for public comments, according to which, among others, an “operator of critical information\ninfrastructure” or a “data processing operator,” who has personal information of more than one million users and is\nseeking to list its securities on a foreign stock exchange, must apply to the relevant cybersecurity review office for a cybersecurity\nreview.\n\n \n\nIn addition, on December 28,\n2021, the CAC published the Revised Cybersecurity Review Measures, which became effective on February 15, 2022. The Revised Cybersecurity\nReview Measures provide that a critical information infrastructure operator purchasing network products and services, and platform operators\ncarrying out data processing activities, which affect or may affect national security, shall apply for cybersecurity review and that a\nplatform operator with more than one million users’ personal information aiming to list abroad must apply for cybersecurity review.\nThere are uncertainties as to the interpretation, application, and enforcement of the Revised Cybersecurity Review Measures. Under the\nRevised Cybersecurity Review Measures, we face potential risks if we are deemed as a “critical information infrastructure operator”\nor “platform operator” under the PRC cybersecurity laws and regulations and would be required to follow cybersecurity review\nprocedures. During such review, we may be required to suspend providing any existing or new services to our customers and/or experience\nother disruptions of our operations, and such review could also result in negative publicity with respect to our Company and diversion\nof our managerial and financial resources. In addition, we cannot guarantee that new rules or regulations promulgated in the future\nwill not impose any additional requirement on us or otherwise tighten the regulations on companies with a VIE structure.\n\n \n\nOn February 17, 2023,\nthe CSRC published the Interim Administrative Measures on Overseas Securities Offering and Listing by the Domestic Enterprises (CSRC Announcement\n[2022] No. 43) (the “Overseas Listing Measures”), which became effective on March 31, 2023. Under the Overseas Listing\nMeasures, a filing-based regulatory system will be applied to “indirect overseas offerings and listings” of PRC domestic companies,\nwhich refers to securities offerings and listings in an overseas market made under the name of an offshore entity but based on the underlying\nequity, assets, earnings or other similar rights of a domestic company that operates its main business domestically. The Overseas Listing\nMeasures state that any post-listing follow-on offering by an issuer in an overseas market, including issuance of shares, convertible\nnotes and other similar securities, shall be subject to filing requirements within three business days after the completion of the offering.\nTherefore, any of our future offerings and listing of our securities in an overseas market may be subject to the filing requirements under\nthe Overseas Listing Measures. In connection with the Overseas Listing Measures, on February 17, 2023, the CSRC also published the\nNotice on the Administrative Arrangements for the Filing of Overseas Securities Offering and Listing by the Domestic Enterprises (the\n“Notice on Overseas Listing Measures”). According to the Notice on Overseas Listing Measures, issuers that have already been\nlisted in an overseas market by March 31, 2023, the date the Overseas Listing Measures will become effective, are not required to\nmake any immediate filing and are only required to comply with the filing requirements under the Overseas Listing Measures when it consequently\nseeks to conduct a follow-on offering.\n\n \n\nIf the CSRC or other relevant\nPRC regulatory agencies subsequently determine that prior approval, filing and/or other administration procedure is required for any of\nour future offerings of securities overseas or maintenance of the listing status of the ADSs, we cannot guarantee that we will be able\nto obtain such approval or complete such filing or other administration procedures in a timely manner, or at all. The CSRC or other PRC\nregulatory agencies also may take actions requiring us, or making it advisable for us, not to proceed with such offering or maintenance\nof the listing status of the ADSs. If we proceed with any of such offering or maintain the listing status of the ADSs without obtaining\nthe CSRC’s or other PRC regulatory agencies’ approval or completing relevant filing or other administration procedures to\nthe extent it is required, or if we are unable to comply with any new approval requirements which might be adopted for offerings that\nwe have completed prior to the publication of the above-referenced opinions, we may face regulatory actions or other sanctions from the\nCSRC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our\nability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds\nfrom offering of securities overseas into China or take other actions that could have a material adverse effect on our business, financial\ncondition, results of operations and prospects, as well as the trading price of the ADSs.\n\n \n\nFurthermore, if there are\nany other approvals, filings and/or other administration procedures to be obtained from or completed with the CSRC or other PRC regulatory\nagencies as required by any new laws and regulations for any of our future proposed offering of securities overseas or the listing of\nthe ADSs, we cannot assure you that we can obtain the required approval or complete the required filings or other regulatory procedures\nin a timely manner, or at all. Any failure to obtain the relevant approvals or complete the filings and other relevant regulatory procedures\nmay subject us to regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies, which may have a material adverse\neffect on our business, financial condition or results of operations. In addition, implementation of industry-wide regulations affecting\nour operations could cause the value of our securities to significantly decline. Therefore, investors of our company and our business\nface potential uncertainty from actions taken by the PRC government affecting our business.\n\n \n\n \n\n \n\n \n\n**Uncertainties exist with respect to the\ninterpretation and implementation of the newly enacted Foreign Investment Law of the PRC and how it may impact on the viability of our\ncurrent corporate structure, corporate governance and business operations.**\n\n \n\nOn\nMarch 15, 2019, the National People’s Congress adopted the Foreign Investment Law of the PRC, which became effective on January 1,\n2020 and replaced three existing laws regulating foreign investment in China, namely, the Wholly Foreign-Invested Enterprise Law of the\nPRC, the Sino-Foreign Cooperative Joint Venture Enterprise Law of the PRC and the Sino-Foreign Equity Joint Venture Enterprise Law of\nthe PRC, together with their implementation rules and ancillary regulations. The Foreign Investment Law of the PRC embodies an expected\nPRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative\nefforts to unify the corporate legal requirements for both foreign and domestic investments. However, since it is relatively new, uncertainties\nstill exist in relation to its interpretation and implementation. For example, the Foreign Investment Law of the PRC adds a catch-all\nclause to the definition of “foreign investment” so that foreign investment, by its definition, includes “investments\nmade by foreign investors in China through other means defined by other laws or administrative regulations or provisions promulgated by\nthe State Council” without further elaboration on the meaning of “other means.” It leaves leeway for the future legislations\npromulgated by the State Council to provide for contractual arrangements as a form of foreign investment. It is therefore uncertain whether\nour corporate structure will be seen as violating the foreign investment rules as we are currently leveraging the contractual arrangements\nto operate certain businesses in which foreign investors are prohibited from or restricted to investing. Furthermore, if future legislation\nprescribed by the State Council mandate further actions to be taken by companies with respect to existing contractual arrangements, we\nmay face uncertainties as to whether we can complete such actions in a timely manner, or at all. If we fail to take appropriate\nand timely measures to comply with any of these or similar regulatory compliance requirements, our current corporate structure, corporate\ngovernance and business operations could be materially and adversely affected.\n\n \n\n**We rely on contractual arrangements with\nthe VIE and its shareholders to operate our business, which may not be as effective as direct ownership in providing operational control\nand otherwise materially and adversely affect our business.**\n\n \n\nWe rely on contractual arrangements\nwith the VIE, its shareholders, as well as certain of its subsidiaries to operate our business in China. For a description of these contractual\narrangements, see “Item 4. Information on the Company-4.C. Organizational Structure-Contractual Arrangements with Beijing Duoke.”\nThese contractual arrangements may not be as effective as direct ownership in providing us with control over the VIE. For example, the\nVIE and its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations\nin an acceptable manner or taking other actions that are detrimental to our interests. The revenues contributed by the VIE and its subsidiaries\nconstituted substantially all of our revenues in 2023, 2024 and 2025.\n\n \n\nIf\nwe had direct ownership of the VIE, we would be able to exercise our rights as a shareholder to effect changes in the board of directors\nof the VIE, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational\nlevel. However, under the contractual arrangements, we expect to rely on the performance by the VIE and its shareholders of their respective\nobligations under the contracts. The shareholders of the VIE may not act in the best interests of our company or may not fulfil their\nobligations under these contracts. Such risks will exist throughout the period in which we operate our business through the contractual\narrangements with the VIE and its shareholders. If any dispute relating to these contracts remains unresolved, we will have to enforce\nour rights under these contracts through the operations of PRC law and arbitration, litigation or other legal proceedings. See “-Any\nfailure by the VIE or its shareholders to perform their obligations under our contractual arrangements with them would have a material\nand adverse effect on our business.” Therefore, our contractual arrangements with the VIE and its shareholders may not be as effective\nin controlling our business operations as direct ownership.\n\n \n\n \n\n \n\n \n\n**All the agreements under our contractual\narrangements are governed by PRC law and provide for the resolution of disputes through arbitration in China. Accordingly, these contracts\nwould be interpreted in accordance with PRC law, and any disputes would be resolved in accordance with PRC legal procedures.**\n\n \n\nAll\nthe agreements under our contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration\nin China. Accordingly, these contracts would be interpreted in accordance with PRC law, and any disputes would be resolved in accordance\nwith PRC legal procedures. There remain significant uncertainties regarding the ultimate outcome of such arbitration should legal action\nbecome necessary. In addition, under PRC law, rulings by arbitrators are final, parties cannot appeal the arbitration results in courts,\nand if the losing parties fail to carry out the arbitration awards within a prescribed time limit, the prevailing parties may only enforce\nthe arbitration awards in PRC courts through arbitration award recognition proceedings, which require additional expenses and delay. In\nthe event we are unable to enforce these contractual arrangements, or if we suffer significant delays or other obstacles in the process\nof enforcing these contractual arrangements, we may not be able to be considered the primary beneficiary of the VIE for accounting purposes,\nand our ability to conduct our business may be negatively affected. See “-Risks Related to Doing Business in China-There\nare uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to\nthe agreements that establish the VIE structure for our operations in China, including potential future actions by the PRC government,\nwhich could affect the enforceability of our contractual arrangements with the VIE and, consequently, significantly affect the financial\ncondition and results of operations performance of 36Kr. If the PRC government finds such agreements non-compliant with relevant PRC laws,\nregulations, and rules, or if these laws, regulations, and rules or the interpretation thereof change in the future, we could be\nsubject to penalties or be forced to relinquish our interests in the VIE.”\n\n \n\n**Contractual arrangements in relation to\nthe VIE may be subject to scrutiny by the PRC tax authorities and they may determine that we or the VIE owe additional taxes, which could\nnegatively affect our financial condition and the value of your investment.