{"url_path":"/sec/raasy/10-k/2026/item-19","section_key":"item-19","section_title":"Item 19 EXHIBITS**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-08","source_url":"https://www.sec.gov/Archives/edgar/data/1804583/0001493152-26-021875-index.html","accession_number":"0001493152-26-021875","cik":"0001804583","ticker":"RAASY","issuer_name":"Cloopen Group Holding Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1804583/0001493152-26-021875-index.html","primary_entity_key":"0001804583","primary_entity_name":"Cloopen Group Holding Ltd"},"word_count":25436,"has_tables":true,"body_markdown":"**ITEM\n19. EXHIBITS**\n\n \n\n**Exhibit\nNo.**\n \n\n**Description\nof Exhibit**\n\n \n \n \n\n1.1\n \n[Eighth Amended and Restated Memorandum and Articles of Association of the Registrant, as currently in effect (incorporated by reference to Exhibit 1.1 of our Annual Report on Form 20-F (File No. 001-40004) filed with the SEC on May 10, 2021)](https://www.sec.gov/Archives/edgar/data/1804583/000110465921063826/raas-20201231xex1d1.htm)\n\n2.1\n \n[Registrant’s Specimen American Depositary Receipt (to reflect the ADS ratio change effected on March 15, 2023) (incorporated by reference to Exhibit 2.1 of our Annual Report on Form 20-F (File No. 001-40004) filed with the SEC on February 27, 2024)](https://www.sec.gov/Archives/edgar/data/1804583/000095017024020632/raasy-ex2_1.htm)\n\n2.2\n \n[Registrant’s Specimen Certificate for Class A Ordinary Shares (incorporated by reference to Exhibit 4.2 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000226/a2242823zex-4_2.htm)\n\n2.3\n \n[Deposit Agreement dated February 8, 2021, by and among the Registrant, the depositary and the owners and holders of American depositary shares issued thereunder (incorporated by reference to Exhibit 2.3 of our Annual Report on Form 20-F (File No. 001-40004) filed with the SEC on May 10, 2021)](https://www.sec.gov/Archives/edgar/data/1804583/000110465921063826/raas-20201231xex2d3.htm)\n\n2.4\n \n[The Sixth Amended and Restated Shareholders Agreement between the Registrant and other parties thereto dated as of November 13, 2020 (incorporated by reference to Exhibit 10.19 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_19.htm)\n\n2.5\n \n[The Sixth Amended and Restated Right of First Refusal and Co-sale Agreement between the Registrant and other parties thereto dated as of November 13, 2020(incorporated by reference to Exhibit 10.20 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_20.htm)\n\n2.6\n \n[Description of Securities (incorporated by reference to Exhibit 2.6 of our Annual Report on Form 20-F (File No. 001-40004) filed with the SEC on March 24,2025)](https://www.sec.gov/Archives/edgar/data/1804583/000164117225000214/ex2-6.htm)\n\n4.1\n \n[2016 Share Incentive Plan (incorporated by reference to Exhibit 10.1 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_1.htm)\n\n4.2\n \n[2021 Share Incentive Plan (incorporated by reference to Exhibit 10.2 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_2.htm)\n\n4.3\n \n[Form of Indemnification Agreement between the Registrant and each of its directors and executive officers (incorporated by reference to Exhibit 10.3 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_3.htm)\n\n4.4\n \n[Form of Employment Agreement between the Registrant and each of its executive officers (incorporated by reference to Exhibit 10.4 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_4.htm)\n\n4.5\n \n[Amended and Restated Exclusive Business Cooperation Agreement between Anxun Guantong (Beijing) Technology Co., Ltd. and Beijing Ronglian Yitong Information Technology Co., Ltd. dated as of November 3, 2020 (incorporated by reference to Exhibit 10.5 of our registration statement on Form F-1 (File No.333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_5.htm)\n\n \n\n142\n\n \n\n \n\n4.6\n \n[Share Pledge Agreement among Anxun Guantong (Beijing) Technology Co., Ltd., Dazi Heye Investment Management Co., Ltd. (formerly known as Lhasa Heye Investment Management Co., Ltd.), and Beijing Ronglian Yitong Information Technology Co., Ltd. dated as of March 28, 2019 (incorporated by reference to Exhibit 10.6 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_6.htm)\n\n4.7\n \n[Share Pledge Agreement among Anxun Guantong (Beijing) Technology Co., Ltd., Changxun Sun, and Beijing Ronglian Yitong Information Technology Co.,Ltd. dated as of March 28, 2019 (incorporated by reference to Exhibit 10.7 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_7.htm)\n\n4.8\n \n[Share Pledge Agreement among Anxun Guantong (Beijing) Technology Co., Ltd., Jianhong Zhou, and Beijing Ronglian Yitong Information Technology Co.,Ltd. dated as of March 28, 2019 (incorporated by reference to Exhibit 10.8 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_8.htm)\n\n4.9\n \n[Share Pledge Agreement among Anxun Guantong (Beijing) Technology Co., Ltd., Beijing Hongshan Shengde Equity Investment Center (Limited Partnership), and Beijing Ronglian Yitong Information Technology Co., Ltd. dated as of November 3, 2020 (incorporated by reference to Exhibit 10.9 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_9.htm)\n\n4.10\n \n[Exclusive Option Agreement among Anxun Guantong (Beijing) Technology Co., Ltd., Dazi Heye Investment Management Co., Ltd. (formerly known as Lhasa Heye Investment Management Co., Ltd.), and Beijing Ronglian Yitong Information Technology Co., Ltd. dated as of August 28, 2019 (incorporated by reference to Exhibit 10.10 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_10.htm)\n\n4.11\n \n[Exclusive Option Agreement among Anxun Guantong (Beijing) Technology Co., Ltd., Changxun Sun, and Beijing Ronglian Yitong Information Technology Co., Ltd. dated as of August 28, 2019 (incorporated by reference to Exhibit 10.11 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_11.htm)\n\n4.12\n \n[Exclusive Option Agreement among Anxun Guantong (Beijing) Technology Co., Ltd., Jianhong Zhou, and Beijing Ronglian Yitong Information Technology Co., Ltd. dated as of March 28, 2019 (incorporated by reference to Exhibit 10.12 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_12.htm)\n\n4.13\n \n[Exclusive Option Agreement among Anxun Guantong (Beijing) Technology Co., Ltd., Beijing Hongshan Shengde Equity Investment Center (Limited Partnership), and Beijing Ronglian Yitong Information Technology Co., Ltd. dated as of November 3, 2020 (incorporated by reference to Exhibit 10.13 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_13.htm)\n\n4.14\n \n[Power of Attorney issued by Dazi Heye Investment Management Co., Ltd. (formerly known as Lhasa Heye Investment Management Co., Ltd.) dated as of August 28, 2019 (incorporated by reference to Exhibit 10.14 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_14.htm)\n\n4.15\n \n[Power of Attorney issued by Changxun Sun dated as of August 28, 2019 (incorporated by reference to Exhibit 10.15 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_15.htm)\n\n4.16\n \n[Power of Attorney issued by Jianhong Zhou dated as of March 28, 2019 (incorporated by reference to Exhibit 10.16 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_16.htm)\n\n4.17\n \n[Power of Attorney issued by Beijing Hongshan Shengde Equity Investment Center (Limited Partnership) dated as of November 3, 2020 (incorporated by reference to Exhibit 10.17 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_17.htm)\n\n4.18\n \n[Spousal Consent Letter issued by the spouse of Changxun Sun dated as of August 28, 2019 incorporated by reference to Exhibit 10.18 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_18.htm)\n\n \n\n143\n\n \n\n \n\n4.19\n \n[Series F Preferred Share Purchase Agreement between the Registrant and other parties thereto dated as of November 4, 2020 (incorporated by reference to Exhibit 10.21 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_21.htm)\n\n4.20\n \n[Warrant to Purchase Series F Preferred Shares of the Registrant, dated as of November 13, 2020 (incorporated by reference to Exhibit 10.22 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-10_22.htm)\n\n4.21\n \n[Termination Agreement in respect of the Current Contractual Agreements among Anxun Guantong (Beijing) Technology Co., Ltd., Beijing HongShan Shengde Equity Investment Center (Limited Partnership) and Bejing Ronglian Yitong Information Technology Co., Ltd. dated as of January 5, 2024 (incorporated by reference to Exhibit 4.21 of our Annual Report on Form 20-F (File No. 001-40004) filed with the SEC on February 27, 2024)](https://www.sec.gov/Archives/edgar/data/1804583/000095017024020632/raasy-ex4_21.htm)\n\n8.1\n \n[List of Principal Subsidiaries and Affiliated Entities of the Registrant (incorporated by reference to Exhibit 8.1 of our Annual Report on Form 20-F (File No.001-40004) filed with the SEC on March 24, 2025)](https://www.sec.gov/Archives/edgar/data/1804583/000164117225000214/ex8-1.htm)\n\n11.1\n \n[Code of Business Conduct and Ethics of the Registrant (incorporated by reference to Exhibit 99.1 of our registration statement on Form F-1 (File No. 333-252205) initially filed with the SEC on January 19, 2021, as amended)](https://www.sec.gov/Archives/edgar/data/1804583/000104746921000127/a2242756zex-99_1.htm)\n\n11.2\n \n[Insider Trading Policy (incorporated by reference to Exhibit 11.2 of our Annual Report on Form 20-F (File No. 001-40004) filed with the SEC on August 27,2024)](https://www.sec.gov/Archives/edgar/data/1804583/000149315224033941/ex11-2.htm)\n\n12.1*\n \n[CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex12-1.htm)\n\n12.2*\n \n[CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex12-2.htm)\n\n13.1**\n \n[CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex13-1.htm)\n\n13.2**\n \n[CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex13-2.htm)\n\n15.1*\n \n[Consent of Maples and Calder (Hong Kong) LLP](ex15-1.htm)\n\n15.2*\n \n[Consent of CM Law Firm](ex15-2.htm)\n\n15.3*\n \n[Consent of ARK Pro CPA & Co](ex15-3.htm)\n\n101.INS*\n \nInline\nXBRL Instance Document\n\n101.SCH*\n \nInline\nXBRL Taxonomy Extension Schema Document\n\n101.CAL*\n \nInline\nXBRL Taxonomy Extension Calculation Linkbase Document\n\n101.DEF*\n \nInline\nXBRL Taxonomy Extension Definition Linkbase Document\n\n101.LAB*\n \nInline\nXBRL Taxonomy Extension Label Linkbase Document\n\n101.PRE*\n \nInline\nXBRL Taxonomy Extension Presentation Linkbase Document\n\n104*\n \nCover\nPage Interactive Data File (embedded within the Inline XBRL document)\n\n \n\n*\nFiled with this annual report on Form 20-F\n\n**\nFurnished with this annual report on Form 20-F\n\n \n\n144\n\n \n\n** **\n\n**SIGNATURES**\n\n \n\nThe\nregistrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized\nthe undersigned to sign this annual report on its behalf.\n\n \n\n \n**Cloopen\nGroup Holding Limited**\n\n \n \n \n\n \nBy:\n*/s/\nChangxun Sun*\n\n \nName:\nChangxun\nSun\n\n \nTitle:\nChief\nExecutive Officer\n\n \n\nDate:\nMay 8, 2026\n\n \n\n145\n\n \n\n \n\n**CLOOPEN\nGROUP HOLDING LIMITED**\n\n \n\n**Index\nto the Consolidated Financial Statements**\n\n \n\n**CONTENTS**\n \n**PAGE(S)**\n\n[Report of Independent Registered Public Accounting Firm](#FIN_001) PCAOB ID 3299\n \nF-2\n\n[Consolidated Balance Sheets as of December 31, 2024 and 2025](#FIN_002)\n \nF-3\n\n[Consolidated Statements of Comprehensive Loss for the years ended December 31, 2023, 2024 and 2025](#FIN_003)\n \nF-4\n\n[Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2023, 2024 and 2025](#FIN_004)\n \nF-5\n- F-7\n\n[Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2024 and 2025](#FIN_005)\n \nF-8\n\n[Notes to Consolidated Financial Statements](#FIN_006)\n \nF-9\n\n \n\nF-1\n\n \n\n \n\nTo\nthe Shareholders and Board of Directors\n\nCloopen\nGroup Holding Limited:\n\n \n\n*Opinion\non the Consolidated Financial Statements*\n\n \n\nWe\nhave audited the accompanying consolidated balance sheets of Cloopen Group Holding Limited (the “Company”), its subsidiaries\nand its variable interest entities (collectively the “Group”) as of December 31, 2024 and 2025, the related consolidated\nstatements of comprehensive loss, changes in shareholders’ equity, and cash flows for each of the years in the three-year period\nended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated\nfinancial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2025,\nand the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity\nwith U.S. generally accepted accounting principles.\n\n \n\n*Basis\nfor Opinion*\n\n \n\nThese\nconsolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion\non these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting\nOversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal\nsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe\nconducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain\nreasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.\nOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether\ndue to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence\nregarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles\nused and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.\nWe believe that our audits provide a reasonable basis for our opinion.\n\n \n\n/s/\nARK PRO CPA & Co\n\n \n\nWe\nhave served as the Company’s auditor since 2023.\n\n \n\nHong\nKong, China\n\n \n\nMay\n8, 2026\n\n \n\nF-2\n\n \n\n** **\n\n**CLOOPEN\nGROUP HOLDING LIMITED**\n\n \n\n**CONSOLIDATED\nBALANCE SHEETS**\n\n \n\n(Amounts\nin thousands of RMB and US$, except for number of shares and per share data)\n\n \n\n  \n  \nRMB  \nRMB  \nUS$ \n\n  \n  \nDecember 31, \n\n  \nNotes \n2024  \n2025 \n\n  \n  \nRMB  \nRMB  \nUS$ \n\nASSETS \n  \n    \n    \n   \n\nCurrent assets \n  \n    \n    \n   \n\nCash \n4 \n 640,119  \n 324,134  \n 46,351 \n\nRestricted cash \n4 \n 10,396  \n 28,107  \n 4,019 \n\nTerm deposits \n2(i) \n 222,783  \n 211,463  \n 30,239 \n\nShort-term investments \n14 \n 291,280  \n 359,734  \n 51,441 \n\nAccounts receivable – third parties, net \n5 \n 120,374  \n 139,651  \n 19,970 \n\nAccounts receivable – a related party, net \n5,19 \n 389  \n 488  \n 70 \n\nAccounts receivable \n5,19 \n 389  \n 488  \n 70 \n\nContract assets \n17 \n 27,752  \n 57,290  \n 8,192 \n\nAmounts due from a related party \n19 \n 2,590  \n 3,345  \n 478 \n\nPrepayments and other current assets \n6 \n 119,996  \n 111,954  \n 16,009 \n\nTotal current assets \n  \n 1,435,679  \n 1,236,166  \n 176,769 \n\nNon-current assets \n  \n    \n    \n   \n\nLong-term investments \n7 \n 54,052  \n 53,269  \n 7,617 \n\nProperty and equipment, net \n8 \n 8,173  \n 6,088  \n 871 \n\nOperating lease right-of-use assets \n9 \n 10,800  \n 14,122  \n 2,019 \n\nIntangible assets, net \n10 \n 11,609  \n 9,271  \n 1,326 \n\nGoodwill \n11 \n 54,427  \n 54,427  \n 7,783 \n\nOther non-current assets \n  \n 3,639  \n 2,925  \n 418 \n\nTotal non-current assets \n  \n 142,700  \n 140,102  \n 20,034 \n\nTotal assets \n  \n 1,578,379  \n 1,376,268  \n 196,803 \n\nLIABILITIES AND SHAREHOLDERS’ EUQITY \n  \n    \n    \n   \n\nCurrent liabilities \n  \n    \n    \n   \n\nAccounts payable \n  \n 95,485  \n 129,831  \n 18,566 \n\nContract liabilities \n17 \n 306,112  \n 299,483  \n 42,825 \n\nOperating lease liabilities-current \n9 \n 5,843  \n 8,093  \n 1,157 \n\nAmounts due to related parties \n19 \n 154  \n 391  \n 56 \n\nAccrued expenses and other current liabilities \n12 \n 101,009  \n 102,675  \n 14,682 \n\nTotal current liabilities \n  \n 508,603  \n 540,473  \n 77,286 \n\nNon-current liabilities \n  \n    \n    \n   \n\nOperating lease liabilities-non current \n9 \n 4,731  \n 3,785  \n 541 \n\nDeferred income tax liabilities \n15 \n 466  \n 76  \n 11 \n\nTotal non-current liabilities \n  \n 5,197  \n 3,861  \n 552 \n\nTotal liabilities \n  \n 513,800  \n 544,334  \n 77,838 \n\nCommitments and contingencies (Note 18) \n  \n -  \n -  \n - \n\nSHAREHOLDERS’ EQUITY: \n  \n    \n    \n   \n\nClass A Ordinary Shares (US$0.0001 par value, 600,000,000 shares authorized, 309,105,485 and 317,606,141 shares issued as of December 31, 2024 and 2025, and 308,053,676 and 316,554,332 shares outstanding as of December 31, 2024 and 2025, respectively) \n  \n 195  \n 195  \n 28 \n\nClass B Ordinary Shares (US$0.0001 par value, 25,649,839 shares authorized, issued and outstanding as of December 31, 2024 and 2025; each Class B ordinary share is convertible into one Class A ordinary share) \n  \n 17  \n 17  \n 2 \n\nOrdinary Shares, value  \n  \n 17  \n 17  \n 2 \n\nAdditional paid-in capital \n  \n 11,225,945  \n 11,239,347  \n 1,607,205 \n\nTreasury stock \n  \n (120,899) \n (120,899) \n (17,288)\n\nAccumulated other comprehensive loss \n  \n (56,362) \n (63,608) \n (9,096)\n\nAccumulated deficit \n  \n (9,974,319) \n (10,213,669) \n (1,460,535)\n\nTotal shareholders’ Equity attributable to Cloopen Group Holding Limited \n  \n 1,074,577  \n 841,383  \n 120,316 \n\nNon-controlling interests \n  \n (9,998) \n (9,449) \n (1,351)\n\nTotal shareholders’ Equity \n  \n 1,064,579  \n 831,934  \n 118,965 \n\nTotal liabilities and shareholders’ equity \n  \n 1,578,379  \n 1,376,268  \n 196,803 \n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-3\n\n \n\n \n\n**CLOOPEN\nGROUP HOLDING LIMITED**\n\n \n\n**CONSOLIDATED\nSTATEMENTS OF COMPREHENSIVE LOSS**\n\n \n\n(Amounts\nin thousands of RMB and US$, except for number of shares and per share data)\n\n \n\n  \n  \nRMB  \nRMB  \nRMB  \nUS$ \n\n  \n  \nYear ended December 31, \n\n  \nNotes \n2023  \n2024  \n2025 \n\n  \n  \nRMB  \nRMB  \nRMB  \nUS$ \n\nRevenues (including related parties amounts of RMB 919, RMB 163 and RMB 337 for the years ended December 31,2023, 2024 and 2025, respectively) \n17,19 \n 571,024  \n 573,566  \n 535,709  \n 76,605 \n\nCost of revenues (including related parties amounts of RMB 3,623, RMB 1,981 and RMB 2,161 for the years ended December 31, 2023, 2024 and 2025, respectively) \n19 \n (366,375) \n (362,717) \n (388,963) \n (55,621)\n\nGross profit \n  \n 204,649  \n 210,849  \n 146,746  \n 20,984 \n\nOperating expenses: \n  \n    \n    \n    \n   \n\nSelling and marketing expenses \n  \n (227,543) \n (187,305) \n (142,265) \n (20,344)\n\nGeneral and administrative expenses \n  \n (191,113) \n (93,916) \n (111,061) \n (15,882)\n\nOther operating income \n  \n -  \n 49,530  \n -  \n - \n\nResearch and development expenses \n19 \n (222,538) \n (177,000) \n (139,081) \n (19,888)\n\nTotal operating expenses \n  \n (641,194) \n (408,691) \n (392,407) \n (56,114)\n\n  \n  \n    \n    \n    \n   \n\nOperating loss \n  \n (436,545) \n (197,842) \n (245,661) \n (35,130)\n\nInterest income \n  \n 26,826  \n 42,151  \n 10,656  \n 1,524 \n\nInvestment income \n  \n 563  \n 11,859  \n 10,423  \n 1,490 \n\nShare of gains (losses) of equity method investments \n7 \n (1,470) \n 3  \n (1,638) \n (234)\n\nImpairment loss of long-term investments \n7 \n (8,011) \n -  \n (11,145) \n (1,594)\n\nGains (losses) from disposal of subsidiaries, net \n  \n -  \n 403  \n (1,743) \n (249)\n\nForeign currency exchange gains (losses), net \n  \n 5,699  \n (3,717) \n (513) \n (73)\n\nLoss before income taxes \n  \n (412,938) \n (147,143) \n (239,621) \n (34,266)\n\nIncome tax benefit \n15 \n 564  \n 316  \n 820  \n 117 \n\nNet loss \n  \n (412,374) \n (146,827) \n (238,801) \n (34,149)\n\nNet income (loss) attributable to non-controlling interests \n  \n (2,652) \n (4,070) \n 549 \n 79\n\nNet loss attributable to Cloopen Group Holding Limited \n  \n (409,722) \n (142,757) \n (239,350) \n (34,228)\n\nNet loss attributable to ordinary shareholders \n  \n (409,722) \n (142,757) \n (239,350) \n (34,228)\n\n  \n  \n    \n    \n    \n   \n\nNet loss \n  \n (412,374) \n (146,827) \n (238,801) \n (34,149)\n\nOther comprehensive income (loss): \n  \n    \n    \n    \n   \n\nForeign currency translation adjustment, net of nil income taxes \n  \n 21,286  \n 965  \n (7,246) \n (1,036)\n\nTotal other comprehensive income (loss) \n  \n 21,286  \n 965  \n (7,246) \n (1,036)\n\n  \n  \n    \n    \n    \n   \n\nComprehensive loss \n  \n (391,088) \n (145,862) \n (246,047) \n (35,185)\n\nComprehensive income (loss) attributable to non-controlling interests \n  \n (2,652) \n (4,070) \n 549 \n 79\n\nComprehensive loss attributable to Cloopen Group Holding Limited \n  \n (388,436) \n (141,792) \n (246,596) \n (35,264)\n\n  \n  \n    \n    \n    \n   \n\nNet loss per ordinary share \n  \n    \n    \n    \n   \n\n—Basic and diluted \n16 \n (1.27) \n (0.44) \n (0.74) \n (0.11)\n\n**Weighted average number of ordinary shares**\n\n**outstanding used in computing net loss per**\n\n**ordinary share**\n \n  \n    \n    \n    \n   \n\n—Basic and diluted \n16 \n 321,945,825  \n 322,945,205  \n 323,149,126  \n 323,149,126 \n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-4\n\n \n\n** **\n\n**CLOOPEN\nGROUP HOLDING LIMITED**\n\n \n\n**STATEMENTS\nOF CHANGES IN SHAREHOLDERS’ EQUITY**\n\n \n\n**FOR\nTHE YEAR ENDED DECEMBER 31, 2023**\n\n \n\n(Amounts\nin thousands of RMB and US$, except for number of shares and per share data)\n\n \n\n  \n  \n\n**Number of**\n\n**shares**\n  \nRMB  \n\n**Number of**\n\n**shares**\n  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB \n\n  \nNote \n\n**Class A**\n\n**ordinary shares**\n  \n\n**Class B**\n\n**ordinary shares**\n  \nTreasury Shares  \n\n**Additional**\n\n**paid-in**\n\n**capital**\n  \n\n**Accumulated**\n\n**other**\n\n**comprehensive loss**\n  \n\n**Accumulated**\n\n**deficit**\n  \n\n**Total\nshareholders’ equity attributable to Cloopen Group Holding Limited**\n  \n\n**Non-**\n\n**controlling**\n\n**interests**\n  \n\n**Total**\n\n**shareholders’**\n\n**equity**\n \n\n  \n  \n\n**Number of**\n\n**shares**\n  \nRMB  \n\n**Number of**\n\n**shares**\n  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB \n\n**Balance\nas of January 1, 2023**\n \n  \n 309,054,428  \n 193  \n 25,649,839  \n 17  \n (120,899) \n 11,184,360  \n (78,613) \n (9,421,840) \n 1,563,218  \n (3,276) \n         1,559,942 \n\nCumulative effect of adoption of ASC 326 \n  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (196) \n (196) \n -  \n (196)\n\nExercise option \n  \n 1,442,808  \n 2  \n -  \n -  \n -  \n 3,943  \n -  \n -  \n 3,945  \n -  \n 3,945 \n\nNet loss \n  \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (409,526) \n (409,526) \n (2,652) \n (412,178)\n\nShare-based compensation \n13 \n -  \n -  \n -  \n -  \n -  \n 22,239  \n -  \n -  \n 22,239  \n -  \n 22,239 \n\nForeign currency translation adjustment, net of nil income taxes \n  \n -  \n -  \n -  \n -  \n -  \n -  \n 21,286  \n -  \n 21,286  \n -  \n 21,286 \n\nBalance as of