JIADE Ltd H1 2026 net loss widens to RMB50.5M
Operating activities used RMB10,664,642 of cash, while cash and cash equivalents were RMB51,837,277 at June 30, 2026.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
JIADE Ltd reported unaudited consolidated results for the six months ended June 30, 2026. Revenue was RMB8,274,218, versus RMB9,383,590 for the same six-month period in 2025, while net loss was RMB50,547,783, compared with RMB4,345,377. Operating expenses totaled RMB54,863,096, including general and administrative expenses of RMB48,848,922; the corresponding 2025 figures were RMB8,681,322 and RMB7,490,194. Adult education supporting services generated RMB5,074,720 and safety technology training services generated RMB2,290,080.
Operating activities used RMB10,664,642 of cash, versus RMB5,133,238 in 2025. Financing activities provided RMB109,241,105 net cash, including RMB112,456,186 of proceeds from ordinary-share issuance, net of issuance costs. Cash and cash equivalents were RMB51,837,277 at June 30, 2026, compared with RMB19,773,580 at December 31, 2025. Net intangible assets were RMB107,273,074, compared with RMB24,043,180 at December 31, 2025; software and copyright purchases costing RMB48,174,210 and RMB36,435,878, respectively, were capitalized in June 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- None.
Negative
- Major pointNet loss widened to RMB50,547,783 for six months ended June 30, 2026.
- Moderate pointRevenue declined to RMB8,274,218 for the six months ended June 30, 2026.
Filing Explained
The six-month statements record issued Class A shares and a Class B award carrying fifty votes per share, changing ownership and voting structure.
Form 6-K is a foreign private issuer’s interim report for material information; this report furnishes unaudited results for the six months ended June 30, 2026, and incorporates them into the company’s Form F-3 registration statement.
The equity statement records 5,048,003 Class A shares issued for cash and 290,000 Class B shares issued as stock compensation during the period; the reported share counts reflect retroactive adjustments for the share consolidations, and both classes were outstanding at
Class B shares carry 50 votes per share, compared with one vote for Class A; the 290,000-share award was issued to JD LIYUAN LIMITED on Yuan Li’s behalf, and the additional shares increase the share count and reduce existing holders’ percentage ownership absent offsetting changes.
Key Figures
Key Terms
Allowance for credit losses financial
Performance obligation financial
Deferred revenue financial
Right-of-use assets financial
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2026
Commission File Number: 001-42098
18/F, Block D, Huirong Plaza, No. 88, Section 3, Jinhua Road
Jinjiang District, Chengdu City, Sichuan Province
The People’s Republic of China
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Explanatory Note
JIADE LIMITED, a Cayman Islands company (the “Company”), is furnishing its unaudited financial statements and notes for the six months ended June 30, 2026. The financial statements and notes are attached as Exhibit 99.1 to this report. Management’s Discussion and Analysis of Financial Condition and Results of Operations for the six months ended June 30, 2026 is attached as Exhibit 99.2 to this report.
The information contained in this Report on Form 6-K, including Exhibit 99.1 and Exhibit 99.2 hereto, is hereby incorporated by reference into the Company’s registration statement on Form F-3 (File No. 333-292574).
