Core Points - The incident involves "Daren Education" and its Qingdao branch, where an employee reported being pressured to resign due to business line adjustments [1] - The employee, Ms. Zhang, stated that due to operational difficulties, her employment was transferred to "New Daren Education" in March [1] - The company allegedly did not provide compensation for layoffs after notifying employees of job transfers, and those who refused to transfer were forced to resign without following labor laws [1] - The Qingdao Human Resources and Social Security Bureau has initiated an investigation into "New Daren Education" [1] - Attempts to contact representatives from "New Daren Education" and "Daren Education" for comments have gone unanswered as of the time of reporting [1]

Core Viewpoint - The company, formerly known as 达内教育, has undergone significant restructuring due to operational difficulties, resulting in the transfer of its adult IT training business to 长水教育集团 and a rebranding to "新达内" [2][8]. Group 1: Business Restructuring - The restructuring involved the transfer of the adult IT training business to 长水教育集团, leading to the renaming of the company to "新达内" [2][8]. - Over 200 employees from the "中心区域" department, including telemarketing and customer service, were affected by the restructuring, facing either forced resignation or mandatory reassignment to sales roles [5][6]. - Employees reassigned to the new "智慧中心" must undergo a probationary period, with the risk of termination without compensation if they fail the assessment [7][9]. Group 2: Employee Impact - The restructuring has led to significant employee dissatisfaction, with many long-term employees resisting the changes and expressing concerns over the lack of proper compensation during layoffs [7][10]. - The company has reportedly restricted access to systems for employees who have not transitioned or resigned, further complicating their work situation [7][9]. - Compensation for voluntary resignations is minimal, with employees having 1-2 years of service receiving only one month’s salary, and those with over six years receiving three months [7][9]. Group 3: Market Position and Challenges - The adult IT training sector is facing increased competition, leading to a decline in the company's market position, which has been evident since 2018 [10][12]. - The shift to a self-sustaining model for training centers has resulted in financial pressures, similar to previous issues faced by the company's subsidiary, 童程童美, which experienced abrupt closures of multiple locations [9][10]. - The competitive landscape in the IT training industry has intensified, diminishing the company's previous advantages and prompting necessary organizational changes [12].

Core Insights - The explosive growth of AI technology has led to a vast training market, with over 210,000 companies involved in "AI training" across the country, including more than 60,000 established within a year and 37,000 within six months [1][3] - Many training institutions lack proper qualifications and transparency, often misleading students with promises of quick results and "big company experience" without providing verifiable credentials [3][4] - The compressed course content and false advertising are prevalent issues, with some programs offering intensive training that may not adequately prepare students for real-world AI roles [4][5] Summary by Sections Market Overview - The AI training market has seen a rapid influx of new companies, with over 210,000 entities involved, indicating a booming but chaotic environment [1][3] Institutional Issues - Many training institutions operate without clear qualifications, using vague business scopes to avoid regulatory scrutiny, which contradicts official educational guidelines [3] - Institutions like Daren Education and Heima Programmer have been criticized for not providing specific proof of their instructors' qualifications, leading to a lack of transparency [3][4] Course Content and Quality - The curriculum in some programs is overly condensed, with courses like those from Heima Programmer covering extensive material in just 86 days, which may be too fast for students, especially those without prior knowledge [4] - The focus of many training programs is on tool usage rather than core AI algorithms and model development, which does not align with the skills required by employers [4][5] Consumer Protection and Certification - Controversial refund policies exist, with institutions imposing penalties that may infringe on consumer rights, such as Daren Education's 10% penalty after seven days and Heima Programmer's strict exam-based refund conditions [4] - The lack of standardized regulation and authoritative certification in the market has led to exploitation of information asymmetry, pushing high-priced courses on anxious consumers [5] Recommended Solutions - The AI Office Application Ability Evaluation Exam has emerged as a reliable learning path, providing a standardized assessment of practical skills in AI applications, which helps students avoid misleading training programs [5] - This exam focuses on practical skills relevant to office scenarios, offering a transparent and fair evaluation system that can enhance employability without the concerns associated with unregulated training institutions [5]

Core Insights - The digital transformation wave has made IT skills a key competitive asset in the job market, leading to explosive growth in the computer training market [1] - Learners' needs are increasingly diverse, whether they are beginners looking to switch careers or professionals seeking advancement in cutting-edge fields like AI and cloud computing [1] - The article evaluates various training institutions based on course update speed, practical project ratio, faculty industry experience, and employment data transparency [1] Group 1: Beijing Baiwei Education - Beijing Baiwei Education has been a leader in vocational education since 1996, focusing on deep integration of teaching and industry [3] - The curriculum covers 15 popular fields, including AI and cloud computing, using a unique "single-subject focus" model that allows students to concentrate on one core technology for 3-6 months [3] - The average salary for graduates in AI is over 10,000 yuan, with a 98.7% employment rate for the 2024 cohort and an average job search period of just 21 days [3] Group 2: Chuan Zhi Bo Ke / Hei Ma Program - This partnership is known for project-driven teaching, with a project library covering 91% of industry scenarios [4] - The average salary for Python full-stack graduates in 2024 is 11,000 yuan, with 18% receiving job offers within one month of course completion [4] - The course intensity is high, making it suitable for learners who can handle pressure [4] Group 3: Da Ni Education - Da Ni Education is the first publicly listed IT training institution in China, known for its rapid course updates [5] - The Java full-stack course is updated quarterly, with a new AI module added for 2025 [5] - The average salary for Java graduates in 2024 is 9,800 yuan, with 23% securing positions at top companies like ByteDance and Meituan [5] Group 4: Peking University Blue Bird - Peking University Blue Bird leverages academic resources from Peking University to create a comprehensive IT curriculum [6] - The curriculum follows a "pyramid" progression, with 30% theory and 70% practical training [6] - The pass rate for their network security certification course is 40% higher than the industry average [6] Group 5: Qian Feng Education - Qian Feng Education emphasizes a "school-enterprise integration" training model, collaborating with companies like JD and Qi An Xin [7] - Graduates in 2024 received an average of 3.2 job offers, with 35% entering major ICT companies [7] - The "Post-Employment Carefree" plan offers lifelong technical support and regular industry expert sessions [7] Group 6: NetEase Cloud Classroom - NetEase Cloud Classroom is recognized for its high cost-effectiveness and flexibility in online education [9] - The IT course library includes over 300 specialized fields, adopting a "micro-major" model [9] - The lack of offline interaction and practical projects suggests it is more suitable for skill supplementation rather than comprehensive learning [10] Group 7: Selection Recommendations - Students are advised to use a "trial + research" dual verification method when choosing institutions [12] - It is essential to consider course depth, faculty quality, and employment services to avoid falling into the "low-cost quick success" trap [12]

Core Insights - The AI training market is experiencing rapid growth, driven by the hype surrounding artificial intelligence and the promise of high-paying jobs for those who complete these courses [1][4][8] - Many training institutions are making exaggerated claims about job placement rates and course effectiveness, often lacking transparency regarding their instructors' qualifications and the actual content of their programs [5][6][8] Group 1: Training Market Dynamics - The AI training market has over 210,000 companies, with more than 60,000 established within the last year, indicating a surge in demand for AI skills [4] - Institutions are targeting young individuals' fears of job loss due to AI, promoting courses that promise quick employment with minimal prerequisites [2][3] Group 2: Course Structure and Costs - Courses often require extensive hours, with basic AI training needing around 400 hours and advanced skills requiring an additional 200+ hours, leading to total costs exceeding 29,000 yuan [2][3] - The pricing structure is often misleading, with institutions advertising low per-hour rates while the total cost becomes significantly higher than traditional education [2][3] Group 3: Quality and Credibility Concerns - Many training programs are criticized for their lack of rigorous academic standards, with instructors' credentials often unverified and course content heavily condensed [4][5] - The focus on practical skills over theoretical knowledge may leave students unprepared for actual job requirements in the AI field [5][6] Group 4: Employment Guarantees and Refund Policies - Claims of "100% job placement" are frequently made but lack substantiation, raising concerns about the reliability of such promises [6][8] - Refund policies are often contentious, with institutions imposing conditions that may disadvantage students seeking to withdraw from courses [7][8]