December 31, 2023 \n  \n 310,491,236  \n 195  \n 25,649,839  \n 17  \n (120,899) \n 11,210,542  \n (57,327) \n (9,831,562) \n 1,200,966  \n (5,928) \n 1,195,038 \n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n** **\n\nF-5\n\n \n\n** **\n\n**CLOOPEN\nGROUP HOLDING LIMITED**\n\n \n\n**STATEMENTS\nOF CHANGES IN SHAREHOLDERS’ EQUITY**\n\n \n\n**FOR\nTHE YEAR ENDED DECEMBER 31, 2024**\n\n \n\n(Amounts\nin thousands of RMB and US$, except for number of shares and per share data)\n\n \n\n  \n   \nNumber\nof shares  \nRMB  \n **Number\nof shares**  \nRMB  \n **RMB**  \n **RMB**  \nRMB  \n **RMB**  \nRMB  \n **RMB**  \n **RMB** \n\n  \nNote  \n\n**Class A**\n\n**ordinary\nshares**\n\n  \n\n**Class B**\n\n**ordinary shares**\n\n  \n\nTreasury\n\nShares\n  \n\n **Additional**\n\n**paid-in capital**\n  \n\n**Accumulated**\n\n**other**\n\n**comprehensive**\n\n**loss**\n  \n\n **Accumulated**\n\n**deficit**\n  \n\n**Total**\n\n**shareholders’\nequity attributable to Cloopen Group Holding Limited**\n  \n\n**Non-**\n\n**controlling**\n\n**interests**\n  \n\n**Total**\n\n**shareholders’ equity**\n \n\n  \n   \nNumber\nof shares  \nRMB  \n **Number\nof shares**  \nRMB  \n **RMB**  \n **RMB**  \nRMB  \n **RMB**  \nRMB  \n **RMB**  \n **RMB** \n\nBalance\nas of January 1, 2024 \n   \n 310,491,236  \n 195  \n 25,649,839  \n 17  \n (120,899) \n 11,210,542  \n (57,327) \n (9,831,562) \n 1,200,966  \n (5,928) \n 1,195,038 \n\nBalance \n   \n 310,491,236  \n 195  \n 25,649,839  \n 17  \n (120,899) \n 11,210,542  \n (57,327) \n (9,831,562) \n 1,200,966  \n (5,928) \n 1,195,038 \n\nExercise\noption \n   \n 588,187  \n -  \n -  \n -  \n -  \n 1,099  \n -  \n -  \n 1,099  \n -  \n 1,099 \n\nNet\nloss \n   \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (142,757) \n (142,757) \n (4,070) \n (146,827)\n\nShare-based\ncompensation \n13  \n -  \n -  \n -  \n -  \n -  \n 14,304  \n -  \n -  \n 14,304  \n -  \n 14,304 \n\nForeign\ncurrency translation adjustment, net of nil income taxes \n   \n -  \n -  \n -  \n -  \n -  \n -  \n 965  \n -  \n 965  \n -  \n 965 \n\nBalance\nas of December 31, 2024 \n   \n 311,079,423  \n 195  \n 25,649,839  \n 17  \n (120,899) \n 11,225,945  \n (56,362) \n (9,974,319) \n 1,074,577  \n (9,998) \n 1,064,579 \n\nBalance \n   \n 311,079,423  \n 195  \n 25,649,839  \n 17  \n (120,899) \n 11,225,945  \n (56,362) \n (9,974,319) \n 1,074,577  \n (9,998) \n 1,064,579 \n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-6\n\n \n\n** **\n\n**CLOOPEN\nGROUP HOLDING LIMITED**\n\n \n\n**STATEMENTS\nOF CHANGES IN SHAREHOLDERS’ EQUITY**\n\n \n\n**FOR\nTHE YEAR ENDED DECEMBER 31, 2025**\n\n \n\n(Amounts\nin thousands of RMB and US$, except for number of shares and per share data)\n\n \n\n  \n   \n\n**Number\nof**\n\n**shares**\n  \nRMB  \n\n**Number\nof**\n\n**shares**\n  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB \n\n  \nNote  \n\n**Class\nA**\n\n**ordinary\nshares**\n  \n\n**Class\nB**\n\n**ordinary\nshares**\n  \nTreasury\nShares  \n\n**Additional**\n\n**paid-in**\n\n**capital**\n  \n\n**Accumulated**\n\n**other**\n\n**comprehensive\nloss**\n  \n\n**Accumulated**\n\n**deficit**\n  \n\n**Total**\n\n**shareholders’\nequity attributable to Cloopen Group Holding Limited**\n  \n\n**Non-**\n\n**controlling**\n\n**interests**\n  \n\n**Total**\n\n**shareholders’**\n\n**equity**\n \n\n  \n   \n\n**Number\nof**\n\n**shares**\n  \nRMB  \n\n**Number\nof**\n\n**shares**\n  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB  \nRMB \n\nBalance\nas of January 1, 2025 \n   \n 311,079,423  \n 195  \n 25,649,839  \n 17  \n (120,899) \n 11,225,945  \n (56,362) \n (9,974,319) \n 1,074,577  \n (9,998) \n 1,064,579 \n\nBalance \n   \n 311,079,423  \n 195  \n 25,649,839  \n 17  \n (120,899) \n 11,225,945  \n (56,362) \n (9,974,319) \n 1,074,577  \n (9,998) \n 1,064,579 \n\nExercise\noption \n   \n 4,263,171  \n -  \n -  \n -  \n -  \n 240  \n -  \n -  \n 240  \n -  \n 240 \n\nChange\nin the ownership interest in the subsidiaries \n   \n -  \n -  \n -  \n -  \n -  \n (31) \n -  \n -  \n (31) \n -  \n (31)\n\nNet\nloss \n   \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (239,350) \n (239,350) \n 549  \n (238,801)\n\nShare-based\ncompensation \n13  \n -  \n -  \n -  \n -  \n -  \n 13,193  \n -  \n -  \n 13,193  \n -  \n 13,193 \n\nForeign\ncurrency translation\nadjustment, net of nil income taxes \n   \n -  \n -  \n -  \n -  \n -  \n -  \n (7,246) \n -  \n (7,246) \n -  \n (7,246)\n\nBalance\nas of December 31, 2025 \n   \n 315,342,594  \n 195  \n 25,649,839  \n 17  \n (120,899) \n 11,239,347  \n (63,608) \n (10,213,669) \n 841,383  \n (9,449) \n 831,934 \n\nBalance \n   \n 315,342,594  \n 195  \n 25,649,839  \n 17  \n (120,899) \n 11,239,347  \n (63,608) \n (10,213,669) \n 841,383  \n (9,449) \n 831,934 \n\nBalance\nas of December 31, 2025—US$ \n   \n -  \n 28  \n -  \n 2  \n (17,288) \n 1,607,205  \n (9,096) \n (1,460,535) \n 120,316  \n (1,351) \n 118,965 \n\nBalance\n \n   \n -  \n 28  \n -  \n 2  \n (17,288) \n 1,607,205  \n (9,096) \n (1,460,535) \n 120,316  \n (1,351) \n 118,965 \n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-7\n\n \n\n \n\n**CLOOPEN\nGROUP HOLDING LIMITED**\n\n \n\n**CONSOLIDATED\nSTATEMENTS OF CASH FLOWS**\n\n \n\n(Amounts\nin thousands of RMB and US$, except for number of shares and per share data)\n\n \n\n  \n   \n   \n   \n  \n\n  \nYear ended December 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB  \nUS$ \n\nOperating activities: \n    \n    \n    \n   \n\n  \n    \n    \n    \n   \n\nNet loss \n (412,374) \n (146,827) \n (238,801) \n (34,149)\n\nAdjustments to reconcile net loss to net cash used in operating activities \n    \n    \n    \n   \n\nAllowance for doubtful accounts \n 16,456  \n (3,875) \n 2,802 \n 401\n\nShare-based compensation \n 22,238  \n 14,304  \n 13,193  \n 1,887 \n\nDepreciation of property and equipment and amortization of Intangible assets \n 8,775  \n 7,634  \n 5,058  \n 723 \n\nAmortization of right-of-use asset and interest on lease liabilities \n 4,516  \n 8,468  \n 2,016  \n 288 \n\nDeferred tax benefit \n (429) \n (390) \n (390) \n (56)\n\nShare of (gains) losses of equity method investments \n 1,470  \n (3) \n 1,638  \n 234 \n\nImpairment loss of long-term investments \n 8,011  \n -  \n 11,145  \n 1,594 \n\nLoss from disposal of property and equipment \n 66  \n 63  \n 120  \n 17 \n\nInvestment income \n (563) \n (11,859) \n (10,423) \n (1,490)\n\nLosses (gains) from disposal of subsidiaries, net \n -  \n (403) \n 1,743  \n 249 \n\nUnrealized foreign exchange (gains) losses \n (5,699) \n 3,717  \n 513  \n 73 \n\nChanges in operating assets and liabilities, net of effect of disposal of subsidiaries: \n    \n    \n    \n   \n\nAccounts receivable - third parties, net \n (28,125) \n 38,573  \n (26,984) \n (3,859)\n\nAccounts receivable - a related party, net \n (724) \n 34  \n (179) \n (26)\n\nContract assets \n 26,675  \n (13,015) \n (24,554) \n (3,511)\n\nAmounts due from a related party \n (3,245) \n 760  \n (755) \n (108)\n\nPrepayments and other current assets \n (1,326) \n 1,726  \n 6,299  \n 901 \n\nOperating lease right-of-use assets \n (2,166) \n (5,276) \n (5,338) \n (763)\n\nOther non-current assets \n 1,052  \n (111) \n 714  \n 102 \n\nAccounts payable \n (34,395) \n 7,756  \n 34,346  \n 4,911 \n\nContract liabilities \n 3,427  \n (57,116) \n (6,629) \n (948)\n\nAmounts due to related parties \n (575) \n (51) \n 237  \n 34 \n\nOperating lease liabilities \n (4,146) \n (1,890) \n 1,304  \n 186 \n\nOther non-current liabilities \n 3,063  \n -  \n -  \n - \n\nAccrued expenses and other current liabilities \n (118,184) \n (22,459) \n 1,906 \n 273\n\nNet cash used in operating activities \n (516,202) \n (180,240) \n (231,019) \n (33,037)\n\nInvesting activities: \n    \n    \n    \n   \n\nCash paid for business combination \n (8,915) \n -  \n -  \n - \n\nCash paid for purchase of property and equipment \n (807) \n (2,892) \n (787) \n (113)\n\nCash paid for purchase of intangible assets \n (952) \n (328) \n (44) \n (6)\n\nCash paid for purchase of long-term investments \n (5,000) \n -  \n (12,000) \n (1,716)\n\nCash received from sale of short-term investments \n 24,663  \n 357,825  \n 358,732  \n 51,298 \n\nCash paid for purchase of short-term investments \n (28,187) \n (222,036) \n (434,551) \n (62,140)\n\nCash received from disposal of property and equipment \n 15  \n 4  \n 30  \n 4 \n\nCash paid for term deposits \n (938,458) \n (1,243,877) \n (1,501,761) \n (214,749)\n\nCash received from maturity of term deposits \n 1,308,935  \n 1,571,532  \n 1,510,189  \n 215,954 \n\nNet cash provided by/ (used in) investing activities \n 351,294  \n 460,228  \n (80,192) \n (11,468)\n\nFinancing activities: \n    \n    \n    \n   \n\nNet cash provided by financing activities \n -  \n -  \n -  \n - \n\nEffect of foreign currency exchange rate changes on cash \n 20,092  \n (11,922) \n 12,937  \n 1,851 \n\nNet increase/(decrease) in cash and restricted cash \n (144,816) \n 268,066  \n (298,274) \n (42,654)\n\nCash and restricted cash at the beginning of the year \n 527,265  \n 382,449  \n 650,515  \n 93,023 \n\nCash and restricted cash at the end of the year \n 382,449  \n 650,515  \n 352,241  \n 50,369 \n\nSupplemental information \n    \n    \n    \n   \n\nIncome tax paid \n 93  \n 11  \n 22  \n 3 \n\nIncome tax refund \n    \n (774) \n (20) \n (3)\n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-8\n\n \n\n \n\n**CLOOPEN\nGROUP HOLDING LIMITED**\n\n \n\n**NOTES\nTO THE CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\nYEARS\nENDED DECEMBER 31, 2023, 2024 and 2025\n\n \n\n(Amounts\nin thousands of RMB and US$, except for number of shares and per share data)\n\n \n\n**1.\nDESCRIPTION OF BUSINESS, ORGANIZATION AND BASIS OF PRESENTATION**\n\n \n\n**Organization\nand principal activities**\n\n \n\nCloopen\nGroup Holding Limited (“the Company”), through its wholly-owned subsidiaries, consolidated variable interest entity (“VIE”)\nand VIE’s subsidiaries (collectively referred to as “the Group”), is principally engaged in providing integrated communication\nservices based on cloud computing technology. The Group’s principal operations and geographic markets are mainly in the People’s\nRepublic of China (“PRC”).\n\n \n\nThe\naccompanying consolidated financial statements include the financial statements of the Company, its subsidiaries, consolidated VIE and\nVIE’s subsidiaries.\n\n \n\n**The\nVIE arrangements**\n\n \n\nThe\nGroup operates its cloud communication business in the PRC through Beijing Ronglian Yitong Information Technology Co., Ltd. (“Ronglian\nYitong”, or the “VIE”), a limited liability company established under the laws of the PRC on March 31, 2009. Ronglian\nYitong and its subsidiaries holds the necessary PRC operating licenses for the online businesses. The equity interests of Ronglian Yitong\nare legally held by Mr. Changxun Sun, the founder, chairman of board of directors and chief executive officer, Mr. Jianhong Zhou, the\ndirector of the Company, Lhasa Heye Investment Management Co., Ltd., and Beijing Hongshan Shengde Equity Investment Center (Limited Partnership)\nwho act as nominee equity holders of the VIE on behalf of Anxun Guantong (Beijing) Technology Co., Ltd. (“Anxun Guantong”\nor “WFOE”), the Company’s wholly-owned subsidiary. A series of contractual agreements, including Powers of Attorney,\nExclusive Business Cooperation Agreement, Equity Pledge Agreement, Exclusive Option Agreement and Spousal Consent Letter (collectively,\nthe “VIE Agreements”), were entered among the Company, Anxun Guantong, Ronglian Yitong and its nominee equity holders.\n\n \n\nPursuant\nto the VIE Agreements, the Company is able to exercise effective control over, bears the risks of, enjoys substantially all of the economic\nbenefits of the VIE, and has an exclusive option to purchase all or part of the equity interests in the VIE when and to the extent permitted\nby the PRC law at the lowest price possible. The Company’s management concluded that Ronglian Yitong is a VIE and the Company is\nits primary beneficiary. As such, the consolidated financial statements of the VIE are included in the consolidated financial statements\nof the Company.\n\n \n\nThe\nprincipal terms of the VIE Agreements are further described below.\n\n \n\n*1)\nPowers of Attorney*\n\n \n\nThe\nCompany and each of the equity holders of Ronglian Yitong entered into Powers of Attorney. Pursuant to the Powers of Attorney, the equity\nholders of Ronglian Yitong irrevocably appointed Anxun Guantong as their attorney-in-fact to exercise all equity holder rights, including,\nbut not limited to, proposing, convening and attending in the equity holders’ meeting, appointing or removing directors, executive\nofficers and senior management, disposing of all or part of the equity holder’s interests in Ronglian Yitong, casting the equity\nholders’ votes on matters requiring equity holders’ approval and doing all other acts in the capacity of the equity holders\nas permitted by Ronglian Yitong’s Memorandum and Articles of Association. In addition, the Company has a right to assign its rights\nand benefits under the Powers of Attorney to any other parties without an advance notice to the equity holders of Ronglian Yitong. The\nPowers of Attorney shall continue in force and be irrevocable as long as the equity holders of Ronglian Yitong remain as the equity holders\nof Ronglian Yitong.\n\n \n\nF-9\n\n \n\n \n\n*2)\nExclusive Business Cooperation Agreement*\n\n \n\nAnxun\nGuantong and Ronglian Yitong entered into an Exclusive Business Cooperation Agreement, whereby Anxun Guantong is appointed as the exclusive\nservice provider for the provision of business support, technology and consulting services to Ronglian Yitong. Unless a written consent\nis given by Anxun Guantong, Ronglian Yitong is not allowed to engage a third party to provide such services, while Anxun Guantong is\nable to designate another party to render such services to Ronglian Yitong. Ronglian Yitong shall pay Anxun Guantong on a monthly basis\na service fee, which shall be equal to 100% of the monthly net profits of Ronglian Yitong, and Anxun Guantong has the sole discretion\nto adjust the basis of calculation of the service fee amount according to service provided to Ronglian Yitong. Anxun Guantong owns the\nexclusive intellectual property rights, whether created by Anxun Guantong or Ronglian Yitong, as a result of the performance of the Exclusive\nBusiness Cooperation Agreement unless terminated in writing by Anxun Guantong. The Exclusive Business Cooperation Agreement may be extended\nif confirmed in writing by Anxun Guantong prior to the expiration thereof. The extended term shall be determined by Anxun Guantong, and\nRonglian Yitong shall accept such extended term unconditionally.\n\n \n\n*3)\nEquity Pledge Agreement*\n\n \n\nAn\nEquity Pledge Agreement was entered into by and among Anxun Guantong, Ronglian Yitong and equity holders of Ronglian Yitong. To guarantee\npayment from Ronglian Yitong, including but not limited to the service fee pursuant to the Exclusive Business Cooperation Agreement,\nand the performance of Ronglian Yitong and the nominee equity holders’ obligations under the contractual arrangements including\nthe Exclusive Business Cooperation Agreement, Exclusive Option Agreement and Powers of Attorney, the equity holders of Ronglian Yitong\npledged their respective equity in Ronglian Yitong to Anxun Guantong under the Equity Pledge Agreement as collateral. In the event Ronglian\nYitong fails to pay Anxun Guantong its service fee, Anxun Guantong will have the right to sell the pledged equity and apply the proceeds\nreceived to pay any outstanding service fees due by Ronglian Yitong to Anxun Guantong. The equity holders of Ronglian Yitong agree that,\nduring the term of the Equity Pledge Agreement, they will not dispose of the pledged equity or create or allow any encumbrance on the\npledged equity, and they also agree that Anxun Guantong’s rights relating to the equity pledges shall not be prejudiced by any\nlegal actions of the equity holders of Ronglian Yitong, their successors or their designees. Except that the pledge of approximately\n1.55% of the equity interests of VIE is subject to the registration in compliance with the PRC Property Rights Law, the equity pledge\nwas registered with the relevant local administration for industry and commerce in October 2019 and may only be terminated upon the fulfillment\nof all contractual obligations under the Exclusive Business Cooperation Agreement, Exclusive Option Agreement and Powers of Attorney.\nDuring the term of the Equity Pledge Agreement, Anxun Guantong is entitled to receive dividends attributable to the pledged Ronglian\nYitong equity.\n\n \n\n*4)\nExclusive Option Agreement*\n\n \n\nEach\nof the equity holders of Ronglian Yitong entered into an Exclusive Option Agreement with Anxun Guantong, and Ronglian Yitong,\npursuant to which the equity holders of Ronglian Yitong granted Anxun Guantong or other person upon the designation by Anxun\nGuantong, an irrevocable and exclusive option to purchase, at its discretion and to the extent permitted under the PRC law, all or\npart of the equity holders’ interests in Ronglian Yitong at the lowest price that the PRC law permits at the time unless a\nvaluation of the equity is required by the PRC law. The equity holders of Ronglian Yitong commit that without the prior written\nconsent of Anxun Guantong, the equity holders of Ronglian Yitong will not, among other things, (1) change or amend the Memorandum\nand Articles of Association, increase or decrease Ronglian Yitong’s registered capital, change its structure of registered\ncapital in other manners; (2) sell, transfer, mortgage or dispose of in any manner any assets of Ronglian Yitong or legal or\nbeneficial interest in the business or revenue of Ronglian Yitong, or allow the encumbrance thereon of any security interest; (3)\nincur, inherit, guarantee or suffer the existence of any debt, except for (i) debts incurred in the ordinary course of business\nother than through loans and (ii) debts disclosed to Anxun Guantong for which Anxun Guantong’s written consent has been\nobtained; (4) providing any person with any loan or credit or guarantee in any form; (5) cause or permit Ronglian Yitong to merge,\nconsolidate with, acquire or invest in any person, and/or sell permit Ronglian Yitong to sell assets with a value of over\nRMB500,000; (6)in any manner distribute dividends to its shareholders; (7) create any pledge or encumbrance on their equity\ninterests in Ronglian Yitong; (8) transfer or otherwise dispose of their equity interests in Ronglian Yitong and its equity holders\nshall appoint those individuals recommended by Anxun Guantong as directors of Ronglian Yitong. Ronglian Yitong shall provide\noperating and financial information to the Company at the request of Anxun Guantong and ensure the continuance of the business. The\nExclusive Option Agreement will remain effective until all equity interests in Ronglian Yitong held by its equity holders are\ntransferred or assigned to the Company or its designee. Ronglian Yitong and its equity holders shall not have any right to terminate\nthe Exclusive Option Agreement.\n\n* *\n\nF-10\n\n \n\n \n\n*5)\nSpousal Consent Letter*\n\n \n\nPursuant\nto the Spousal Consent Letters executed by the spouse of the principal individual shareholder of the VIE, the signing spouse confirmed\nthat she does not enjoy any right or interest in connection with the equity interests of the VIE. The spouse also irrevocably agreed\nthat she would not claim in the future any right or interest in connection with the equity interests in the VIE held by her spouse.\n\n \n\n**Risks\nin relation to the VIE structure**\n\n \n\nIn\nthe opinion of the Company’s management, the VIE Agreements have resulted in the WFOE having the power to direct activities that\nmost significantly impact the VIE, including appointing key management, setting up operating policies, exerting financial controls and\ntransferring profit or assets out of the VIE at its discretion. The Company considers that it has the right to receive all the benefits\nand assets of the VIE. As the VIE was established as a limited liability company under the PRC law, its creditors do not have recourse\nto the general credit of the Company for the liabilities of the VIE, and the Company does not have the obligation to assume the liabilities\nof the VIE.\n\n \n\nThe\nCompany has determined that the VIE Agreements are in compliance with the PRC laws and are legally enforceable. However, uncertainties\nin the PRC legal system could limit the Company’s ability to enforce the VIE Agreements; and if the equity holders of the VIE were\nto reduce their interest in the Company, their interests may diverge from that of the Company and that may potentially increase the risk\nthat they would seek to act contrary to the contractual terms.\n\n \n\nThe\nCompany’s ability to control the VIE also depends on the rights provided to the Company under the Powers of Attorney to vote on\nall matters requiring equity holders’ approval in the respective VIE. As noted above, the Company believes these Powers of Attorney\nare legally enforceable but yet they may not be as effective as direct equity ownership. In addition, if the corporate structure of the\nGroup or the contractual arrangements among the Company, Anxun Guantong, the VIE and its respective equity holders were found to be in\nviolation of any existing PRC laws and regulations, the relevant PRC regulatory authorities could:\n\n \n\n \n●\nrevoke\nthe business license and/or operating licenses of such entities;\n\n \n \n \n\n \n●\ndiscontinue\nor place restrictions or onerous conditions on the Group’s operations;\n\n \n \n \n\n \n●\nimpose\nfines, confiscating the income from the VIE, or imposing other requirements with which the Group may not be able to comply;\n\n \n \n \n\n \n●\nrequire\nthe Group to restructure its ownership structure or operations, including terminating the contractual arrangements with the VIE and\nderegistering the equity pledges of the VIE, which in turn would affect the Company’s ability to consolidate, derive economic\ninterests from, or exert effective control over the VIE; or\n\n \n \n \n\n \n●\nrestrict\nor prohibit our use of the proceeds of this offering to finance our business and operations in the PRC.