1
Exhibit Index
Exhibit No. | | Description | |
99.1 |
| Unaudited Consolidated Financial Statements and Notes of JIADE LIMITED for the Six Months Ended June 30, 2026 and 2025 | |
99.2 |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
101. INS | | Inline XBRL Instance Document | |
101.SCH | | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| JIADE LIMITED | |
|
|
|
Date: November 9, 2026 | By: | /s/ Yuan Li |
| Name: | Yuan Li |
| Title: | Chief Executive Officer |
3
Table of Contents
Exhibit 99.1
JIADE LIMITED
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TABLE OF CONTENTS
| | |
CONTENTS | | PAGE(S) |
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2025 AND JUNE 30, 2026 (UNAUDITED) | | F-1 |
| | |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2026 | | F-2 |
| | |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2026 | | F-3 |
| | |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2026 | | F-4 |
| | |
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | | F-5 |
Table of Contents
JIADE LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
| | | | | | |
| | As of | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
| | Audited | | Unaudited | | Unaudited |
CURRENT ASSETS: |
| |
| |
| |
Cash and cash equivalents |
| |
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| |
Accounts receivable, net |
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| |
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Deferred offering costs |
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| — |
| — |
Prepayment and other current assets |
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TOTAL CURRENT ASSETS |
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NON-CURRENT ASSETS |
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Property and equipment, net |
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Intangible assets, net |
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Right-of-use assets |
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Deferred tax assets | | | | | | |
Goodwill |
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TOTAL ASSETS |
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LIABILITIES AND EQUITY |
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CURRENT LIABILITIES: |
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Bank loans |
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Accounts payable |
| — |
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Payroll payables |
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Other payables |
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Deferred revenue |
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Lease liabilities |
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Amounts due to related parties |
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Taxes payable |
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TOTAL CURRENT LIABILITIES |
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NON-CURRENT LIABILITIES |
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Long-term loans | | | | |
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Lease liabilities |
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TOTAL LIABILITIES |
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COMMITMENTS AND CONTINGENCIES |
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SHAREHOLDERS’ EQUITY: |
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Class A ordinary shares, US$ | | |
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Class B ordinary shares, US$ | | | | | | |
Additional paid-in capital |
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Statutory reserves |
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Ordinary shares subscribed |
| ( |
| — |
| — |
Retained earnings (losses) |
| |
| ( |
| ( |
Accumulated other comprehensive loss | | ( | | ( | | ( |
TOTAL JIADE LIMITED SHAREHOLDERS’ EQUITY |
| |
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NON-CONTROLLING INTERESTS |
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TOTAL SHAREHOLDERS’ EQUITY |
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
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*
F-1
Table of Contents
JIADE LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| | | | | | |
| | For the six months ended June 30, | ||||
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
REVENUE |
| |
| | | |
Cost of revenue | | | | | | |
GROSS PROFIT | | | | | | |
OPERATING EXPENSES |
| |
| | | |
Selling expenses |
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General and administrative expenses |