[INTRODUCTION](index=5&type=section&id=INTRODUCTION) This section defines terms, clarifies financial reporting currency and exchange rates, and outlines the company's corporate structure, including its reliance on Variable Interest Entities (VIEs) in mainland China - Financial results are presented in RMB, with U.S. dollar translations made at **RMB7.2993 to US$1.00 as of December 31, 2024**[16](index=16&type=chunk) - TCTM Kids IT Education Inc. is a Cayman Islands holding company, with primary operations conducted through mainland China subsidiaries and contractual arrangements with VIEs (Variable Interest Entities) in mainland China, which entails **unique risks to investors**[17](index=17&type=chunk) - The company completed the **divestiture of its professional education business** at the **end of March 2024**, a strategic shift detailed further in the report[17](index=17&type=chunk) [FORWARD-LOOKING INFORMATION](index=7&type=section&id=FORWARD-LOOKING%20INFORMATION) This section highlights forward-looking statements, their inherent risks and uncertainties, and cautions investors against relying on them as predictions of future events - **Forward-looking statements** are identified by words like 'may,' 'will,' 'expect,' 'anticipate,' and 'believe,' and are based on current expectations and projections[21](index=21&type=chunk) - Key areas covered by **forward-looking statements** include **growth strategies**, **market demand**, **student enrollments**, learning center utilization, new course offerings, tuition fees, future financial condition, market trends in mainland China, and government policies[24](index=24&type=chunk) - The company operates in an evolving environment, and new **risk factors** and uncertainties may emerge, making it impossible to predict all potential impacts on business and financial performance[22](index=22&type=chunk) [PART I.](index=8&type=section&id=PART%20I.) [ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS](index=8&type=section&id=ITEM%201.%20IDENTITY%20OF%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20ADVISERS) This item states that information regarding the identity of directors, senior management, and advisers is not applicable - Information for this item is '**Not Applicable**'[26](index=26&type=chunk) [ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE](index=8&type=section&id=ITEM%202.%20OFFER%20STATISTICS%20AND%20EXPECTED%20TIMETABLE) This item indicates that information regarding offer statistics and expected timetable is not applicable - Information for this item is '**Not Applicable**'[27](index=27&type=chunk) [ITEM 3. KEY INFORMATION](index=8&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section provides crucial information on the company's holding company structure, VIE reliance, regulatory environment, cash flow mechanisms, and a comprehensive summary of significant business and ADS risks [Our Holding Company Structure and Contractual Arrangements with the Variable Interest Entities](index=8&type=section&id=3.1%20Our%20Holding%20Company%20Structure%20and%20Contractual%20Arrangements%20with%20the%20Variable%20Interest%20Entities) TCTM, a Cayman Islands holding company, operates in mainland China via subsidiaries and VIEs, relying on contractual arrangements to control operations and consolidate financial results, which entails inherent enforcement and regulatory risks - TCTM is a Cayman Islands holding company, conducting operations in mainland China through subsidiaries and VIEs to comply with foreign investment restrictions in certain internet value-added businesses[28](index=28&type=chunk) VIEs' Contribution to Net Revenues from Continuing Operations | Year | Percentage of Net Revenues | | :--- | :--- | | 2022 | **2.9%** | | 2023 | **6.6%** | | 2024 | **7.4%** | - The **professional education business**, including the former VIE, was **divested by the end of March 2024**, reclassifying it as discontinued operations and shifting focus to continuing operations[30](index=30&type=chunk) - Contractual arrangements with VIEs (exclusive business cooperation, power of attorney, equity pledges, exclusive options) enable TCTM to control their economic performance and consolidate financial results, but these arrangements are subject to **enforcement risks** and regulatory uncertainties in mainland China[31](index=31&type=chunk)[32](index=32&type=chunk)[37](index=37&type=chunk) - Mr. Shaoyun Han's **70% equity interest** in Beijing Tongcheng (the current VIE) was **frozen from September 19, 2024, to September 18, 2027**, due to asset preservation measures related to a share transfer dispute[35](index=35&type=chunk) [Permissions Required from the PRC Government Authorities for Our Operations](index=14&type=section&id=3.2%20Permissions%20Required%20from%20the%20PRC%20Government%20Authorities%20for%20Our%20Operations) The company's mainland China operations require various licenses and permits, but future interpretations of laws and recent CSRC Filing Rules introduce uncertainties for additional approvals and future financing activities - The company believes its mainland China subsidiaries and VIEs have obtained all material requisite licenses and permits, including business, ICP, radio/television program production, and school operation permits[40](index=40&type=chunk) - Uncertainties in interpretation and implementation of PRC laws may require additional licenses or approvals in the future, potentially leading to **sanctions or business restrictions** if not obtained[40](index=40&type=chunk) - The CSRC's Filing Rules (effective March 31, 2023) require domestic companies, including those with VIE structures, to file with the CSRC for future overseas equity and equity-linked financing activities, though prior listings are exempt[42](index=42&type=chunk) [Cash and Asset Flows through Our Organization](index=16&type=section&id=3.3%20Cash%20and%20Asset%20Flows%20through%20Our%20Organization) TCTM relies on dividends and service fees from mainland China subsidiaries and VIEs for cash, but PRC regulations restrict offshore transfers, including dividend payments and statutory reserve requirements, with no payments made from 2022-2024 - TCTM's ability to pay dividends and service debt depends on distributions from its mainland China subsidiaries and service fees from VIEs[43](index=43&type=chunk) - Mainland China subsidiaries can only pay dividends from retained earnings and must appropriate at least **10% of after-tax profits** to statutory reserve funds until they reach **50% of registered capital**[43](index=43&type=chunk) Restricted Net Assets of Subsidiaries and VIEs in Mainland China | As of December 31, | Amount (RMB in millions) | | :----------------- | :----------------------- | | 2022 | **1,558.9** | | 2023 | **1,228.2** | | 2024 | **1,236.9** | - No dividends or service fees were paid to TCTM by its subsidiaries or VIEs for the years ended **December 31, 2022, 2023, and 2024**[45](index=45&type=chunk) [Financial Information Related to the Variable Interest Entities](index=20&type=section&id=3.4%20Financial%20Information%20Related%20to%20the%20Variable%20Interest%20Entities) This section details the financial impact of the professional education business divestiture, reclassified as discontinued operations, and presents condensed consolidating financial schedules for the parent company, VIEs, and other subsidiaries from 2022-2024 - The **professional education business** was **divested in December 2023** and consummated by **March 2024**, leading to its reclassification as discontinued operations[52](index=52&type=chunk) Selected Condensed Consolidated Statements of Income (VIEs Consolidated) | Metric (RMB in thousands) | 2022 | 2023 | 2024 | | :------------------------ | :--- | :--- | :--- | | Net revenues from continuing operations | **40,755** | **90,661** | **86,125** | | Net income (loss) | **1,255** | **3,606** | **(43,457)** | | Net cash provided by/(used in) operating activities | **7,722** | **(17,817)** | **(80,322)** | | Net cash provided by/(used in) investing activities | **19,975** | — | **(8,200)** | | Net cash provided by/(used in) financing activities | **5,762** | **(7,192)** | **86,483** | Selected Condensed Consolidated Balance Sheet (VIEs Consolidated) | Metric (RMB in thousands) | 2023 | 2024 | | :------------------------ | :--- | :--- | | Cash and cash equivalents | **2,520** | **2,519** | | Total Assets | **252,862** | **45,541** | | Total Liabilities | **281,289** | **201,055** | [Summary of Risk Factors](index=23&type=section&id=3.5%20Summary%20of%20Risk%20Factors) This section summarizes material risks related to the business, corporate structure, China operations, and ADSs, including divestiture uncertainties, reliance on IT-focused STEM education, regulatory compliance, and potential delisting - The **divestiture of the professional education business** introduces uncertainties and risks, as the company's future performance is now substantially dependent on **IT-focused supplementary STEM education**[62](index=62&type=chunk)[72](index=72&type=chunk) - The company incurred a **net loss of RMB578.1 million in 2024**, and its historical financial results may not predict future performance, especially after the strategic shift[73](index=73&type=chunk) - Significant risks include the potential **delisting of ADSs** under the HFCA Act if PCAOB inspections of auditors are not complete, and uncertainties in the interpretation and enforcement of rapidly evolving PRC laws and regulations[69](index=69&type=chunk)[179](index=179&type=chunk) - The company's VIE structure and contractual arrangements may not be as effective as direct ownership, posing risks if VIEs or nominee shareholders fail to perform obligations or if PRC government regulations change[64](index=64&type=chunk)[137](index=137&type=chunk) - The company faces risks related to cybersecurity, information security, privacy, and data protection due to complex and evolving Chinese laws, which could lead to increased compliance costs, penalties, or reputational harm[65](index=65&type=chunk)[98](index=98&type=chunk)[101](index=101&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=59&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section details the company's history, business overview, corporate structure, and regulatory environment, highlighting the strategic shift to IT-focused supplementary STEM education and the extensive legal framework in China [History and Development of the Company](index=99&type=section&id=4.1%20History%20and%20Development%20of%20the%20Company) TCTM Kids IT Education Inc., incorporated in 2003, began Nasdaq trading in 2014, underwent a strategic shift to IT-focused STEM education in March 2024, changed ticker symbols, and acquired brain-computer interface algorithms in April 2025 - TCTM Kids IT Education Inc. (formerly Tarena International, Inc.) was incorporated in the Cayman Islands in **October 2003**, with operations commencing in Beijing in **September 2002**[271](index=271&type=chunk) - The company's ADSs began trading on Nasdaq on **April 3, 2014**, initially under 'TEDU'[272](index=272&type=chunk) - A major **strategic shift** involved the **divestiture of the professional education business**, consummated by the **end of March 2024**, to focus primarily on **IT-focused supplementary STEM education**[276](index=276&type=chunk) - The company changed its ticker symbol from 'TEDU' to '**TCTM**' on **January 10, 2024**, and then to '**VSA**' on **April 3, 2025**[276](index=276&type=chunk)[277](index=277&type=chunk) - On **April 1, 2025**, the company **acquired core algorithms** and related software/hardware systems for **brain-computer interfaces**, issuing **135,625,000 Class A ordinary shares** as consideration[276](index=276&type=chunk) Revenue and Asset Contribution by Entity Type (Continuing Operations) | Category | 2022 Net Revenues | 2023 Net Revenues | 2024 Net Revenues | 2024 Assets | | :------- | :---------------- | :---------------- | :---------------- | :---------- | | TCTM and its wholly owned subsidiaries | **97.1%** | **93.4%** | **92.6%** | **56.9%** | | VIEs | **2.9%** | **6.6%** | **7.4%** | **43.1%** | [Business Overview](index=102&type=section&id=4.2%20Business%20Overview) TCTM primarily provides IT-focused supplementary STEM education for children aged three to eighteen in mainland China, utilizing a blended learning platform, offering ten programs, and operating in a competitive market with approximately 191,200 student enrollments in 2024 - The company's **primary focus** is on **IT-focused supplementary STEM education services** for children aged three to eighteen in mainland China, offering courses in **ten STEM education programs**[280](index=280&type=chunk)[294](index=294&type=chunk) - The education platform integrates live distance instruction, classroom-based learning, and proprietary online learning modules via the TTS platform and 61it.cn[286](index=286&type=chunk)[291](index=291&type=chunk)[293](index=293&type=chunk) - As of **December 31, 2024**, the company managed **218 learning centers** in **53 cities** for STEM education, with approximately **191,200 student enrollments** in STEM education programs[288](index=288&type=chunk)[289](index=289&type=chunk) - In **2024**, childhood robotics programming and computer programming courses contributed **42.2%** and **18.9% of net revenues** from continuing operations, respectively[74](index=74&type=chunk) - Standard tuition fees for STEM education programs range between **RMB8,000 and RMB23,400**, collected upfront[313](index=313&type=chunk) - The company regularly updates its courses, typically every **six months**, to align with technology developments and market demand, with new courses pilot tested for **100% student satisfaction**[306](index=306&type=chunk)[308](index=308&type=chunk) - As of **March 31, 2025**, the company held **30 registered domain names**, **three software copyrights**, and **116 trademarks** related to its continuing operations[319](index=319&type=chunk) [Government Regulations](index=115&type=section&id=4.3%20Government%20Regulations) This section outlines the extensive and evolving regulatory landscape in mainland China affecting TCTM's operations, particularly in private education, online tutoring, and internet services, with significant compliance requirements and risks from various laws - The Company Law (2023), effective **July 1, 2024**, governs corporate entities in China, requiring full payment of subscribed capital within **five years**[326](index=326&type=chunk)[327](index=327&type=chunk) - The Private Education Law, amended in **2018 and 2021**, allows for-profit and non-profit private schools but prohibits for-profit compulsory education, with the Amended Private Education Implementation Rules (effective **Sept 1, 2021**) prohibiting foreign control of compulsory education or non-profit preschools via VIEs and enhancing supervision over related-party transactions[329](index=329&type=chunk)[333](index=333&type=chunk)[339](index=339&type=chunk) - The 'Alleviating Burden Opinions' (**July 2021**) classify IT education as a non-academic subject but impose strict operating requirements on after-school tutoring institutions, including prohibitions on online tutoring for preschoolers and capital market activities for academic AST institutions[345](index=345&type=chunk)[347](index=347&type=chunk) - The Interim Measures for Administrative Penalties on After-school Tutoring (effective **Oct 2023**) define illegal tutoring activities and impose various administrative penalties for non-compliance with licensing and operational requirements[353](index=353&type=chunk) - The PRC Cybersecurity Law (2017), Data Security Law (2021), Personal Information Protection Law (2021), and Network Data Regulations (2025) establish a comprehensive framework for data security, privacy, and cross-border data transfer, imposing significant compliance obligations and potential penalties[103](index=103&type=chunk)[104](index=104&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk)[390](index=390&type=chunk)[392](index=392&type=chunk)[393](index=393&type=chunk)[397](index=397&type=chunk)[398](index=398&type=chunk)[399](index=399&type=chunk)[400](index=400&type=chunk) - Foreign investment in value-added telecommunication services (excluding e-commerce) is restricted to **50% foreign equity ownership**, necessitating the company's VIE structure for operating 61it.cn and Tongcheng Online App[377](index=377&type=chunk)[379](index=379&type=chunk) - The CSRC's Overseas Listing Regulations (effective **March 2023**) require mainland China domestic companies, including those with VIE structures, to file with the CSRC for future overseas securities offerings[418](index=418&type=chunk) [Organizational Structure](index=151&type=section&id=4.4%20Organizational%20Structure) TCTM, a Cayman Islands holding company, operates in mainland China through subsidiaries and the VIE Beijing Tongcheng due to foreign ownership restrictions, using contractual arrangements for financial control and consolidation, which carry inherent enforcement risks - TCTM operates in mainland China through its subsidiaries and the current VIE, Beijing Tongcheng, due to foreign ownership restrictions in internet and value-added telecommunication services[440](index=440&type=chunk) - Beijing Tongcheng is **70% owned by Mr. Shaoyun Han** (founder and chairman) and **30% by Mr. Jin Li** (management member), both PRC citizens[440](index=440&type=chunk) - Contractual arrangements (Exclusive Business Cooperation Agreement, Power of Attorney, Share Pledge Agreements, Exclusive Option Agreements, Loan Agreements) grant TCTM effective financial control and economic benefits over Beijing Tongcheng, enabling consolidation of its financial results[441](index=441&type=chunk)[444](index=444&type=chunk)[445](index=445&type=chunk)[446](index=446&type=chunk)[448](index=448&type=chunk)[449](index=449&type=chunk) - The **equity interest of Mr. Shaoyun Han** in Beijing Tongcheng was **frozen from September 19, 2024, to September 18, 2027**, due to asset preservation measures related to a share transfer dispute[439](index=439&type=chunk) - PRC legal counsel opines that these contractual arrangements are valid and enforceable, but substantial uncertainties remain regarding interpretation and application of current or future PRC laws[450](index=450&type=chunk) [Property, Plants and Equipment](index=155&type=section&id=4.5%20Property%2C%20Plants%20and%20Equipment) The company's Beijing headquarters and facilities across 53 cities comprise 136,401.2 square meters of leased and owned space for operations, with management believing current and planned facilities are adequate for future expansion - As of **December 31, 2024**, the company's principal executive offices in Beijing occupy **3,710.9 square meters**, and it leases **13,054.3 square meters of classroom space** in Beijing[451](index=451&type=chunk) - The company operates **119,636 square meters** of offices, classrooms, and student dormitories across **53 cities** in mainland China, with lease terms ranging from **six months to ten years**[452](index=452&type=chunk) - Management believes current and planned facilities are sufficient for foreseeable future needs, with expansion primarily through leasing additional properties[453](index=453&type=chunk) [ITEM 4.A. UNRESOLVED STAFF COMMENTS](index=155&type=section&id=ITEM%204.A.%20UNRESOLVED%20STAFF%20COMMENTS) This item indicates that there are no unresolved staff comments - This item is '**Not Applicable**', indicating no unresolved staff comments[454](index=454&type=chunk) [ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=156&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes the company's financial condition and operating results, focusing on the professional education business divestiture, continuing operations, liquidity, capital resources, R&D, market trends, and critical accounting estimates [Operating Results](index=156&type=section&id=5.1%20Operating%20Results) The company's 2024 operating results were significantly impacted by the professional education business divestiture, leading to decreased net revenues and a net loss in continuing IT-focused STEM education due to reduced enrollments and increased impairment expenses - The **professional education business** was **divested** and reclassified as **discontinued operations**, significantly impacting the company's financial results[456](index=456&type=chunk)[457](index=457&type=chunk) Financial Impact of Discontinued Operations | Metric (RMB in millions) | 2022 | 2023 | 2024 | | :----------------------- | :--- | :--- | :--- | | Net Revenues | **1,068.2** | **624.6** | **111.9** | | Gross Profit | **740.6** | **398.4** | **70.5** | | Total Assets (as of Dec 31) | N/A | **275.6** | **0** | Net Revenues from Continuing Operations | Year | Net Revenues (RMB in millions) | | :--- | :----------------------------- | | 2022 | **1,399.8** | | 2023 | **1,375.2** | | 2024 | **1,170.9** | Student Enrollments in STEM Education Programs | Year | Student Enrollments | | :--- | :------------------ | | 2022 | **209,400** | | 2023 | **210,600** | | 2024 | **191,200** | Consolidated Statements of Comprehensive (Loss) Income (Continuing Operations) | Metric (RMB in thousands) | 2022 | 2023 | 2024 | | :------------------------ | :--- | :--- | :--- | | Net revenues | **1,399,844** | **1,375,192** | **1,170,858** | | Gross profit | **671,428** | **624,352** | **423,702** | | Operating (loss) income | **(26,353)** | **13,451** | **(506,372)** | | Net (loss) income from continuing operations | **(2,062)** | **22,334** | **(535,429)** | | Net income (loss) | **85,233** | **10,354** | **(587,102)** | - **Net revenues from continuing operations decreased by 14.9% in 2024**, primarily due to a slowdown in course consumption and reduced student enrollments in STEM education[475](index=475&type=chunk) - General and administrative expenses increased by **108.3% in 2024**, mainly due to significant **impairment of long-lived assets** (right-of-use assets, intangible assets, goodwill, and fixed assets)[485](index=485&type=chunk) [Liquidity and Capital Resources](index=166&type=section&id=5.2%20Liquidity%20and%20Capital%20Resources) The company's liquidity, primarily from operations and bank borrowings, totaled RMB46.5 million in cash and equivalents as of December 31, 2024, with net cash outflow from