\n\n \n\nF-11\n\n \n\n \n\nThe\nimposition of any of the above restrictions or actions may result in a material and adverse effect on the Group’s ability to conduct\nits business. In addition, if the imposition of any of these restrictions causes the Company to lose the right to direct the activities\nof the VIE or the right to receive its economic benefits, the Company would no longer be able to consolidate the VIE. The Company’s\nmanagement believes that the likelihood to lose the Company’s current\n\nownership\nstructure or the contractual arrangements with the VIE is remote based on the current facts and circumstances.\n\n \n\nThere\nis no VIE in which the Company has a variable interest but is not the primary beneficiary. Currently there is no contractual arrangement\nthat could require the Company to provide additional financial support to the VIE.\n\n \n\nThe\nfollowing consolidated assets and liabilities information of the Group’s VIE as of December 31, 2024 and 2025, and consolidated\nrevenues, net loss and cash flow information for the years then ended, have been included in the accompanying consolidated financial\nstatements:\n\n SCHEDULE OF CONSOLIDATED ASSETS AND LIABILITIES INFORMATION OF THE GROUP'S VIE AND CONSOLIDATED REVENUES, NET LOSS AND CASH FLOW INFORMATION\n\n  \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025 \n\n  \nRMB  \nRMB \n\nCash \n 139,299  \n 159,481 \n\nRestricted cash \n 10,396  \n 7,727 \n\nAccounts receivable - third parties, net \n 112,705  \n 133,813 \n\nAccounts receivable - related parties, net* \n 49,603  \n 51,573 \n\nContract assets \n 27,752  \n 57,290 \n\nAmounts due from related parties \n 8,575  \n 20,835 \n\nPrepayments and other current assets \n 73,556  \n 59,664 \n\nTotal current assets \n 421,886  \n 490,383 \n\nLong-term investments \n 54,052  \n 53,269 \n\nProperty and equipment, net \n 6,759  \n 5,029 \n\nOperating lease right-of-use assets \n 6,856  \n 9,214 \n\nIntangible assets, net \n 11,507  \n 9,076 \n\nGoodwill \n 54,427  \n 54,427 \n\nOther non-current assets \n 2,949  \n 2,533 \n\nTotal assets \n 558,436  \n 623,931 \n\nAccounts payable \n 84,134  \n 116,020 \n\nContract liabilities \n 299,010  \n 299,279 \n\nAmounts due to related parties** \n 2,207,995  \n 2,316,709 \n\nOperating lease liabilities-current \n 3,930  \n 5,574 \n\nAccrued expenses and other current liabilities \n 60,321  \n 67,249 \n\nTotal current liabilities \n 2,655,390  \n 2,804,831 \n\nOperating lease liabilities-non current \n 2,707  \n 2,186 \n\nDeferred income tax liabilities \n 466  \n 76 \n\nTotal liabilities \n 2,658,563  \n 2,807,093 \n\n \n\n*Accounts\nreceivable-related parties, net includes accounts receivable,\nnet due from the Company and its subsidiaries, which are eliminated upon consolidation, and accounts receivable, net due from one of\nthe Company’s shareholders and other related parties of RMB389\nand RMB488\nas of December 31, 2024 and 2025.\n\n \n\nF-12\n\n \n\n \n\n**Amounts\ndue to related parties include amounts due to the Company and\nits subsidiaries, which are eliminated upon consolidation, and amounts due to one of the Company’s shareholders and other related\nparties of RMB154\nand RMB391\nas of December 31, 2024 and 2025.\n\n \n\n  \n   \n   \n  \n\n  \nYear ended December 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nRevenues \n 553,910  \n 563,277  \n 495,463 \n\nNet loss \n (232,856) \n (33,078) \n (82,869)\n\nNet cash provided by/ (used in) operating activities \n (184,395) \n 46,516  \n (46,311)\n\nNet cash used in investing activities \n (6,700) \n (3,216) \n (12,508)\n\nNet cash provided by/ (used in) financing activities \n 218,926  \n (4,712) \n 76,333 \n\nNet increase in cash and restricted cash \n 27,831  \n 38,588  \n 17,514 \n\nCash and restricted cash at the beginning of the year \n 83,275  \n 111,106  \n 149,694 \n\nCash and restricted cash at the end of the year \n 111,106  \n 149,694  \n 167,208 \n\n \n\nIn\naccordance with VIE Agreements, WFOE has the power to direct the activities of the VIE. Therefore, the Company considers that there are\nno assets in the VIE that can be used only to settle obligations of the VIE, except for restricted cash of RMB10,396\nand RMB7,727\nas of December 31, 2024 and 2025, respectively. The creditors of VIEs do not have recourse to the general credit of WFOE.\n\n \n\nF-13\n\n \n\n** **\n\n**2.\nSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**\n\n \n\n**(a)\nBasis of Presentation**\n\n \n\nThe\naccompanying consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted\nin the United States of America (“U.S. GAAP”).\n\n \n\nThe\naccompanying consolidated financial statements contemplate the realization of assets and the satisfaction of liabilities in the normal\ncourse of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on,\namong other things, the Group’s ability to operate profitably, to generate cash flows from operations, and its ability to attract\ninvestors and to borrow funds on reasonable economic terms.\n\n \n\n**(b)\nPrinciples of Consolidation**\n\n \n\nThe\nconsolidated financial statements include the financial statements of the Company, its subsidiaries, the VIE for which the WFOE is the\nprimary beneficiary, and the VIE’s subsidiaries.\n\n \n\nSubsidiaries\nare those entities in which the Company, directly or indirectly, controls more than one half of the voting power or has the power to\ngovern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a\nmajority of votes at the meeting of directors. A VIE is an entity in which the Company, or its subsidiary, through contractual arrangements,\nexercises effective control over the activities that most impact the economic performance, bears the risks of, and enjoys the rewards\nnormally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity.\n\n \n\nAll\nintercompany transactions and balances among the Company, its subsidiaries, the VIE, and the VIE’s subsidiaries have been eliminated\nupon consolidation.\n\n \n\nThe\nfollowing table lists major subsidiaries and the consolidated VIEs of the Company as of December 31, 2025:\n\n \n\nSCHEDULE OF MAJOR SUBSIDIARIES AND CONSOLIDATED VARIABLE INTEREST ENTITIES\n\n  \n\nPalace of\n\nIncorporation\n  \n\nPercentage of\n\nownership\n \n\nBeijing Ronglian Yitong Information Technology Co., Ltd. \n PRC  \n VIE \n\nBeijing Ronglian Qimo Technology Co., Ltd. \n PRC  \n 100%\n\nBeijing Ronglian Guanghui Technology Co., Ltd. \n PRC  \n 100%\n\nBeijing Baiyi High-tech Information Technology Co., Ltd. \n PRC  \n 100%\n\nBeijing Ronglian Huitong Technology Information Co., Ltd. \n PRC  \n 100%\n\nShenzhen Zhongtian Wangjing Technology Co., Ltd. \n PRC  \n 100%\n\nCloopen Japan Co., Ltd. \n Japan  \n 100%\n\nAnxun Guantong (Beijing) Technology Co., Ltd. \n PRC  \n 100%\n\nCloopen limited \n HK  \n 100%\n\n \n\n**(c)\nUse of Estimates**\n\n \n\nThe\npreparation of the consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions\nthat affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet\ndate, and the reported revenues and expenses during the reported period in the consolidated financial statements and accompanying notes.\nActual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements.\nSignificant accounting estimates reflected in the Group’s financial statements include, but not limited to, revenue recognition,\nfair value of assets and liabilities acquired in business combination, the allowance for credit loss of accounts receivable and contract\nassets, depreciable lives and recoverability of property and equipment and intangible assets, assessment of impairment of long-lived\nassets, intangible assets and goodwill, the realization of deferred income tax assets, the fair value of share based compensation awards,\nshort-term investments, equity method investments, other equity investments, incremental borrowing rates for operating lease liabilities,\nand management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under\nthe circumstances.\n\n \n\nF-14\n\n \n\n \n\nIn\nMarch 2020, the World Health Organization declared the outbreak of a disease caused by a novel strain of the coronavirus (“COVID-19”)\nto be a pandemic. After the initial outbreak of the COVID-19, some instances of COVID-19 infections have emerged from time to time. The\nCOVID-19 pandemic has created and may continue to create significant uncertainty in the macroeconomic environment which, in addition\nto other unforeseen effects of this pandemic, may adversely impact the Group’s results of operations. The extent to which COVID-19\nwould impacts the results of operations is contingent on the future developments of the outbreak, including constant updates concerning\nthe global severity of and actions needed to contain the outbreak, which are highly uncertain and unpredictable. Due to the uncertainty\nand the economic implications on global economics conditions from the COVID-19 pandemic, certain estimates and assumptions may change\nin the near term.\n\n \n\n**(d)\nConvenience Translation**\n\n \n\nTranslations\nof the consolidated financial statements from RMB into US$ as of and for the year ended December 31, 2025 are solely for the convenience\nof the readers and were calculated at the rate of US$1.00 = RMB6.9931, representing the noon buying rate in The City of New York for\ncable transfers of RMB as set forth in the H.10 weekly statistical release of Federal Reserve Board on December 31, 2025. No representation\nis made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2025,\nor at any other rate.\n\n \n\n**(e)\nCommitments and Contingencies**\n\n \n\nIn\nthe normal course of business, the Group is subject to loss contingencies, such as legal proceedings and claims arising out of its business,\nthat cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, and non-income tax matters.\nAn accrual for a loss contingency is recognized when it is probable that a liability has been incurred and the amount of loss can be\nreasonably estimated. If a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot\nbe estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and\nmaterial, is disclosed.\n\n \n\n**(f)\nBusiness combinations**\n\n \n\nBusiness\ncombinations are recorded using the acquisition method of accounting in accordance with ASC topic 805 (“ASC 805”): Business\nCombinations. The acquisition method of accounting requires an acquirer to determine the identifiable acquired assets, the liabilities\nassumed and any non-controlling interest in the acquiree at the acquisition date, measured at their fair values as of that date. The\nconsideration transferred for an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given,\nliabilities assumed, and equity instruments issued as well as the contingent considerations as of the acquisition date. The costs directly\nattributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed\nare measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests.\nThe excess of (i) the total cost of the acquisition, fair value of the non-controlling interests and acquisition date fair value of any\npreviously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded\nas goodwill. If the cost of the acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference\nis recognized directly in earnings.\n\n \n\nF-15\n\n \n\n** **\n\n**(g)\nCash**\n\n \n\nCash\nconsists of cash on hand and cash at bank. Cash at bank are deposited in financial institutions at below locations:\n\nSCHEDULE OF CASH ON HAND AND CASH AT BANK \n\n  \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025 \n\n  \nRMB  \nRMB \n\n**Cash\nbalances include deposits in: Financial institutions in the mainland of the PRC**\n \n   \n  \n\n—Denominated in Renminbi (“RMB”) \n 257,829  \n 217,384 \n\n—Denominated in US$ \n 160,963  \n 24,162 \n\n**Total\ncash balances held at mainland PRC financial institutions**\n \n 418,792  \n 241,546 \n\nFinancial institutions in Hong Kong Special Administrative Region (“HKSAR”) \n    \n   \n\n—Denominated in US$ \n 180,551  \n - \n\n— Denominated in Renminbi (“RMB”) \n -  \n 45,973 \n\nTotal cash balances held at HKSAR financial institutions \n 180,551  \n 45,973 \n\nFinancial institutions in Japan \n    \n   \n\n—Denominated in Japanese Yen \n 25,265  \n 18,450 \n\n— Denominated in United Stated Dollars (“USD”) \n 11,030  \n 10,570 \n\nTotal cash balances held at Japan financial institutions \n 36,295  \n 29,020 \n\nFinancial institutions in Malaysia \n    \n   \n\n—Denominated in Malaysian Ringgit \n 842  \n 463 \n\n—Denominated in US$ \n 77  \n 174 \n\nTotal cash balances held at Malaysia financial institutions \n 919  \n 637 \n\nFinancial institutions in Singapore \n    \n   \n\n—Denominated in SGD \n 1,978  \n 2,202 \n\n— Denominated in United Stated Dollars (“USD”) \n 1,166  \n 4,756 \n\nTotal cash balances held at Singapore financial institutions \n 3,144  \n 6,958 \n\nFinancial institutions in Korean \n    \n   \n\n— Denominated in Korean Won (“KRW”) \n 362  \n - \n\n— Denominated in United Stated Dollars (“USD”) \n 49  \n - \n\nTotal cash balances held at Korean financial institutions \n 411  \n - \n\nFinancial institutions in Mexico \n    \n   \n\n— Denominated in United Stated Dollars (“USD”) \n 7  \n - \n\nTotal cash balances held at Korean financial institutions \n 7  \n - \n\nTotal cash balances held at financial institutions \n 640,119  \n 324,134 \n\nTotal cash balances \n 640,119  \n 324,134 \n\n \n\nF-16\n\n \n\n \n\nThe\nbank deposits, including term deposits, with financial institutions in the mainland of the PRC and Japan are insured by the government\nauthorities up to RMB500\nand JPY10,000,\nrespectively. The bank deposits including term deposits are insured by the government authorities with amounts up to RMB20,422\nand RMB21,177\nas of December 31, 2024 and 2025, respectively. The Company has not experienced any losses in uninsured bank deposits and does not believe\nthat it is exposed to any significant risks on cash held in bank accounts. To limit exposure to credit risk, the Company primarily places\nbank deposits with large financial institutions in the PRC and Japan with acceptable credit rating.\n\n \n\n**(h)\nRestricted cash**\n\n \n\nCash\nbalances that have restrictions as to withdrawal or usage are considered restricted cash. Restricted cash that will be released to cash\nwithin the next 12 months is classified as current asset, while the balance restricted for use longer than one year is classified as\nnon-current asset on the consolidated balance sheets.\n\n \n\n**(i)\nTerm deposits**\n\n \n\nTerm\ndeposits represent deposits at banks with original maturities more than three months but less than one year. The Group’s term deposits\nwere denominated in US$ and were deposited at financial institutions in the mainland of the PRC with the interest rate of 4.72%,\nand 3.05%\nper annum as of December 31, 2024 and 2025, respectively.\n\n \n\nTerm\ndeposits maintained at financial institutions consist of the following:\n\n \n\nSCHEDULE OF TERM DEPOSITS MAINTAINED AT BANKS\n\n  \n2024  \n2025 \n\n  \nRMB  \nRMB \n\nUS$ denominated bank deposits with financial institutions in the PRC \n 222,783  \n 211,463 \n\n \n\nTo\nlimit exposure to credit risk relating to bank deposits, the Company primarily places term deposits only with large financial institutions\nin the PRC with acceptable credit rating.\n\n \n\n**(j)\nShort-term Investments**\n\n \n\nThe\nGroup’s short-term investments represent the Group’s investments in financial products managed by financial institutions\nin the PRC and Cayman which are redeemable at the option of the Group on any working day. Short-term investments are classified as available\nfor sale debt securities and reported at fair value, with unrealized holding gains or losses, net of any related income tax effect, excluded\nfrom earnings and recorded as accumulated other comprehensive loss until realized. Realized gains or losses from the sale of short-term\ninvestments are determined on a specific identification basis and are recorded as investment income when earned.\n\n \n\n**(k)\nAccounts Receivable, net**\n\n \n\nPrior\nto January 1, 2023, the Company assesses recoverability of accounts receivable in accordance with ASC 310. Subsequent to January 1, 2023,\naccounts receivable is recorded at the realizable value amount, net of allowances for credit loss in accordance with ASC 326 and records\nthe allowance for credit losses as an offset to accounts receivable. The estimated credit losses are classified as “General and\nadministrative” in the consolidated statements of comprehensive loss. The Company assesses collectability by reviewing accounts\nreceivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific\ncustomers with known disputes or collectability issues. In determining the amount of the allowance for credit losses using probability-of-default\nmethod, the Company considers size, the historical credit loss experience, current economic conditions,\nsupportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses, and\nother factors that may affect the Company’s ability to collect from customers.\n\n \n\nF-17\n\n \n\n** **\n\n**(l)\nLong-term investments**\n\n \n\n**Equity\nmethod investments**\n\n \n\nThe\nGroup applies the equity method to account for an equity interest in an investee over which the Group has significant influence but does\nnot own a majority equity interest or otherwise control.\n\n \n\nUnder\nthe equity method of accounting, the Group’s share of the investee’s results of operations is reported as share of losses\nof equity method investments in the consolidated statements of comprehensive loss.\n\n \n\nThe\nGroup recognizes an impairment loss when there is a decline in value below the carrying value of the equity method investment that is\nconsidered to be other than temporary. The process of assessing and determining whether impairment on an investment is other than temporary\nrequires a significant amount of judgment. To determine whether an impairment is other than temporary, management considers whether it\nhas the ability and intent to hold the investment until recovery and whether evidence indicating the carrying value of the investment\nis recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the\nseverity and duration of the decline in value, any change in value subsequent to the period end, and forecasted performance of the investee.\n\n \n\n**Other\nequity investments**\n\n \n\nThe\nGroup elects the measurement alternative in ASC 321 and measures investments in “equity investment” at cost, adjusted for\nchanges resulting from impairments and observable price changes in orderly transactions for identical or similar securities of the same\nissuer. The Group considers information in periodic financial statements and other documentation provided by the investees to determine\nwhether observable price changes have occurred.\n\n \n\nThe\nGroup makes a qualitative assessment considering impairment indicators to evaluate whether the equity investments without a readily determinable\nfair value is impaired at each reporting period, and written down to its fair value if a qualitative assessment indicates that the investment\nis impaired and the fair value of the investment is less than its carrying value. If an equity investment without a readily determinable\nfair value is impaired, the Group includes an impairment loss in net income equal to the difference between the fair value of the investment\nand its carrying amount.\n\n \n\n**(m)\nProperty and Equipment, net**\n\n \n\nProperty\nand equipment are stated at cost less accumulated depreciation and any recorded impairment.\n\n \n\nThe\nestimated useful lives are as follows:\n\n \n\nSCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT\n\nComputer\nand office equipment\n \n3-5\nyears\n\nFurniture\nand fixtures\n \n3-5\nyears\n\nMotor\nvehicles\n \n4-5\nyears\n\nBuildings\n \n20\nyears\n\nLeasehold\nimprovements\n \nThe\nshorter of lease terms and estimated useful lives\n\n \n\nDepreciation\non property and equipment is calculated on the straight-line method over the estimated useful lives of the assets.\n\n \n\nWhen\nitems are retired or otherwise disposed of, income is charged or credited for the difference between net book value and the proceeds\nreceived thereon. Ordinary maintenance and repairs are charged to expense as incurred.\n\n \n\nF-18\n\n \n\n** **\n\n**(n)\nIntangible Assets, net**\n\n \n\nIntangible\nassets purchased from third parties are initially recorded at cost and amortized on a straight-line basis over the estimated economic\nuseful lives. The Group performs valuation of the intangible assets arising from business combination to determine the fair value to\nbe assigned to each asset acquired. The acquired intangible assets are recognized and measured at fair value and are expensed or amortized\nusing the straight-line approach over the estimated economic useful lives of the assets.\n\n \n\nThe\nestimated useful lives of intangible assets are as follows:\n\n \n\nSCHEDULE OF ESTIMATED USEFUL LIVES OF INTANGIBLE ASSETS\n\nSoftware copyrights \n 8 years \n\nTelecommunication business operation licenses \n 3-5 years \n\nTechnology \n 6-10 years \n\nNon-compete arrangements \n 4-7 year \n\nCustomer relationship \n 3-10 years \n\nTrademark \n 10 years \n\nOrder backlogs \n 1-4 years \n\nSoftware \n 3-8 years \n\n \n\n**(o)\nGoodwill**\n\n \n\nGoodwill\nrepresents the excess of the purchase consideration over the acquisition date amounts of the identifiable tangible and intangible assets\nacquired and liabilities assumed from the acquired entity as a result of the Company’s acquisitions of interests in its subsidiaries.\nGoodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate\nthat it might be impaired. In accordance with ASC 350, the Company may first assess qualitative factors to determine whether it is necessary\nto perform the quantitative goodwill impairment test. In the qualitative assessment, the Company considers factors such as macroeconomic\nconditions, industry and market considerations, overall financial performance of the reporting unit, and other specific information related\nto the operations, business plans and strategies of the reporting unit, including consideration of the impact of the COVID-19 pandemic.\nBased on the qualitative assessment, if it is more likely than not that the fair value of a reporting unit is less than the carrying\namount, the quantitative impairment test is performed. The Company may also bypass the qualitative assessment and proceed directly to\nperform the quantitative impairment test.