**\n\n \n\nUnder applicable PRC laws\nand regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities within\nten years after the taxable year when the transactions are conducted. We could face material and adverse tax consequences if the PRC tax\nauthorities determine that the contractual arrangements between us and the VIE were not entered into on an arm’s-length basis in\nsuch a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust the income\nof the VIE in the form of a transfer pricing adjustment. A transfer pricing adjustment could, among other things, result in a reduction\nof expense deductions recorded by the VIE for PRC tax purposes, which could in turn increase its tax liabilities without reducing our\nPRC subsidiary’s tax expenses. In addition, the PRC tax authorities may impose additional tax liability on the VIE for the adjusted\nbut unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if the VIE’s\ntax liabilities increase or if it is required to pay late payment fees and other penalties.\n\n \n\n**The shareholders of the VIE may have actual\nor potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.**\n\n \n\nThe shareholders of the VIE\nmay have actual or potential conflicts of interest with us. These shareholders may breach, or cause the VIE to breach, or refuse to renew,\nthe existing contractual arrangements we have with them and the VIE, which would have a material and adverse effect on our ability to\neffectively control the VIE and receive economic benefits from them. For example, the shareholders may be able to cause our agreements\nwith the VIE to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements\nto us on a timely basis. We cannot assure you that when conflicts of interest arise any or all of these shareholders will act in the best\ninterests of our company, or such conflicts will be resolved in our favor. If we cannot resolve any conflict of interest or dispute between\nus and these shareholders, we would have to rely on legal proceedings, which could result in disruption of our business and subject us\nto uncertainty as to the outcome of any such legal proceedings.\n\n \n\n \n\n \n\n \n\n**We may lose the ability to use, or otherwise\nbenefit from, the licenses, permits and assets held by the VIE.**\n\n \n\nAs part of our contractual\narrangements with the VIE, the VIE holds certain assets, licenses and permits that are material to our business operations, including\nwithout limitation permits, licenses, domain names and most of our IP rights. The contractual arrangements contain terms that specifically\nobligate the VIE’s shareholders to ensure the valid existence of the VIE and restrict the disposal of material assets of the VIE.\nHowever, in the event that the VIE’s shareholders breach the terms of these contractual arrangements and voluntarily liquidate any\nof the VIE, or the VIE declares bankruptcy and all or part of its assets become subject to liens or rights of third-party creditors, or\nare otherwise disposed of or encumbered without our consent, we may be unable to conduct some or all of our business operations or otherwise\nbenefit from the assets held by the VIE, which could have a material adverse effect on our business, financial condition and results of\noperations. Furthermore, under the contractual arrangements, the VIE may not, in any manner, sell, transfer, mortgage or dispose of their\nmaterial assets or legal or beneficial interests in the business without our prior consent. If the VIE undergoes a voluntary or involuntary\nliquidation proceeding, its shareholders or unrelated third-party creditors may claim rights to some or all of the assets of the VIE,\nthereby hindering our ability to operate our business as well as constrain our growth.\n\n \n\n**Risks Related to Doing Business in China**\n\n \n\n**The enforcement of laws, and changes in\npolicies, laws and regulations in China, could adversely affect us.**\n\n \n\nThe PRC legal system is a\ncivil law system based on written statutes. The interpretations and enforcement of laws, regulations and rules involves uncertainties.\nThese uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or\ntort claims. The PRC government has historically published new policies that adversely affected certain industries such as the education\nand internet industries, and we cannot rule out the possibility that it will in the future further release regulations or policies\nregarding our industry that could further affect our business, financial condition and results of operations. Furthermore, the CSRC published\nthe Overseas Listing Measures, under which a filing-based regulatory system will be applied to “indirect overseas offerings and\nlistings” of PRC domestic companies, which refers to securities offerings and listings in an overseas market made under the name\nof an offshore entity but based on the underlying equity, assets, earnings or other similar rights of a domestic company that operates\nits main business domestically. Any such action, once taken by the PRC government, could significantly limit or completely hinder our\nability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme\ncases, become worthless.\n\n \n\nHowever, as there are still\nregulatory uncertainties in this regard, we cannot assure you that we will be able to comply with new laws and regulations in all respects,\nand we may be ordered to rectify, suspend or terminate any actions or services that are deemed illegal by the regulatory authorities and\nbecome subject to material penalties, which may materially harm our business, financial condition, results of operations and prospects.\n\n \n\nIn particular, PRC laws and\nregulations concerning the industries we operate are developing and evolving. Although we have taken measures to comply with the laws\nand regulations that are applicable to our business operations and avoid conducting any non-compliant activities under the applicable\nlaws and regulations, the PRC governmental authorities may promulgate new laws and regulations regulating the industries we operate in\nthe future. We cannot assure you that our practice would not be deemed to violate any new PRC laws or regulations relating to the industries\nwe operate. Moreover, developments in the industries we operate may lead to changes in PRC laws, regulations and policies or in the interpretation\nand application of existing laws, regulations and policies that may limit or restrict us, which could materially and adversely affect\nour business and operations.\n\n \n\n**Changes in China’s economic, political\nand social conditions as well as government policies could have a material adverse effect on our business and prospect.**\n\n \n\nSubstantially all of our\noperations are located in China. Accordingly, our business, prospects, financial condition and results of operations may be influenced\nto a significant degree by political, economic and social conditions in China generally, and by continued economic growth in China as\na whole.\n\n \n\nIn addition, the Chinese\ngovernment continues to play a significant role in regulating industry development by imposing industrial policies. For example, Beijing\nDuoke is recognized as “High-New Technology Enterprise” (“HNTE”) and is eligible for a 15% preferential tax rate\neffective through 2023, 2024, and 2025, upon the completion of its filings with the relevant tax authorities. However, the qualification\nas an HNTE is subject to annual evaluation and a three-year review by the relevant authorities in China. There can be no assurance that\nwe will enjoy such preferential tax treatment in the future. Without such preferential tax treatment, we may incur more tax expense, and\nour operating results could be adversely affected.\n\n \n\nAny adverse changes in economic\nconditions in China or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China.\nSuch developments could adversely affect our business and operating results, lead to a reduction in demand for our services and adversely\naffect our competitive position. Any prolonged slowdown in the Chinese economy may reduce the demand for our services and materially and\nadversely affect our business and operating results.\n\n \n\n \n\n \n\n \n\n**Certain judgments obtained against us by\nour shareholders may not be enforceable in China.**\n\n \n\nWe are a Cayman Islands company\nand substantially all of our current operations are conducted in China. In addition, most of our current directors and officers are nationals\nand residents of countries other than the United States. As a result, it may be difficult or impossible for you to bring an action against\nus or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S.\nfederal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and\nof China may render you unable to enforce a judgment against our assets or the assets of our directors and officers.\n\n \n\nShareholder claims that are\ncommon in the United States, including securities law class actions and fraud claims, generally are difficult to pursue as a matter of\nlaw or practicality in China. For example, in China, there are significant legal and other obstacles to obtaining information needed for\nshareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the local authorities in\nChina may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement\ncross-border supervision and administration, such regulatory cooperation with the securities regulatory authorities in the Unities States\nhave not been efficient in the absence of mutual and practical cooperation mechanism. According to Article 177 of the PRC Securities\nLaw which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence\ncollection activities within the territory of the PRC. Accordingly, without the consent of the competent PRC securities regulators and\nrelevant authorities, no organization or individual may provide the documents and materials relating to securities business activities\nto overseas parties. See also “-You may face difficulties in protecting your interests, and your ability to protect your rights\nthrough U.S. courts may be limited, because we are incorporated under Cayman Islands law.” for risks associated with investing in\nus as a Cayman Islands company.\n\n \n\n**Trading in our securities may be prohibited\nunder the HFCAA if the PCAOB determines that it is unable to inspect or investigate completely our auditor, and as a result, U.S. national\nsecurities exchanges, such as the Nasdaq, may determine to delist our securities.**\n\n \n\nOur independent registered\npublic accounting firm that issues the audit report included in this annual report, as an auditor of companies that are traded publicly\nin the United States and a firm registered with the PCAOB, is required by the laws of the United States to undergo regular inspections\nby the PCAOB to assess its compliance with the laws of the United States and professional standards. Our auditor is located in China,\na jurisdiction where the PCAOB was historically unable to conduct inspections and investigations completely, without the approval of the\nChinese authorities. The inability of the PCAOB to conduct inspections of auditors in China in the past has made it more difficult to\nevaluate the effectiveness of our independent registered public accounting firm’s audit procedures or quality control procedures\nas compared to auditors outside of China that are subject to the PCAOB inspections. As a result, investors were deprived of the benefits\nof such PCAOB inspections.\n\n \n\nIn recent years, U.S. regulatory\nauthorities have continued to express their concerns about challenges in their oversight of financial statement audits of U.S.-listed\ncompanies with significant operations in China. Furthermore, as part of a continued regulatory focus in the United States on access to\naudit and other information currently protected by national law, in particular China’s, the United States enacted the Holding Foreign\nCompanies Accountable Act, or the HFCAA, in December 2020. Trading in our securities on U.S. markets, including the Nasdaq, may be\nprohibited under the HFCAA if the PCAOB determines that it is unable to inspect or investigate completely our auditor for two consecutive\nyears. On December 16, 2021, the PCAOB issued the HFCAA Determination Report to notify the SEC of its determinations that the PCAOB\nwas unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, or the\n2021 Determinations, including our auditor. On May 26, 2022, we were conclusively identified by the SEC under the HFCAA as having\nfiled audit reports issued by a registered public accounting firm that cannot be inspected or investigated completely by the PCAOB in\nconnection with the filing of our 2021 Form 20-F. The inability of the PCAOB to conduct inspections in the past also deprived our\ninvestors of the benefits of such inspections. On December 15, 2022, the PCAOB announced that it was able to conduct inspections\nand investigations completely of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong in 2022. The PCAOB\nvacated its previous 2021 Determinations accordingly. As a result, we are not at risk of having our securities subject to a trading prohibition\nunder the HFCAA unless a new determination if made by the PCAOB.