continuing operations and restrictions on cash transfers from PRC entities Cash, Cash Equivalents, Time Deposits, and Restricted Cash | As of December 31, | Amount (RMB in millions) | | :----------------- | :----------------------- | | 2024 | **46.5** | - The company believes its current cash, equivalents, time deposits, restricted cash, and anticipated cash flow from operations will be sufficient for the next **12 months**[501](index=501&type=chunk) Summary of Cash Flows (Continuing Operations) | Activity (RMB in thousands) | 2022 | 2023 | 2024 | | :-------------------------- | :--- | :--- | :--- | | Net cash provided by/(used in) operating activities | **1,046** | **21,468** | **(104,941)** | | Net cash used in investing activities | **(28,818)** | **(34,544)** | **(89,208)** | | Net cash (used in)/provided by financing activities | **(24,105)** | **(33,781)** | **18,632** | Capital Expenditures | Year | Amount (RMB in millions) | | :--- | :----------------------- | | 2022 | **29.4** | | 2023 | **34.7** | | 2024 | **65.6** | - PRC regulations restrict the ability of mainland China subsidiaries and VIEs to transfer cash or assets offshore, including requirements for statutory reserve funds and limitations on dividend payments[515](index=515&type=chunk)[517](index=517&type=chunk)[518](index=518&type=chunk)[519](index=519&type=chunk) [Research and Development, Patents and Licenses, etc.](index=171&type=section&id=5.3%20Research%20and%20Development%2C%20Patents%20and%20Licenses%2C%20etc.) The company invests in R&D to maintain its education platform's technology infrastructure, protecting intellectual property through copyrights, trademarks, and domain names, with 30 domain names, three software copyrights, and 116 trademarks as of March 31, 2025 - R&D focuses on improving the technology infrastructure for live lectures, TTS, and 61it.cn, utilizing a mix of commercial and proprietary systems[520](index=520&type=chunk) Research and Development Expenses | Year | Amount (RMB in millions) | | :--- | :----------------------- | | 2022 | **20.2** | | 2023 | **11.7** | | 2024 | **19.1** | - The company protects its intellectual property through copyright and trademark laws, trade secret protection, and confidentiality agreements[522](index=522&type=chunk) - As of **March 31, 2025**, the company had registered **30 domain names**, **three software copyrights**, and **116 trademarks** related to its continuing operations[523](index=523&type=chunk) [Trend Information](index=171&type=section&id=5.4%20Trend%20Information) The company is not aware of any new material trends, uncertainties, demands, commitments, or events since January 1, 2025, that would materially affect its financial performance or condition beyond existing disclosures - No new material trends, uncertainties, demands, commitments, or events are identified for the period starting **January 1, 2025**, that would materially affect financial performance or condition, beyond what is already disclosed[524](index=524&type=chunk) [Critical Accounting Estimates](index=173&type=section&id=5.5%20Critical%20Accounting%20Estimates) Financial statement preparation under U.S. GAAP requires significant judgments and estimates, particularly for revenue recognition, operating leases, income taxes, and fair value measurements, with key critical estimates including asset impairment, credit loss allowances, and income tax provisions - **Critical accounting policies** and practices include revenue recognition, operating leases, income taxes, and fair value measurements, requiring significant judgment and estimates[526](index=526&type=chunk) - In **2024**, the company recorded **goodwill impairment losses of RMB49.4 million** and **impairment of long-lived assets totaling RMB272.6 million** (including **RMB4.0 million for intangible assets**, **RMB60.9 million for property and equipment**, and **RMB207.7 million for right-of-use assets**)[528](index=528&type=chunk)[529](index=529&type=chunk) - **Allowance for credit losses** is estimated using the CECL Model, considering historical experience, creditworthiness, economic conditions, and payment patterns[530](index=530&type=chunk) As of **December 31, 2024**, the **allowance for prepaid expenses and other current assets was RMB49.7 million**, and for other non-current assets was **RMB23.1 million**[532](index=532&type=chunk) - Deferred tax assets and liabilities are recognized based on temporary differences, with a **valuation allowance** recorded when realization is not more likely than not[534](index=534&type=chunk) As of **December 31, 2024**, the **net deferred tax assets for continuing operations were nil**, after a **RMB170.9 million valuation allowance**[534](index=534&type=chunk) [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=175&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section provides information on the company's executive officers, directors, compensation, share incentive plans, board practices, and employee structure, detailing key management roles, board committees, and workforce changes post-divestiture [Directors and Senior Management](index=175&type=section&id=6.1%20Directors%20and%20Senior%20Management) The company's leadership team includes Shaoyun Han, Heng Wang (CEO), Jianguang Li, Mingjie Sun, Linjing Xu, Zhe Sun, He Huang (Independent Directors), Xiaolan Tang (CFO), and Robert L. Angell (CTO), with recent appointments in February and March 2025 Directors and Executive Officers | Name | Age | Position/Title | | :------------ | :-- | :----------------------- | | Shaoyun Han | **54** | Founder and Chairman | | Heng Wang | **57** | Director, Chief Executive Officer | | Jianguang Li | **60** | Independent Director | | Mingjie Sun | **61** | Independent Director | | Linjing Xu | **52** | Independent Director | | Zhe Sun | **59** | Independent Director | | He Huang | **52** | Independent Director | | Xiaolan Tang | **45** | Chief Financial Officer | | Robert L. Angell | **64** | Chief Technology Officer | - **Heng Wang** was appointed **CEO in February 2025**, bringing over **30 years of experience** in financial technologies, IT strategy, and compliance[538](index=538&type=chunk)[990](index=990&type=chunk) - **Xiaolan Tang** was re-designated as **CFO in March 2025**, with over **20 years of experience** in education industry sales, marketing, and corporate management[544](index=544&type=chunk)[990](index=990&type=chunk) - **Robert L. Angell** was appointed **CTO in February 2025**, with over **30 years of experience** in systems engineering, data structures, algorithms, and data science[545](index=545&type=chunk)[990](index=990&type=chunk) [Compensation](index=179&type=section&id=6.2%20Compensation) For FY2024, the company paid RMB5.5 million in cash to executive officers and RMB5.1 million to non-executive directors, provides statutory social security benefits, and has non-competition and indemnification agreements in place - In **FY2024**, executive officers received approximately **RMB5.5 million in cash compensation**, and non-executive directors received **RMB5.1 million**[546](index=546&type=chunk) - The company contributes to various employee social security plans in mainland China (pension, unemployment, maternity, work-related injury, medical, and housing insurance) as required by law[546](index=546&type=chunk) - Employment agreements include non-competition and non-solicitation restrictions for executive officers, typically for **two years post-employment**[549](index=549&type=chunk) - Indemnification agreements are in place for directors and executive officers, covering liabilities and expenses incurred in their roles, excluding dishonesty, willful default, or fraud[550](index=550&type=chunk) [Share Incentive Plan](index=181&type=section&id=6.3%20Share%20Incentive%20Plan) The company operates under the 2024 Share Incentive Plan, adopted in February 2024, with an initial award pool of 3,500,000 shares, and as of February 28, 2025, 791,905 options and 59,920 restricted share units were outstanding - The **2024 Share Incentive Plan**, adopted in **February 2024**, authorizes the issuance of options, restricted shares, and restricted share units to eligible participants[551](index=551&type=chunk) - The maximum aggregate number of shares for awards under the **2024 Plan is 3,500,000**, with an annual increase mechanism to maintain **2% of total outstanding shares**[551](index=551&type=chunk) Outstanding Share Options (as of Feb 28, 2025) | Name | Ordinary Shares Underlying Options Awarded | | :---------- | :--------------------------------------- | | Shaoyun Han | * | | Xiaolan Tang | * | | Total | **849,660** | Outstanding Restricted Share Units (as of Feb 28, 2025) | Name | Number of Class A Ordinary Shares Underlying Restricted Share Units | | :---------- | :---------------------------------------------------------------- | | Jianguang Li | * | - As of **February 28, 2025**, **791,905 options** and **59,920 restricted share units** were outstanding under the **2024 Plan**[551](index=551&type=chunk)[559](index=559&type=chunk) The **2014 Plan**, which terminated in **February 2024**, still had **1,702,335 options** and **1,605 restricted share units** outstanding[551](index=551&type=chunk)[559](index=559&type=chunk) [Board Practices](index=183&type=section&id=6.4%20Board%20Practices) The company's board of directors, comprising five members, operates with audit, compensation, and nominating committees, all with independent directors, and directors owe duties of loyalty and care under Cayman Islands law - The board of directors currently consists of **five directors**[565](index=565&type=chunk) - The company has an audit committee (chaired by He Huang), a compensation committee (chaired by Linjing Xu), and a nominating and corporate governance committee (chaired by Zhe Sun), all composed of independent directors[567](index=567&type=chunk)[568](index=568&type=chunk)[569](index=569&type=chunk)[571](index=571&type=chunk) - Directors have a duty of loyalty to act honestly in good faith and a duty to exercise skill and care, as per Cayman Islands law[572](index=572&type=chunk) - Independent directors serve **two-year terms**, while other directors hold office until resignation or removal by shareholder resolution[573](index=573&type=chunk) [Board Diversity](index=187&type=section&id=6.5%20Board%20Diversity) As of February 28, 2025, the company's board of directors comprises 7 directors, with 2 female and 5 male members, including one underrepresented individual in the home country jurisdiction Board Diversity Matrix (As of February 28, 2025) | Category | Count | | :------- | :---- | | Total Number of Directors | **7** | | Female | **2** | | Male | **5** | | Underrepresented Individual in Home Country Jurisdiction | **1** | [Employees](index=187&type=section&id=6.6%20Employees) As of December 31, 2024, the company had 4,142 employees, with 3,854 in continuing operations, primarily in teaching and content