\n\n \n\nThe\nCompany performs the quantitative impairment test by comparing the fair value of each reporting unit to its carrying amount, including\ngoodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying\namount of a reporting unit exceeds its fair value, the amount by which the carrying amount exceeds the reporting unit’s fair value\nis recognized as impairment. Application of a goodwill impairment test requires significant management judgment, including the identification\nof reporting units, allocation of assets, liabilities and goodwill to reporting units, and determination of the fair value of each reporting\nunit.\n\n \n\n**(p)\nImpairment of Long-lived Assets**\n\n \n\nLong-lived\nassets such as property and equipment and intangible assets with finite lives are evaluated for impairment whenever events or changes\nin circumstances indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than the\nGroup had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the\ncarrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and\ntheir eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets,\nthe Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets.\n\n** **\n\nF-19\n\n \n\n** **\n\n**(q)\nValue Added Taxes**\n\n \n\nThe\nCompany’s PRC subsidiaries are subject to value added tax (“VAT”). Revenue from providing cloud communication services\nand communication devices sales are generally subject to VAT at the rate of 6% and 13% since April 1, 2019, or 6% to 16% between May\n1, 2018 and April 1, 2019, and subsequently paid to PRC tax authorities after netting input VAT on purchases. The excess of output VAT\nover input VAT is reflected in accrued expenses and other current liabilities, and the excess of input VAT over output VAT is reflected\nin prepayments and other current assets in the consolidated balance sheets.\n\n \n\n**(r)\nFair Value Measurements**\n\n \n\nFair\nvalue represents the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between\nmarket participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions\nthat market participants would use in pricing an asset or a liability.\n\n \n\nAccounting\nguidance defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.\nAccounting guidance establishes a three-level fair value hierarchy and requires an entity to maximize the use of observable inputs and\nminimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value\nhierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs are:\n\n \n\nLevel\n1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.\n\nLevel\n2—Include other inputs that are directly or indirectly observable in the marketplace.\n\nLevel\n3—Unobservable inputs which are supported by little or no market activity.\n\n \n\nAccounting\nguidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income\napproach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving\nidentical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present\nvalue amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach\nis based on the amount that would currently be required to replace an asset.\n\n \n\nFinancial\nassets and liabilities of the Group primarily consist of cash, restricted cash, term deposits, short-term investments, accounts\nreceivable - third parties, net, accounts receivable – a related party, net, other receivables included in prepayments and other\ncurrent assets, long-term investment, amounts due from a related party, accounts payable, contract liabilities, amounts due to\nrelated parties, and other payables included in accrued expenses and other current liabilities. The Group measures short-term\ninvestments at fair value on a recurring basis. Short-term investments include financial products issued by financial institutions,\nwhich are valued based on prices per units quoted by issuers and are categorized in Level 2 of the fair value hierarchy.\n\n \n\nThe\nGroup’s non-financial assets, such as intangible assets and property and equipment, would be measured at fair value only if they\nwere determined to be impaired.\n\n \n\nF-20\n\n \n\n \n\n****\n\n**(s)\nRevenue recognition**\n\n \n\nThe\nGroup accounts for its revenue contracts in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606). According\nto ASC 606, revenue is recognized when control of the promised goods or services is transferred to the customers, in an amount that reflects\nthe consideration the Group expects to be entitled to in exchange for those goods or services. The Group determines revenue recognition\nthrough the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract,\n(3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize\nrevenue when (or as) the entity satisfies a performance obligation.\n\n \n\nThe\nGroup generate substantially all of the Group’s revenues from the following services and products:\n\n \n\n(1)\nCommunication\nPlatform-as-a-Service (“CPaaS”) which allows customers to send text messages and place voice calls using the Company’s\ncloud-based platform;\n\n \n \n\n(2)\nCloud-based\nContact Centers (“Cloud-based CC”) with which customers can operate their virtual contact centers and access related\nvalue-added services using the Company’s cloud-based platform; and\n\n \n \n\n(3)\nCloud-based\nUnified Communications and Collaborations (“Cloud-based UC&C”) where the Company creates customized communications\nsoftware on customers’ private clouds to meet their specific needs and deliver the software licenses to customers.\n\n \n\nThe\nCompany recognizes revenue upon the transfer of control of promised products or services provided to the Company’s customers, in\nthe amount of consideration the Company expect to receive for those products or services (excluding sales taxes collected on behalf of\ngovernment authorities). The Company’s revenue contracts generally do not include a right of return in relation to the delivered\nproducts or services.\n\n \n\nThe\ntiming of revenue recognition may differ from the timing of invoicing to the Company’s customers. The Company record a contract\nasset when revenue is recognized prior to invoicing, and a contract liability when payment is received from a customer in advance of\nrevenue recognition. The Company generally issue invoices based on contract terms, which may be when the services are completed, upon\ncustomer acceptance of the Company’s deliverables or at preset milestones. Payments are due with standard payment terms which are\ngenerally not more than 90 days from invoice issuance.\n\n \n\nWe\nrecognize the incremental costs of obtaining contracts as selling, general and administrative expenses when incurred if the amortization\nperiod of the asset that otherwise would have been recognized is one year or less. Assets recognized for costs to obtain a contract were\nnot material as of December 31, 2025. Costs to fulfill a contract are recorded as assets if they relate directly to a contract or a specific\nanticipated contract, the costs generate or enhance resources that will be used in satisfying performance obligations in the future and\nthe costs are expected to be recovered. Costs to fulfill a contract recognized as assets primarily consist of labor and materials costs\nand generally relate to engineering and set-up costs incurred prior to the satisfaction of performance obligations. Assets recognized\nfor costs to fulfill a contract are included in the “Prepaid expenses and other current assets” line of the consolidated\nbalance sheets and were not material as of December 31, 2025. Such assets are recognized as expenses as we transfer the related goods\nor services to the customer. All other costs to fulfill a contract are expensed as incurred.\n\n \n\nAs\nof December 31, 2025, there were no material amounts of remaining performance obligations that are required to be disclosed. As permitted\nby ASC 606, we have elected not to disclose information about remaining performance obligations where i) the performance obligation is\npart of a contract that has an original expected duration of one year or less or ii) when we recognize revenue from the satisfaction\nof the performance obligation in accordance with the right-to-invoice practical expedient.\n\n \n\nF-21\n\n \n\n \n\nCPaaS\nrevenues\n\n \n\nThe\nCompany accounts for revenue from customers’ usage of text message and voice call services on the Company’s CPaaS platform\nas two separate performance obligations. The Company’s service fees are determined by applying the contractual unit price to the\nmonthly usage volume of text messages sent or minutes of voice calls placed and a contractual monthly fixed charge per subscriber multiplied\nby the number of subscribers recorded by the Company’s CPaaS platform where relevant. The cloud-based services to send text messages\nand place voice calls are sold separately to customers with observable standalone selling prices.\n\n \n\nThe\nCompany also provides services as an agent in provision of CPaaS platforms to customers. The Company identified one performance obligation\nand recognized the revenues, on a monthly basis, at the amount equal to the difference between the amount charged to the customers and\nthe amount charged by telecommunication operators. The net amount of revenue from services as an agent was RMB16 million,\nRMB15 million and RMB11 million for the years ended December 31, 2023, 2024 and 2025, respectively.\n\n \n\nThe\nservice contracts are generally with a length between 3 and 12 months and renewable at the latest fee rates of the renewed contract services\non the contract renewal date. The option of renewal does not provide the customer with a material right that it otherwise could not obtain\nwithout entering into that contract, therefore the renewal option was not recognized as a separate performance obligation in the contract.\nThe service contracts do not grant the Company or customers a unilateral right to terminate the contracts before completion.\n\n \n\nCloud-based\nCC revenues\n\n \n\nCustomers\nsubscribe to the Company’s basic Cloud-based CC services at a fixed monthly fee and pay for other value-added services on a usage\nbasis. The Company recognizes the monthly service fees ratably over the contract period during which the Company is obligated to grant\ncustomers continuous access to those basic Cloud-based CC services. Revenue for other value-added services on top of the basic subscription\nis determined by applying the contractual unit price to the monthly usage volume and recognized when the related services are provided\nto customers. The basic subscription is sold to customers at the same price with or without the value-added services, so the transaction\nprice is allocated on the basis of observable stand-alone selling prices.\n\n \n\nThe\nservice contracts are generally with a length between 3 and 12 months and renewable at the latest fee rates of the renewed contract services\non the contract renewal date. The option of renewal does not provide customers with a material right that it otherwise could not obtain\nwithout entering into that contract, therefore the renewal option was not recognized as a separate performance obligation in the contract.\nThe service contracts do not grant the Company or customers a unilateral right to terminate the contracts before completion.\n\n \n\nThe\nCompany also offers customized Cloud-based CC solutions to customers with tailored functionalities and interfacing capabilities suitable\nto their complicated IT environment. The Company has identified that the nature of our overall promise to customers as the provision\nof an appropriately customized and interfaced software solution comprising the customized CC license and other highly interdependent\nand interrelated services, and has accounted for the promise as one combined performance obligation. The Company applies an iterative\nprocess to design, test and implement the software in customers’ IT environment and recognizes revenue for this performance obligation\nover a period of time during which the control of the customized Cloud-based CC solution is progressively transferred to the customers.\nThe Company uses an input method to estimate progress, based on the proportion of the labour hours incurred relative to the estimated\ntotal labour hours. The Company also offers standard or non-complex cloud-based CC solutions to customers, and has identified one performance\nobligation in the agreement and recognized revenue upon delivery of standard software. The Company’s Cloud-based CC contracts generally\ninclude a standard assurance-type warranty.\n\n \n\nF-22\n\n \n\n \n\nCloud-based\nUC&C revenues\n\n \n\nThe\nCompany offers customized Cloud-based UC&C solutions to customers with tailored functionalities and interfacing capabilities suitable\nto their complicated IT environment. The Company has identified that the nature of our overall promise to customers as the provision\nof an appropriately customized and interfaced software solution comprising the customized UC&C license and other highly interdependent\nand interrelated services, and has accounted for the promise as one combined performance obligation. The Company applies an iterative\nprocess to design, test and implement the software in customers’ IT environment and recognizes revenue for this performance obligation\nover a period of time during which the control of the customized UC&C solution is progressively transferred to the customers. The\nCompany uses an input method to estimate progress, based on the proportion of the labour hours incurred relative to the estimated total\nlabour hours. The Company also offers standard or non-complex cloud-based UC&C solutions to customers, and has identified one performance\nobligation in the agreement and recognized revenue upon delivery of standard software. Our cloud-based UC&C contracts generally include\na standard assurance-type warranty.\n\n \n\n**(t)\nCost of Revenues**\n\n \n\nCost\nof revenues mainly consists of payroll and related costs for employees, communication service expense associated with the use of facilities\nand equipment by these employees, such as rental and depreciation expenses, communication service expense charges to telecom operators\nor its distributors and cloud service fees to cloud service providers.\n\n \n\n**(u)\nResearch and Development Expenses**\n\n \n\nResearch\nand development expenses mainly consist of payroll and related costs for employees involved in researching in the field of cloud communication,\nand outsourced design expenses as well as expenses associated with the use by these functions of facilities and equipment, such as rental\nand depreciation expenses. Research and development expenses are expensed as incurred in accordance with ASC 730 amounted to RMB222,538,\nRMB177,000 and RMB139,081 for the years ended December 31, 2023, 2024 and 2025, respectively.\n\n \n\n**(v)\nSelling and Marketing Expenses**\n\n \n\nSelling\nand marketing expenses mainly consist of advertising expenses, promotion expenses, payroll and related expenses for personnel engaged\nin selling and marketing activities and expenses associated with the use by these functions of facilities and equipment, such as rental\nand depreciation expenses. Advertising expenses are expensed when incurred and are included in selling expenses in the consolidated statements\nof comprehensive loss. For the years ended December 31, 2023, 2024 and 2025, the advertising expenses were RMB42,885,\nRMB39,154 and\nRMB28,433 respectively.\n\n \n\n**(w)\nGeneral and Administrative Expenses**\n\n \n\nGeneral\nand administrative expenses mainly consist of payroll and related costs for employees involved in general corporate functions, expenses\nassociated with the use of facilities and equipment by these employees, such as rental and depreciation expenses, professional fees and\nother general corporate expenses.\n\n \n\nF-23\n\n \n\n \n\n**(x)\nShare-based Compensation**\n\n \n\nThe\nGroup applied ASC 718, *Compensation-Stock Compensation* (“ASC 718”), to account for its employee share-based payments.\nShare-based awards granted to the founders and employees in the form of restricted shares are measured at the grant date fair value of\nthe awards, and are recognized as compensation expense using the graded-vesting schedules over the requisite service period for each\nseparately vesting portion (or tranche) of the award. The Group elects to recognize the effect of forfeitures in compensation cost when\nthey occur. To the extent the required vesting conditions are not met resulting in the forfeiture of the share-based awards, previously\nrecognized compensation expense relating to those awards is reversed.\n\n \n\nShare-based\ncompensation in relation to the restricted ordinary shares is measured based on the fair value of the Company’s ordinary shares\nat the grant date of the award, which is estimated using the income approach and equity allocation method. Estimation of the fair value\nof the Company’s ordinary shares involves significant assumptions that might not be observable in the market, and a number of complex\nand subjective variables, discount rate, risk-free interest rate and subjective judgments regarding the Company’s projected financial\nand operating results, its unique business risks, the liquidity of its ordinary shares and its operating history and prospects at the\ntime the grants are made. Share-based compensation in relation to the share options is estimated using the binominal option pricing model.\nThe determination of the fair value of share options is affected by the fair value of the Company’s ordinary shares as well as\nthe assumptions regarding a number of complex and subjective variables, including the expected share price volatility, risk-free interest\nrate, exercise multiple and expected dividend yield. The fair value of these awards was determined by management with the assistance\nfrom a valuation report prepared by an independent valuation firm using management’s estimates and assumptions.\n\n \n\nA\nchange in any of the terms or conditions of share-based awards is accounted for as a modification of the awards. The Company calculates\nincremental compensation cost of a modification as the excess of the fair value of the modified awards over the fair value of the original\nawards immediately before its terms are modified at the modification date. For vested awards, the Company recognizes incremental compensation\ncost in the period the modification occurs. For awards not being fully vested, the Company recognizes the sum of the incremental compensation\ncost and the remaining unrecognized compensation cost for the original awards over the remaining requisite service period after modification.\n\n \n\n**(y)\nEmployee Benefits**\n\n \n\nThe\nCompany’s subsidiaries and the VIE and VIE’s subsidiaries in the PRC participate in a government mandated, multi-employers,\ndefined contribution plan, pursuant to which certain retirement, medical, housing and other welfare benefits are provided to employees.\nPRC labor laws require the entities incorporated in the PRC to pay to the local labor bureau a monthly contribution calculated at a stated\ncontribution rate on the monthly basic compensation of qualified employees. The Company also makes payments to other defined contribution\nplans and defined benefit plans for the benefit of employees employed by the subsidiary of Japan. The Group has no further commitments\nbeyond its monthly contribution. Employee social benefits included as expenses in the accompanying consolidated statements of comprehensive\nloss amounted to RMB86,198,\nRMB65,998\nand RMB64,390\nfor the years ended December 31, 2023, 2024 and 2025, respectively.\n\n \n\nF-24\n\n \n\n \n\n**(z)\nIncome Taxes**\n\n \n\nThe\nCompany follows the asset and liability method in according for income taxes in according to ASC topic 740 “Taxation” (“ASC\n740”), Income Taxes, under this method, current income taxes are provided on the basis of income before income taxes for financial\nreporting purposes, and adjusted for income and expense items which are not assessable or deductible for income tax purposes, deferred\nincome taxes are provided using the liability method. Under this method, deferred income tax assets and liabilities are recognized for\nthe tax effects of temporary differences and are determined by applying enacted statutory tax rates that will be in effect in the period\nin which the temporary differences are expected to reverse to the temporary differences between the financial statements’ carrying\namounts and the tax bases of assets and liabilities. A valuation allowance is provided to reduce the amount of deferred income tax assets\nif based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred income tax assets\nwill not be realized. The effect on deferred income taxes arising from a change in tax rates is recognized in the consolidated statements\nof comprehensive loss in the period of change.\n\n \n\nThe\nCompany adopts ASC740 to account for uncertainty in income taxes. ASC740 clarifies a “more likely than not” recognition threshold\nin the evaluation of uncertain tax positions. The Group recognizes the benefit of a tax position in its consolidated financial statements\nif the tax position is “more likely than not” to prevail based on the facts and technical merits of the position. Tax positions\nthat meet the “more likely than not” recognition threshold is measured at the largest amount of tax benefit that has a greater\nthan fifty percent likelihood of being realized upon settlement. Unrecognized tax benefits may be affected by changes in interpretation\nof laws, rulings of tax authorities, tax audits, and expiry of statutory limitations. In addition, changes in facts, circumstances and\nnew information may require the Group to adjust the recognition and measurement estimates with regard to individual tax positions. Accordingly,\nunrecognized tax benefits are periodically reviewed and re-assessed. Adjustments, if required, are recorded in the Group’s consolidated\nfinancial statements in the period in which the change that necessities the adjustments occur. The ultimate outcome for a particular\ntax position may not be determined with certainty prior to the conclusion of a tax audit and, in certain circumstances, a tax appeal\nor litigation process. The Group records interest and penalties related to unrecognized tax benefits (if any) in interest expenses and\ngeneral and administrative expenses, respectively. As of December 31, 2024 and 2025, the Group did not have any significant unrecognized\nuncertain tax positions.