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Research and development expenses |
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Total operating expenses |
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LOSS FROM OPERATIONS |
| ( |
| ( | | ( |
OTHER INCOME (EXPENSES) |
| |
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Interest income |
| |
| | | |
Interest expense |
| ( |
| ( | | ( |
Other income, net |
| |
| | | |
Total other income, net |
| |
| | | |
LOSS BEFORE INCOME TAXES |
| ( |
| ( | | ( |
INCOME TAXES BENEFIT |
| ( |
| ( | | ( |
NET LOSS |
| ( |
| ( | | ( |
Less: net income (loss) attributable to non-controlling interest | | |
| ( | | ( |
NET LOSS ATTRIBUTABLE TO JIADE LIMITED’S SHAREHOLDERS |
| ( |
| ( | | ( |
| | | | | | |
OTHER COMPREHENSIVE LOSS |
| |
| | | |
Foreign currency translation adjustment |
| ( |
| ( | | ( |
TOTAL COMPREHENSIVE LOSS |
| ( |
| ( | | ( |
Less: comprehensive income (loss) attributable to non-controlling interest |
| |
| ( | | ( |
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO JIADE LIMITED’S SHAREHOLDERS |
| ( |
| ( | | ( |
BASIC AND DILUTED LOSS PER SHARE ATTRIBUTABLE TO THE COMPANY* |
| |
| | | |
Basic and diluted |
| ( |
| ( | | ( |
Weighted average number of shares outstanding |
| |
| | | |
Basic and diluted |
| |
| | | |
*Shares have been retroactively adjusted to reflect the decreased number of shares resulting from the Share Consolidations. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
Table of Contents
JIADE LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | Accumulated | | | | | | | | |
| | | | Class A | | | | Class B | | | | Additional | | | | Other | | | | JIADE LIMITED’s | | | | Total |
| | Class A | | Issued | | Class B | | Issued | | Subscribed | | Paid-in | | Statutory | | Comprehensive | | Retained | | Shareholders’ | | Non-controlling | | Shareholders’ |
| | Shares* | | Amount | | Shares* | | Amount | | Amount | | Capital | | Reserve | | Income (Loss) | | Earnings | | Equity | | Interests | | Equity |
| | | | RMB | | | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB |
Balance as of December 31, 2024 |
| |
| |
| | | | | ( |
| | | | | | | | | |
| |
| |
Net (loss) income for the period | | — | | — | | — | | — | | — | | — | | — | | — | | ( | | ( | | | | ( |
Currency translation differences |
| — |
| — |
| — | | — | | — |
| — | | — | | ( | | — | | ( |
| — |
| ( |
Balance as of June 30, 2025 |
| |
| |
| | | | | ( |
| | | | | ( | | | | |
| |
| |
| | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2025 |
| |
| |
| | | | | ( |
| | | | | ( | | | | |
| |
| |
Net loss for the period | | — | | — | | — | | — | | — | | — | | — | | — | | ( | | ( | | ( | | ( |
Stock-based compensation | | — | | — | | | | | | — | | | | — | | — | | — | | | | — | | |
Issuance of Class A ordinary shares for cash |
| |
| |
| — | | — | | — |
| | | — | | — | | — | | |
| — |
| |
Effect of the change of shares of par value | | — | | ( | | — | | ( | | — |
| | | — | | — | | — | | — | | — | | — |
Payment of subscribed ordinary shares |
| — |
| — |
| — | | — | | |
| — | | — | | — | | — | | |
| — |
| |
Currency translation differences | | — | | — | | — | | — | | — | | — | | — | | ( | | — | | ( | | — | | ( |
Balance as of June 30, 2026 |
| |
| |
| | | | | — |
| | | | | ( | | ( | | |
| |
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Balance as of June 30, 2026 (US$) |
| — |
| |
| — | | | | — |
| | | | | ( | | ( | | |
| |
| |
*
F-3
Table of Contents
JIADE LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | | | | |
| | For the six months ended June 30, | ||||
| | 2025 | | 2026 |
| 2026 |
| | RMB | | RMB | | US$ |
CASH FLOWS FROM OPERATING ACTIVITIES: |
| |
| | | |
Total net loss |
| ( |
| ( | | ( |
Adjustments to reconcile net loss to net cash used in operating activities: |
| |
| | | |
Depreciation and amortization |
| |
| | | |
Non-cash operating lease |
| |
| | | |
Gain from termination of operating lease |
| ( |
| — | | — |
Net loss on disposal of property and equipment |
| |
| | | |
Credit loss for accounts receivable |
| |
| | | |
Unrealized foreign exchange gain |
| ( |
| ( | | ( |
Deferred tax |
| ( |
| ( | | ( |
Employee stock compensation | | — | | | | |
Changes in operating assets and liabilities: |
| |
| | | |
Accounts receivable |
| |
| ( | | ( |
Prepayment and other current assets |
| ( |
| | | |
Accounts payable |
| — |
| | | |
Other payables |
| ( |
| ( | | ( |
Payroll payables |
| |
| | | |
Deferred revenue |
| ( |
| | | |
Change in lease liabilities – operating lease |
| ( |
| ( | | ( |
Taxes payable |
| ( |
| ( | | ( |
NET CASH USED IN OPERATING ACTIVITIES |
| ( |
| ( | | ( |
CASH FLOWS FROM INVESTING ACTIVITIES: |