\n\n \n\nHowever, whether the PCAOB\nwill continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered\nin mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control,\nincluding positions taken by authorities of the PRC. The PCAOB is expected to continue to demand complete access to inspections and investigations\nagainst accounting firms headquartered in mainland China and Hong Kong in the future and states that it has already made plans to resume\nregular inspections going forward. The PCAOB is required under the HFCAA to make its determination on an annual basis with regards to\nits ability to inspect and investigate completely accounting firms based in the mainland China and Hong Kong. The possibility of being\na “Commission-Identified Issuer” and risk of delisting could continue to adversely affect the trading price of our securities.\n\n \n\n \n\n \n\n \n\nIf the PCAOB determines in\nthe future that it no longer has full access to inspect and investigate accounting firms headquartered in mainland China and Hong Kong\nand we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with\nthe Securities and Exchange Commission, we and investors in the ADSs would be deprived of the benefits of such PCAOB inspections again,\nwhich could cause investors and potential investors in the ADSs to lose confidence in our audit procedures and reported financial information\nand the quality of our financial statements, we would be identified as a “Commission-Identified Issuer” under the HFCAA following\nthe filing of the annual report for the relevant fiscal year. If we were so identified for two consecutive years, trading in our securities\non U.S. markets would be prohibited. If our shares and ADSs are prohibited from trading in the United States, there is no certainty that\nwe will be able to list on a non-U.S. exchange or that a market for our shares will develop outside of the United States. This would also\nsubstantially impair your ability to sell or purchase the ADSs when you wish to do so. Furthermore, such trading prohibition would significantly\naffect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business,\nfinancial condition and prospects.\n\n \n\n**The custodians or authorized users of our\ncontrolling non-tangible assets, including chops and seals, may fail to fulfill their responsibilities, or misappropriate or misuse these\nassets.**\n\n \n\nUnder the PRC law, legal\ndocuments for corporate transactions, including agreements and contracts are executed using the chop or seal of the signing entity or\nwith the signature of a legal representative whose designation is registered and filed with relevant PRC market regulation administrative\nauthorities.\n\n \n\nIn order to secure the use\nof our chops and seals, we have established internal control procedures and rules for using these chops and seals. In any event that\nthe chops and seals are intended to be used, the responsible personnel will submit the application through our office automation system\nand the application will be verified and approved by authorized employees in accordance with our internal control procedures and rules.\nIn addition, in order to maintain the physical security of our chops, we generally have them stored in secured locations accessible only\nto authorized employees. Although we monitor such authorized employees, the procedures may not be sufficient to prevent all instances\nof abuse or negligence. There is a risk that our employees could abuse their authority, for example, by entering into a contract not approved\nby us or seeking to gain control of one of our subsidiaries or the VIE. If any employee obtains, misuses or misappropriates our chops\nand seals or other controlling non-tangible assets for whatever reason, we could experience disruption to our normal business operations.\nWe may have to take corporate or legal action, which could involve significant time and resources to resolve and divert management from\nour operations.\n\n \n\n**Regulation and censorship of information\ndisseminated over the Internet in China may adversely affect our business and reputation and subject us to liability for information displayed\non our platform.**\n\n \n\nThe PRC government has adopted\nregulations governing Internet access and the distribution of news and other information over the Internet. Under these regulations, Internet\ncontent providers and Internet publishers are prohibited from posting or displaying over the Internet content that, among other things,\nviolates PRC laws and regulations, impairs the national dignity of China, or is reactionary, obscene, superstitious, fraudulent or defamatory.\nFailure to comply with these requirements may result in the revocation of licenses to provide Internet content and other licenses, and\nthe closure of the concerned websites. The website operator may also be held liable for such censored information displayed on or linked\nto the websites. If our platform is found to be in violation of any such requirements, we may be penalized by relevant authorities, and\nour operations or reputation could be adversely affected.\n\n \n\n**We may rely on dividends and other distributions\non equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our\nPRC subsidiaries to make payments to us and any tax we are required to pay could have a material and adverse effect on our ability to\nconduct our business.**\n\n \n\nWe are a Cayman Islands holding\ncompany and, other than external financing, we rely principally on dividends and other distributions on equity from our PRC subsidiaries\nfor our cash requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders and for services\nof any debt we may incur. Our PRC subsidiaries’ ability to distribute dividends is based upon their distributable earnings. Current\nPRC regulations permit our PRC subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits, if\nany, determined in accordance with PRC accounting standards and regulations. In addition, each of our PRC subsidiaries, the VIE and its\nsubsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such\nreserve reaches 50% of its registered capital. Each of our PRC subsidiaries is also required to further set aside a portion of its after-tax\nprofits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at its discretion. These reserves\nare not distributable as cash dividends. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing\nthe debt may restrict their ability to pay dividends or make other payments to us. Any limitation on the ability of our PRC subsidiaries\nto distribute dividends or other payments to their respective shareholders could materially and adversely limit our ability to grow, make\ninvestments or acquisitions that could be beneficial to our businesses, pay dividends or otherwise fund and conduct our business.\n\n \n\n \n\n \n\n \n\nIn response to the persistent\ncapital outflow and the RMB’s depreciation against the U.S. dollar in the fourth quarter of 2016, the People’s Bank of China,\nor the PBOC, and the State Administration of Foreign Exchange, or SAFE, have implemented a series of capital control measures in the subsequent\nmonths, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend\npayments and shareholder loan repayments. For instance, the PBOC issued the Circular on Further Clarification of Relevant Matters Relating\nto Offshore RMB Loans Provided by Domestic Enterprises, or PBOC Circular 306, on November 26, 2016, which provides that offshore\nRMB loans provided by a domestic enterprise to offshore enterprises with which it has an equity relationship shall not exceed 30% of the\ndomestic enterprise’s most recent audited owner’s equity. PBOC Circular 306 may constrain our PRC subsidiaries’ ability\nto provide offshore loans to us. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries’ dividends\nand other distributions may be subjected to tighter scrutiny in the future. In addition, under the Enterprise Income Tax Law of the PRC\nand related regulations, dividends, interests, rent or royalties paid by a foreign-invested enterprise, such as our PRC subsidiaries,\nto any of its foreign non-resident non-PRC enterprise investors, and net proceeds from any such foreign enterprise investor’s disposition\nof shares of the PRC subsidiary, are subject to a 10% withholding tax, unless the foreign enterprise investor qualifies for the benefits\nof a tax treaty with China that provides for a reduced rate of withholding tax.\n\n \n\nAny limitation on the ability\nof our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make\ninvestments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.\n\n \n\n**PRC regulation of loans to, and direct investment\nin, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from using the\nproceeds of our initial public offering to make loans to our PRC subsidiary and the VIE, or to make additional capital contributions to\nour PRC subsidiary.**\n\n \n\nIn utilizing the proceeds\nof our initial public offering, we, as an offshore holding company, are permitted under PRC laws and regulations to provide funding to\nour PRC subsidiaries, which are treated as foreign-invested enterprises under PRC laws, through loans or capital contributions. However,\nloans by us to our PRC subsidiaries to finance their activities cannot exceed statutory limits and must be registered with the local counterpart\nof SAFE and capital contributions to our PRC subsidiaries are subject to the requirement of making necessary filings in the Foreign Investment\nComprehensive Management Information System, and registration with other governmental authorities in China.\n\n \n\nSAFE promulgated the Notice\nof the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested\nEnterprises, or Circular 19, effective on June 1, 2015, in replacement of the Circular on the Relevant Operating Issues Concerning\nthe Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or SAFE\nCircular 142, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration\nof Foreign Exchange Businesses, or Circular 59, and the Circular on Further Clarification and Regulation of the Issues Concerning the\nAdministration of Certain Capital Account Foreign Exchange Businesses, or Circular 45. According to Circular 19, the flow and use of the\nRenminbi capital converted from foreign currency-denominated registered capital of a foreign-invested company is regulated such that Renminbi\ncapital may not be used for the issuance of Renminbi entrusted loans, the repayment of inter-enterprise loans or the repayment of banks\nloans that have been transferred to a third party. Although Circular 19 allows Renminbi capital converted from foreign currency-denominated\nregistered capital of a foreign-invested enterprise to be used for equity investments within the PRC, it also reiterates the principle\nthat Renminbi converted from the foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly\nused for purposes beyond its business scope. Thus, it is unclear whether SAFE will permit such capital to be used for equity investments\nin the PRC in actual practice. SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing\nthe Foreign Exchange Settlement Management Policy of Capital Account, or Circular 16, effective on June 9, 2016, which reiterates\nsome of the rules set forth in Circular 19, but changes the prohibition against using Renminbi capital converted from foreign currency-denominated\nregistered capital of a foreign-invested company to issue Renminbi entrusted loans to a prohibition against using such capital to issue\nloans to non-associated enterprises. Violations of SAFE Circular 19 and Circular 16 could result in administrative penalties. Circular\n19 and Circular 16 may significantly limit our ability to transfer any foreign currency we hold, including the net proceeds from our initial\npublic offering and follow-on public offering to our PRC subsidiaries, which may adversely affect our liquidity and our ability to fund\nand expand our business in the PRC.\n\n \n\nDue to the restrictions imposed\non loans in foreign currencies extended to any PRC domestic companies, we are not likely to make such loans to the VIE and its subsidiaries,\neach a PRC domestic company. Meanwhile, we are not likely to finance the activities of the VIE and its subsidiaries by means of capital\ncontributions given the restrictions on foreign investment in the businesses that are currently conducted by the VIE and its subsidiaries.\n\n \n\n \n\n \n\n \n\nIn light of the various requirements\nimposed by PRC regulations on loans to, and direct investment in, PRC entities by offshore holding companies, we cannot assure you that\nwe will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if\nat all, with respect to future loans to our PRC subsidiaries or the VIE or future capital contributions by us to our PRC subsidiaries.\nAs a result, uncertainties exist as to our ability to provide prompt financial support to our PRC subsidiaries or the VIE and its subsidiaries\nwhen needed. If we fail to complete such registrations or obtain such approvals, our ability to use foreign currency, including the proceeds\nwe received from our initial public offering, and to capitalize or otherwise fund our PRC operations may be negatively affected, which\ncould materially and adversely affect our liquidity and our ability to fund and expand our business.\n\n \n\n**Fluctuations in exchange rates could have\na material and adverse effect on our results of operations and the value of your investment.**\n\n \n\nThe value of the Renminbi\nagainst the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions\nin China and by China’s foreign exchange policies. On July 21, 2005, the PRC government changed its decade-old policy of pegging\nthe value of the Renminbi to the U.S. dollar, and the Renminbi appreciated more than 20% against the U.S. dollar over the following three\nyears. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the Renminbi and the U.S. dollar\nremained within a narrow band. Since June 2010, the Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably.\nOn November 30, 2015, the Executive Board of the International Monetary Fund (IMF) completed the regular five-year review of the\nbasket of currencies that make up the Special Drawing Right, or the SDR, and decided that with effect from October 1, 2016, Renminbi\nis determined to be a freely usable currency and will be included in the SDR basket as a fifth currency, along with the U.S. dollar, the\nEuro, the Japanese yen and the British pound. In the fourth quarter of 2016, the Renminbi has depreciated significantly in the backdrop\nof a surging U.S. dollar and persistent capital outflows of China. Moreover, there remains significant international pressure on the PRC\ngovernment to adopt a more flexible currency policy, which could result in greater fluctuation of the Renminbi against the U.S. dollar.\nWith the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization,\nthe PRC government may in the future announce further changes to the exchange rate system and we cannot assure you that the Renminbi will\nnot appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces\nor PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future.\n\n \n\nSignificant revaluation of\nthe Renminbi may have a material and adverse effect on your investment. For example, to the extent that we need to convert U.S. dollars\nwe receive from our initial public offering into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would\nhave an adverse effect on the Renminbi amount we would receive from the conversion. Conversely, if we decide to convert our Renminbi into\nU.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs or for other business purposes, appreciation\nof the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount available to us.\n\n \n\nVery limited hedging options\nare available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions\nin an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future,\nthe availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In\naddition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert Renminbi\ninto foreign currency.\n\n \n\n**Foreign exchange controls may limit our\nability to utilize our revenues effectively and affect the value of your investment.**\n\n \n\nThe PRC government imposes\nforeign exchange controls on the convertibility of the Renminbi, in certain cases, the remittance of currency out of China. We receive\nsubstantially all of our revenues in Renminbi. Under our current corporate structure, our Cayman Islands holding company primarily relies\non dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign exchange\nregulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign\nexchange transactions, can be made in foreign currencies without prior approval of SAFE by complying with certain procedural requirements.\nSpecifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of our PRC\nsubsidiaries in China may be used to pay dividends to our company. However, approval from or registration with appropriate government\nauthorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such\nas the repayment of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval or registration to use cash\ngenerated from the operations of our PRC subsidiaries and VIE to pay off their respective debt in a currency other than Renminbi owed\nto entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi. The PRC government\nmay at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control\nsystem prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends\nin foreign currencies to our shareholders and holders of the ADSs.\n\n \n\n \n\n \n\n \n\n**The M&A Rules and certain other\nPRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more\ndifficult for us to pursue growth through acquisitions in China.**\n\n \n\nThe Rules on Mergers\nand Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and\namended in 2009, and some other regulations and rules concerning mergers and acquisitions established additional procedures and requirements\ncould make merger and acquisition activities by foreign investors more time consuming and complex, including requirements in some instances\nthat the anti-monopoly law enforcement agency be notified in advance of any change-of-control transaction in which a foreign investor\ntakes control of a PRC domestic enterprise. Moreover, the Anti-Monopoly Law of the PRC requires that the anti-monopoly law enforcement\nagency be notified in advance of any transaction where the parties’ turnover in the China market and/or global market exceed certain\nthresholds and the buyer would obtain control of, or decisive influence over, the target as a result of the business combination. As further\nclarified by the Provisions of the State Council on the Threshold of Filings for Undertaking Concentrations issued by the State Council\nin 2008 and amended in September 2018 and in January 2024, such thresholds include: (i) the total global turnover of all\noperators participating in the transaction exceeds RMB12 billion in the preceding fiscal year and at least two of these operators each\nhad a turnover of more than RMB800 million within China in the preceding fiscal year, or (ii) the total turnover within China of\nall the operators participating in the transaction exceeded RMB2 billion in the preceding fiscal year, and at least two of these operators\neach had a turnover of more than RMB400 million within China in the preceding fiscal year. There are numerous factors the anti-monopoly\nlaw enforcement agency considers in determining “control” or “decisive influence,” and, depending on certain criteria,\nthe anti-monopoly law enforcement agency may conduct anti-monopoly review of transactions in respect of which it was notified. In light\nof the uncertainties relating to the interpretation, implementation and enforcement of the Anti-Monopoly Law of the PRC, we cannot assure\nyou that the anti-monopoly law enforcement agency will not deem our past and future acquisitions or investments to have triggered filing\nrequirement for anti-trust review. If we are found to have violated the Anti-Monopoly Law of the PRC for failing to file the notification\nof concentration and request for review, we could be subject to a fine of up to RMB500,000, and the parts of the transaction causing the\nprohibited concentration could be ordered to be unwound, which may materially and adversely affect our business, financial condition and\nresults of operations.\n\n \n\nIn addition, the Circular\nof the General Office of the State Council on the Establishment of Security Review System for the Merger and Acquisition of Domestic Enterprises\nby Foreign Investors that became effective in March 2011, and the Rules on Implementation of Security Review System for the\nMerger and Acquisition of Domestic Enterprises by Foreign Investors issued by the Ministry of Commerce that became effective in September 2011\nspecify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers\nand acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security”\nconcerns are subject to strict review by the Ministry of Commerce, and the rules prohibit any activities attempting to bypass a security\nreview, including by structuring the transaction through a proxy or contractual control arrangement. In the future, we may grow our business\nby acquiring complementary businesses. Complying with the requirements of the above-mentioned regulations and other relevant rules to\ncomplete such transactions could be time consuming, and any required approval processes, including obtaining approval from the Ministry\nof Commerce or its local counterparts may delay or inhibit our ability to complete such transactions, which could affect our ability to\nexpand our business or maintain our market share.\n\n \n\n**PRC regulations relating to the establishment\nof offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability\nor penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase their\nregistered capital or distribute profits to us, or may otherwise adversely affect us.**\n\n \n\nSAFE promulgated the Circular\non Issues Concerning the Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic\nResidents via Special Purpose Vehicles, or SAFE Circular 37, in July 2014. SAFE Circular 37 requires PRC residents or entities to\nregister with SAFE or its local branches in connection with their establishment or control of an offshore entity established for the purpose\nof overseas investment or financing with such PRC residents or entities’ legally owned assets or equity interests in domestic enterprises\nor offshore assets or interests. In addition, such PRC residents or entities must update their SAFE registrations when the offshore special\npurpose vehicle undergoes material events relating to any change of basic information (including change of such PRC citizens or residents,\nname and operation term), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions. According\nto the Circular of Further Simplifying and Improving the Policies of Foreign Exchange Administration Applicable to Direct Investment released\nin February 2015 by SAFE, local banks will examine and handle foreign exchange registration for overseas direct investment, including\nthe initial foreign exchange registration and amendment registration, under SAFE Circular 37 from June 2015. See “Item 4. Information\non the Company—4.B. Business Overview—Regulation—Regulations on Foreign Exchange and Offshore Investment.”\n\n \n\nIf our shareholders who are\nPRC residents or entities do not complete their registration with the local SAFE, the National Development and Reform Commission, or the\nNDRC, or MOCT branches, our PRC subsidiaries may be prohibited from distributing their profits and proceeds from any reduction in capital,\nshare transfer or liquidation to us, and we may be restricted in our ability to contribute additional capital to our PRC subsidiaries.\nIn addition, our shareholders may be required to suspend or stop the investment and complete the registration within a specified time,\nand may be warned or prosecuted for criminal liability if a crime is constituted. Moreover, failure to comply with the SAFE registration\ndescribed above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions.\n\n \n\n \n\n \n\n \n\nWe have notified all PRC\nresidents or entities who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being PRC\nresidents or entities to complete the foreign exchange registrations or outbound investment filings. However, we may not be informed of\nthe identities of all the PRC residents or entities holding direct or indirect interest in our company, nor can we compel our beneficial\nowners to comply with SAFE registration or outbound investment filings requirements. As a result, we cannot assure you that all of our\nshareholders or beneficial owners who are PRC residents or entities have complied with, and will in the future make, obtain or update\nany applicable registrations or approvals required by SAFE, NDRC or MOCT regulations. Failure by such shareholders or beneficial owners\nto comply with SAFE, NDRC or MOCT regulations, or failure by us to amend the foreign exchange registrations of our PRC subsidiaries, could\nsubject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiaries’\nability to make distributions or pay dividends to us or affect our ownership structure, which could adversely affect our business and\nprospects.\n\n \n\nFurthermore, as these foreign\nexchange and outbound investment regulations are still relatively new and their interpretation and implementation has been constantly\nevolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted,\namended and implemented by the relevant government authorities. For example, we may be subject to a more stringent review and approval\nprocess with respect to our foreign exchange activities, such as remittance of dividends and foreign currency denominated borrowings,\nwhich may adversely affect our financial condition and results of operations. In addition, if we decide to acquire a PRC domestic company,\nwe cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete\nthe necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our acquisition\nstrategy and could adversely affect our business and prospects.\n\n \n\n**Any failure to comply with PRC regulations\nregarding the registration requirements for employee share incentive plans may subject the PRC plan participants or us to fines and other\nlegal or administrative sanctions.