\n\n \n\n**(aa)\nOperating Leases**\n\n \n\nThe\nCompany adopted ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) from January 1, 2022 by using the modified retrospective\nmethod and did not restate the comparable periods. The Company has elected the package of practical expedients, which allows the Company\nnot to reassess (1) whether any expired or existing contracts as of the adoption date are contain a lease, (2) lease classification for\nany expired or existing leases as of the adoption date and (3) initial direct costs for any expired or existing leases as of the adoption\ndate. The Company also elected the short-term lease exemption for all contracts with lease terms of 12 months or less.\n\n \n\nThe\nCompany determines if an arrangement is a lease or contains a lease at lease inception. Leases are classified at the inception date as\neither as a finance lease or an operating lease. The Company classifies a lease as a finance lease when the lease meets any one of the\nfollowing criteria at lease commencement:\n\n \n\na.\nThe lease transfers ownership of the underlying asset to the lessee by the end of the lease term.\n\n \n\nb.\nThe lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise.\n\n \n\nc.\nThe lease term is for a major part of the remaining economic life of the underlying asset.\n\n \n\nd.\nThe present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the\nlease payments equals or exceeds substantially all of the fair value of the underlying asset.\n\n \n\ne.\nThe underlying asset is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the\nlease term.\n\n \n\nF-25\n\n \n\n \n\nFor\noperating leases, the Company recognizes an ROU asset and a lease liability based on the present value of the lease payments over the\nlease term on the consolidated balance sheets at commencement date. At lease commencement, operating lease ROU assets represent the right\nto use underlying assets for their respective lease terms and are recognized at amounts equal to the lease liabilities adjusted for any\nlease payments made prior to the lease commencement date, less any lease incentives received and any initial direct costs incurred by\nthe Company.\n\n \n\nAfter\nlease commencement, operating lease liabilities are measured at the present value of the remaining lease payments using the discount\nrate determined at lease commencement.\n\n \n\nOperating\nlease ROU assets are measured at the amount of the lease liabilities and further adjusted for prepaid or accrued lease payments, the\nremaining balance of any lease incentives received, unamortized initial direct costs and impairment of the ROU assets, if any. Operating\nlease expense is recorded as a single cost on a straight-line basis over the lease term.\n\n \n\nThe\nCompany’s leases do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information\navailable at the commencement date in determining the present value of lease payments. The incremental borrowing rate is estimated to\napproximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased\nasset is located.\n\n \n\n**(bb)\nForeign Currency Translation and Foreign Currency Risks**\n\n \n\nThe\nCompany’s reporting currency is RMB. The functional currency of the Company and its subsidiary incorporated at Hong Kong S.A.R.\nis the US$. The functional currency of the Company’s subsidiary incorporated at Japan is JPY. The functional currency of the Company’s\nPRC subsidiary, the VIE and the VIE’s subsidiaries is RMB.\n\n \n\nTransactions\ndenominated in currencies other than the functional currency are remeasured into the functional currency at the exchange rates prevailing\nat the dates of the transactions. Monetary assets and liabilities denominated in a foreign currency are remeasured into the functional\ncurrency using the applicable exchange rate at the balance sheet date. The resulted exchange differences are recorded as foreign currency\nexchange gains (losses), net in the consolidated statements of comprehensive loss.\n\n \n\nThe\nfinancial statements of the Company, its subsidiary incorporated at Hong Kong S.A.R. and its subsidiary incorporated at Japan are translated\nfrom the functional currency into RMB. Assets and liabilities are translated into RMB using the applicable exchange rates at the balance\nsheet date. Equity accounts other than earnings (deficits) generated in the current period are translated into RMB using the appropriate\nhistorical rates. Revenues, expenses, gains and losses are translated into RMB using the average exchange rates for the relevant period.\nThe resulted foreign currency translation adjustments are recorded as a component of other comprehensive loss in the consolidated statements\nof comprehensive loss, and the accumulated foreign currency translation adjustments are recorded as a component of accumulated other\ncomprehensive loss in the consolidated statements of changes in shareholders’ deficit.\n\n \n\nRMB\nis not a freely convertible currency. The PRC State Administration for Foreign Exchange, under the authority of the PRC government, controls\nthe conversion of RMB to foreign currencies. The value of RMB is subject to changes of central government policies and international\neconomic and political developments affecting supply and demand in the PRC foreign exchange trading system market.\n\n \n\nF-26\n\n \n\n \n\n**(cc)\nConcentration and Risk**\n\n \n\n*Concentration\nof customers and suppliers*\n\n \n\nNo\ncustomers individually represent greater than 10.0% of total revenues of the Group during the years ended December 31, 2023, 2024 and\n2025.\n\n \n\nTwo\nsupplier represents 14.7% and 13.4% of total purchases of the Group during the year ended December 31, 2023, respectively. One supplier\nrepresents 19.6% of total purchases of the Group during the year ended December 31,2024. No supplier represents greater than 10.0% of\ntotal purchases of the Group during the year ended December 31,2025.\n\n \n\nTwo\ncustomers represent 15.4% and 13.8% of total accounts receivable, net including related party amounts and contract assets of the Group\nas of December 31, 2023, respectively. One customer represents 16.6% of total accounts receivable, net including related party amounts\nand contract assets of the Group as of December 31, 2024. Two customers represent 13.2% and 11.6% of total accounts receivable, net including\nrelated party amounts and contract assets of the Group as of December 31, 2025, respectively.\n\n \n\nTwo suppliers\nrepresent 14.7%\nand 11.3%\nof total accounts payable of the Group as of December 31, 2023, respectively. Two suppliers\nrepresent 13.3%\nand 12.4%\nof total accounts payable of the Group as of December 31, 2024, respectively. One supplier represents 14.0%\nof total accounts payable of the Group as of December 31, 2025.\n\n \n\nOne\ncustomer represents 10.2% of total contract liabilities of the Group as of December 31, 2023. No customers individually represent greater\nthan 10.0% of total contract liabilities of the Group as of December 31, 2024. One customer represents 13.0% of total contract liabilities\nof the Group as of December 31, 2025.\n\n \n\nOne\nsupplier individually represents 21.0%\nof prepayments and other current assets excluding related party amounts of the Group as of December 31, 2023. Two\nsuppliers\nrepresent 20.8%\nand 10.8%\nof prepayments and other current assets excluding related party amounts of the Group as of December 31, 2024, respectively. One\nsupplier\nrepresents 23.6%\nof prepayments and other current assets excluding related party amounts of the Group as of December 31, 2025.\n\n \n\n*Concentration\nof credit risk*\n\n \n\nFinancial\ninstruments that potentially expose the Group to concentrations of credit risk consist principally of cash, restricted cash, term deposits,\nshort-term investments and accounts receivable. The total amount of these financial instruments was RMB1,285 million and RMB1,064 million\nas of December 31, 2024 and 2025.\n\n \n\nThe\nGroup’s investment policy requires cash, restricted cash, term deposits and short-term investments to be placed with high-quality\nfinancial institutions and to limit the amount of credit risk from any one issuer. The Group regularly evaluates the credit standing\nof the counterparties or financial institutions.\n\n \n\nThe\nGroup conducts credit evaluations on its customers prior to delivery of goods or services. The assessment of customer creditworthiness\nis primarily based on historical collection records, research of publicly available information and customer on-site visits by senior\nmanagement. Based on this analysis, the Group determines what credit terms, if any, to offer to each customer individually. If the assessment\nindicates a likelihood of collection risk, the Company will not deliver the services or sell the products to the customer or require\nthe customer to pay cash, post letters of credit to secure payment or to make significant down payments.\n\n \n\n*Interest\nrate risk*\n\n \n\nThe\nGroup’s short-term bank borrowings bears interests at fixed rates. If the Group were to renew these loans, the Group might be subject\nto interest rate risk.\n\n \n\nF-27\n\n \n\n** **\n\n**(dd)\nLoss per Share**\n\n \n\nIn\naccordance with ASC 260, *Earnings per Share,* basic income (loss) per share is computed by dividing net income (loss) attributable\nto ordinary shareholders by the weighted average number of ordinary shares and participating securities during the period, considering\nthe accretions to redemption value of the preferred shares, by the weighted average number of ordinary shares outstanding during the\nyear using the two-class method. Under the two-class method, any net income is allocated between ordinary shares and other participating\nsecurities based on their participating rights. A net loss is not allocated to participating securities when the participating securities\ndoes not have contractual obligation to share losses.\n\n \n\nThe\nCompany’s preferred shares and restricted ordinary shares are participating securities. The preferred shares are participating\nsecurities as they participate in undistributed earnings on an as-if-converted basis and the restricted ordinary shares are participating\nsecurities as the holders of the restricted ordinary shares have a non-forfeitable right to receive dividends with all ordinary shares.\nNeither the preferred shares nor the restricted ordinary shares has a contractual obligation to fund or otherwise absorb the Group’s\nlosses. Accordingly, any undistributed net income is allocated on a pro rata basis to the ordinary shares, preferred shares and restricted\nordinary shares; whereas any undistributed net loss is allocated to ordinary shares only.\n\n \n\nUnvested\nrestricted ordinary shares are excluded from the weighted average number of ordinary shares outstanding because the restricted ordinary\nshareholders must return the restricted ordinary shares to the Company, if the specified condition are not met.\n\n \n\nDiluted\nloss per share is calculated by dividing net loss attributable to ordinary shareholders, as adjusted for the effect of dilutive ordinary\nequivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the\nperiod. Ordinary equivalent shares consist of shares issuable upon the conversion of the preferred shares and shares issuable upon the\nexercise of warrants, and ordinary shares issuable upon the vest of restricted ordinary shares or exercise of outstanding share option\n(using the treasury stock method). Ordinary equivalent shares are calculated based on the most advantageous conversion rate or exercise\nprice from the standpoint of the security holder. Ordinary equivalent shares are not included in the denominator of the diluted loss\nper share calculation when inclusion of such shares would be anti-dilutive.\n\n \n\n**(ee)\nSegment Reporting**\n\n \n\nThe\nCompany’s chief operating decision maker has been identified as the chief executive officer, who reviews consolidated results when\nmaking decisions about allocating resources and assessing performance of the Group. For the purpose of internal reporting and management’s\noperation review, the Company’s chief executive officer and management personnel do not segregate the Group’s business by\nproduct or service. All products and services are viewed as in one and the only operating segment.\n\n \n\n**(ff)\nTreasury Stock**\n\n \n\nThe\nCompany accounts for treasury stock using the cost method. Under this method, the cost incurred to purchase the stock is recorded in\nthe treasury stock account on the consolidated balance sheets. At retirement of the treasury stock, the ordinary shares account is charged\nonly for the aggregate par value of the shares. The excess of the acquisition cost of treasury stock over the aggregate par value is\nallocated between additional paid-in capital and retained earnings.\n\n \n\n**(gg)\nStatutory Reserves**\n\n \n\nIn\naccordance with the PRC Company Laws, the Group’s PRC subsidiary, VIE and VIE’s subsidiaries must make appropriations from\ntheir after-tax profits as determined under the generally accepted accounting principles in the PRC (“PRC GAAP”) to non-distributable\nreserve funds including statutory surplus fund and discretionary surplus fund. The appropriation to the statutory surplus fund must be\n10% of the after-tax profits as determined under PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50%\nof the registered capital of the PRC companies. Appropriation to the discretionary surplus fund is made at the discretion of the PRC\ncompanies.\n\n \n\nF-28\n\n \n\n \n\nThe\nstatutory surplus fund and discretionary surplus fund are restricted for use. They may only be applied to offset losses or increase the\nregistered capital of the respective companies. These reserves are not allowed to be transferred to the Company by way of cash dividends,\nloans or advances, nor can they be distributed except for liquidation.\n\n \n\nDuring\nthe years ended December 31, 2024 and 2025, no profit appropriation to statutory surplus fund for the Group’s entities incorporated\nin the PRC. No appropriation to discretionary surplus fund was made for any of the periods presented by the Group’s PRC subsidiary,\nVIE and VIE’s subsidiaries.\n\n \n\n**(hh)\nImpact of newly adopted accounting pronouncement**\n\n \n\nIn\nJune 2022, the FASB issued ASU 2022-03, *Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to\nContractual Sale Restrictions*, which clarifies that a contractual restriction on the sale of an equity security is not considered\npart of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify\nthat an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This guidance also requires\ncertain disclosures for equity securities subject to contractual sale restrictions. The new guidance is required to be applied prospectively\nwith any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This guidance\nis effective for the Company for the year ending December 31, 2025 and interim reporting periods during the year ending December 31,\n2025. Early adoption is permitted. The Company adopted this guidance for the fiscal year ended\nDecember 31, 2025 with no material impact on the Company’s consolidated financial statements.\n\n \n\nIn\nMarch 2023, the FASB issued ASU No. 2023-02, *Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments\nin Tax Credit Structures Using the Proportional Amortization Method*, that is intended to improve the accounting and disclosures for\ninvestments in tax credit structures. This ASU allows reporting entities to elect to account for qualifying tax equity investments using\nthe proportional amortization method, regardless of the program giving rise to the related income tax credits. For public business entities,\nthe amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.\nFor all other entities, the amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within\nthose fiscal years. Early adoption is permitted for all entities in any interim period. The Company adopted this guidance for\nthe fiscal year ended December 31, 2025 with no material impact on the Company’s consolidated financial statements.\n\n \n\n**(ii)\nRecently issued accounting pronouncements not yet adopted**\n\n \n\nIn\nOctober 2023, the FASB issued ASU 2023-06, *Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure\nUpdate and Simplification Initiative*. This standard was issued in response to the SEC’s disclosure update and simplification\ninitiative, which affects a variety of topics within the Accounting Standards Codification. The amendments apply to all reporting entities\nwithin the scope of the affected topics unless otherwise indicated. The effective date for each amendment will be the date on which the\nSEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.\nThe Company is currently evaluating the impact this guidance will have on its financial statement disclosures.\n\n \n\nIn\nDecember 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures*, which improves income\ntax disclosures. The amendments require the disclosure of specific categories in the rate reconciliation and additional information for\nreconciling items that meet a quantitative threshold. The amendments also require disaggregated information about the amount of income\ntaxes paid (net of refunds received), Income (or loss) from continuing operations before income tax expense (or benefit) and Income tax\nexpense (or benefit) from continuing operations. The new guidance is required to be applied either prospectively or retrospectively.\nThis guidance is effective for the Company for the year ending March 31, 2026. Early adoption is permitted. The Company is evaluating\nthe impact of the adoption of this guidance.\n\n \n\nF-29\n\n \n\n \n\nIn\nMarch 2024, the Securities and Exchange Commission issued *The Enhancement and Standardization of Climate - Related Disclosures for\nInvestors,*which requires entities to provide information of certain climate - related information. This update will be effective\nfor the Company’s fiscal years beginning in 2027. The Company is currently in the process of evaluating the disclosure impact.\n\n \n\nIn\nNovember 2024, the FASB issued ASU2024-03, *Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures\n(Subtopic 220-40): Disaggregation of Income Statement Expenses*. The standard will require additional disclosure of the nature of\nexpenses included in the income statement in response to longstanding requests from investors for more information about an entity’s\nexpenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face\nof the income statement as well as disclosures about selling expenses. ASU2024-03 applies to all public business entities and is effective\nfor annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning\nafter December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption\nis permitted. We are evaluating this standard to determine if adoption will have a material impact on our consolidated financial statements.\n\n \n\nIn\nMay 2025, the FASB issued ASU 2025-05, *Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts\nReceivable and Contract Assets,* which provides a simplified practical expedient for the measurement of expected credit losses (CECL)\nfor accounts receivable and contract assets. The amendments allow entities to use a simplified approach to measure credit losses for\ncertain accounts receivable and contract assets, reducing the complexity of accounting treatment. The new guidance is applied prospectively.\nThis guidance is effective for entities for the fiscal years and interim periods beginning after December 15, 2025. Early adoption is\npermitted. The Company is evaluating the impact of the adoption of this guidance.\n\n \n\nIn\nJune 2025, the FASB issued ASU 2025-06, *Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted\nImprovements to the Accounting for Internal-Use Software*, which optimizes the boundary between capitalization and expensing of internal-use\nsoftware. The amendments clarify the accounting treatment of implementation costs related to cloud service arrangements and internal-use\nsoftware, specifying which costs can be capitalized and which should be expensed as incurred. The new guidance is applied prospectively.\nThis guidance is effective for public business entities for the fiscal years beginning after December 15, 2026, and for non-public business\nentities for the fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of\nthe adoption of this guidance.\n\n \n\nIn\nOctober 2025, the FASB issued ASU 2025-10, *Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities*,\nwhich establishes an accounting model for government grants received by business entities for the first time (referring to IAS 20). The\namendments set the recognition threshold that grants are recognized when it is probable that the conditions will be met and the grants\nwill be received, and distinguish between asset-related and income-related grants, specifying their respective accounting treatments.\nThe new guidance is applied retrospectively. This guidance is effective for entities for the fiscal years beginning after December 15,\n2027. Early adoption is permitted. The Company is evaluating the impact of the adoption of this guidance.\n\n \n\nIn\nDecember 2025, the FASB issued ASU 2025-12, *Codification Improvements*, which includes 33 minor amendments to the FASB Accounting\nStandards Codification. The amendments involve earnings per share (EPS) (calculation of diluted EPS when there is a loss), leases (disclosure\nof receivables from sales-type/direct financing leases), transfer of receivables (application of Topic 860 (Transfers and Servicing of\nFinancial Assets) to the transfer of receivables from customer contracts), and treasury stock (accounting methods for the retirement\nof treasury stock), correcting minor inconsistencies and improving the clarity of the codification. The new guidance is applied retrospectively\nwhere applicable. This guidance is effective for entities for the fiscal years beginning after December 15, 2026. Early adoption is permitted.\nThe Company is evaluating the impact of the adoption of this guidance.\n\n \n\nF-30\n\n \n\n \n\n**3.\nBUSINESS ACQUISITION**\n\n \n\nThe\nCompany accounted for its acquisition in accordance with ASC 805, “Business Combination” (“ASC 805”). The result\nof the acquiree’s operation has been included in the consolidated financial statements since the acquisition date. The excess of\nthe fair value of the consideration transferred over the fair value of net tangible and intangible assets acquired was recorded as goodwill,\nwhich is not deductible for corporate income taxation purposes.