| |
| | | |
Purchase of property and equipment |
| ( |
| ( | | ( |
Purchase of intangible assets |
| ( |
| ( | | ( |
Proceeds from disposal of property and equipment |
| |
| — | | — |
Net cash acquired from acquisitions |
| |
| — | | — |
NET CASH USED IN INVESTING ACTIVITIES |
| ( |
| ( | | ( |
CASH FLOWS FROM FINANCING ACTIVITIES: |
| |
| | | |
Proceeds from bank loans |
| |
| — | | — |
Repayments of bank loans |
| ( |
| ( | | ( |
Proceeds from issuance of ordinary shares, net of issuance costs |
| — |
| | | |
Deferred costs related to initial public offering |
| ( |
| — | | — |
Net proceeds from (repayment to) related parties |
| |
| ( | | ( |
NET CASH PROVIDED BY FINANCING ACTIVITIES |
| |
| | | |
EFFECT OF FOREIGN EXCHANGE RATE ON CASH AND CASH EQUIVALENT |
| ( |
| ( | | ( |
NET INCREASE IN CASH AND CASH EQUIVALENTS |
| |
| | | |
TOTAL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
| |
| | | |
TOTAL CASH AND CASH EQUIVALENTS, END OF PERIOD |
| |
| | | |
SUPPLEMENTAL CASH FLOW INFORMATION: | | | | | | |
Cash paid for interest expense | | | | | ||
Cash paid for income tax | | | | | | |
Supplemental Schedule of Non-Cash Investing and Financing Activities | | | | | | |
Right-of-use assets obtained in exchange for new operating lease liabilities | | | | | | |
*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — Organization and principal activities
JIADE LIMITED is a holding company that was incorporated under the laws of the Cayman Islands on February 20, 2023 (“JIADE LIMITED” or the “Company”). JIADE LIMITED and its subsidiaries (collectively referred to as the “Group”) specialize in providing one-stop comprehensive education supporting services to adult education institutions, through a wide range of software platform and auxiliary solutions, and safety technology training for personnel. One-stop comprehensive education supporting services encompass exam administration services and teaching support services throughout the entire teaching cycle. Specifically, the Group offers pre-enrollment guidance on school/major selection and application strategy development, training for entrance exams, and assistance in the application process. The Group also provides offline tutoring, exam administration services, guidance on graduation thesis, and social practice assistance included in the one-stop comprehensive education supporting services in the People’s Republic of China (“China” or the “PRC”). Safety technology training services for personnel are primarily offer initial training, refresher training, and certification renewal programs for these types of operations, with both theoretical instruction and practical training components. After obtaining the required certificates issued by the Ministry of Emergency Management of China, personnel are required to complete refresher training every three years and certification renewal training every six years. As a result, the Group benefit from a high rate of repeat business, providing a recurring revenue stream.
JIADEZHIGAO Limited (“Jiadezhigao HK”) was incorporated in accordance with the laws and regulations of Hong Kong on March 30, 2023 and is a wholly owned subsidiary of the Company.
Shenzhen Kebiao Technology Co., Ltd. (“Shenzhen Kebiao”) was incorporated in China on May 23, 2023 and a wholly owned subsidiary of Jiadezhigao HK.
Sichuan Jiade Zhigao Technology Co., Ltd. (“Jiade Zhigao”) was incorporated in China on May 6, 2022 and has been controlled by Mr. Yuan Li and Ms. Zhirong Zhou.
Sichuan Kebiao Technology Co., Ltd. (“Kebiao Technology”), a limited liability company established in Chengdu City, Sichuan Province, China on April 28, 2020, which has been controlled by Mr. Yuan Li and Ms. Zhirong Zhou since inception.
Wismass International Holdings Limited (“WISMASS HK”) was incorporated in accordance with the laws and regulations of Hong Kong on October 24, 2022 and is a wholly owned subsidiary of Wismass International Holdings Limited (BVI) (“WISMASS BVI”). WISMASS BVI was incorporated in accordance with the laws and regulations of British Virgin Islands on August 17, 2022.
Sichuan Kunyuan Safety Technology Services Co., Ltd. (“Kunyuan”) was incorporated in China on March 25, 2021 and a subsidiary of Jiade Zhigao since January 9, 2025.
Sichuan Jiazhi Taizhang Safety Technology Co., Ltd (“Jiazhi”) was incorporated in China on April 28, 2023 and a wholly owned subsidiary of Jiade Zhigao since January 26, 2025.
HK Yifu International Limited (“HK Yifu”) was incorporated in accordance with the laws and regulations of Hong Kong on July 15, 2025 and has been a wholly owned subsidiary of the Company since August 13, 2025.