**\n\n \n\nPursuant to SAFE Circular\n37, PRC residents who participate in share incentive plans in overseas non-publicly-listed companies may submit applications to SAFE or\nits local branches for the foreign exchange registration with respect to offshore special purpose companies. In the meantime, directors,\nexecutive officers and other employees who are PRC citizens or who are non-PRC residents residing in the PRC for a continuous period of\nnot less than one year, subject to limited exceptions, and who have been granted share-based awards, may follow the Circular of the SAFE\non Issues Concerning the Administration of Foreign Exchange Used for Domestic Individuals’ Participation in Equity Incentive Plan\nof Overseas Listed Companies, promulgated by SAFE in 2012. Pursuant to the circular, PRC citizens and non-PRC citizens who reside in China\nfor a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company,\nsubject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiaries\nof such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained\nto handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. We, our directors,\nour executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of not less than one\nyear and who have been granted share-based awards are subject to these regulations. Failure to complete the SAFE registrations may subject\nus to fines, and legal sanctions and may also limit our ability to contribute additional capital into our PRC subsidiaries and limit our\nPRC subsidiaries’ ability to distribute dividends to us. We also face regulatory uncertainties that could restrict our ability to\nadopt additional incentive plans for our directors, executive officers and employees under PRC law. See “Item 4. Information on\nthe Company—4.B. Business Overview—Regulation—Regulations on Foreign Exchange and Offshore Investment.”\n\n \n\nThe State Administration\nof Taxation has issued certain circulars concerning employee share options and restricted shares. Under these circulars, our employees\nworking in China who exercise share options or are granted restricted shares will be subject to PRC individual income tax. Our PRC subsidiaries\nhave obligations to file documents related to employee share options or restricted shares with relevant tax authorities and to withhold\nindividual income taxes of those employees who exercise their share options. If our employees fail to pay or we fail to withhold their\nincome taxes according to relevant laws and regulations, we may face sanctions imposed by the tax authorities or other PRC governmental\nauthorities. See “Item 4. Information on the Company—4.B. Business Overview—Regulation—Regulations on Foreign\nExchange and Offshore Investment.”\n\n \n\n**The enforcement of the PRC Labor Contract\nLaw and other labor-related regulations in the PRC may adversely affect our business and results of operations.**\n\n \n\nThe Standing Committee of\nthe National People’s Congress enacted the Labor Contract Law in 2008, and amended it on December 28, 2012. The Labor Contract\nLaw introduced specific provisions related to fixed-term employment contracts, part-time employment, probationary periods, consultation\nwith labor unions and employee assemblies, employment without a written contract, dismissal of employees, severance, and collective bargaining\nto enhance previous PRC labor laws. Under the Labor Contract Law, an employer is obligated to sign a non-fixed-term labor contract with\nany employee who has worked for the employer for ten consecutive years. Further, if an employee requests or agrees to renew a fixed-term\nlabor contract that has already been entered into twice consecutively, the resulting contract, with certain exceptions, must have an unlimited\nterm, subject to certain exceptions. With certain exceptions, an employer must pay severance to an employee where a labor contract is\nterminated or expires. In addition, the PRC governmental authorities have continued to introduce various new labor-related regulations\nsince the effectiveness of the Labor Contract Law.\n\n \n\n \n\n \n\n \n\nUnder the PRC Social Insurance\nLaw and the Administrative Measures on Housing Fund, employees are required to participate in pension insurance, work-related injury insurance,\nmedical insurance, unemployment insurance, maternity insurance, and housing funds and employers are required, together with their employees\nor separately, to pay the social insurance premiums and housing funds for their employees. If we fail to make adequate social insurance\nand housing fund contributions, we may be subject to fines and legal sanctions, and our business, financial conditions and results of\noperations may be adversely affected.\n\n \n\nThese laws designed to enhance\nlabor protection tend to increase our labor costs. In addition, as the interpretation and implementation of these regulations are still\nevolving, our employment practices may not be at all times be deemed in compliance with the regulations. As a result, we could be subject\nto penalties or incur significant liabilities in connection with labor disputes or investigations.\n\n \n\n**We\nmay be classified as a****“PRC resident enterprise” for PRC enterprise income tax purposes, which\ncould result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders and have a material adverse effect on\nour results of operations and the value of your investment.**\n\n \n\nUnder the Enterprise Income\nTax Law of the PRC and its implementation rules, an enterprise established outside of the PRC with a “de facto management body”\nwithin the PRC is considered a “resident enterprise” and will be subject to PRC enterprise income tax on its global income\nat the rate of 25%. The implementation rules define the term “de facto management body” as the body that exercises full\nand substantial control over and overall management of the business, personnel, accounts and properties of an enterprise. In April 2009,\nthe State Administration of Taxation issued a circular, known as SAT Circular 82, which provides certain specific criteria for determining\nwhether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China. Although\nthis circular only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC\nindividuals or foreigners like us, the criteria set forth in the circular may reflect the State Administration of Taxation’s general\nposition on how the “de facto management body” test should be applied in determining the tax resident status of all offshore\nenterprises. According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group\nwill be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to\nPRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day\noperational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are\nmade or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting\nbooks and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least\n50% of voting board members or senior executives habitually reside in the PRC.\n\n \n\nWe believe none of our entities\noutside of China is a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination\nby the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.”\nAs a majority of our management members are based in China, it remains unclear how the tax residency rule will apply to our case.\nIf the PRC tax authorities determine that our company or any of our subsidiaries outside of China is a PRC resident enterprise for enterprise\nincome tax purposes, we may be subject to PRC enterprise income on our worldwide income at the rate of 25%, which could materially reduce\nour net income. In addition, we will also be subject to PRC enterprise income tax reporting obligations. Furthermore, we may be required\nto withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of\nthe ADSs, if such income is treated as sourced from within the PRC. In addition, non-resident enterprise shareholders (including the ADS\nholders) may be subject to PRC tax at a rate of 10% on gains realized on the sale or other disposition of ADSs or ordinary shares, if\nsuch income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our\nnon-PRC individual shareholders (including the ADS holders) and any gain realized on the transfer of ADSs or ordinary shares by such shareholders\nmay be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us), if such income is deemed\nto be from PRC sources. These rates may be reduced by an applicable tax treaty, but it is unclear whether non-PRC shareholders of our\ncompany would be able to obtain the benefits of any tax treaties between their country of tax residence and the PRC in the event that\nwe are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in the ADSs or ordinary shares.\n\n \n\n \n\n \n\n \n\n**We face uncertainty with respect to indirect\ntransfers of equity interests in PRC resident enterprises by their non-PRC holding companies.**\n\n \n\nOn February 3, 2015,\nthe State Administration of Taxation issued the Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC\nResident Enterprises, or SAT Circular 7. SAT Circular 7 extends its tax jurisdiction to transactions involving the transfer of taxable\nassets through offshore transfer of a foreign intermediate holding company. In addition, SAT Circular 7 has introduced safe harbors for\ninternal group restructurings and the purchase and sale of equity securities through a public securities market. SAT Circular 7 also brings\nchallenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets.\n\n \n\nOn October 17, 2017,\nthe State Administration of Taxation issued the Circular on Issues of Tax Withholding regarding Non-PRC Resident Enterprise Income Tax\nat Source, or SAT Circular 37, which came into effect on December 1, 2017. SAT Circular 37 further clarifies the practice and procedure\nof the withholding of nonresident enterprise income tax.\n\n \n\nWhere a nonresident enterprise\ntransfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is known as an indirect\ntransfer, the nonresident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets, may\nreport such indirect transfer to the relevant tax authority. Using a “substance over form” principle, the PRC tax authority\nmay disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose\nof reducing, avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income\ntax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently\nat a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject\nto penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.\n\n \n\nWe face uncertainties as\nto the reporting and other implications of certain past and future transactions where PRC taxable assets are involved, such as offshore\nrestructuring, sale of the shares in our offshore subsidiaries and investments. Our company may be subject to filing obligations or taxed\nif our company is transferor in such transactions, and may be subject to withholding obligations if our company is transferee in such\ntransactions, under SAT Circular 7 or SAT Circular 37. For transfer of shares in our company by investors who are non-PRC resident enterprises,\nour PRC subsidiaries may be requested to assist in the filing under SAT Circular 7 or SAT Circular 37. As a result, we may be required\nto expend valuable resources to comply with SAT Circular 7 or SAT Circular 37 or to request the relevant transferors from whom we purchase\ntaxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, which may have\na material adverse effect on our financial condition and results of operations.\n\n \n\n**The PCAOB had historically been unable to\ninspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections\nof our auditor in the past had deprived our investors with the benefits of such inspections.**\n\n \n\nOur auditor, the independent\nregistered public accounting firm that issues the audit report included elsewhere in this annual report, as an auditor of companies that\nare traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which\nthe PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. The auditor is located in\nmainland China, a jurisdiction where the PCAOB had historically been unable to conduct inspections and investigations completely before\n2022. As a result, we and investors in the ADSs were deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to\nconduct inspections of auditors in China in the past made it more difficult to evaluate the effectiveness of our independent registered\npublic accounting firm’s audit procedures or quality control procedures as compared to auditors outside of China that are subject\nto the PCAOB inspections. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and\nremoved mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered\npublic accounting firms. However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely\naccounting firms in mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an\naudit report on our financial statements filed with the SEC, we and investors in the ADSs would be deprived of the benefits of such PCAOB\ninspections again, which could cause investors and potential investors in the ADSs to lose confidence in our audit procedures and reported\nfinancial information and the quality of our financial statements.\n\n \n\n \n\n \n\n \n\n**Risks Related to the ADSs**\n\n \n\n**The trading price of the ADSs is likely\nto be volatile, which could result in substantial losses to investors.