development, and only 15 employees in continuing operations as of March 31, 2025, post-divestiture Total Employees by Year | Year | Number of Employees | | :--- | :------------------ | | 2022 | **7,955** | | 2023 | **7,024** | | 2024 | **4,142** | Employees by Function (as of December 31, 2024) | Functions | Number of Employees | | :------------------------ | :------------------ | | Teaching and content development | **2,218** | | Selling and marketing | **465** | | General and administration | **512** | | Others | **947** | | Total | **4,142** | - As of **March 31, 2025**, only **15 employees** were associated with continuing operations following the **divestiture of the professional education business**[578](index=578&type=chunk) - The company participates in various mandatory employee social security plans in mainland China, including pension, unemployment, maternity, work-related injury, medical insurance, and housing funds[579](index=579&type=chunk) [Share Ownership](index=189&type=section&id=6.7%20Share%20Ownership) As of February 28, 2025, the company had 49,771,953 ordinary shares outstanding, with Class B shares (14.5% of total shares, 62.9% of voting power) held by Ms. Lijuan Han, indicating concentrated control - As of **February 28, 2025**, there were **49,771,953 ordinary shares outstanding**, including **42,565,894 Class A** and **7,206,059 Class B ordinary shares**[581](index=581&type=chunk) - Class A ordinary shares carry **one vote per share**, while Class B ordinary shares carry **ten votes per share**[587](index=587&type=chunk) Beneficial Ownership of Ordinary Shares (as of Feb 28, 2025) | Shareholder | Class A Ordinary Shares | Class B Ordinary Shares | Total Ordinary Shares (as-converted) | % of Total Ordinary Shares | % of Aggregate Voting Power | | :---------- | :---------------------- | :---------------------- | :----------------------------------- | :------------------------- | :-------------------------- | | Shaoyun Han | **683,285** | — | **683,285** | **1.4%** | **0.6%** | | All directors and executive officers as a group | **1,572,042** | — | **1,572,042** | **3.2%** | **1.4%** | | Lijuan Han | **2,344,665** | **7,206,059** | **9,550,724** | **19.2%** | **64.9%** | | Theodore Walker Cheng-De King | **9,226,355** | — | **9,226,355** | **18.5%** | **8.0%** | | Connion Capital Limited | **6,746,618** | — | **6,746,618** | **13.6%** | **5.9%** | - Ms. Lijuan Han, through Learningon, holds **19.2% of total ordinary shares** and **64.9% of aggregate voting power**, indicating **substantial influence**[583](index=583&type=chunk)[585](index=585&type=chunk) [Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation](index=193&type=section&id=6.8%20Disclosure%20of%20a%20Registrant%27s%20Action%20to%20Recover%20Erroneously%20Awarded%20Compensation) This item states that there is no applicable information regarding the registrant's action to recover erroneously awarded compensation - This item is '**Not applicable**'[591](index=591&type=chunk) [ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=193&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section refers to major shareholder disclosures and details related party transactions, including the professional education business divestiture to a related party-led consortium and inter-company service agreements with Tarena Tech [Major Shareholders](index=193&type=section&id=7.1%20Major%20Shareholders) Information regarding major shareholders is referenced to 'Item 6. Directors, Senior Management and Employees—E. Share Ownership' - Major shareholder information is provided in '**Item 6. Directors, Senior Management and Employees—E. Share Ownership**'[592](index=592&type=chunk) [Related Party Transactions](index=193&type=section&id=7.2%20Related%20Party%20Transactions) Key related party transactions include the professional education business divestiture to a consortium led by Ms. Lijuan Han in December 2023, ongoing service agreements with Tarena Tech, and new loans totaling RMB33,383 thousand to Tarena Tech and Tarena Hangzhou in 2024 - The **professional education business** was **divested** to a buyer consortium led by Ms. Lijuan Han, sister of the founder and chairman Mr. Shaoyun Han, in **December 2023**[593](index=593&type=chunk) - In **2024**, the company provided **RMB3,338 in services** to Tarena Tech and received **RMB10,942 in services** from Tarena Tech for HR and IT staff sharing[594](index=594&type=chunk) - In **2024**, the company provided **RMB33,383 thousand in new loans** to Tarena Tech and Tarena Hangzhou, with **RMB21,591 thousand offset by a building purchase** from Tarena Hangzhou[946](index=946&type=chunk) [Interests of Experts and Counsel](index=193&type=section&id=7.3%20Interests%20of%20Experts%20and%20Counsel) This item states that there is no applicable information regarding the interests of experts and counsel - This item is '**Not applicable**'[595](index=595&type=chunk) [ITEM 8. FINANCIAL INFORMATION](index=193&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section confirms the inclusion of consolidated financial statements, details legal proceedings, dividend policy, and significant changes, highlighting a settled securities class action lawsuit and the company's earnings retention policy [Consolidated Statements and Other Financial Information](index=193&type=section&id=8.1%20Consolidated%20Statements%20and%20Other%20Financial%20Information) The consolidated financial statements are appended as part of this annual report - Consolidated financial statements are included as part of this annual report[596](index=596&type=chunk) [Legal Proceedings](index=195&type=section&id=8.2%20Legal%20Proceedings) The company was a defendant in a securities class action lawsuit, Yili Qiu v. Tarena International, Inc. et al., filed in 2021, which was settled and received final court approval on September 9, 2024, closing the case - The company was a defendant in a **securities class action lawsuit** (Yili Qiu v. Tarena International, Inc. et al.) filed in **June 2021**, alleging false or misleading statements in SEC filings[598](index=598&type=chunk) - A settlement agreement for the class action lawsuit received preliminary approval on **September 5, 2023**, and final approval on **September 9, 2024**, closing the case[598](index=598&type=chunk) - The company is not currently a party to any other material legal, arbitration, or administrative proceedings[599](index=599&type=chunk) [Dividend Policy](index=195&type=section&id=8.3%20Dividend%20Policy) The company has not declared or paid cash dividends since 2019, planning to retain earnings for business expansion, with declarations subject to board discretion, Cayman Islands law, and PRC regulations - The company has not declared or paid any cash dividends since the **beginning of 2019** and intends to retain available funds and future earnings for business expansion[600](index=600&type=chunk) - Dividend declarations are at the discretion of the board of directors, subject to Cayman Islands law (dividends from profit or share premium, provided debts can be paid) and PRC regulations on dividend distribution from mainland China subsidiaries[601](index=601&type=chunk)[603](index=603&type=chunk) [Significant Changes](index=195&type=section&id=8.4%20Significant%20Changes) No significant changes have occurred since the date of the audited consolidated financial statements, other than those already disclosed in this annual report - No significant changes have occurred since the date of the audited consolidated financial statements, other than those already disclosed in the annual report[603](index=603&type=chunk) [ITEM 9. THE OFFER AND LISTING](index=197&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) This section details the company's ADSs listing history, including market transfers and ticker symbol changes, and states that information on offer details, distribution plan, selling shareholders, dilution, and issue expenses is not applicable [Offer and Listing Details](index=197&type=section&id=9.1%20Offer%20and%20Listing%20Details) Information regarding offer and listing details is referenced to 'Item 9. The Offer and Listing—C. Markets' - Information for this item is referenced to '**Item 9. The Offer and Listing—C. Markets**'[605](index=605&type=chunk) [Plan of Distribution](index=197&type=section&id=9.2%20Plan%20of%20Distribution) This item states that information regarding the plan of distribution is not applicable - Information for this item is '**Not applicable**'[605](index=605&type=chunk) [Markets](index=197&type=section&id=9.3%20Markets) The company's ADSs, listed on Nasdaq Global Select Market since April 3, 2014, transferred to Nasdaq Capital Market on November 17, 2023, with ticker symbol changes to 'TCTM' in January 2024 and 'VSA' in April 2025 - ADSs were listed on Nasdaq Global Select Market since **April 3, 2014**, and transferred to Nasdaq Capital Market on **November 17, 2023**[606](index=606&type=chunk) - Ticker symbol changed from 'TEDU' to '**TCTM**' on **January 10, 2024**, and then to '**VSA**' on **April 7, 2025**[606](index=606&type=chunk) [Selling Shareholders](index=197&type=section&id=9.4%20Selling%20Shareholders) This item states that information regarding selling shareholders is not applicable - Information for this item is '**Not applicable**'[607](index=607&type=chunk) [Dilution](index=197&type=section&id=9.5%20Dilution) This item states that information regarding dilution is not applicable - Information for this item is '**Not applicable**'[608](index=608&type=chunk) [Expenses of the Issue](index=197&type=section&id=9.6%20Expenses%20of%20the%20Issue) This item states that information regarding the expenses of the issue is not applicable - Information for this item is '**Not applicable**'[609](index=609&type=chunk) [ITEM 10. ADDITIONAL INFORMATION](index=197&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section provides supplementary information on the company's share capital, memorandum and articles of association, material contracts, exchange controls, and taxation in various jurisdictions [Share Capital](index=197&type=section&id=10.1%20Share%20Capital) This item states that information regarding share capital is not applicable - Information for this item is '**Not applicable**'[610](index=610&type=chunk) [Memorandum and Articles of Association](index=197&type=section&id=10.2%20Memorandum%20and%20Articles%20of%20Association) This section summarizes the company's memorandum and articles of association and Cayman Islands Companies Act, detailing Class A and Class B shareholder rights, board powers, liquidation, and corporate law differences compared to Delaware - The company's registered office is in the Cayman Islands, and its objects are unrestricted[611](index=611&type=chunk) - Holders of Class A and Class B ordinary shares have equal dividend rights[613](index=613&type=chunk) Class A shares have **one vote**, while Class B shares have **ten votes per