Reorganization
In preparation of the Company’s initial public offering (the “IPO”) in the United States, the following transactions were undertaken to reorganize the legal structure of the Company. The Company was incorporated in connection with a group reorganization (the “Reorganization”).
F-5
Table of Contents
Note 1 — Organization and principal activities (continued)
On December 14, 2022, Kebiao Technology and Jiade Zhigao entered into an equity purchase agreement with Kebiao Technology’s shareholders, through which Kebiao Technology became a wholly owned subsidiary of Jiade Zhigao. On June 7, 2023, Shenzhen Kebiao acquired an aggregate of
On November 30, 2022, WISMASS HK entered into a share transfer agreement with Yuan Li, who was then the
On December 24, 2024, Jiade Zhigao entered into an equity transfer agreement with Chengdu Meirusi Technology Co., Ltd. (“Meirusi”), which is a PRC limited liability company holding
On December 24, 2024, Jiade Zhigao entered into an equity transfer agreement with Meirusi, which entity holds
On August 13, 2025, the Company entered into an equity transfer agreement with Mr. Guoqiang Wu, who holds
As all the entities involved in the process of the Reorganization are under common ownership of Jiade Zhigao’s shareholders before and after the Reorganization, except for Kunyuan, Jiazhi and HK Yifu, the common control of which started from January 9, 2025, January 26, 2025 and August 13, 2025, respectively, the Reorganization is accounted for in a manner similar to a pooling of interests with the assets and liabilities of the parties to the Reorganization carried over at their historical amounts. Therefore, the accompanying unaudited condensed consolidated financial statements were prepared as if the corporate structure of the Group had been in existence since the beginning of the periods presented.
F-6
Table of Contents
Note 1 — Organization and principal activities (continued)
As of December 31, 2025 and June 30, 2026, the Group’s condensed consolidated financial statements reflected the activities for each of the following entities.
| | | | | | | | | | |
| | | | | | % of | | % of | | |
| | Date of | | Place of | | Ownership as of | | Ownership as of | | |
Name of Entity | | Incorporation | | Incorporation | | December 31, 2025 | | June 30, 2026 | | Principal Activities |
JIADE LIMITED | | February 20, 2023 |
| Cayman Islands |
| N/A |
| N/A | | Investment Holding |
JIADEZHIGAO Limited (“Jiadezhigao HK”) | | March 30, 2023 |
| Hong Kong |
| | % | | % | Investment Holding |
WISMASS International Holdings Limited (“WISMASS HK”) | | October 24, 2022 |
| Hong Kong |
| | % | | % | Investment Holding |
Shenzhen Kebiao Technology Co., Ltd (“Shenzhen Kebiao”) | | May 23, 2023 |
| PRC |
| % | % | Providing one-stop comprehensive education supporting services | ||
Sichuan Jiadezhigao Technology Limited (“Jiade Zhigao”) | | May 6, 2022 |
| PRC |
| % | % | Providing one-stop comprehensive education supporting services | ||
Sichuan Kebiao Technology Co., Ltd. (“Kebiao Technology”) | | April 28, 2020 | | PRC | | % | % | Providing one-stop comprehensive education supporting services | ||
Sichuan Kunyuan Safety Technology Services Co., Ltd. (“Kunyuan”) | | March 25, 2021 | | PRC | | % | % | Providing safety technology training services | ||
Sichuan Jiazhi Taizhang Safety Technology Co., Ltd (“Jiazhi”) | | April 28, 2023 |
| PRC |
| % | % | Providing safety technology training services | ||
HK Yifu International Limited (“HK Yifu”) | | July 15, 2025 | | Hong Kong | | | % | | % | Investment Holding |
Note 2 — Summary of significant accounting policies
Basis of consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the U.S. (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities Exchange Commission.
Retroactivity
For the six months ended June 30, 2026 and up to the date of these financial statements, the Company effected two share consolidations and change of authorized share capital. All historical references relating to the number of authorized shares, issued and outstanding ordinary shares, ordinary shares subscribed, earnings per share, and the related amounts of ordinary shares have been retroactively adjusted in the unaudited condensed consolidated financial statements to reflect these changes for all periods presented.