**\n\n \n\nThe trading price of the\nADSs is likely to be volatile and could fluctuate widely due to multiple factors, some of which are beyond our control. This may happen\nbecause of broad market and industry factors, including the performance and fluctuation of the market prices of other companies with business\noperations located mainly in China that have listed their securities in the United States. In addition to market and industry factors,\nthe price and trading volume for the ADSs may be highly volatile for factors, including the following:\n\n \n\n·\nvariations in our revenues, operating costs and expenses, earnings and cash flow;\n\n \n\n·\nannouncements of new investments, acquisitions, strategic partnerships or joint ventures by us or our\ncompetitors;\n\n \n\n·\nannouncements of new products and services by us or our competitors;\n\n \n\n·\nchanges in financial estimates by securities analysts;\n\n \n\n·\ndetrimental adverse publicity about us, our shareholders, affiliates, directors, officers or employees,\nour content offerings, our business model, our services or our industry;\n\n \n\n·\nannouncements of new regulations, rules or policies relevant for our business;\n\n \n\n·\nadditions or departures of key personnel;\n\n \n\n·\nallegations of a lack of effective internal control over financial reporting, inadequate corporate governance\npolicies, or allegations of fraud, among other things, involving China-based issuers;\n\n \n\n·\nrelease of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional\nequity securities; and\n\n \n\n·\npotential litigation or regulatory investigations.\n\n \n\nAny of these factors may\nresult in large and sudden changes in the volume and price at which the ADSs will trade.\n\n \n\nIn the past, shareholders\nof public companies have often brought securities class action suits against those companies following periods of instability in the market\nprice of their securities. If we were involved in a class action suit, it could divert a significant amount of our management’s\nattention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which\ncould harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our\nability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant\ndamages, which could have a material adverse effect on our financial condition and results of operations.\n\n \n\n**We have not maintained compliance with the\nminimum bid price requirement of $1.00 per share for continued listing on the Nasdaq. If we continue to fail to meet this requirement\nand Nasdaq determines to delist the ADSs, the delisting would adversely affect the market liquidity of the ADSs and the market price of\nthe ADSs could decrease.**\n\n \n\nThe ADSs are listed on the\nNasdaq. In order to maintain our listing, we must meet minimum financial and other requirements, including the minimum bid price requirement\nof $1.00 per share for continued listing, as set forth in Nasdaq Listing Rule 5450(a)(1). We received a letter dated November 3,\n2023 from the Nasdaq indicating that for the last 30 consecutive business days, the closing bid price of the ADSs was below the minimum\nbid price of US$1.00 per share requirement. As announced on May 3, 2024, Nasdaq approved the Company’s request to transfer\nthe listing of its ADSs from the Nasdaq Global Market to the Nasdaq Capital Market. As part of its efforts to regain compliance with the\nMinimum Bid Price Requirement, the Company changed the ratio of its ADSs representing Class A ordinary shares from one ADS representing\n25 Class A ordinary shares to one ADS representing 500 Class A ordinary shares. The change became effective on October 3,\n2024. On October 17, 2024, Nasdaq confirmed in the Compliance Notification that the closing bid price of the Company’s ADSs\nhas been at $1.00 per share or greater for the ten consecutive business days from October 3, 2024 through October 16, 2024.\nAccordingly, the Company has regained compliance with the Nasdaq Capital Market Minimum Bid Price Requirement, and the matter is now closed.\n\n \n\nThere can be no assurance\nthat we will meet the minimum bid price requirement or any other requirements in the future. The failure to maintain our listing on the\nNasdaq would have an adverse effect on the market price and liquidity of the ADSs. Without a Nasdaq listing, shareholders may have a difficult\ntime getting a quote for the sale or purchase of the ADSs, the sale or purchase of the ADSs would likely be made more difficult, and the\ntrading volume and liquidity of the ADSs could decline. Delisting from the Nasdaq could also result in negative publicity and could make\nit more difficult for us to raise additional capital.\n\n \n\n**If securities or industry analysts do not\npublish research or reports about our business, or if they adversely change their recommendations regarding the ADSs, the market price\nfor the ADSs and trading volume could decline.**\n\n \n\nThe trading market for the\nADSs will be influenced by research or reports that industry or securities analysts publish about our business. If one or more analysts\nwho cover us downgrade the ADSs, the market price for the ADSs would likely decline. If one or more of these analysts cease to cover us\nor fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price\nor trading volume for the ADSs to decline.\n\n \n\n \n\n \n\n \n\n**The sale or availability for sale of substantial\namounts of the ADSs could adversely affect their market price.**\n\n \n\nSales of substantial amounts\nof the ADSs in the public market, or the perception that these sales could occur, could adversely affect the market price of the ADSs\nand could materially impair our ability to raise capital through equity offerings in the future. The ADSs representing our Class A\nordinary shares sold in our initial public offering are freely transferable by persons other than our “affiliates” without\nrestriction or further registration under the Securities In addition, ordinary shares held by our existing shareholders may also be sold\nin the public market in the future subject to the restrictions in Rule 144 and Rule 701 under the Securities Act and the applicable\nlock-up agreements. Any or all of these ordinary shares may be released prior to the expiration of the applicable lock-up period at the\ndiscretion of the designated representatives. To the extent ordinary shares are released before the expiration of the applicable lock-up\nperiod and sold into the market, the market price of the ADSs could decline. We cannot predict what effect, if any, market sales of securities\nheld by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the\nmarket price of the ADSs.\n\n \n\n**Techniques employed by short sellers may\ndrive down the market price of the ADSs.**\n\n \n\nShort selling is the practice\nof selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities\nback at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the\nsale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than\nit received in the sale. As it is in the short seller’s interest for the price of the security to decline, many short sellers publish,\nor arrange for the publication of, negative opinions and allegations regarding the relevant issuer and its business prospects in order\nto create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the\npast, led to selling of shares in the market. If we were to become the subject of any unfavorable allegations, whether such allegations\nare proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend\nourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed\nagainst the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality.\n\n \n\n**You may be subject to limitations on the\ntransfer of the ADSs.**\n\n \n\nThe ADSs are transferable\non the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems it expedient\nin connection with the performance of its duties. The depositary may close its books in emergencies, and on weekends and public holidays.\nThe depositary may refuse to deliver, transfer or register transfers of the ADSs generally when our share register or the books of the\ndepositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of\nany government or governmental body, or under any provision of the deposit agreement, or for any other reason.\n\n \n\n**Because we do not expect to pay cash dividends\nin the foreseeable future, you must rely on a price appreciation of the ADSs for a return on your investment.**\n\n \n\nWe currently intend to retain\nmost, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do\nnot expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in the ADSs as a source\nfor any future dividend income.\n\n \n\nOur board of directors has\ncomplete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders\nmay by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. Under Cayman Islands\nlaw, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may\na dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business.\nEven if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend\non our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received\nby us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors.\nAccordingly, the return on your investment in the ADSs will likely depend entirely upon any future price appreciation of the ADSs. There\nis no guarantee that the ADSs will appreciate in value or even maintain the price at which you purchased the ADSs. You may not realize\na return on your investment in the ADSs and you may even lose your entire investment in the ADSs.\n\n \n\n \n\n \n\n \n\n**Our fourth amended and restated memorandum\nand articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our\nordinary shares and the ADSs.**\n\n \n\nOur fourth amended and restated\nmemorandum and articles of association contain provisions to limit the ability of others to acquire control of our company or cause us\nto engage in change-of-control transactions. These provisions could have the effect of depriving our shareholders of an opportunity to\nsell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company\nin a tender offer or similar transaction. Our board of directors has the authority, without further action by our shareholders, to issue\npreferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional\nor special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms\nof redemption and liquidation preferences, any or all of which may be greater than the rights associated with our ordinary shares, in\nthe form of ADS or otherwise. Preferred shares could be issued quickly with terms calculated to delay or prevent a change in control of\nour company or make removal of management more difficult. If our board of directors decides to issue preferred shares, the price of the\nADSs representing our ordinary shares may fall and the voting and other rights of the holders of our ordinary shares and the ADSs may\nbe materially and adversely affected.\n\n \n\n**You may face difficulties in protecting\nyour interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands\nlaw.**\n\n \n\nWe are an exempted company\nincorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association, the\nCompanies Act (As Revised) of the Cayman Islands, or the Companies Act, and the common law of the Cayman Islands. The rights of shareholders\nto take action against our directors, actions by our minority shareholders and the fiduciary duties of our directors to us under Cayman\nIslands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in\npart from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose\ncourts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary\nduties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent\nin some jurisdictions in the United States. In particular, the Cayman Islands have a less developed body of securities laws than the United\nStates. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman\nIslands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of\nthe United States.\n\n \n\nShareholders of Cayman Islands\nexempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than copies of the memorandum\nand articles of association and the register of mortgages and charges, and any special resolutions passed by these companies) or to obtain\ncopies of lists of shareholders of these companies. Our directors have discretion under our articles of association to determine whether\nor not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available\nto our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder\nmotion or to solicit proxies from other shareholders in connection with a proxy contest.\n\n \n\nAs a result of all of the\nabove, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management,\nmembers of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the\nUnited States.\n\n \n\n**ADSs holders may not be entitled to a jury\ntrial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiff(s) in\nany such action.**\n\n \n\nThe deposit agreement governing\nthe ADSs representing our Class A ordinary shares provides that, to the fullest extent permitted by law, ADS holders waive the right\nto a jury trial for any claim they may have against us or the depositary arising out of or relating to our shares, the ADSs or the deposit\nagreement, including any claim under the U.S. federal securities laws.\n\n \n\nIf we or the depositary were\nto oppose a jury trial based on this waiver, the court would have to determine whether the waiver was enforceable based on the facts and\ncircumstances of the case in accordance with applicable state and federal law. To our knowledge, the enforceability of a contractual pre-dispute\njury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by the United States\nSupreme Court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under\nthe laws of the State of New York, which govern the deposit agreement, or by a federal or state court in the City of New York, which has\nnon-exclusive jurisdiction over matters arising under the deposit agreement. In determining whether to enforce a contractual pre-dispute\njury trial waiver, courts will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury\ntrial. We believe that this would be the case with respect to the deposit agreement and the ADSs. It is advisable that you consult legal\ncounsel regarding the jury waiver provision before investing in the ADSs.