share**[614](index=614&type=chunk) - Class B ordinary shares are convertible into Class A shares on a **one-for-one basis**, but Class A shares are not convertible into Class B shares[617](index=617&type=chunk) - The Companies Act of the Cayman Islands permits mergers and consolidations, with specific procedures for shareholder and board approval, and dissenters' rights for fair value payment[634](index=634&type=chunk)[638](index=638&type=chunk) - Cayman Islands law allows for indemnification of officers and directors, similar to Delaware law, but U.S. federal securities laws deem indemnification for Securities Act liabilities against public policy[645](index=645&type=chunk)[646](index=646&type=chunk) - Directors owe fiduciary duties to the company, including acting bona fide in its best interests and exercising skill and care[649](index=649&type=chunk) [Material Contracts](index=209&type=section&id=10.3%20Material%20Contracts) No material contracts have been entered into during the past two years, other than those already disclosed in 'Item 4. Information on the Company' or elsewhere in this annual report - No material contracts have been entered into during the past **two years**, other than those already disclosed[662](index=662&type=chunk) [Exchange Controls](index=211&type=section&id=10.4%20Exchange%20Controls) This section refers to 'Item 4. Information on the Company—B. Business Overview—Government Regulations' for information on foreign exchange registration, foreign currency exchange, and dividend distribution controls - Information on exchange controls is detailed in '**Item 4. Information on the Company—B. Business Overview—Government Regulations**' sections on Foreign Exchange Registration, Foreign Currency Exchange, and Dividend Distribution[664](index=664&type=chunk) [Taxation](index=211&type=section&id=10.5%20Taxation) This section summarizes tax considerations for ADSs and ordinary shares under Cayman Islands, mainland China, and U.S. federal income tax laws, highlighting Cayman Islands tax exemption, potential mainland China 'resident enterprise' classification, and adverse U.S. PFIC consequences - The company is exempt from income or capital gains tax in the Cayman Islands, and dividend payments are not subject to withholding tax there[665](index=665&type=chunk) - If classified as a mainland China '**resident enterprise**' under the EIT Law, the company would be subject to a **25% enterprise income tax** on its worldwide income, and dividends to non-mainland China enterprise shareholders could face a **10% withholding tax**[667](index=667&type=chunk)[669](index=669&type=chunk) - The company does not believe it is a mainland China resident enterprise, but uncertainties exist regarding the interpretation and application of relevant tax laws[667](index=667&type=chunk) - The company does not believe it was a PFIC for the taxable year ended **December 31, 2024**, but PFIC status is a factual determination made annually and can be affected by market price fluctuations and asset composition[254](index=254&type=chunk)[255](index=255&type=chunk)[683](index=683&type=chunk)[684](index=684&type=chunk) - If classified as a PFIC, U.S. Holders would be subject to special adverse tax rules on excess distributions and gains from disposition, unless a mark-to-market election is made for marketable stock[694](index=694&type=chunk)[696](index=696&type=chunk) [Dividends and Paying Agents](index=224&type=section&id=10.6%20Dividends%20and%20Paying%20Agents) This item states that information regarding dividends and paying agents is not applicable - Information for this item is '**Not Applicable**'[702](index=702&type=chunk) [Statement by Experts](index=224&type=section&id=10.7%20Statement%20by%20Experts) This item states that information regarding statements by experts is not applicable - Information for this item is '**Not Applicable**'[703](index=703&type=chunk) [Documents on Display](index=224&type=section&id=10.8%20Documents%20on%20Display) The company is subject to SEC reporting requirements, filing annual reports on Form 20-F as a foreign private issuer, with all information available on www.sec.gov and its website - The company is subject to SEC reporting requirements, filing annual reports on Form 20-F[704](index=704&type=chunk) - As a foreign private issuer, the company is exempt from certain U.S. domestic issuer rules, including quarterly reports and proxy statements[704](index=704&type=chunk) - All SEC filings and annual reports are available on www.sec.gov and the company's website, http://ir.tctm.cn[704](index=704&type=chunk)[706](index=706&type=chunk) [Subsidiary Information](index=224&type=section&id=10.9%20Subsidiary%20Information) This item states that information regarding subsidiary information is not applicable - Information for this item is '**Not applicable**'[707](index=707&type=chunk) [Annual Report to Security Holders](index=224&type=section&id=10.10%20Annual%20Report%20to%20Security%20Holders) This item states that information regarding the annual report to security holders is not applicable - Information for this item is '**Not applicable**'[708](index=708&type=chunk) [ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=224&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section discusses the company's exposure to market risks, primarily foreign exchange risk due to RMB/USD fluctuations and interest rate risk from cash and time deposits, without significant derivative hedging [Foreign Exchange Risk](index=224&type=section&id=11.1%20Foreign%20Exchange%20Risk) The company's primary foreign exchange risk arises from U.S. dollar-denominated equity offering proceeds, with RMB/USD fluctuations adversely affecting earnings and dividends, resulting in a net foreign exchange loss of RMB0.3 million in 2024 - Substantially all net revenues, costs, and expenses are denominated in Renminbi, while foreign exchange risk primarily relates to U.S. dollar proceeds from equity offerings[709](index=709&type=chunk) - The company had a **net foreign exchange loss of RMB0.3 million** (US$0.05 million) in **2024**[709](index=709&type=chunk) - A hypothetical **10% decrease or increase** in the U.S. dollar against the RMB would result in an increase or decrease of **RMB60.4 million** in the value of U.S. dollar-denominated financial assets as of **December 31, 2024**[713](index=713&type=chunk) [Interest Rate Risk](index=226&type=section&id=11.2%20Interest%20Rate%20Risk) The company's interest rate risk primarily relates to interest income from excess cash in demand deposits, with no significant derivative use and no anticipated material risks from interest rate changes - **Interest rate risk** primarily relates to interest income from excess cash invested in demand deposits[714](index=714&type=chunk) - The company has not used significant derivative financial instruments to manage interest rate risk and does not anticipate material risks from changes in interest rates[714](index=714&type=chunk) [ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](index=226&type=section&id=ITEM%2012.%20DESCRIPTION%20OF%20SECURITIES%20OTHER%20THAN%20EQUITY%20SECURITIES) This section details fees and charges associated with holding the company's ADSs, including issuance, cancellation, distribution, and depositary service fees, and states that information on debt securities, warrants, and other securities is not applicable [Debt Securities](index=226&type=section&id=12.1%20Debt%20Securities) This item states that information regarding debt securities is not applicable - Information for this item is '**Not applicable**'[715](index=715&type=chunk) [Warrants and Rights](index=226&type=section&id=12.2%20Warrants%20and%20Rights) This item states that information regarding warrants and rights is not applicable - Information for this item is '**Not applicable**'[716](index=716&type=chunk) [Other Securities](index=226&type=section&id=12.3%20Other%20Securities) This item states that information regarding other securities is not applicable - Information for this item is '**Not applicable**'[717](index=717&type=chunk) [American Depositary Shares](index=226&type=section&id=12.4%20American%20Depositary%20Shares) Holders of the company's ADSs are subject to various service fees from the depositary bank for issuance, cancellation, cash distributions, and depositary services, with the depositary reimbursing the company US$150 thousand in 2024 Fees Payable by ADS Holders | Service | Fees | | :------------------------------------------ | :---------------------------------------- | | Issuance of ADSs | Up to **U.S. 5¢ per ADS issued** | | Cancellation of ADSs | Up to **U.S. 5¢ per ADS canceled** | | Distribution of cash dividends or other cash distributions | Up to **U.S. 5¢ per ADS held** | | Depositary Services | Up to **U.S. 5¢ per ADS held** on applicable record date(s) established by the Depositary bank | - In **2024**, the company received **US$150 thousand** from the depositary for expenses related to the establishment and maintenance of the ADS program[723](index=723&type=chunk) [PART II.](index=228&type=section&id=PART%20II.) [ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES](index=228&type=section&id=ITEM%2013.%20DEFAULTS%2C%20DIVIDEND%20ARREARAGES%20AND%20DELINQUENCIES) This item states that there are no defaults, dividend arrearages, or delinquencies to report - There are no defaults, dividend arrearages, or delinquencies[725](index=725&type=chunk) [ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](index=228&type=section&id=ITEM%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) This item states that there have been no material modifications to the rights of security holders - There have been no material modifications to the rights of security holders[726](index=726&type=chunk) [ITEM 15. CONTROLS AND PROCEDURES](index=228&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) This section details the company's evaluation of disclosure controls and procedures and management's annual report on internal control over financial reporting, concluding effectiveness as of December 31, 2024, with no material changes during the year [Evaluation of Disclosure Controls and Procedures](index=228&type=section&id=15.1%20Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) As of December 31, 2024, the company's management, including the CEO and CFO, evaluated and concluded the effectiveness of its disclosure controls and procedures, ensuring timely and appropriate information reporting - As of **December 31, 2024**, the company's disclosure controls and procedures were evaluated and deemed **effective**[728](index=728&type=chunk) - These controls ensure that information required for SEC reports is recorded, processed, summarized, and reported timely[728](index=728&type=chunk) [Management's Annual Report on Internal Control over Financial Reporting](index=230&type=section&id=15.2%20Management%27s%20Annual%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting) Management is responsible for establishing and maintaining adequate internal control over financial reporting, concluding its effectiveness as of December 31, 2024, based on the COSO 2013 Framework - Management is responsible for establishing and maintaining adequate internal control over financial reporting[730](index=730&type=chunk) - As of **December 31, 2024**, management concluded that internal control over financial reporting was **effective**, based on the **COSO 2013 Framework**[731](index=731&type=chunk)[732](index=732&type=chunk) [Changes in Internal Control over Financial Reporting](index=230&type=section&id=15.3%20Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes in the company's internal control over financial reporting occurred during the year ended December 31, 2024 - No material changes in internal control over financial reporting occurred during the year ended **December 31, 2024**[734](index=734&type=chunk) [ITEM 16. [RESERVED]](index=231&type=section&id=ITEM%2016.