\n\n \n\nOn\nDecember 8, 2021, the Company entered into a share purchase agreement with all of the selling shareholders of Zhuge Inc. to acquire 100%\nequity interests of Zhuge Inc. in exchange for RMB93.5 million consideration in cash and 30,463 ordinary shares of the Company. Zhuge\nInc. mainly provided professional data intelligence solutions, and the Group expected to generate synergy with the Cloud-based CC service\nline after the closing of acquisition. The Group obtained the control of Zhuge Inc. on December 22, 2021 and paid off the cash consideration\nof RMB93.5 million as of December 31, 2023.\n\n \n\nThe\nacquisition was recorded as a business combination. The Group determined the fair values of assets acquired and liabilities assumed for\nthis acquisition with assistance of an independent appraiser. The goodwill resulting from the acquisition is primarily attributable to\nthe assembled workforce and established network of customers around China. The acquired goodwill is not deductible for tax purposes.\nA summary of identifiable assets acquired and liabilities assumed in connection with the acquisition is as follows:\n\nSUMMARY OF IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES\n\nPurchase consideration: \nRMB \n\ncash \n 93,511 \n\nFair value of 30,463 ordinary shares \n 300 \n\n  \n 93,811 \n\n \n\nRecognized amounts of identifiable assets acquired and liabilities assumed: \nDecember 31, 2021 \n\nCash \n 6,551 \n\nAccounts receivable \n 815 \n\nPrepaid expenses and other current assets \n 635 \n\nProperty and equipment, net \n 19 \n\nIntangible assets \n   \n\nTrademark \n 2,840 \n\nNon-compete arrangements \n 720 \n\nOrder backlogs \n 8,560 \n\nCustomer relationship \n - \n\nTechnology \n 6,400 \n\nShort-term loan \n (5,500)\n\nAccounts payable \n (1,220)\n\nContract liabilities \n (4,129)\n\nAccrued expenses and other current liabilities \n (12,780)\n\nDeferred income tax liability \n (4,630)\n\nLong-term borrowings \n (9,144)\n\nTotal identifiable assets acquired and liabilities assumed \n (10,863)\n\nGoodwill \n 104,674 \n\n \n\nThe\nintangible assets consist of trademark, non-compete arrangements, order backlogs, customer relationship and Technology. The fair values\nof trademark of RMB2,840, non-competition arrangements of RM720, order backlogs of RMB8,560, and Technology of RMB6,400 are amortized\nover 10 years, 4 years, 4 years and 7 years, respectively on a straight-line basis.\n\n \n\nIntangible\nassets and goodwill arising from the above acquisition was impaired to nil as of December 31, 2022.\n\n \n\nThe\nacquisition above did not have a material impact on the Group’s consolidated financial statements, and, therefore, pro forma disclosures\nhave not been presented.\n\n \n\nF-31\n\n \n\n \n\n**4.\nCASH AND RESTRICTED CASH**\n\n \n\nA\nreconciliation of cash and restricted cash in the consolidated balance sheets to the amounts in the consolidated statement of cash flows\nis as follows:\n\n \n\nSCHEDULE OF RECONCILIATION OF CASH AND RESTRICTED CASH\n\n  \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025 \n\n  \nRMB  \nRMB \n\nCash \n 640,119  \n 324,134 \n\nRestricted cash \n 10,396  \n 28,107 \n\nTotal cash and restricted cash shown in the consolidated statements of cash flows \n 650,515  \n 352,241 \n\n \n\nThe\nbalances of restricted cash were mainly related to bank deposits for performance guarantee, which were restricted for use as of December\n31, 2024 and 2025, and will be released from restriction within the next 12 months.\n\n \n\n**5.\nACCOUNTS RECEIVABLE, NET**\n\n \n\nAccounts\nreceivable, net consisted of the following:\n\n \n\nThe\nmovement of the allowance for credit loss including both account receivables due from third parties and a related party is as follows:\n\n SUMMARY\nOF ACCOUNTS RECEIVABLES, NET\n\n  \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025 \n\n  \nRMB  \nRMB \n\nAccounts receivable - third parties \n 204,502  \n 231,534 \n\nAllowance for doubtful accounts - third parties \n (84,128) \n (91,883)\n\nAccounts receivable - third parties, net \n 120,374  \n 139,651 \n\n  \n    \n   \n\nAccounts receivable – a related party \n 663  \n 794 \n\nAllowance for doubtful accounts – a related party \n (274) \n (306)\n\nAccounts receivable – a related party \n 389  \n 488 \n\n \n\n SUMMARY OF MOVEMENT OF ALLOWANCE FOR DOUBTFUL ACCOUNTS INCLUDING BOTH ACCOUNT RECEIVABLES DUE FROM THIRD PARTIES AND RELATED PARTIES\n\n  \n   \n  \n\n  \nYear ended December 31, \n\nAllowance for doubtful accounts - third parties \n2024  \n2025 \n\n  \nRMB  \nRMB \n\nBalance at the beginning of the year \n 99,523  \n 84,128 \n\nAdditions charged to bad debt expense \n (15,395) \n 7,755\n\nBalance at the end of the year \n 84,128  \n 91,883 \n\n \n\n  \n   \n  \n\n  \nYear ended December 31, \n\nAllowance for doubtful accounts –a related party \n2024  \n2025 \n\n  \nRMB  \nRMB \n\nBalance at the beginning of the year \n 124  \n 274 \n\nAdditions charged to bad debt expense \n 150  \n 32 \n\nBalance at the end of the year \n 274  \n 306 \n\n \n\nF-32\n\n \n\n \n\nThe\naging analysis table of allowance for credit loss is as follows:\n\n \n\n SUMMARY OF AGING ANALYSIS OF ALLOWANCE FOR DOUBTFUL ACCOUNTS\n\n  \n   \n  \n\n  \nYear ended December 31, \n\n  \n2024  \n2025 \n\n  \nRMB  \nRMB \n\nWithin 1 year \n (36,044) \n (43,868)\n\nThereafter \n (48,084) \n (48,015)\n\nAllowance for credit loss - third parties \n (84,128) \n (91,883)\n\n  \n    \n   \n\nWithin 1 year \n (274) \n (306)\n\nAllowance for credit loss - a related party \n (274) \n (306)\n\n \n\n**6.\nPREPAYMENTS AND OTHER CURRENT ASSETS**\n\n \n\nPrepayments\nand other current assets as of December 31, 2024 and 2025 consisted of the following:\n\n SCHEDULE OF PREPAYMENTS AND OTHER CURRENT ASSETS\n\n  \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025 \n\n  \nRMB  \nRMB \n\nAdvance to suppliers \n 45,325  \n 35,317 \n\nDeposits \n 11,951  \n 13,094 \n\nStaff advances \n 848  \n 1,004 \n\nDeductible input VAT \n 45,188  \n 49,870 \n\nReceivables from third party payment platforms \n 550  \n 1,241 \n\nOthers \n 16,134  \n 11,428 \n\nPrepayments and Other Current Assets \n **119,996**** **** **\n** ****111,954**** **\n\n** **\n\n**7.\nLONG-TERM INVESTMENTS**\n\n SCHEDULE OF LONG-TERM INVESTMENTS\n\n  \n   \n  \n\n  \nFor the year ended December 31, \n\n  \n2024  \n2025 \n\n  \nRMB  \nRMB \n\nEquity method investments \n    \n   \n\nShanghai Keshen Information Technology Co., Ltd. \n 13,168  \n 12,363 \n\nBeijing Lingshang Chunding Technology Co., Ltd. \n -  \n - \n\nShanghai Gaozhi Lefu Intelligent Technology Co., Ltd. \n -  \n 22 \n\nTotal equity method investments \n 13,168  \n 12,385 \n\n  \n    \n   \n\nOther equity investments \n    \n   \n\nShanghai Yuhuan Information System Co.Ltd. \n 18,784  \n 18,784 \n\nBeijing Hujingtiaoyue Technology Co., Ltd. \n 11,000  \n 11,000 \n\nXinyu Hongling Investment Management Center (limited Partnership) \n 11,100  \n 11,100 \n\nTotal other equity investments \n 40,884  \n 40,884 \n\nTotal long-term investments \n 54,052  \n 53,269 \n\n** **\n\n****\n\nF-33\n\n \n\n** **\n\n**(a)\nEquity method investments**\n\n \n\n*Investments\nin Shanghai Keshen*\n\n \n\nIn\nNovember 2021, Ronglian Yitong aquired 20% equity interest of Shanghai Keshen Information Technology Co., Ltd. (“Shanghai Keshen”),\nwhich is principally engaged in technology development, technology transfer, technical consultation and technical services, at a cash\nconsideration of RMB15 million. Ronglian Yitong has the right to appoint one out of three directors for the year ended December 31, 2021.\nThe investments are accounted for under the equity method as Ronglian Yitong is able to exercise significant influence through its board\nrepresentation. Ronglian Yitong recognized its share of loss of RMB981, share of gain of RMB3 and share of loss of RMB806 for the year\nended December 31, 2023, 2024 and 2025. The Company performed an impairment analysis in 2023, 2024\nand 2025, and no impairment loss was recognized related to the investments without readily determinable fair value due to the lower-than-expected\nfinancial performance, and no other downward adjustment was related to the investments without readily determinable fair value.\n\n \n\n*Investments\nin Beijing Lingshang*\n\n \n\nIn\nJanuary 2023, Ronglian Yitong aquired 20% equity interest of Beijing Lingshang Chunding Technology Co., Ltd. (“Beijing Lingshang”),\nwhich is principally engaged in intelligent voice product development, technology transfer, technical consultation and technical services,\nat a cash consideration of RMB5 million. Ronglian Yitong has the right to appoint one out of three directors for the year ended December\n31, 2023. The investments are accounted for under the equity method as Ronglian Yitong is able to exercise significant influence through\nits board representation. Ronglian Yitong recognized its share of loss RMB489 for the year ended December 31, 2023. The\nCompany performed an impairment analysis in 2023, and recognized RMB4,511 impairment loss related to the investments without readily\ndeterminable fair value due to the lower-than-expected financial performance, and no other downward adjustment was related to the investments\nwithout readily determinable fair value.\n\n \n\n*Investments\nin Shanghai Gaozhi*\n\n \n\nIn\nApril 2025, Ronglian Yitong aquired 15%\nequity interest of Shanghai Gaozhi Lefu Intelligent Technology Co., Ltd., (“Shanghai Gaozhi”), which is principally engaged\nin technical services, technology development, technology transfer, technical consultation and technology promotion, at a cash consideration\nof RMB12\nmillion. In December 2025, Shanghai Gaozhi entered into new\nfinancing agreements with new investors. After Shanghai Gaozhi’s new financing, Ronglian Yitong’s equity interest in Shanghai\nGaozhi decreased to 13.5%.\nRonglian Yitong has the right to appoint one\nout of three\ndirectors for the year ended December 31, 2025. The investments\nare accounted for under the equity method as Ronglian Yitong is able to exercise significant influence through its board representation.\nRonglian Yitong recognized its share of loss RMB832\nfor the year ended December 31, 2025. The\nCompany performed an impairment analysis in 2025, and recognized RMB11,145\nimpairment loss related to the investments without readily determinable fair value due to the lower-than-expected financial performance,\nand no other downward adjustment was related to the investments without readily determinable fair value.\n\n \n\n**(b)\nOther equity investments**\n\n \n\n*Investments\nin Hujingtiaoyue*\n\n \n\nIn\nSeptember 2017, Ronglian Yitong entered into a share purchase agreement to acquire 6.56% equity interest of Beijing Hujingtiaoyue Technology\nCo., Ltd. (“Hujingtiaoyue”), which is principally engaged in provision of artificial intelligence marketing solutions, at\na cash consideration of RMB4,000. According to the shares purchase agreement, Ronglian Yitong, together with another shareholder, has\nthe right to appoint one director. The Group accounts for its investment in Hujingtiaoyue as other equity investments since its investment\nis not in-substance common stock due to the liquidation preference feature, and does not have readily determinable fair value. The Group\nelected to measure other equity investments without a readily determinable fair value at cost adjusted for changes resulting from impairments,\nif any, and observable price changes in orderly transactions for the identical or similar securities of the same issuer.\n\n \n\nF-34\n\n \n\n \n\nIn\nJune 2018, Hujingtiaoyue entered into new financing agreements with new investors. After Hujingtiaoyue’s new financing, Ronglian\nYitong’s equity interest in Hujingtiaoyue decreased to 5.45% and Ronglian Yitong, together with another shareholder, remains the\nright to appoint one director. The new financing provided an observable price for Ronglian Yitong’s investment in Hujingtiaoyue\nand Ronglian Yitong evaluated the investment’s carrying amount based on the observable price and recognized a gain of RMB100 from\nthe change in fair value.\n\n \n\nIn\nMay 2019, Hujingtiaoyue entered into new financing agreements with new investors. After Hujingtiaoyue’s new financing, Ronglian\nYitong’s equity interest in Hujingtiaoyue further decreased to 4.29% and Ronglian Yitong, together with another shareholder, remains\nthe right to appoint one director. The new financing provided an observable price for Ronglian Yitong’s investments in Hujingtiaoyue\nand Ronglian Yitong evaluated this investment’s carrying amount based on the observable price, and recognized a gain of RMB900\nfrom the change in fair value.\n\n \n\nIn\nMay 2021, Hujingtiaoyue conducted reorganization and setup Beijing Tanma Qifu Technolory Co., Ltd.(“Beijing Tanma”), a new\nVIE. All shareholders of Hujingtiaoyue were transferred to Beijing Tanma, on a pro rate basis. Ronglian Yitong owned 4.29% equity interest\nin Beijing Tanma.\n\n \n\nIn\nOctober 2021 and December 2021, Beijing Tanma entered into new financing agreements with new investors. After Beijing Tanma’s new\nfinancing, Ronglian Yitong’s equity interest in Beijing Tanma further decreased to 2.45%. Since May 2021, Ronglian Yitong had no\nright to appoint any director due to reduction of equity interest. The new financing provided an observable price for Ronglian Yitong’s\ninvestments in Hujingtiaoyue and Ronglian Yitong evaluated the investment’s carrying amount based on the observable price, and\nrecognized a gain of RMB8,000 from the change in fair value.\n\n \n\nThe\nnew financing agreement with new investors provided the observable price for other equity investment and the fair value adjustment was\ndetermined primarily based on the market approach as of the transaction date, which takes into consideration a number of factors including\nrecent financing pricing which shall be adjusted as similar securities to reflect difference in the rights and obligations between the\nequity security that was transacted and the equity security held by the Company, and discount rates from traded companies in the industry\nand requires the Company to make certain assumptions and estimates regarding industry factors. Specifically, some of the significant\nunobservable inputs\n\nincluded\ndiscount of lack of marketability. The assumptions are inherently uncertain and subjective. Changes in any unobservable inputs may have\na significant impact on the fair values.\n\n \n\nIn\nDecember 2023, 2024 and 2025, the Company recognized\nnil impairment loss related to the investments without readily determinable fair value due to the lower-than-expected financial performance,\nand no other downward adjustment was related to the investments without readily determinable fair value.\n\n \n\n*Investments\nin Xinyu Hongling*\n\n \n\nIn\nAugust 2021, Ronglian Yitong and other third party entities set up a limited partnership, Xinyu Hongling Investment Management Center\n(limited partnership) (“Xinyu Hongling”), which is mainly engaged in investment management and asset management, with a subscribed\ncapital of RMB150 million. Xinyu Hongling’s fund is used to invest in Xicheng Zhiyuan Digital Power Selection (Beijing) Investment\nCenter (Limited Partnership) (“Xicheng Zhiyuan”), with a target subscription amount of RMB751 million. The subscribed capital\ncontribution of Ronglian Yitong is RMB20,000, accounting for 13.33% and 2.66% of the registered capital of Xinyu Hongling and Xicheng\nZhiyuan. According to the investment agreement, Ronglian Yitong does not have the right to appoint any directors. The Group accounts\nfor its investment in Xinyu Hongling as other equity investments since its investment is not in-substance common stock due to the liquidation\npreference feature, and does not have readily determinable fair value. The Group elected to measure other equity investments without\na readily determinable fair value at cost adjusted for changes resulting from impairments, if any, and observable price changes in orderly\ntransactions for the identical or similar securities of the same issuer.\n\n \n\nIn\nDecember 2023, 2024 and 2025, the Company performed an impairment analysis, and recognized RMB3,500, nil and nil impairment loss related\nto the investments without readily determinable fair value due to the lower-than-expected financial performance, and no other downward\nadjustment was related to the investments without readily determinable fair value.\n\n \n\n*Investments\nin Shanghai Yuhuan*\n\n \n\nThe\nCompany performed impairment analysis for Shanghai Yuhuan Information System Co., Ltd. (“ShanghaiYuhuan”) in 2023, 2024 and\n2025, and recognized nil impairment loss related to the investments without readily determinable fair value due to the lower-than-expected\nfinancial performance, and no other downward adjustment was related to the investments without readily determinable fair value. To estimate\nthe fair value of investment in Shanghai Yuhuan, the Company used discounted cash flow model (“DCF Model”), which is based\non the fair value of the entire invested capital of Shanghai Yuhuan using an income approach. The significant inputs for the valuation\nmodel include, but not limited to, future cash flows, discount rate, and the comparable selection set of companies operating in similar\nbusinesses.\n\n \n\n \n\nF-35\n\n \n\n \n\n**8.\nPROPERTY AND EQUIPMENT, NET**\n\n \n\nProperty\nand equipment as of December 31, 2024 and 2025 consisted of the following:\n\n SCHEDULE OF PROPERTY AND EQUIPMENT\n\n  \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025 \n\n  \nRMB  \nRMB \n\nComputer and office equipment \n 22,836  \n 20,999 \n\nFurniture and fixtures \n 2,661  \n 2,564 \n\nMotor vehicles \n 938  \n 938 \n\nLeasehold improvement \n 5,448  \n 5,702 \n\nBuildings \n 4,702  \n 4,702 \n\nProperty and Equipment \n 36,585  \n 34,905 \n\nLess: Accumulated depreciation \n 28,412  \n 28,817 \n\nProperty and Equipment, net \n 8,173  \n 6,088 \n\n \n\nDepreciation\nexpenses were RMB5,383, RMB4,992 and RMB2,688 for the years ended December 31, 2023, 2024 and 2025, respectively.\n\n \n\nDepreciation\nexpenses on property and equipment were allocated to the following expense items:\n\n SCHEDULE OF DEPRECIATION EXPENSES ON PROPERTY AND EQUIPMENT\n\n  \n   \n   \n  \n\n  \nYear ended December 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nCost of revenues \n 279  \n 106  \n 77 \n\nResearch and development expenses \n 2,019  \n 1,787  \n 759 \n\nSelling and marketing expenses \n 1,299  \n 1,712  \n 912 \n\nGeneral and administrative expenses \n 1,786  \n 1,387  \n 940 \n\nTotal depreciation expenses \n 5,383  \n 4,992  \n 2,688 \n\n \n\n**9.\nLease**\n\n**LEASE**\n\n** **\n\nThe\nGroup has entered into various non-cancellable operating lease agreements for certain offices. The Group determines if an arrangement\nis a lease, or contains a lease, at inception and record the leases in the financial statements upon lease commencement, which is the\ndate when the underlying asset is made available for use by the lessor.\n\n \n\nThe\nbalances for the operating and finance leases where the Group is the lessee are presented as follows within the consolidated balance\nsheet:\n\n SCHEDULE OF BALANCES FOR THE OPERATING AND FINANCE LEASES\n\n  \n   \n   \n  \n\n  \nFor the year ended December 31, \n\nOperating leases: \n2024  \n2025 \n\n \nRMB(000)  \nRMB(000)  \nUS$(000) \n\n**Assets:** \n    \n    \n   \n\nRight-of-use assets - operating lease \n 10,800  \n 14,122  \n 2,019 \n\nLiability: \n    \n    \n   \n\nCurrent portion of operating lease liabilities \n 5,843  \n 8,093  \n 1,157 \n\nNon-current operating lease liabilities \n 4,731  \n 3,785  \n 541 \n\nTotal operating lease liabilities \n 10,574  \n 11,878  \n 1,698 \n\n \n\nF-36\n\n \n\n \n\nThe\ncomponents of lease expenses were as follows:\n\n SCHEDULE\nOF COMPONENTS OF LEASE EXPENSES\n\n  \n   \n   \n  \n\n  \nFor the year ended December 31, \n\n  \n2024  \n2025 \n\n**Lease Cost** \nRMB(000)  \nRMB(000)  \nUS$(000) \n\nAmortization of right-of-use assets \n 9,769  \n 8,950  \n 1,280 \n\nInterest of operating lease liabilities \n 2,719  \n 1,755  \n 251 \n\nExpenses for short-term leases within 12 months and other non-lease component \n 1,281  \n 1,204  \n 172 \n\nTotal lease cost \n 13,769  \n 11,909  \n 1,703 \n\n \n\nAs\nof December 31, 2024 and 2025, the weighted average remaining lease term was 2.32\nand 1.86\nyears and weighted average discount rate was 5.49%\nand 6.00%\nfor the Company’s operating leases.\n\n \n\nFor\nthe year ended December 31, 2023, 2024 and 2025, the Company recognized lease expense of RMB19,669 and RMB13,769, RMB11,909,\nrespectively, under ASC 840.\n\n \n\nSupplemental\ncash flow information related to leases where we are the lessee is as follows:\n\n SCHEDULE\nOF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES\n\n  \nFor the year ended December 31, \n\n  \n2024  \n2025 \n\n  \nRMB(000)  \nRMB(000)  \nUS$(000) \n\nCash payments for operating leases \n 14,331  \n 15,663  \n 2,240 \n\nROU assets obtained in exchange for operating lease liabilities \n 11,634  \n 11,040  \n 1,579 \n\n \n\nAs\nof Dec 31, 2025, the maturities of our operating are as follows:\n\n SCHEDULE\nOF OPERATING LEASE MATURITIES\n\n  \n   \n  \n\n  \nOperating Lease \n\nYear ending December 31. \nRMB(000)  \nUS$(000) \n\n2026 \n 10,251  \n 1,466 \n\n2027 \n 3,168  \n 453 \n\n2028 \n 1,103  \n 158 \n\nTotal future lease payments \n 14,522  \n 2,077 \n\nLess: Imputed interest \n 2,644  \n 379 \n\nTotal lease liability balance \n 11,878  \n 1,698 \n\n \n\nAs\nof Dec 31, 2024, the maturities of our operating are as follows:\n\n \n\n  \n   \n  \n\n  \nOperating Lease \n\nYear ending December 31. \nRMB(000)  \nUS$(000) \n\n2025 \n 7,849  \n 1,075 \n\n2026 \n 4,219  \n 578 \n\n2027 \n 1,321  \n 181 \n\nTotal future lease payments \n 13,389  \n 1,834 \n\nLess: Imputed interest \n 2,815  \n 385 \n\nTotal lease liability balance \n 10,574  \n 1,449 \n\n \n\n \n\nF-37\n\n \n\n \n\n**10.\nINTANGIBLE ASSETS, NET**\n\n \n\nThe\nfollowing table summarizes the Company’s intangible assets, as of December 31, 2024 and 2025.