Principles of consolidation
The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries, which include the Hong Kong-registered entities, and PRC-registered entities directly or indirectly owned by the Company. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. The results of subsidiaries acquired or disposed of are recorded in the unaudited consolidated income statements from the effective date of acquisition or up to the effective date of disposal, as appropriate.
F-7
Table of Contents
Note 2 — Summary of significant accounting policies (continued)
A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meetings of the board of directors or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders.
Uses of estimates and assumptions
In preparing the unaudited condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods presented. These estimates are based on information as of the date of the unaudited condensed consolidated financial statements. The estimates required to be made by management include, but are not limited to, useful lives of property and equipment and intangible assets, the incremental borrowing rate used in operating lease right-of-use assets and lease liabilities, the valuation of accounts receivable, the recoverability of long-lived assets, deferred tax assets, goodwill and contingencies. Actual results could differ from those estimates.
Cash and cash equivalents
Cash and cash equivalents represent demand deposits placed with banks and cash on hand, which are unrestricted as to withdrawal or use, and which have original maturities of three months or less and are readily convertible to known amounts of cash. The Group maintains the majority of its bank accounts in the PRC. Cash balances in bank accounts in the PRC are protected under Deposit Protection Scheme in accordance with the Deposit Protection Scheme Ordinance. The maximum protection is up to RMB500,000 per depositor per Scheme member, including both principal and interest. As of December 31, 2025 and June 30, 2026, cash and cash equivalents balance were RMB
Fair Value of Financial Instruments
ASC Topic 825-10, Financial instruments – overall: Recognition and measurement of financial assets and financial liabilities (“ASC 825-10”) requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
| ● | Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| ● | Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. |
| ● | Level 3 — inputs to the valuation methodology are unobservable. |
Unless otherwise disclosed, the fair value of the Group’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, deferred revenue, other payables, bank loans, and amounts due to related parties, approximates their recorded values due to their short-term maturities.
The Group determined that the carrying value of the lease liabilities approximated their fair value as the interest rates used to discount the contracts approximate market rates. The Group noted no transfers between levels during any of the periods presented. The Group did not have any instruments that were measured at fair value on a recurring or non-recurring basis as of December 31, 2025 and June 30, 2026.
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Table of Contents
Note 2 — Summary of significant accounting policies (continued)
Accounts receivable and allowance for credit loss
The Group maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as “General and administrative expenses” in the condensed consolidated statements of operations and comprehensive loss. The Group’s estimation of allowance for credit losses considers factors such as historical credit loss experience, age of receivable balances, current market conditions, reasonable and supportable forecasts of future economic conditions, as well as an assessment of receivables due from specific identifiable counterparties to determine whether these receivables are considered at risk or uncollectible. For the six months ended June 30, 2025 and 2026, the expected credit loss amounted to RMB
Deferred revenue
Deferred revenue represents the upfront payments received upon the signing of a contract for one-stop comprehensive education supporting services with adult education institutions and the upfront payments received from personnel for safety technology training services. The deferred revenue is subsequently released into revenue once the customers receive and consume benefits of such services and is released using straight-line method based on the contract term. As of December 31, 2025 and June 30, 2026, the deferred revenue amounted to RMB
Contingencies
In the normal course of business, the Group is subject to contingencies, including legal proceedings and claims arising out of its business that relate to a wide range of matters, such as government investigations and tax matters. The Group recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Group may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.
Property and equipment, net
Property and equipment are recorded at cost less accumulated depreciation. Depreciation is provided in the amounts sufficient to depreciate the cost of the related assets over their useful lives using the straight- line method, as follows:
| | |
| | Useful life |
Motor vehicles |
| |
Office equipment |
| |
Leasehold improvement |
| Over shorter of the lease term and the remaining useful life |
Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expenses as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the unaudited consolidated statements of operation and other comprehensive loss as other income or expenses.