\n\n \n\n \n\n \n\n \n\nIf you or any other holders\nor beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement\nor the ADSs, including claims under federal securities laws, you or such other holder or beneficial owner may not be entitled to a jury\ntrial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us or the depositary. If a\nlawsuit is brought against us or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable\ntrial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury\nwould have, including outcomes that could be less favorable to the plaintiff(s) in any such action.\n\n \n\nNevertheless, if this jury\ntrial waiver is not permitted by applicable law, an action could proceed under the terms of the deposit agreement with a jury trial. No\ncondition, stipulation or provision of the deposit agreement or the ADSs serves as a waiver by any holder or beneficial owner of ADSs\nor by us or the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations\npromulgated thereunder.\n\n \n\n**The voting rights of holders of ADSs are\nlimited by the terms of the deposit agreement, and you may not be able to exercise your right to direct the voting of your Class A\nordinary shares underlying the ADSs.**\n\n \n\nHolders of ADSs do not have\nthe same rights as our registered shareholders. As a holder of the ADSs, you will not have any direct right to attend general meetings\nof our shareholders or to cast any votes at such meetings. You will only be able to exercise the voting rights which attach to the Class A\nordinary shares underlying the ADSs indirectly by giving voting instructions to the depositary in accordance with the provisions of the\ndeposit agreement. Under the deposit agreement, you may vote only by giving voting instructions to the depositary, as holder of the Class A\nordinary shares underlying the ADSs. If we ask for your instructions, then upon receipt of your voting instructions, the depositary will\ntry to vote the underlying Class A ordinary shares in accordance with these instructions. If we do not instruct the depositary to\nask for your instructions, the depositary may still vote in accordance with instructions you give, but it is not required to do so. You\nwill not be able to directly exercise any right to vote with respect to the underlying Class A ordinary shares unless you withdraw\nthe shares underlying your ADSs and become the registered holder of such shares prior to the record date for the general meeting. When\na general meeting is convened, you may not receive sufficient advance notice of the meeting to enable you to withdraw the shares underlying\nthe ADSs and become the registered holder of such shares prior to the record date for the general meeting to allow you to attend the general\nmeeting and to vote directly with respect to any specific matter or resolution to be considered and voted upon at the general meeting.\nIn addition, under our fourth amended and restated articles of association, for the purposes of determining those shareholders who are\nentitled to attend and vote at any general meeting, our directors may close our register of members and/or fix in advance a record date\nfor such meeting, and such closure of our register of members or the setting of such a record date may prevent you from withdrawing the\nClass A ordinary shares underlying the ADSs and becoming the registered holder of such shares prior to the record date, so that you\nwould not be able to attend the general meeting or to vote directly. Where any matter is to be put to a vote at a general meeting, upon\nour instruction, the depositary will notify you of the upcoming vote and to deliver our voting materials to you. Under our fourth amended\nand restated memorandum and articles of association, the minimum notice period required to be given by our company to our registered shareholders\nfor convening a general meeting is fifteen (15) days. We cannot assure you that you will receive the voting material in time to ensure\nyou can direct the depositary to vote your shares. In addition, the depositary and its agents are not responsible for failing to carry\nout voting instructions or for their manner of carrying out your voting instructions. This means that you may not be able to exercise\nyour right to direct how the shares underlying the ADSs are voted and you may have no legal remedy if the shares underlying the ADSs are\nnot voted as you requested.\n\n \n\n**Certain of our existing shareholders have\nsubstantial influence over our company, and their interests may not be aligned with the interests of our other stockholders.**\n\n \n\nDagang\nFeng, our chief executive officer and the chairman of our board of directors, holds approximately 89.0% voting power as of the\ndate of this annual report, including his sole voting power and the shared voting power resulting from an acting-in-concert agreement\nentered into in September 2019. For more information, see “Item 6. Directors, Senior Management and Employees-6.E. Share Ownership.”\nAccordingly, Mr. Feng will have the ability to control the outcome of matters submitted to our shareholders for approval, including\ndecisions regarding mergers, consolidations, liquidations and the sale of all or substantially all of our assets, election of directors\nand other significant corporate actions. This concentration of ownership may also have the effect of discouraging, delaying or preventing\na future change of control, which could deprive our stockholders of an opportunity to receive a premium for their shares as part of a\nsale of our company and might reduce the price of the ADSs. The voting control of Mr. Feng will limit the ability of other shareholders\nto influence corporate activities and, as a result, we may take actions that shareholders other than Mr. Feng do not view as beneficial.\nAs a shareholder, even a controlling shareholder, Mr. Feng is entitled to exercise his voting power in his own interests, which may\nnot be the same as, or may conflict with, the interests of our other shareholders. Furthermore, because Mr. Feng controls a majority\nof our voting stock, he may pursue corporate opportunities independent of us.\n\n \n\n \n\n \n\n \n\n**Our dual-class share structure with different\nvoting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions\nthat holders of our Class A ordinary shares and ADSs may view as beneficial.**\n\n \n\nWe\nhave adopted a dual-class share structure such that our ordinary shares consist of Class A ordinary shares, Class B ordinary\nshares and Class C ordinary shares. In respect of matters requiring the votes of shareholders, each Class A ordinary\nshare is entitled to one vote, each Class B ordinary share is entitled to 25 votes and each Class C ordinary share is entitled\nto 100 votes. Each Class B or Class C ordinary share is convertible into one Class A ordinary share at any time by the\nholder thereof. However, Class B ordinary shares are not convertible into Class C ordinary shares, and Class C ordinary\nshares are not convertible into Class B ordinary shares.\n\n \n\nAs\nof the date of this annual report, Palopo Holding Limited, an entity wholly owned by Dagang Feng, beneficially owns all of our issued\nand outstanding Class C ordinary shares. These Class C ordinary shares constituted approximately 5.5% of our total issued\nand outstanding share capital and 74.1% of the aggregate voting power of our total issued and outstanding share capital.\n\n \n\nAs\nof the date of this annual report, 36Kr Heros Holding Limited, an entity wholly owned by Chengcheng Liu, beneficially owns all of our\nissued and outstanding Class B ordinary shares. These Class B ordinary shares constituted approximately 4.1% of our total\nissued and outstanding share capital and 13.9% of the aggregate voting power of our total issued and outstanding share capital.\n\n \n\nAs\na result of this dual-class share structure, the holders of our Class B and Class C ordinary shares will have concentrated\ncontrol over the outcome of matters put to a vote of shareholders and have significant influence over our business, including decisions\nregarding mergers, consolidations, liquidations and the sale of all or substantially all of our assets, election of directors and other\nsignificant corporate actions. The holders of Class B and Class C ordinary shares may take actions that are not in the best\ninterest of us or our other shareholders or holders of the ADSs. This concentration of ownership may discourage, delay or prevent a change\nin control of our company, which could have the effect of depriving our other shareholders of the opportunity to receive a premium for\ntheir shares as part of a sale of our company and may reduce the price of the ADSs. This concentrated control will limit your ability\nto influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions\nthat holders of Class A ordinary shares and ADSs may view as beneficial. In addition, future issuances of Class B or Class C\nordinary shares may be dilutive to the holders of Class A ordinary shares. As a result, the market price of our Class A ordinary\nshares could be adversely affected. Furthermore, the conversion of Class B and Class C ordinary shares to Class A ordinary\nshares over time, while increasing the absolute voting power of holders of our Class A ordinary shares, may have the effect of increasing\nthe relative voting power of the holders of Class B and Class C ordinary shares who retain their shares in the long term. As\na result, the relative voting power of holders of Class A ordinary share may remain limited for a significant period of time.\n\n \n\n**We\nare a****“controlled company” within the meaning of the Nasdaq Stock Market Rules and, as a\nresult, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.**\n\n \n\nWe are a “controlled\ncompany” as defined under the Nasdaq Stock Market Rules since Dagang Feng controls a majority of our total voting power as\nof the date of this annual report. For so long as we remain a controlled company under that definition, we are permitted to elect to rely,\nand may rely, on certain exemptions from corporate governance rules, such as the requirement that a majority of our board of directors\nmust be independent directors, and the requirement that our board of directors have a compensation committee and nominating and corporate\ngovernance committee composed entirely of independent directors.\n\n \n\nAs a result, you will not\nhave the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.\n\n \n\n**The difference in the voting rights of our\nClass A ordinary share, Class B ordinary share and Class C ordinary share may harm the value and liquidity of our Class A\nordinary share.**\n\n \n\nThe\ndifference in the voting rights of our Class A ordinary share, Class B ordinary share and Class C ordinary share\ncould harm the value of our Class A ordinary share to the extent that any investor or potential future purchaser of our Class A\nordinary share ascribes value to the right of holders of our Class B ordinary share to 25 votes per share and the right of holders\nof our Class C ordinary share to 100 votes per share. The existence of our dual-class share structure could also result in less liquidity\nfor our Class A ordinary share than if there were only one class of our ordinary share.\n\n \n\n**Our dual-class share structure may depress\nthe trading price of our Class A ordinary share.**\n\n \n\nOur dual-class share structure\nmay result in a lower or more volatile market price of our Class A ordinary share or in adverse publicity or other adverse consequences.\nFor example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain\nof their indexes. S&P Dow Jones and FTSE Russell have announced changes to their eligibility criteria for inclusion of shares of public\ncompanies on certain indices, including the S&P 500. These changes exclude companies with multiple classes of shares from being added\nto these indices. In addition, several shareholder advisory firms have announced their opposition to the use of multiple- class structures.\nAs a result, our dual-class share structure may prevent the inclusion of our Class A ordinary share in these indices and may cause\nshareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change\nour capital structure. Any such exclusion from indices could result in a less active trading market for our Class A ordinary share.\nAny actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also\nadversely affect the value of our Class A ordinary share.\n\n \n\n \n\n \n\n \n\n**You may experience dilution of your holdings\ndue to the inability to participate in rights offerings.**\n\n \n\nWe may, from time to time,\ndistribute rights to our shareholders, including rights to acquire securities. Under the deposit agreement, the depositary will not distribute\nrights to holders of ADSs unless the distribution and sale of rights and the securities to which these rights relate are either exempt\nfrom registration under the Securities Act with respect to all holders of ADSs, or are registered under the provisions of the Securities\nAct. The depositary may, but is not required to, attempt to sell these undistributed rights to third parties, and may allow the rights\nto lapse. We may be unable to establish an exemption from registration under the Securities Act, and we are under no obligation to file\na registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared\neffective. Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings\nas a result.\n\n \n\n**As a company incorporated in the Cayman\nIslands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly\nfrom the Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy\nif we complied fully with the Nasdaq corporate governance listing standards.**\n\n \n\nAs a Cayman Islands company\nlisted on the Nasdaq, we are subject to the Nasdaq corporate governance listing standards. However, the Nasdaq rules permit a foreign\nprivate issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the\nCayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. We have followed\nand intend to continue to follow Cayman Islands corporate governance practices in lieu of the corporate governance requirements of the\nNasdaq that listed companies must have: (i) a majority of independent directors; (ii) the establishment of a nominating/corporate\ngovernance committee composed entirely of independent directors; and (iii) a compensation committee composed entirely of independent\ndirectors. As a result of our reliance on the “foreign private issuer” or the “controlled company” exemptions,\nour shareholders may be afforded less protection than they otherwise would enjoy under the Nasdaq corporate governance listing standards\napplicable to U.S. domestic issuers.\n\n \n\n**We are a foreign private issuer within the\nmeaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public\ncompanies.**\n\n \n\nBecause we qualify as a foreign\nprivate issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United\nStates that are applicable to U.S. domestic issuers, including:\n\n \n\n·\nthe rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q\nor current reports on Form 8-K;\n\n \n\n·\nthe sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in\nrespect of a security registered under the Exchange Act;\n\n \n\n·\nthe sections of the Exchange Act requiring insiders to file public reports of their stock ownership and\ntrading activities and liability for insiders who profit from trades made in a short period of time; and\n\n \n\n·\nthe rules under Regulation FD governing selective disclosure rules of material nonpublic information.\n\n \n\nWe will be required to file\nan annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on\na quarterly basis as press releases, distributed pursuant to the rules and regulations of the Nasdaq. Press releases relating to\nfinancial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to\nfile with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic\nissuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing\nin a U.S. domestic issuer.\n\n \n\n**We incur significant costs as a result of\nbeing a public company.**\n\n \n\nAs a public company, we incur\nsignificant legal, accounting and other expenses. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the\nSEC and the Nasdaq, impose various requirements on the corporate governance practices of public companies. In addition, as we have ceased\nto be an “emerging growth company” as such term is defined in the JOBS Act, we expect to incur significant expenses and devote\nsubstantial management effort toward ensuring compliance with the requirements of Section 404 and the other rules and regulations\nof the SEC.\n\n \n\n \n\n \n\n \n\nWe expect the rules and\nregulations applicable to public companies to increase our legal and financial compliance costs and to make some corporate activities\nmore time-consuming and costly. For example, as a public company, we will need to increase the number of independent directors and adopt\npolicies regarding internal controls and disclosure controls and procedures. We also expect that operating as a public company makes it\nmore difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced\npolicy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. In addition, we incur additional\ncosts associated with our public company reporting requirements. It is also more difficult for us to find qualified persons to serve on\nour board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules and\nregulations, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.\n\n \n\n**We believe that we were likely a passive\nforeign investment company (“PFIC”) for 2025 if the value of our assets is determined by reference to our market capitalization,\nand due to the current trading prices of the ADSs there is a significant risk that we will be a PFIC for 2026 and possibly future taxable\nyears, which could result in adverse U.S. federal income tax consequences to U.S. investors in the ADSs or Class A ordinary shares.**\n\n \n\nIn general, a non-U.S. corporation\nis a passive foreign investment company, or PFIC, for any taxable year in which (i) 75% or more of its gross income consists of passive\nincome (the “income test”) or (ii) 50% or more of the average value of its assets (generally determined on a quarterly\nbasis) consists of assets that produce, or are held for the production of, passive income (the “assets test”). For purposes\nof the above calculations, a non-U.S. corporation that owns (or is treated as owning for U.S. federal income tax purposes), directly or\nindirectly, at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets\nof the other corporation and received directly its proportionate share of the income of the other corporation. Passive income generally\nincludes dividends, interest, rents, certain royalties and gains from financial investments. Cash is generally a passive asset for these\npurposes. Goodwill and other intangible assets are active assets to the extent attributable to activities that produce active income.\n\n \n\nBecause we hold a substantial\namount of cash and financial investments, our PFIC status for any taxable year may depend on the average value of our goodwill and other\nintangible assets, in addition to other active assets. We have not obtained valuations of our assets (including goodwill and other intangible\nassets) for 2025. However, the value of our assets may be determined by reference to our average market capitalization. Because of the\nlow average value of our market capitalization during 2025, we believe that we were likely a PFIC for our taxable year of 2025 if the\nvalue of our assets is determined by reference to our market capitalization. Considering the current low level and volatility of our market\ncapitalization, there is a significant risk that we will also be a PFIC under the assets test for our taxable year of 2026, and possibly\nfuture taxable years, if the value of our assets is determined by reference to our market capitalization. Moreover, the extent to which\nour goodwill and other intangible assets should be treated as active assets is not entirely clear. In addition, we provide financing to\ncustomers as part of our advertisement agent services and although our income from this business segment is small, if in the future the\nproportionate share of this income grows, we may be a PFIC under the income test. Furthermore, it is not entirely clear how the contractual\narrangements between us and the VIE will be treated for purposes of the PFIC rules, and we may be a PFIC for any taxable year if the VIE\nis not treated as owned by us. Our PFIC status for any taxable year is an annual factual determination that can be made only after the\nend of that year and will depend on the composition of our income and assets and the value of our assets from time to time. For these\nreasons, our PFIC status for any past, current or future taxable year is uncertain.\n\n \n\nIf we are a PFIC for any\ntaxable year during which a U.S. investor owns the ADSs or Class A ordinary shares, we will generally continue to be a PFIC with\nrespect to that investor for all succeeding taxable years, even if we cease to meet the threshold requirements for PFIC status, unless\ncertain elections are timely made by the investor. In addition, a U.S. holder of the ADSs or Class A ordinary shares will be subject\nto reporting obligations with respect to its ownership of PFIC stock. See “Item 10.E. Taxation-U.S. Federal Income Tax Considerations-Passive\nForeign Investment Company Rules”.\n\n \n\n**If we were deemed to be an “investment\ncompany” under the Investment Company Act, applicable restrictions could make it impractical for us to continue our business as\ncontemplated and could have a material adverse effect on our business, results of operations and financial condition.**\n\n \n\nWe intend to conduct our\noperations so that we will not be deemed to be an investment company under the Investment Company Act. Section 3(a)(1)(A) and\nRule 3a-1 under the Investment Company Act generally provide that an entity will not be deemed to be an “investment company”\nfor purposes of the Investment Company Act if: (a) it is not and does not hold itself out as being engaged primarily, and does not\npropose to engage primarily, in the business of investing, reinvesting or trading securities and (b) consolidating the entity’s\nwholly-owned subsidiaries (within the meaning of the Investment Company Act), no more than 45% of the value of its assets (exclusive of\nU.S. government securities and cash items) consists of, and no more than 45% of its net income after taxes (for the past four fiscal quarters\ncombined) is derived from, securities other than U.S. government securities, securities issued by employees’ securities companies,\nsecurities issued by qualifying majority owned subsidiaries of such entity and securities issued by qualifying companies that are controlled\nprimarily by such entity.\n\n \n\n \n\n \n\n \n\nWe believe that we are engaged\nprimarily in the business of generating and distributing media content and providing business services, including online advertising services,\nenterprise value-added services and subscription services to customers, and not in the business of investing, reinvesting or trading in\nsecurities. We hold ourselves out as such and do not propose to engage primarily in the business of investing, reinvesting or trading\nin securities. Accordingly, we do not believe that the Company is what is frequently referred to as an “orthodox” investment\ncompany as defined in the Investment Company Act and described in clause (a) in the second sentence of the preceding paragraph. We\nalso believe that the primary source of income from our businesses is properly characterized as income derived from our operating business,\nand not from investment securities. Furthermore, the Company’s assets, consolidated with its wholly-owned subsidiaries (within the\nmeaning of the Investment Company Act), consist primarily of assets that we believe would not be considered securities for purposes of\nthe Investment Company Act. Therefore, we believe that, consolidating the Company’s wholly-owned subsidiaries (within the meaning\nof the Investment Company Act), no more than 45% of the value of its assets (exclusive of U.S. government securities and cash items) consists\nof, and no more than 45% of its net income after taxes (for the past four fiscal quarters combined) is derived from, securities other\nthan U.S. government securities, securities issued by employees’ securities companies, securities issued by qualifying majority\nowned subsidiaries of the Company and securities issued by qualifying companies that are controlled primarily by the Company. Accordingly,\nwe do not believe the Company is an investment company by virtue of the 45% test in Rule 3a-1 under the Investment Company Act as\ndescribed in clause (b) in the second sentence of the preceding paragraph.\n\n \n\nThe need to comply with Section 3(a)(1)(A) and\nRule 3a-1 under the Investment Company Act may cause us to restrict our business and subsidiaries with respect to how we invest excess\ncash pending use in our business. In addition, if we no longer meet the requirements of Section 3(a)(1)(A) and Rule 3a-1,\nand no other exemption is available to us, we may take other actions in order to conduct our business in a manner that does not subject\nus to the registration and other requirements of the Investment Company Act. This may include adjusting our cash management investments,\nwhich may result in lower rates of returns, and/or liquidating all or a portion of our investment securities (including potentially short-\nand/or long-term bank time deposits), including on unfavorable terms, and holding such amounts in cash, and/or acquiring assets or businesses\nthat could change the nature of our business or potentially take other actions that may be viewed as adverse to the holders of the ADSs,\nin order to conduct our business in a manner that does not subject us to the registration and other requirements of the Investment Company\nAct.\n\n \n\nIf anything were to happen\nwhich would cause the Company to be deemed to be an investment company under the Investment Company Act, we may lose our ability to raise\nmoney in the U.S. capital markets and from U.S. lenders, and additional restrictions under the Investment Company Act could apply to us,\nall of which could make it impractical for us to continue our business as currently conducted. This would materially and adversely affect\nthe value of the ADSs and our ability to pay dividends in respect of the ADSs."}