%20%5BRESERVED%5D) This item is reserved and contains no information [ITEM 16.A. AUDIT COMMITTEE FINANCIAL EXPERT](index=231&type=section&id=ITEM%2016.A.%20AUDIT%20COMMITTEE%20FINANCIAL%20EXPERT) The board of directors has determined that Mr. He Huang, an independent director and audit committee chairman, qualifies as an audit committee financial expert - Mr. He Huang, an independent director and chairman of the audit committee, is designated as an **audit committee financial expert**[735](index=735&type=chunk) [ITEM 16.B. CODE OF ETHICS](index=231&type=section&id=ITEM%2016.B.%20CODE%20OF%20ETHICS) The board of directors has adopted a code of ethics applicable to all directors, officers, and employees, with specific provisions for senior finance officers, available on the company's website - A **code of ethics** has been adopted for all directors, officers, and employees, with specific provisions for senior finance officers[736](index=736&type=chunk) - A copy of the code of business conduct and ethics is available on the company's website at http://ir.tctm.cn/[736](index=736&type=chunk) [ITEM 16.C. PRINCIPAL ACCOUNTANT FEES AND SERVICES](index=231&type=section&id=ITEM%2016.C.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) This section details audit fees paid to independent registered public accounting firms, with Marcum Asia CPAs LLP receiving RMB5,997 thousand in 2023 and Assentsure PAC receiving RMB3,285 thousand in 2024 Principal Accountant Fees | Year | Auditor | Audit Fees (RMB in thousands) | | :--- | :---------------- | :---------------------------- | | 2023 | Marcum Asia CPAs LLP | **5,997** | | 2024 | Assentsure PAC | **3,285** | - The audit committee pre-approves all audit and non-audit services provided by the independent registered public accounting firms[738](index=738&type=chunk) [ITEM 16.D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES](index=231&type=section&id=ITEM%2016.D.%20EXEMPTIONS%20FROM%20THE%20LISTING%20STANDARDS%20FOR%20AUDIT%20COMMITTEES) This item states that there are no exemptions from the listing standards for audit committees - This item is '**Not Applicable**'[739](index=739&type=chunk) [ITEM 16.E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS](index=231&type=section&id=ITEM%2016.E.%20PURCHASES%20OF%20EQUITY%20SECURITIES%20BY%20THE%20ISSUER%20AND%20AFFILIATED%20PURCHASERS) In January 2024, the company repurchased 5,119,698 Class A ordinary shares from Talent Fortune Investment Limited, an KKR affiliate, at $0.2 per share - In **January 2024**, the company **repurchased 5,119,698 Class A ordinary shares** from Talent Fortune Investment Limited (an KKR affiliate) at **$0.2 per share**[740](index=740&type=chunk) [ITEM 16.F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT](index=231&type=section&id=ITEM%2016.F.%20CHANGE%20IN%20REGISTRANT%27S%20CERTIFYING%20ACCOUNTANT) The company dismissed Marcum Asia CPAs LLP on March 14, 2025, appointed and dismissed Guangdong Prouden CPAs GP, and then appointed Assentsure PAC as the new independent registered public accounting firm on April 14, 2025 - Marcum Asia CPAs LLP was **dismissed** as the independent registered public accounting firm on **March 14, 2025**[741](index=741&type=chunk) - Guangdong Prouden CPAs GP was appointed on **March 14, 2025**, but **dismissed** on **April 14, 2025**[746](index=746&type=chunk)[748](index=748&type=chunk) - Assentsure PAC was **appointed** as the new independent registered public accounting firm on **April 14, 2025**[748](index=748&type=chunk) - No adverse opinions, disclaimers, qualifications, or modifications were in Marcum Asia's reports, and no disagreements or reportable events occurred during the changes in accountants[742](index=742&type=chunk)[743](index=743&type=chunk)[749](index=749&type=chunk) [ITEM 16.G. CORPORATE GOVERNANCE](index=234&type=section&id=ITEM%2016.G.%20CORPORATE%20GOVERNANCE) As a Cayman Islands company listed on NASDAQ, the company follows home country corporate governance practices, which may differ from NASDAQ standards, potentially offering shareholders less protection than U.S. domestic issuers - As a foreign private issuer listed on NASDAQ, the company follows Cayman Islands corporate governance practices, which may differ from NASDAQ standards[753](index=753&type=chunk) - The company relied on an exemption for not holding an annual general meeting in **2024** and followed home country practices for adopting the **2024 Share Incentive Plan**[754](index=754&type=chunk) [ITEM 16.H. MINE SAFETY DISCLOSURE](index=234&type=section&id=ITEM%2016.H.%20MINE%20SAFETY%20DISCLOSURE) This item states that information regarding mine safety disclosure is not applicable - This item is '**Not applicable**'[755](index=755&type=chunk) [ITEM 16.I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS](index=234&type=section&id=ITEM%2016.I.%20DISCLOSURE%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTIONS) This item states that information regarding foreign jurisdictions that prevent inspections is not applicable - This item is '**Not applicable**'[756](index=756&type=chunk) [ITEM 16.J. INSIDER TRADING POLICIES](index=234&type=section&id=ITEM%2016.J.%20INSIDER%20TRADING%20POLICIES) The company has adopted an insider trading policy for directors, senior management, and employees to ensure compliance with insider trading laws, filed as Exhibit 11.2 to the Annual Report - An **insider trading policy** has been adopted for directors, senior management, and employees to ensure compliance with insider trading laws[757](index=757&type=chunk) - The policy is filed as Exhibit 11.2 to the Annual Report[757](index=757&type=chunk) [ITEM 16.K. CYBERSECURITY](index=235&type=section&id=ITEM%2016.K.%20CYBERSECURITY) The company has implemented a robust cybersecurity defense system and integrated cybersecurity risk management, with board oversight and management responsibility for threats, and no material incidents reported as of the report date - The company has a robust **cybersecurity defense system** and integrates **cybersecurity risk management** into its enterprise risk management[759](index=759&type=chunk)[760](index=760&type=chunk) - The board's cybersecurity committee oversees **risk management**, and management-level officers (CEO, CFO, Cybersecurity Officer) are responsible for assessing, identifying, and managing cybersecurity threats and incidents[762](index=762&type=chunk)[763](index=763&type=chunk) - As of the report date, no material cybersecurity incidents or threats have affected the company's business strategy, results of operations, or financial condition[761](index=761&type=chunk) [PART III.](index=236&type=section&id=PART%20III.) [ITEM 17. FINANCIAL STATEMENTS](index=236&type=section&id=ITEM%2017.%20FINANCIAL%20STATEMENTS) The company has elected to provide its financial statements pursuant to Item 18 - Financial statements are provided under Item 18[766](index=766&type=chunk) [ITEM 18. FINANCIAL STATEMENTS](index=236&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section includes the consolidated financial statements of TCTM Kids IT Education Inc., its subsidiaries, and VIEs, prepared under U.S. GAAP, featuring auditor reports, balance sheets, income statements, changes in deficit, cash flows, and detailed notes [Notes to the Consolidated Financial Statements](index=252&type=secti

Core Insights - The strategic cooperation between Daren Education and Adobe China aims to enhance the training of AGI design talents, integrating Adobe's creative software technology with cutting-edge AGI developments [4][6] - Daren Education has a long-standing partnership with Adobe, having become an Adobe training certification center since 2012, and has trained over 100,000 high-quality design talents [3][4] - The collaboration will focus on course development, faculty training, and employment services, leveraging Daren Education's extensive network of talent service centers across 37 major cities in China [4][6] Group 1 - The ACP World Championship China Finals took place in Shanghai, where Daren Education signed a strategic cooperation agreement with Adobe China [1] - AGI technology is reshaping the design industry, creating new opportunities and raising standards for design professionals [3] - Adobe International Certification is a globally recognized certification system for Adobe software users, available in 128 countries and 19 languages [3] Group 2 - The strategic agreement will enhance the integration of Adobe's international certification with AGI technology, aligning China's vocational education standards with international benchmarks [6] - Daren Education aims to provide more internship and employment opportunities for students, facilitating their entry into high-demand sectors such as internet companies and media production [4] - During the ACP finals, Daren Education's general manager awarded certificates to winners, highlighting the success of students in a world-class competition [4]