\n\n SCHEDULE OF INTANGIBLE ASSETS, NET\n\n  \nDecember 31, 2024 \n\n  \nGross  \n   \n   \nNet  \nWeighted average \n\n  \ncarrying  \nAccumulated  \nAccumulated  \ncarrying  \namortization \n\n  \namount  \namortization  \nimpairment  \namount  \nPeriod \n\n  \nRMB  \nRMB  \nRMB  \nRMB  \nYears \n\nSoftware copyrights \n 16,816  \n (12,687) \n -  \n 4,129  \n 7.0 \n\nTelecommunication business operation licenses \n 2,882  \n (2,839) \n -  \n 43  \n 4.0 \n\nTechnology \n 14,865  \n (3,447) \n (10,474) \n 944  \n 7.0 \n\nNon-compete arrangements \n 805  \n (260) \n (545) \n -  \n 4.0 \n\nCustomer relationship \n 15,000  \n (4,271) \n (5,586) \n 5,143  \n 10.0 \n\nTrademark \n 8,472  \n (2,016) \n (5,106) \n 1,350  \n 9.0 \n\nOrder backlogs \n 8,660  \n (2,223) \n (6,437) \n -  \n 4.0 \n\nTotal \n 67,500  \n (27,743) \n (28,148) \n 11,609  \n   \n\n \n\n  \nDecember 31, 2025 \n\n  \nGross  \n   \n   \nNet  \nWeighted average \n\n  \ncarrying  \nAccumulated  \nAccumulated  \ncarrying  \namortization \n\n  \namount  \namortization  \nimpairment  \namount  \nPeriod \n\n  \nRMB  \nRMB  \nRMB  \nRMB  \nYears \n\nSoftware copyrights \n 16,848  \n (13,494) \n -  \n 3,354  \n 7.0 \n\nTelecommunication business operation licenses \n 2,527  \n (2,487) \n -  \n 40  \n 4.0 \n\nTechnology \n 14,865  \n (3,866) \n (10,474) \n 525  \n 7.0 \n\nNon-compete arrangements \n 805  \n (260) \n (545) \n -  \n 4.0 \n\nCustomer relationship \n 15,000  \n (5,094) \n (5,586) \n 4,320  \n 10.0 \n\nTrademark \n 8,472  \n (2,334) \n (5,106) \n 1,032  \n 9.0 \n\nOrder backlogs \n 8,660  \n (2,223) \n (6,437) \n -  \n 4.0 \n\nTotal \n 67,177  \n (29,758) \n (28,148) \n 9,271  \n   \n\n \n\nAmortization\nexpenses for intangible assets were RMB3,392, RMB2,641 and RMB2,370 for the years ended December 31, 2023, 2024 and 2025, respectively.\n\n \n\nF-38\n\n \n\n \n\nThe\nestimated amortization expense for the next five years is as follows:\n\n SCHEDULE OF ESTIMATED AMORTIZATION EXPENSE\n\n  \nRMB \n\n2026 \n 2,375 \n\n2027 \n 2,017 \n\n2028 \n 1,749 \n\n2029 \n 1,405 \n\n2030 \n 1,220 \n\nThen thereafter \n 505 \n\n \n\n**11.\nGOODWILL**\n\n \n\nThe\nchange in the carrying amount of goodwill by reporting unit is as follows:\n\n SCHEDULE OF CARRYING AMOUNT OF GOODWILL\n\n  \nAcquisition of  \n  \n\n  \nGuohebing  \nZhuge Inc.  \nMolun SAAS  \nTotal \n\n  \nRMB  \nRMB  \nRMB  \nRMB \n\nBalance as of December 31, 2023 \n 54,427  \n -  \n -  \n 54,427 \n\nAdditions \n -  \n -  \n -  \n - \n\nImpairment \n -  \n -  \n -  \n - \n\nBalance as of December 31, 2024 \n 54,427  \n -  \n -  \n 54,427 \n\nAdditions \n -  \n -  \n -  \n - \n\nImpairment \n -  \n -  \n -  \n - \n\nBalance as of December 31, 2025 \n 54,427  \n -  \n -  \n 54,427 \n\n \n\nIn\nthe annual goodwill impairment assessment, the Company concluded that the respective fair value of the reporting units exceeded its carrying\namount and no impairment losses was recorded during the years ended December 31, 2023, 2024 and 2025, respectively. The fair value of\nthe reporting unit was determined using the market value approach.\n\n \n\n**12.\nACCRUED EXPENSES AND OTHER CURRENT LIABILITIES**\n\n** SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES**\n\n  \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025 \n\n  \nRMB  \nRMB \n\nAccrued payroll and social insurance \n 42,547  \n 61,505 \n\nTaxes payable \n 32,383  \n 35,521 \n\nDeposits of BNY MELLON \n 19,016  \n - \n\nDeposits \n 218  \n 379 \n\nStaff reimbursements \n 4,915  \n 3,756 \n\nOther payables \n 1,930  \n 1,514 \n\nAccrued expenses and other current liabilities \n 101,009  \n 102,675 \n\n \n\nF-39\n\n \n\n** **\n\n**13.\nSHARE-BASED COMPENSATION**\n\n \n\n**Restricted\nordinary shares**\n\n \n\nIn\nJanuary 2021, the Company adopted a second share option Plan (“2021 Share Plan”), under which the maximum aggregate\nnumber of Class A ordinary shares that may be issued pursuant to all awards under such plan is 15,144,221.\nThe ordinary shares became restricted with a vesting schedule of four years. Under the 2021 Share Plan, 6,430,000, 1,802,351ordinary shares were granted to employees for the years ended December 31, 2024 and 2025, respectively.\n\n \n\nIn\nMarch 2021, the Company offered certain management members of EliteCRM 2,411,177 ordinary shares, which become restricted with a graded\nvesting as to 1/2 of the restricted ordinary shares vest on the first anniversary of March 22, 2022 and with the remaining 1/2 of the\nrestricted ordinary shares vesting on March 22, 2023. The fair value of the shares of US$23,883 are amortized to consolidated statements\nof comprehensive loss over the vesting term of two years.\n\n \n\nA\nsummary of the Company’s restricted ordinary shares held by the Company’s employees for the years ended December 31, 2024\nand 2025 is presented below:\n\nSCHEDULE OF RESTRICTED ORDINARY SHARES HELD BY THE COMPANY'S EMPLOYEES \n\n  \nNumber of\nshares  \nWeighted\naverage grant\ndate fair value \n\nUnvested as of January 1, 2024 \n 2,802,977  \n 4.62 \n\nGranted \n 6,430,000  \n 0.54 \n\nVested \n (906,732) \n 0.89 \n\nForfeited \n (87,225) \n 1.76 \n\nUnvested as of December 31, 2024 \n 8,239,020  \n 1.88 \n\nGranted \n 1,802,351  \n 0.57 \n\nVested \n (2,541,677) \n 0.67 \n\nForfeited \n (18,816) \n 0.57 \n\nUnvested as of December 31, 2025 \n 7,480,878  \n 1.98 \n\n \n\nTotal\ncompensation expenses recognized for restricted ordinary shares for the years ended December 31, 2023, 2024 and 2025 were allocated to\nthe following expense items:\n\n  SCHEDULE OF COMPENSATION EXPENSES RECOGNIZED \n\n  \n   \n   \n  \n\n  \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nResearch and development expenses \n 654  \n (545) \n 2,013 \n\nGeneral and administrative expenses \n 10,868  \n 1,828  \n 2,529 \n\nSelling and marketing expenses \n 1,851  \n 10,968  \n 7,969 \n\nTotal restricted ordinary shares compensation expenses \n 13,373  \n 12,251  \n 12,511 \n\n \n\nF-40\n\n \n\n \n\nAs\nof December 31, 2025, total unrecognized compensation expense related to restricted ordinary shares were RMB11,126\nuntil 2029. The restricted ordinary shares are expected to\nbe recognized over a weighted average period of approximately 2.63\nyears.\n\n** **\n\n**Shares\nOptions**\n\n \n\nIn\nJanuary 2017, the Company’s shareholders and board of directors approved a share option Plan (“2016 Share Plan’’),\nunder which a maximum aggregate number of 21,119,408 ordinary shares may be issued pursuant to all awards to be granted. In September\n2018, the Company’s shareholders and board of directors approved that the maximum aggregate number of ordinary shares may be issued\nunder 2016 Share Plan shall be modified to 25,838,502 pre-offering Class A Ordinary Shares. In March 2020 and July 2020, the Company’s\nshareholders and board of directors approved that the maximum aggregate number of ordinary shares may be issued under 2016 Share Plan\nshall be modified to 26,419,211 and 29,525,465 pre-offering Class A Ordinary Shares, respectively.\n\n \n\nIn\naddition, the options may be exercised with respect to 25% to 50% of the shares subject to the options as of the first anniversary of\nthe vesting commencement date with the remaining shares subject to the options shall become vested in equal monthly installments over\na period of 12-36 months thereafter. Share options were granted with exercise prices ranging from US$0.01 to US$0.38 and will expire\n10 years from the grant dates.\n\n \n\nUnder\nthe 2016 Share Plan, 1,000,000 and nil share options were granted to employees, officers, and board members for the years ended December\n31, 2024 and 2025, respectively. A summary of the share options activities for the years ended December 31, 2024 and 2025 is presented\nbelow:\n\nSCHEDULE OF SHARE OPTIONS ACTIVITIES \n\n  \nNumber of\nshares  \nWeighted\naverage exercise\nprice  \nWeighted\nremaining\ncontractual\nyears  \nAggregate\nintrinsic value \n\n  \n    \n **US$**  \n    \n **US$** \n\nOutstanding as of January 1, 2024 \n 13,141,586  \n 0.26  \n    \n   \n\nGranted \n 1,000,000  \n 0.38  \n    \n   \n\nForfeited \n (736,690) \n 0.15  \n    \n   \n\nExercised \n (1,018,889) \n 0.19  \n    \n   \n\nOutstanding as of December 31, 2024 and 2025 \n 12,386,007  \n 0.28  \n    \n   \n\nVested and expected to vest as of December 31, 2025 \n 12,386,007  \n 0.28  \n 2.61  \n 24,278 \n\nExercisable as of December 31, 2025 \n 11,499,929  \n 0.25  \n 1.74  \n 24,016 \n\n \n\nF-41\n\n \n\n \n\nThe\nfair values of the options granted are estimated on the dates of grant using the binomial option pricing model with the following assumptions\nused:\n\nSCHEDULE OF FAIR VALUE ASSUMPTIONS \n\n  \nYear ended\n\nGrant dates: \nDecember 31, 2024\n\nRisk free rate of return \n2.5%\n\nVolatility \n45.0%\n\nExpected dividend yield \n0%\n\nExercise multiple \n2.20\n\nFair value of underlying ordinary share \nUS$0.30- US$0.52\n\nExpiration terms \n10 years\n\n \n\nThe\nexpected volatility was estimated based on the historical volatility of comparable peer public companies with a time horizon close to\nthe expected term of the Company’s options. The risk-free interest rate was estimated based on the yield to maturity of U.S. treasury\nbonds denominated in US$ for a term consistent with the expected term of the Company’s options in effect at the option valuation\ndate. Expected dividend yield is zero as the Company does not anticipate any dividend payments in the foreseeable future. The expected\nexercise multiple was estimated as the average ratio of the stock price to the exercise price of when employees would decide to voluntarily\nexercise their vested options. As the Company did not have sufficient information of past employee exercise history, it has considered\nthe statistics on exercise patterns of employees compiled by Huddart and Lang in Huddart, S., and M. Lang. 1996. “Employee Stock\nOption Exercises: An Empirical Analysis.” *Journal of Accounting and Economics*, vol. 21, no. 1 (February), pages 5-43, which\nare widely adopted by valuers as authoritative guidance on expected exercise multiples. Expected term is the contract life of the option.\n\n \n\nCompensation\nexpense recognized for share options during the years ended December 31,2023, 2024 and 2025 is allocated to the following expense items:\n\nSCHEDULE\nOF COMPENSATION EXPENSES RECOGNIZED \n\n  \n   \n   \n  \n\n  \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nCost of revenues \n 3  \n -  \n - \n\nResearch and development expenses \n 1,006  \n 55  \n - \n\nSelling and marketing expenses \n 6,068  \n 345  \n 1 \n\nGeneral and administrative expenses \n 1,788  \n 1,653  \n 681 \n\nTotal share option compensation expenses \n 8,865  \n 2,053  \n 682 \n\n \n\nAs\nof December 31, 2025, RMB430\nof total unrecognized compensation expense related to share\noptions that are expected to be recognized until 2028. The share options are expected to be recognized over a weighted average period\nof approximately 2.08\nyears.\n\n \n\nF-42\n\n \n\n** **\n\n**14.\nFAIR VALUE MEASUREMENT**\n\n \n\nThe\nfollowing tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of\nDecember 31, 2023, 2024 and 2025 respectively:\n\nSCHEDULE OF FAIR VALUE HIERARCHY ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS \n\n  \n   \n   \n   \n  \n\n  \nDecember 31, 2023  \n  \n\nRMB \nLevel 1  \nLevel 2  \nLevel 3  \nTotal Fair Value \n\nAssets \n   \n   \n   \n  \n\nShort-term investments \n -  \n -  \n 422,559  \n 422,559 \n\n \n\n  \n   \n   \n   \n  \n\n  \nDecember 31, 2024  \n  \n\nRMB \nLevel 1  \nLevel 2  \nLevel 3  \nTotal Fair Value \n\nAssets \n   \n   \n   \n  \n\nShort-term investments \n -  \n -  \n 291,280  \n 291,280 \n\n \n\n \n\n  \n   \n   \n   \n  \n\n  \nDecember 31, 2025  \n  \n\nRMB \nLevel 1  \nLevel 2  \nLevel 3  \nTotal Fair Value \n\nAssets \n   \n   \n   \n  \n\nShort-term investments \n -  \n -  \n 359,734  \n 359,734 \n\n \n\nThe\ntable below reflects the reconciliation from the opening balances to the closing balances for recurring fair value measurements of the\nfair value hierarchy for the years ended December 31, 2023, 2024 and 2025:\n\n \n\nF-43\n\n \n\n SCHEDULE\nOF RECONCILIATION FOR RECURRING FAIR VALUE MEASUREMENTS OF FAIR VALUE \n\n  \n   \n   \n   \nYear ended December 31, 2023  \n  \n\n  \n   \n   \n   \nGain or Losses  \n  \n\nRMB \nJanuary 1, 2023  \n\n**Purchase/**\n\n**Issue**\n  \nSell / Exercise  \nIncluded\nin earnings  \nIncluded in\nother\ncomprehensive\nloss  \nForeign\ncurrency\ntranslation\nadjustment included in\nother\ncomprehensive\nloss  \nDecember 31, 2023 \n\nAssets \n    \n    \n    \n    \n    \n    \n   \n\nShort term investments \n 412,031  \n 28,187  \n 24,663  \n 563  \n       -  \n 6,441  \n 422,559 \n\n \n\n  \n   \n   \n   \nYear ended December 31, 2024 \n  \n\n  \n   \n   \n   \nGain or Losses \n  \n\nRMB \nJanuary 1, 2024  \n\n**Purchase/**\n\n**Issue**\n  \nSell / Exercise  \nIncluded\nin earnings \nIncluded in\nother\ncomprehensive\nloss  \nForeign\ncurrency\ntranslation\nadjustment included in\nother\ncomprehensive\nloss  \nDecember 31, 2024 \n\nAssets \n    \n    \n    \n  \n    \n    \n   \n\nShort term investments \n 422,559  \n 222,036  \n 357,825  \n11,859 \n       -  \n (7,349) \n 291,280 \n\n \n\n  \n   \n   \n   \nYear ended December 31, 2025  \n  \n\n  \n   \n   \n   \nGain or Losses  \n  \n\nRMB \nJanuary 1, 2025  \n\n**Purchase/**\n\n**Issue**\n  \nSell / Exercise  \nIncluded\nin earnings  \nIncluded in\nother\ncomprehensive\nloss  \nForeign\ncurrency\ntranslation\nadjustment included in\nother\ncomprehensive\nloss  \nDecember 31, 2025 \n\nAssets \n    \n    \n    \n    \n    \n    \n   \n\nShort term investments \n 291,280  \n 434,551  \n 358,732  \n 10,423  \n       -  \n (17,788) \n 359,734 \n\n \n\n****\n\nF-44\n\n \n\n** **\n\n**15.\nINCOME TAX**\n\n \n\n**a)\nIncome tax**\n\n \n\n*The\nCayman Islands*\n\n \n\nUnder\nthe current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, the Cayman Islands\ndoes not impose a withholding tax on payments of dividends to shareholders.\n\n \n\nNo\nstamp duty is payable in respect of the issue of the shares or on an instrument of transfer in respect of a share.\n\n \n\n*Hong\nKong S.A.R.*\n\n \n\nUnder\nthe current Hong Kong S.A.R. Inland Revenue Ordinance, the Company’s Hong Kong S.A.R. subsidiary is subject to Hong Kong S.A.R.\nprofits tax at the rate of 16.5% on its taxable income generated from the operations in Hong Kong S.A.R. Payments of dividends by the\nHong Kong S.A.R. subsidiary to the Company is not subject to withholding tax in Hong Kong S.A.R. A two-tiered profits tax rates regime\nwas introduced in 2018 where the first HK$2 million of assessable profits earned by a company will be taxed at half of the current tax\nrate (8.25%) whilst the remaining profits will continue to be taxed at 16.5%. There is an anti-fragmentation measure where each group\nwill have to nominate only one company in the group to benefit from the progressive rates. No provision for Hong Kong profits tax has\nbeen made in the financial statements as the subsidiary in Hong Kong has no assessable profits for the years ended December 31, 2023,\n2024 and 2025.\n\n \n\n*Japan*\n\n \n\nThe\nCompany’s Japan subsidiary, Cloopen Japan Co., Ltd., is subject to Japanese corporation tax (including national corporation tax,\nlocal enterprise tax and other income-based taxes) on its worldwide income. The statutory effective tax rate is approximately 30% to\n34%, depending on the size of the company.\n\n \n\nDividends\npaid by a Japanese company are generally subject to Japanese withholding tax. If the Japanese company paying dividends is a non-listed\ncompany and the payee is a non-resident of Japan, the rate of such withholding tax is 20.42% under Japanese Tax law. The Company enjoys\npreferential withholding tax rate of 10% under Japan-China tax treaty.\n\n \n\n*The\nPRC*\n\n \n\nThe\nGroup’s PRC subsidiaries, the VIE, and the VIE’s subsidiaries are subject to the PRC Corporate Income Tax Law (“CIT\nLaw”) and are taxed at the statutory income tax rate of 25%, unless otherwise specified.\n\n \n\nIn\nMarch 2007, a new enterprise income tax law (the “New EIT Law”) in the PRC was enacted which became effective on January\n1, 2008. The New EIT Law applies a unified 25% enterprise income tax (“EIT”) rate to both foreign invested enterprises and\ndomestic enterprises, unless a preferential EIT rate is otherwise stipulated. On April 14, 2008, relevant governmental regulatory authorities\nreleased further qualification criteria, application procedures and assessment processes for meeting the High and New Technology Enterprise\n(“HNTE”) status under the New EIT Law which would entitle qualified and approved entities to a favorable EIT tax rate of\n15%. In April 2009 and June 2017, the State Administration for Taxation (“SAT”) issued Circular Guoshuihan (2009) No. 203\n(“Circular 203”) and SAT Announcement (2017) No. 24 (“Announcement 24”) stipulating that the entities which qualified\nfor the HNTE status should apply with in-charge tax authorities to enjoy the reduced EIT rate of 15% provided under the New EIT Law starting\nfrom the year when the new HNTE certificate becomes effective. The HNTE certificate is effective for a period of three years and can\nbe renewed for another three years. Subsequently, an entity needs to re-apply for the HNTE status in order to be able to enjoy the preferential\ntax rate of 15%.\n\n \n\nF-45\n\n \n\n \n\nRonglian\n7Moor obtained the HNTE certificate in December 2016, and subsequently renewed the HNTE certificate in October 2019, November 2022 and\nOctober 2025. Thus, Ronglian 7Moor is entitled to a preferential tax rate of 15% from 2016 to 2027.\n\n \n\nBeijing\nYunrong Tianxia Technology Co., Ltd., a subsidiary of the Company, obtained the HNTE certificates in December 2017 and subsequently renewed\nthe HNTE Certificate in October 2020 and October 2023. Thus, it was entitled to the preferential tax rate of 15% from 2017 to 2025.\n\n \n\nRonglian\nYitong, a subsidiary of the Company, obtained the HNTE certificate in September 2015 and subsequently renewed the HNTE certificate in\nSeptember 2018, December 2021 and December 2024. Thus, it was entitled to the preferential tax rate of 15% from 2015 to 2026.\n\n \n\nBeijing\nRonglian Huitong Technology Co., Ltd. (“Beijing Ronglian Huitong”)\nand Shenzhen Zhongtian Wangjing Technology Co., Ltd. (“Shenzhen Zhongtian Wangjing”),\nsubsidiaries of the Company, obtained the HNTE certificates in December 2019. Thus, they are entitled to the preferential tax rate of\n15% from 2019 to 2021. Beijing Ronglian Huitong renewed its HNTE status in December 2021 and August 2023, and is entitled to a preferential\ntax rate of 15% from 2022 to 2024. In December 2022, Shenzhen Zhongtian Wangjing renewed its HNTE status which entitled it to the preferential\nincome tax rate of 15% from 2022 to 2024. Due to business scope change, they have no plan to renew the HNTE certificates and could not\nentitle to the preferential tax rate of 15% after the HNTE certificate became void from January 1, 2025.\n\n \n\nShanghai\nGuohebing Information Technology Co., Ltd., a subsidiary of the Company, obtained the HNTE certificate in December 2024. Thus, it was\nentitled to the preferential tax rate of 15% from 2024 to 2026.\n\n \n\nZhuge\nYunyou, a subsidiary of the Company, obtained the HNTE certificate in October 2021 and subsequently renewed the HNTE certificate in December\n2024. Thus, it was entitled to the preferential tax rate of 15% from 2021 to 2026.\n\n \n\nIf\nany entities fail to maintain the HNTE qualification under the New EIT Law, they will no longer qualify for the preferential tax rate\nof 15%.\n\n \n\nThe\nCIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management\nbody” is located in the PRC be treated as a resident enterprise for the PRC tax purposes and consequently be subject to the PRC\nincome tax at the rate of 25% for its global income. The Implementing Rules of the CIT Law define the location of the “de facto\nmanagement body” as “the place where the exercising, in substance, of the overall management and control of the production\nand business operation, personnel, accounting, property, etc., of a non-PRC company is located.” Based on a review of surrounding\nfacts and circumstances, the Group does not believe that it is likely that its operations outside the PRC should be considered a resident\nenterprise for PRC tax purposes.\n\n \n\nF-46\n\n \n\n \n\nThe\ncomponents of loss before income taxes are as follows:\n\nSCHEDULE OF COMPONENTS OF LOSS BEFORE INCOME TAXES \n\n  \n   \n   \n  \n\n  \nYear ended December 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nThe Cayman Islands* \n (69,414) \n (13,599) \n (23,846)\n\nHong Kong S.A.R* \n 3,397  \n 35,238  \n 6,429 \n\nJapan* \n (19,507) \n (10,690) \n (8,206)\n\nThe PRC, excluding Hong Kong S.A.R. \n (327,414) \n (158,092) \n (213,998)\n\nTotal \n (412,938) \n (147,143) \n (239,621)\n\n \n\n \n*\nNon-PRC\nentities not subject to income tax\n\n \n\n*Withholding\ntax on undistributed dividends*\n\n \n\nThe\nCIT law also imposes a withholding income tax of 10% on dividends distributed by a foreign investment enterprise (“FIE”)\nto its immediate holding company outside of Mainland China, if such immediate holding company is considered as a non-resident enterprise\nwithout any establishment or place within Mainland China or if the received dividends have no connection with the establishment or place\nof such immediate holding company within Mainland China, unless such immediate holding company’s jurisdiction of incorporation\nhas a tax treaty with the PRC that provides for a different withholding arrangement. The Cayman Islands, where the Company is incorporated,\ndoes not have such tax treaty with the PRC. According to the arrangement between Mainland China and Hong Kong S.A.R. on the Avoidance\nof Double Taxation and Prevention of Fiscal Evasion in August 2006, dividends paid by an FIE in Mainland China to its immediate holding\ncompany in Hong Kong S.A.R. will be subject to withholding tax at a rate of no more than 5% (if the foreign investor owns directly at\nleast 25% of the shares of the FIE). The Group did not record any dividend withholding tax, as the Group’s PRC entities, have no\nretained earnings in any of the years presented.\n\n \n\nPursuant\nto the PRC Corporate Income Tax Law, a 10% withholding tax is levied on interest income from the foreign investment enterprises established\nin Mainland China. The requirement is effective from 1 January 2008 and applies to earnings after 31 December 2007. The Group applies\na preferential withholding tax rate of 7% due to a tax treaty between Mainland China and the jurisdiction of the foreign investors.