[**Introduction**](index=4&type=section&id=INTRODUCTION) This section defines key terms and highlights TCTM Kids IT Education Inc.'s Cayman Islands holding company structure, its operations through mainland China subsidiaries and VIEs, and the associated risks [**Definitions**](index=4&type=section&id=Definitions) This section defines key terms, including ADSs, VIEs, China/PRC, Divestiture, former VIE, current VIE, STEM education, and currency translations, emphasizing TCTM's Cayman Islands holding structure and its operational risks - TCTM Kids IT Education Inc. is a Cayman Islands holding company with operations primarily conducted through mainland China subsidiaries and Variable Interest Entities (VIEs), a structure that entails **unique risks** to investors[6](index=6&type=chunk) - The company's professional education business was divested in **December 2023**, with consummation by the end of **March 2024**, leading to a reclassification of this business as discontinued operations[6](index=6&type=chunk) - Financial results are presented in RMB, with U.S. dollar translations provided for convenience at an exchange rate of **RMB7.0999** to **US$1.00** as of **December 29, 2023**[6](index=6&type=chunk) [**Forward-Looking Information**](index=5&type=section&id=FORWARD-LOOKING%20INFORMATION) This section cautions that the annual report contains forward-looking statements, which are subject to known and unknown risks and uncertainties, and actual results may differ materially - Forward-looking statements are based on current expectations and projections, but actual results may differ materially due to known and unknown risks and uncertainties[8](index=8&type=chunk)[10](index=10&type=chunk) - Goals and growth strategies, and ability to implement them - Expectations regarding demand for and market acceptance of courses - Ability to retain and increase courses and student enrollments - Ability to maintain and increase the utilization rate of learning centers - Ability to offer new courses in existing and new subject areas - Future business development, results of operations, and financial condition - Expected growth of, and trends in, the markets for services in mainland China - Government policies and regulations relating to corporate structure, business, and industry - The company operates in an evolving environment, with new risk factors and uncertainties emerging, making it difficult to predict all potential impacts[10](index=10&type=chunk) [**PART I.**](index=6&type=section&id=PART%20I.) This part covers the company's foundational information, including its corporate structure, key operations, risk factors, and regulatory environment in China [**ITEM 1. Identity of Directors, Senior Management and Advisers**](index=6&type=section&id=ITEM%201.%20IDENTITY%20OF%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20ADVISERS) This item is not applicable, indicating no information on directors, senior management, or advisers is provided in this section [**ITEM 2. Offer Statistics and Expected Timetable**](index=6&type=section&id=ITEM%202.%20OFFER%20STATISTICS%20AND%20EXPECTED%20TIMETABLE) This item is not applicable, indicating no information on offer statistics or expected timetable is provided in this section [**ITEM 3. Key Information**](index=6&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section provides critical information on the company's corporate structure, reliance on VIEs, recent business divestiture, regulatory environment, cash flows, and a comprehensive summary of significant risk factors [**Our Holding Company Structure and Contractual Arrangements with the Variable Interest Entities**](index=6&type=section&id=Our%20Holding%20Company%20Structure%20and%20Contractual%20Arrangements%20with%20the%20Variable%20Interest%20Entities) TCTM, a Cayman Islands holding company, operates in mainland China through subsidiaries and VIEs due to foreign investment restrictions, using contractual arrangements to control operations and consolidate financial results - TCTM is a Cayman Islands holding company operating in mainland China through subsidiaries and VIEs due to foreign investment restrictions in certain internet value-added businesses[13](index=13&type=chunk) - Revenues from continuing operations contributed by VIEs accounted for **1.3%**, **2.9%**, and **6.6%** of net revenues for **2021, 2022, and 2023**, respectively[13](index=13&type=chunk) - The professional education business was divested in **December 2023** (consummated **March 2024**), reclassified as discontinued operations, with the remaining STEM education business reclassified as continuing operations[14](index=14&type=chunk) [**Permissions Required from the PRC Government Authorities for Our Operations**](index=10&type=section&id=Permissions%20Required%20from%20the%20PRC%20Government%20Authorities%20for%20Our%20Operations) The company's operations in mainland China require various licenses and permits from PRC government authorities, with future overseas offerings subject to CSRC filing procedures - The company's subsidiaries and VIEs in mainland China have obtained material requisite licenses and permits, including an ICP license and school operation permits[22](index=22&type=chunk) - Uncertainties in the interpretation and implementation of relevant laws and regulations may require obtaining additional licenses, permits, filings, or approvals in the future[22](index=22&type=chunk) - The CSRC's Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (Filing Rules), effective **March 31, 2023**, will require future overseas offerings of equity and equity-linked securities to be filed with the CSRC[23](index=23&type=chunk) [**Cash and Asset Flows through Our Organization**](index=11&type=section&id=Cash%20and%20Asset%20Flows%20through%20Our%20Organization) TCTM relies on dividends from mainland China subsidiaries and service fees from VIEs for funding, subject to PRC regulatory restrictions on distributable profits and statutory reserve appropriations - TCTM's ability to pay dividends depends on distributions from its mainland China subsidiaries and service fees from VIEs, which are subject to PRC regulatory restrictions[24](index=24&type=chunk) - PRC subsidiaries and VIEs must appropriate profits to statutory reserve funds, which are not distributable as cash dividends, totaling **RMB1,228.2 million** (**US$173.0 million**) as of **December 31, 2023**[26](index=26&type=chunk) - No service fees were paid by VIEs to TCTM, and no dividends or distributions were made to TCTM by its subsidiaries or VIEs for the years ended **December 31, 2021, 2022, and 2023**[25](index=25&type=chunk)[26](index=26&type=chunk) Hypothetical Tax Calculation for Earnings Distribution in Mainland China | Indicator | Percentage | | :--- | :--- | | Hypothetical pre-tax earnings | 100% | | Tax on earnings at statutory rate of 25% | (25)% | | Net earnings available for distribution | 75% | | Withholding tax at standard rate of 10% | (7.5)% | | Net distribution to Parent/Shareholders | 67.5% | [**Financial Information Related to the Variable Interest Entities**](index=12&type=section&id=Financial%20Information%20Related%20to%20the%20Variable%20Interest%20Entities) This section presents condensed consolidated financial information for the Variable Interest Entities (VIEs) and other entities, reflecting the reclassification of the professional education business as discontinued operations - The professional education business was reclassified as discontinued operations following an equity transfer agreement in **December 2023**, with consummation in **March 2024**[31](index=31&type=chunk) Selected Condensed Consolidated Statements of Income (VIEs and Other Entities) (RMB in thousands) | Indicator | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | | Net revenues from continuing operations | 1,236,273 | 1,399,844 | 1,375,192 | | Net income/(loss) | (475,780) | 85,233 | 10,354 | | Net cash provided by/(used in) operating activities | 8,610 | (27,528) | (118,935) | | Net cash provided by investing activities | 33,693 | (22,709) | 72,048 | | Net cash provided by/(used in) financing activities | 23,237 | (2,105) | (35,781) | [**D. Risk Factors**](index=17&type=section&id=D.%20Risk%20Factors) This section outlines significant risks associated with TCTM's business, corporate structure, operations in China, and its ADSs, including regulatory uncertainties and market competition [**Summary of Risk Factors**](index=17&type=section&id=Summary%20of%20Risk%20Factors) Investment in TCTM ADSs involves significant risks, particularly those related to operations in mainland China, categorized into business, corporate structure, doing business in China, and ADSs-specific factors - Investment in TCTM ADSs involves **significant risks**, especially those related to operations in mainland China, which are governed by different laws than Hong Kong[47](index=47&type=chunk) [**Risks Related to Our Business**](index=18&type=section&id=Risks%20Related%20to%20Our%20Business) TCTM faces substantial business risks, including uncertainties from divesting its professional education business and a heavy reliance on IT-focused STEM education, and challenges in student attraction and retention - Uncertainties and risks accompany the strategy to divest the professional education business, which was a **significant revenue driver** - Reliance on IT-focused supplementary STEM education programs for a substantial part of net revenues, making the business vulnerable to decreased popularity of these courses - Difficulty in attracting and retaining students, recruiting and retaining qualified instructors and teaching assistants, and developing new courses in a timely and cost-effective manner - Adverse effects from downturns in the global or Chinese economy, and potential decline in student performance or satisfaction - Intense competition in the fragmented STEM education market in China - Complex and evolving Chinese laws and regulations regarding cybersecurity, information security, privacy, and data protection, with potential for claims, negative publicity, and increased costs - Risks related to the operations of certain learning centers potentially being beyond authorized business scope or without proper licenses, leading to administrative penalties - Dependence on market recognition of 'TongchengTongmei' brand,

Group 1 - Tarena International changed its stock ticker from TEDU to TCTM and moved from the Nasdaq Global Market to the Nasdaq Capital Markets [1] - The CEO of Tarena International, Ying Sun, emphasized the company's commitment to enhancing course offerings and services during the ticker change announcement [1] - Following the ticker change, TCTM stock experienced a 20.3% increase in value during normal trading hours, with approximately 1 million shares traded [2] Group 2 - On the morning after the ticker change, TCTM stock fell by 10.3%, with around 6,000 shares changing hands, compared to a daily average trading volume of about 27,000 shares [2]

Core Viewpoint - Tarena International, Inc. will change its Nasdaq ticker symbol from "TEDU" to "TCTM" effective January 10, 2024, and the CEO will lead the opening bell ceremony to celebrate this change [1][2]. Company Overview - Tarena is a leading provider of IT-focused supplementary STEM education services in China, offering a diversified portfolio of IT-related courses for students aged three to eighteen [2][3]. - The company has established over 200 learning centers across more than 50 cities in China, with a cumulative enrollment of over 350,000 students [2]. Educational Offerings - Tarena provides professional education courses in both IT and non-IT subjects, focusing on practical skills that prepare students for jobs in high-demand industries [3]. - The company emphasizes IT-focused supplementary STEM education programs, including computer coding and robotics programming, aimed at developing children's logical thinking and learning abilities [3].