\n\n \n\nIncome\ntax expense recognized in the consolidated statements of comprehensive loss consists of the following:\n\nSCHEDULE OF CURRENT AND DEFERRED PORTION OF INCOME TAX (BENEFIT)/EXPENSE \n\n  \n   \n   \n  \n\n  \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nCurrent income tax expense \n (135) \n 74  \n (430)\n\nDeferred income tax benefit (expense) \n (429) \n (390) \n (390)\n\nTotal income tax expense \n (564) \n (316) \n (820)\n\n \n\nReconciliation\nof the differences between the income tax benefit computed based on the PRC statutory income tax rate and the Group’s income tax\nexpense for the years ended December 31, 2023, 2024 and 2025 are as follows:\n\n \n\nF-47\n\n \n\nSCHEDULE OF RECONCILIATION OF DIFFERENCES BETWEEN THE INCOME TAX BENEFIT \n\n  \n   \n   \n  \n\n  \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nComputed expected income tax benefit \n (103,234) \n (36,786) \n (59,905)\n\nNon-deductible expenses / taxable deemed income \n    \n    \n   \n\nShare-based compensation \n 5,560  \n 3,576  \n 3,298 \n\nNon-deductible entertainment \n 1,264  \n 802  \n 326 \n\nTaxable deemed interest income from inter-company\ninterest-free loans \n 1,828  \n 1,633  \n 983 \n\nEmployee commercial Insurance \n 208  \n 271  \n 203 \n\nSelling Commission \n 1,057  \n 1,016  \n 233 \n\nOthers \n 167  \n 97  \n 9 \n\nNon-PRC entities not subject to income tax \n 16,571  \n 1,044  \n 555 \n\nEffect of income tax rate differences in jurisdictions other than the PRC \n (282) \n (345) \n (546)\n\nOver provision in respect of prior years \n 36  \n (65) \n (596)\n\nNOL expired \n 34,921  \n 18,292  \n 10,911 \n\nAmortization of intangible assets formed by business combinations \n (429) \n (390) \n (390)\n\nOthers \n (2,759) \n (1,725) \n (2,212)\n\nChanges in valuation allowance \n 44,528  \n 12,264  \n 46,311 \n\nActual income tax expense \n (564) \n (316) \n (820)\n\n \n\n**b)\nDeferred income tax assets**\n\n** **\n\n**SCHEDULE OF DEFERRED INCOME TAX ASSETS **\n\n  \n   \n   \n  \n\n  \nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nNet operating loss carry forwards \n 388,065  \n 398,464  \n 445,204 \n\nUn-invoiced expenditures \n 9,867  \n 9,867  \n 9,867 \n\nAccounts receivable and contract assets allowance \n 26,561  \n 25,711  \n 26,132 \n\nOther equity investments impairment \n 10,278  \n 10,278  \n 9,969 \n\nGoodwill impairment \n 55,534  \n 55,534  \n 55,534 \n\nShare of losses of equity method investments \n 980  \n 979  \n 1,388 \n\nOthers \n 3,199  \n 5,915  \n 4,965 \n\nLess: Valuation allowance \n (487,834) \n (500,098) \n (546,409)\n\nTotal deferred income tax assets, net \n 6,650  \n 6,650  \n 6,650 \n\nIntangible assets \n (857) \n (466) \n (76)\n\nChange in fair value of other equity investments \n (6,650) \n (6,650) \n (6,650)\n\nTotal gross deferred income tax liabilities \n (7,507) \n (7,116) \n (6,726)\n\nNet deferred income tax assets \n (857) \n (466) \n (76)\n\n \n\nF-48\n\n \n\n \n\nAs\nof December 31, 2025, the Group had net operating loss carry forwards of approximately RMB2,097\nmillion attributable to the PRC and Hong Kong S.A.R. subsidiaries,\nthe VIE, and the VIE’s subsidiaries. The loss carried forward by the PRC companies will expire during the period from year 2026\nto year 2035. As of December 31, 2025, the Group had tax loss carry forwards for PRC and Hong Kong S.A.R. income tax purpose of RMB 2,096,898\nwhich will expire if unused by the following year-end:\n\nSCHEDULE OF TAX LOSS CARRY FORWARDS FOR PRC INCOME TAX PURPOSE \n\nYear ending December 31, \nRMB \n\n2026 \n 339,156 \n\n2027 \n 328,457 \n\n2028 \n 176,069 \n\n2029 \n 225,616 \n\n2030 \n 420,323 \n\nThen thereafter \n 607,277 \n\nTotal \n 2,096,898 \n\n \n\nA\nvaluation allowance is provided against deferred income tax assets when the Group determines that it is more likely than not that the\ndeferred income tax assets will not be utilized in the foreseeable future. In making such determination, the Group evaluates a variety\nof factors including the Group’s operating history, accumulated deficit, existence of taxable temporary differences and reversal\nperiods.\n\n \n\nAs\nof December 31, 2025, the valuation allowance of RMB 546,409\nwas related to the deferred income tax assets of the PRC and\nHong Kong S.A.R. entities which were in loss position. As of December 31, 2025, management believes it is more likely than not that the\nGroup will realize the deferred income tax assets, net of the valuation allowance.\n\n \n\nChanges\nin valuation allowance are as follows:\n\n \n\nSCHEDULE OF CHANGES IN VALUATION ALLOWANCE \n\n  \n   \n   \n  \n\n  \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nBalance at the beginning of the year \n (443,306) \n (487,834) \n (500,098)\n\nAdditions \n (44,528) \n (12,264) \n (46,311)\n\nBalance at the end of the year \n (487,834) \n (500,098) \n (546,409)\n\n \n\nAccording\nto the PRC Tax Administration and Collection Law, the statute of limitation is three years if the underpayment of taxes is due to computational\nerrors made by the taxpayer or the withholding agent. The statute of limitation is extended to five years under special circumstances\nwhere the underpayment of taxes is more than RMB100. In the case of transfer pricing issues, the statute of limitation is 10 years. There\nis no statute of limitation in the case of tax evasion. The income tax returns of the Company’s PRC subsidiary, the VIE and the\nVIE’s subsidiaries for the years from 2020 to 2025 are open to examination by the PRC tax authorities.\n\n \n\nF-49\n\n \n\n** **\n\n**16.\nNET LOSS PER SHARE**\n\n \n\nThe\nfollowing table sets forth the basic and diluted net loss per ordinary share computation and provides a reconciliation of the numerator\nand denominator for the years presented:\n\n \n\nSCHEDULE\nOF BASIC AND DILUTED NET LOSS PER ORDINARY SHARE COMPUTATION \n\n  \n   \n  \n\n  \nYear ended\nDecember 31, \n\n  \n2024  \n2025 \n\n  \nRMB  \nRMB \n\nNumerator: \n   \n  \n\nNet loss \n (142,757) \n (239,350)\n\nNumerator for basic and diluted net loss per ordinary share calculation \n (142,757) \n (239,350)\n\nDenominator: \n    \n   \n\nWeighted average number of Class A and Class B ordinary shares \n 322,945,205  \n 323,149,126 \n\nDenominator for basic and diluted net loss per ordinary share calculation \n 322,945,205  \n 323,149,126 \n\nNet loss per ordinary share attributable to pre-offering Class A and pre-offering Class B ordinary shareholders \n    \n   \n\n—Basic and diluted \n (0.44) \n (0.74)\n\n \n\nSecurities\nthat could potentially dilute basic net loss per ordinary share in the future that were not included in the computation of diluted net\nloss per ordinary share because to do so would have been antidilutive for the years ended December 31, 2024 and 2025 are as follow:\n\n \n\nSCHEDULE\nOF POTENTIALLY DILUTE BASIC NET LOSS PER ORDINARY SHARE \n\n  \n   \n  \n\n  \nYear ended\nDecember 31, \n\n  \n2024  \n2025 \n\nShare options \n 12,386,007  \n 12,386,007 \n\nRestricted ordinary shares \n 8,239,020  \n 7,480,878 \n\n \n\nF-50\n\n \n\n** **\n\n**17.\nREVENUE INFORMATION**\n\n \n\n**Revenues**\n\n \n\nThe\nGroup’s revenues are disaggregated by major products/services lines, timing of revenue recognition and primary geographical markets\n(based on the location of customers) as follow:\n\n \n\nSCHEDULE\nOF DISAGGREGATION OF REVENUE \n\nMajor products/services lines \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nCPaaS \n   \n   \n  \n\n- Text messaging \n 136,654  \n 132,242  \n 80,927 \n\n- Voice calls \n 25,958  \n 35,708  \n 42,739 \n\n- Others (Note 1) \n 32,799  \n 21,457  \n 25,001 \n\nCloud-based CC \n 256,961  \n 268,081  \n 219,168 \n\nCloud-based UC&C \n 117,554  \n 116,078  \n 162,821 \n\nOther services \n 1,098.00  \n -  \n 5,053 \n\nRevenues \n 571,024  \n 573,566  \n 535,709 \n\n \n\nNote\n1: Others mainly include CPaaS revenue from the customers’ use of the Group’s Internet of Things (IoT) and jointly-operated\nCPaaS platforms.\n\n \n\nTiming of revenue recognition \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nPoint in time \n 331,220  \n 301,480  \n 226,720 \n\nOver time \n 239,804  \n 272,086  \n 308,989 \n\nRevenues \n 571,024  \n 573,566  \n 535,709 \n\n \n\nPrimary geographical markets (based on the location of customers) \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nThe PRC \n 539,867  \n 543,774  \n 512,204 \n\nJapan \n 31,157  \n 29,792  \n 23,505 \n\nRevenues \n 571,024  \n 573,566  \n 535,709 \n\n \n\nRevenue based on a gross basis/ net basis \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nOn a gross basis \n 555,409  \n 558,926  \n 524,935 \n\nOn a net basis \n 15,615  \n 14,640  \n 10,774 \n\nRevenues \n 571,024  \n 573,566  \n 535,709 \n\n \n\n****\n\nF-51\n\n \n\n** **\n\n**Contract\nAssets and Contract Liabilities**\n\n \n\nThe\nGroup’s contract assets and contract liabilities as of December 31, 2023, 2024 and 2025 are as follows:\n\nSCHEDULE\nOF CONTRACT ASSETS AND CONTRACT LIABILITIES \n\n  \nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nContract assets \n 26,107  \n 27,752  \n 57,290 \n\nContract liabilities \n 363,228  \n 306,112  \n 299,483 \n\n \n\nThe\ncontract assets primarily relate to the Group’s rights to consideration for work performed but not invoiced at the reporting date\non Cloud-based UC&C projects and Cloud-based CC projects. The contract assets are transferred to receivables when the rights to consideration\nbecome unconditional.\n\n \n\nThe\ncontract liabilities primarily related to the advanced consideration received from customers in relation to the subsequent provision\nof Cloud-based CC services and CPaaS solutions. The contract liabilities will be recognized as revenue when the Group fulfills its performance\nobligations to transfer the promised products or services to customers, which is expected to occur within one year.\n\n \n\nChanges\nin the contract assets balances for the years ended December 31, 2023, 2024 and 2025 are as follows:\n\n \n\nSCHEDULE\nOF CONTRACT ASSETS \n\n  \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nGross amount at the beginning of the year \n 63,144  \n 36,469  \n 49,484 \n\nIncreases due to revenue recognized during the year \n 27,787  \n 44,616  \n 45,577 \n\nTransfers to accounts receivable during the year \n (54,462) \n (31,601) \n (21,024)\n\nGross amount at the end of the year \n 36,469  \n 49,484  \n 74,037 \n\nAllowance for credit loss of contract assets \n (10,362) \n (21,732) \n (16,747)\n\nContract assets, net \n 26,107  \n 27,752  \n 57,290 \n\n \n\nThe\nmovement of the allowance for contract assets is as follows:\n\n \n\n  \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nBalance at the beginning of the year \n 12,306  \n 10,362  \n 21,732 \n\nAdditions charged to credit loss \n (1,944) \n 11,370  \n (4,985)\n\nBalance at the end of the year \n 10,362  \n 21,732  \n 16,747 \n\n \n\nF-52\n\n \n\n \n\nChanges\nin the contract liabilities balances for the years ended December 31, 2023, 2024 and 2025 are as follows:\n\n \n\n    SCHEDULE\nOF CONTRACT LIABILITIES \n\n  \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nBalance at the beginning of the year \n 359,801  \n 363,228  \n 306,112 \n\nRevenue recognized that was included in the contract liabilities balance at the beginning of the year \n (92,339) \n (80,856) \n (72,158)\n\nOther operating income recognised that was included in the contract liabilities balance at the beginning of the period \n -  \n (49,530) \n -\n\nIncrease due to cash received, excluding amount recognized as revenue during the year \n 95,766  \n 73,270  \n 65,529 \n\nBalance at the end of the year \n 363,228  \n 306,112  \n 299,483 \n\n \n\nThe\namounts of revenue recognized for the years ended December 31, 2023, 2024 and 2025 that were included in the contract liabilities balances\nat the beginning of the year are RMB92,339\nand RMB80,856,\nRMB72,158,\nrespectively.\n\n \n\nThe\nCompany has elected the practical expedient in ASC 606-10-50-14(a) to not disclose the information about remaining performance obligations\nwhich are part of contracts that have an original expected duration of one year or less.\n\n \n\n**18.\nCOMMITMENTS AND CONTINGENCIES**\n\n \n\n**Legal\nProceedings**\n\n \n\nFrom\ntime to time, the Group is involved in claims and legal proceedings that arise in the ordinary course of business. The Group records\na liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based\non currently available information, the Group has recorded accrued liabilities for class action of US$12,000\n(equivalent to RMB83,575) in this regard as of December 31, 2022, and paid off the settlement\namount as of December 31, 2023. On January 23, 2024, the Supreme Court of the State of New York issued an order granting final approval\nof the settlement and dismissing the claims the in the Sonny St. John action.\n\n \n\n**Purchase\nCommitment**\n\n \n\nThe\nGroup’s purchase commitments primarily relate to purchase of software and equipment. Total purchase commitments contracted but\nnot yet reflected in the consolidated financial statements as of December 31, 2025 were as follows:\n\n \n\nSCHEDULE\nOF PURCHASE COMMITMENT \n\nYear ended December 31, \nRMB \n\n2026 \n 31,871 \n\n2027 and thereafter \n 288 \n\n \n\nF-53\n\n \n\n \n\n**19.\nRELATED PARTY TRANSACTIONS**\n\n \n\n(i)Related Parties\n\nSCHEDULE\nOF RELATED PARTIES \n\n**Name\nof Related Parties**\n \n**Relationship\nwith the Company**\n\nShanghai\nKeshen Information Technology Co., Ltd.\n \nOne\nof the Company’s investment affiliates and the Company owns 20% equity interest and has significant influence since December\n2021\n\nShenzhen\nCity Yunjitong Technology Co., Ltd\n \nOne\nof the Company’s investment affiliates and the Company owns 18.52% equity interest and has significant influence, which was\ndisposed of in November 2025.\n\nShenyang\nYunrongxin Technology Co., Ltd\n \nOne\nof the Company’s investment affiliates and the Company owns 20% equity interest and has significant influence\n\nShanghai Gaozhi Lefu Intelligent Technology Co., Ltd.\n\n \nOne of the Company’s investment affiliates and the Company owns 13.5%\nequity interest and has significant influence\n\n \n\n(ii)The Company had\nthe following related party transactions for the years ended December 31, 2023, 2024 and 2025:\n\nSUMMARY OF RELATED PARTY TRANSACTIONS \n\n  \n  \nYear ended December 31, \n\n  \nNote \n2023  \n2024  \n2025 \n\n  \n  \nRMB  \nRMB  \nRMB \n\nCloud-based UC&C services provided to a related party: \n  \n    \n    \n   \n\n-Shanghai Keshen Information Technology Co., Ltd. \n(a) \n 6  \n -  \n - \n\n  \n  \n    \n    \n   \n\nCPaaS services provided to related parties: \n  \n    \n    \n   \n\n-Shenyang Yunrongxin Technology Co., Ltd \n(b) \n 913  \n 162  \n 334 \n\n-Shenzhen City Yunjitong Technology Co., Ltd \n(b) \n -  \n 1  \n - \n\n-Shanghai Gaozhi Lefu Intelligent Technology Co., Ltd. \n(b) \n -  \n -  \n 3 \n\n Project development services purchased from related parties: \n  \n    \n    \n   \n\n-Shenyang Yunrongxin Technology Co., Ltd \n(c) \n 321  \n -  \n - \n\n-Shanghai Keshen Information Technology Co., Ltd. \n(c) \n 3,302  \n 1,981  \n 2,161 \n\nBusiness process outsourcing (BPO) services purchased from a related party: \n  \n    \n    \n   \n\n-Shanghai Gaozhi Lefu Intelligent Technology Co., Ltd. \n\n(c)\n \n -  \n -  \n 171 \n\n \n\n(a)\nCloud-based UC&C services provided to a related party\n\n \n\nThe\nCompany provided Cloud-based UC&C services to subsidiaries of Shanghai Keshen Information Technology Co., Ltd (“Shanghai Keshen”).\nRevenues of RMB6, nil and nil, were recorded in the consolidated statements of comprehensive loss for the year ended December 31, 2023,\n2024 and 2025. Amounts due to Shanghai Keshen were RMB62 and RMB62, which were deposits as of December 31, 2024 and 2025, respectively.\n\n \n\nF-54\n\n \n\n \n\n(b)\nCPaaS services provided to related parties\n\n \n\nThe\nCompany provided CPaaS services to Shenyang Yunrongxin Technology Co., Ltd (“Shenyang Yunrongxin”). Revenues of RMB913, RMB162\nand RMB334 were recorded in the consolidated statements of comprehensive loss for the years ended December 31, 2023, 2024 and 2025, respectively.\nAmounts due from Shenyang Yunrongxin were RMB389 and RMB488 as of December 31, 2024 and 2025, which are included in accounts receivable\n- a related party, net on the consolidated balance sheets, respectively.\n\n \n\nThe\nCompany provided CPaaS services to Shenzhen City Yunjitong Technology Co., Ltd (“Shenzhen City Yunjitong”). Revenues of nil,\nRMB1 and nil were recorded in the consolidated statements of comprehensive loss for the years ended December 31, 2023, 2024 and 2025,\nrespectively. Amounts due to Shenzhen City Yunjitong were RMB1 and nil as of December 31, 2024 and 2025, which are included in accounts amounts due to related parties on the consolidated\nbalance sheets.\n\n \n\nThe Company provided\nCPaaS services to Shanghai Gaozhi Lefu Intelligent Technology Co., Ltd (“Shanghai Gaozhi Lefu”). Revenues of nil, nil and\nRMB3 were recorded in the consolidated statements of comprehensive loss for the years ended December 31, 2023, 2024 and 2025, respectively.\n\n \n\n(c)\nOutsourcing services purchased from related parties\n\n \n\nThe\nCompany purchased from Shenyang Yunrongxin project development services, which is included in cost of revenues of RMB321, nil and nil,\nfor the years ended December 31, 2023, 2024 and 2025, respectively. Amounts due to Shenyang Yunrongxin were RMB91 and RMB228 as of December\n31, 2024 and 2025, which are included in accounts amounts due to related parties on the consolidated balance sheets.\n\n \n\nThe\nCompany purchased project development services from Shanghai Keshen, which is included in cost of revenues of RMB3,302, RMB1,981 and\nRMB2,161, for the years ended December 31, 2023, 2024 and 2025, respectively. Amounts due from Shanghai Keshen were RMB2,590 and RMB3,345,\nwhich were prepayment of project development services fee as of December 31, 2024 and 2025, respectively.\n\n \n\nThe\nCompany purchased business process outsourcing (BPO) services from Shanghai Gaozhi Lefu, which is included in cost of revenues of nil,\nnil and RMB171, for the years ended December 31, 2023, 2024 and 2025, respectively. Amounts due from Shanghai Gaozhi Lefu were nil and\nRMB101, which were prepayment of BPO services fee as of December 31, 2024 and 2025, respectively.\n\n \n\n(iii)\nThe\nCompany had the following related party balances as of December 31, 2024 and 2025:\n\n \n\n  \nNotes \n2024  \n2025 \n\n  \n  \nRMB  \nRMB \n\nAccounts receivable – a related party, net: \n  \n    \n   \n\n-Shenyang Yunrongxin Technology Co., Ltd \n(b) \n 389  \n 488 \n\n  \n  \n    \n   \n\nAmounts due from a related party: \n  \n    \n   \n\n-Shanghai Keshen Information Technology Co., Ltd. \n(c) \n 2,590  \n 3,345 \n\nTotal amounts due from a related party \n  \n 2,590  \n 3,345 \n\n  \n  \n    \n   \n\nAmounts due to related parties: \n  \n    \n   \n\n-Shenyang Yunrongxin Technology Co., Ltd \n(c) \n 91  \n 228 \n\n-Shenzhen City Yunjitong Technology Co., Ltd \n(b) \n 1  \n - \n\n-Shanghai Keshen Information Technology Co., Ltd. \n(a) \n 62  \n 62 \n\n-Shanghai Gaozhi Lefu Intelligent Technology Co., Ltd. \n(c) \n -  \n 101 \n\nTotal amounts due to related parties \n  \n 154  \n 391 \n\n \n\nF-55\n\n \n\n** **\n\n**20.\nPARENT ONLY FINANCIAL INFORMATION**\n\n \n\nThe\nfollowing condensed parent company financial information of Cloopen Group Holding Limited has been prepared using the same accounting\npolicies as set out in the accompanying consolidated financial statements. As of December 31, 2025, there were no material contingencies,\nsignificant provisions of long-term obligations, mandatory dividend or redemption requirements of redeemable stocks or guarantees of\nCloopen Group Holding Limited, except for those, which have been separately disclosed in the consolidated financial statements.\n\n \n\n**(a)\nCondensed Balance Sheets**\n\nSCHEDULE\nOF CONDENSED BALANCE SHEETS \n\n  \n   \n  \n\n  \nDecember 31, \n\n  \n2024  \n2025 \n\n  \nRMB  \nRMB \n\nAssets \n    \n   \n\nCurrent assets \n    \n   \n\nCash \n 79,741  \n 2,202 \n\nTerm deposits \n 143,768  \n - \n\nShort-term investments \n 39,536  \n 179,234 \n\nOther current assets \n 81  \n 5,061 \n\nTotal current assets \n 263,126  \n 186,497 \n\nNon-current asset: \n    \n   \n\nInvestments in and amounts due from subsidiaries and consolidated VIE and VIE’s subsidiaries \n 993,075  \n 765,636 \n\nTotal non-current asset \n 993,075  \n 765,636 \n\nTotal assets \n 1,256,201  \n 952,133 \n\nLiabilities \n    \n   \n\nCurrent liabilities \n    \n   \n\nAccrued expenses and other current liabilities \n 181,624  \n 110,750 \n\nTotal current liabilities \n 181,624  \n 110,750 \n\nTotal liabilities \n 181,624  \n 110,750 \n\nShareholders’ equity: \n    \n   \n\nClass A Ordinary Shares \n 195  \n 195 \n\nClass B Ordinary Shares \n 17  \n 17 \n\nAdditional paid-in capital \n 11,225,945  \n 11,239,347 \n\nTreasury stock \n (120,899) \n (120,899)\n\nAccumulated other comprehensive loss \n (56,362) \n (63,608)\n\nAccumulated deficit \n (9,974,319) \n (10,213,669)\n\nTotal shareholders’ equity \n 1,074,577  \n 841,383 \n\nTotal liabilities and shareholders’ equity \n 1,256,201  \n 952,133 \n\n \n\nF-56\n\n \n\n** **\n\n**(b)\nCondensed Statements of Comprehensive Loss**\n\n**  SCHEDULE\nOF CONDENSED STATEMENTS OF COMPREHENSIVE LOSS **\n\n  \n   \n   \n  \n\n  \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nTotal operating expenses \n (89,953) \n (32,074) \n (26,860)\n\nShare of losses from subsidiaries and consolidated VIE and\nVIE’s subsidiaries \n (319,769) \n (110,683) \n (212,490)\n\nLoss before income taxes \n (409,722) \n (142,757) \n (239,350)\n\nNet loss \n (409,722) \n (142,757) \n (239,350)\n\nNet loss attributable to ordinary shareholders \n (409,722) \n (142,757) \n (239,350)\n\n \n\n**(c)\nCondensed Statements of Cash Flows**\n\nSCHEDULE\nOF CONDENSED STATEMENTS OF CASH FLOWS \n\n  \n   \n   \n  \n\n  \nYear ended\nDecember 31, \n\n  \n2023  \n2024  \n2025 \n\n  \nRMB  \nRMB  \nRMB \n\nNet cash provided by (used in) operating activities \n (133,979) \n 115,285  \n (32,515)\n\nNet cash used in investing activities \n (569,407) \n (486) \n (185,787)\n\nNet cash provided by financing activities \n -  \n -  \n - \n\nEffect of foreign currency exchange rate changes on cash \n 31,168  \n 2,713  \n (3,005)\n\nNet increase/(decrease) in cash \n (672,218) \n 117,512  \n (221,307)\n\nCash at the beginning of the year \n 778,215  \n 105,997  \n 223,509 \n\nCash at the end of the year \n 105,997  \n 223,509  \n 2,202 \n\n \n\n \n\nF-57"}