Goodwill
Goodwill represents the excess of the purchase consideration over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed from the acquired entity as a result of the Group’s acquisitions of interests in its consolidated subsidiaries.
Goodwill is not depreciated or amortized but is tested for impairment at the reporting unit level on an annual basis, and between annual tests when an event or circumstances change occurs that indicate the asset might be impaired. Under ASC 350-20-35 – Intangibles – Goodwill and Other – Subsequent Measurement, the Group has the option to choose whether it will apply the qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative assessment directly.
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Note 2 — Summary of significant accounting policies (continued)
If the Group believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the quantitative impairment test described above is required. Otherwise, no further testing is required. In the qualitative assessment, the Group considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. If the quantitative analysis indicates the carrying value of a reporting unit exceeds its fair value, the Group measures any goodwill impairment losses as the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit.
As of June 30, 2026, the Group performed a qualitative assessment of its goodwill under Kunyuan and Jiazhi’s operation and concluded that there were no indicators of impairment.
Impairment of long-lived assets other than goodwill
The Group evaluates the recoverability of its long-lived assets, including property and equipment, intangible assets and operating lease right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of its asset may not be fully recoverable. When these events occur, the Group measures impairment by comparing the carrying amount of the assets to the estimated undiscounted future cash flows expected to result from the use of the asset and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the asset, the Group recognizes an impairment loss based on the excess of the carrying amount of the asset over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the asset, when the market prices are not readily available. The adjusted carrying amount of the asset is the new cost basis and is depreciated over the asset’s remaining useful life. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. For the six months ended June 30, 2025 and 2026,
Leases
The Group leases offices in the PRC under operating leases. The Group determines whether an arrangement constitutes a lease at inception and records lease liabilities and right-of-use assets on its consolidated balance sheets at the lease commencement. The Group measures its lease liabilities based on the present value of the total lease payments not yet paid discounted based on its incremental borrowing rate, as the rates implicit in its leases are not determinable. The Group measures right-of-use assets based on the corresponding lease liability adjusted for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Group begins recognizing rent expenses when the lessor makes the underlying asset available to the Group.
For short-term leases, the Group records operating lease expenses in its unaudited condensed consolidated statements of operation and comprehensive loss on a straight-line basis over the lease term.
The Group adopted ASC Topic 842, Lease (“ASC 842”) on January 1, 2021, using the modified retrospective method. Leases are classified as operating or finance leases in accordance with the recognition criteria in ASC 842-20-25. The Group’s leases do not contain any material residual value guarantees or material restrictive covenants.
As the lessee, the Group recognizes in the unaudited condensed consolidated balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, the Group makes an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities and recognizes lease expenses for such lease generally on a straight-line basis over the lease term. For the six months ended June 30, 2025 and 2026, the Group incurred lease expenses with a term of 12 months or less of
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Table of Contents
Note 2 — Summary of significant accounting policies (continued)
Operating lease assets are included within right-of-use assets — operating lease, and the corresponding operating lease liabilities are included within operating lease liabilities on the condensed consolidated balance sheets as of December 31, 2025 and June 30, 2026.
Intangible Assets, net
Intangible assets consist primarily of software purchased and copyrights purchased. Software purchased and under development for internal use, including fees paid to third parties for services provided to develop the software, are stated at cost less accumulated amortization and impairment, if any. Generally, software is amortized using the straight-line method over its estimated useful life, which is typically
Amortization is provided in the amounts sufficient to depreciate the cost of the related assets over their useful lives using the straight-line method, as follows:
| | Useful life |
Software | | |
Copyrights | |
Revenue recognition
The Group adopted ASC 606 for all periods presented. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue is the transaction price the Group expects to be entitled to in exchange for the promised services in a contract in the ordinary course of the Group’s activities and is recorded net of value-added tax (“VAT”). To achieve that core principle, the Group applies the following steps:
1. Identify the contract(s) with a customer;
2. Identify the performance obligations in the contract;
3. Determine the transaction price;
4. Allocate the transaction price to the performance obligations in the contract; and
5. Recognize revenue when (or as) the entity satisfies a performance obligation.
One-stop comprehensive education supporting services
The Group enters into service contracts with adult education institutions to provide one-stop comprehensive education supporting services. It is within the scope of the revenue recognition standard that the essence of such contractual arrangements involves the Group providing one-stop comprehensive education supporting services to adult education institutions, and those services or activities are considered part of the Group’s ordinary business operations and are exchanged for compensation. Accordingly, the Group identifies its customers as the adult education institutions to which it provides services. One-stop comprehensive education supporting services encompass exam administration services and teaching support services throughout the entire teaching cycle from pre-enrollment to post-graduation. The Group determined the transaction price based on customer demand, effect of competitors on the Group’s services, the number of students to be served and other market factors. The transaction price does not change, once the Group has verified the number of students to be served with adult education institutions. The Group currently does not have any modification to the contract and the contracts currently do not have any variable consideration.
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Table of Contents
Note 2 — Summary of significant accounting policies (continued)
The Group provides one-stop comprehensive education supporting services from pre-enrollment services to post-graduation services. These comprehensive services need to be combined into a single performance obligation because they are not separately identifiable in the contract. The Group typically verifies the number of students served with the adult education institutions at the beginning of the year then issues settlement statements to the adult education institutions and, upon receipt of the adult education institutions’ services confirmation, the Group issues a bill to the customers. The Group satisfies its performance obligations to provide the comprehensive services to the adult education institutions throughout the terms of the contract. Therefore, the revenue from such services is recognized over the contract term on a monthly straight-line basis as adult education institutions receive and consume the benefits of such services.
The Group applies the practical expedient that permits the Group not to disclose the aggregate amount of transaction price allocated to performance obligations that are unsatisfied as of the end of the period, as the Group’s contracts have an expected length of one year or less. The Group also applies the practical expedient that permits the recognition of incremental costs of obtaining contracts as an expense when incurred if the amortization period of such costs is one year or less. These costs are included in direct costs of revenue under costs and expenses. The Group uses independent contractors and third-party companies in the performance of its education supporting services. The Group evaluates who controls the education-supporting services to determine whether its performance obligation is to transfer services to the customer or to arrange for services to be provided by another party. The Group determined it acts as the principal for its education supporting services performance obligation since it is in control of establishing the prices for these services and managing all aspects of services delivered to the institutions’ students.
Safety technology training services
The Group enters into service contracts with personnel or institutions to provide safety technology training services. The safety technology training services for personnel encompass initial training, refresher training, and certification renewal programs for certain types of operations, with both theoretical instruction and practical training components. The Group determined the transaction price based on customer demand, the effect of competitors on the Group’s services and other market factors. The transaction price does not change once the Group has verified the type of training services with the personnel. The Group currently does not have any modifications to the contract, and the contracts currently do not have any variable consideration.
The Group typically verifies the type of training services with the personnel during the registration stage and issues receipts to customers. The Group fulfills its performance obligations by providing safety technology training services to the personnel throughout the entire training process. Therefore, the revenue from safety technology training services is recognized over the training period on a straight-line basis.
The determination of whether revenues should be reported on a gross or net basis is based on the Group’s assessment of whether it is the principal or an agent in the transaction in accordance with ASC Topic 606-10-55, Revenue from Contracts with Customers - Overall - Implementation Guidance and Illustrations, and depends on whether its performance obligation is to transfer services to the customer or to arrange for services to be provided by another party. The Group determined it acts as the principal for its safety technology training services performance obligation since it is in control of establishing the prices for these services and managing all aspects of services delivered to the personnel.
Online course services
The Group’s online course services revenue is primarily generated from authorizing the developed course on a third-party online learning platform. The Group determined the transaction price based on customer demand, the effect of competitors on the Group’s services and other market factors. The transaction price does not change once the Group has signed the contract with the third-party platform, and the contracts currently do not have any variable consideration.
The Group satisfies its performance obligations by granting registered personnel access to the developed courses on the learning platform. Revenue is recognized when personnel can directly use the learning platform and derive all the benefits from it while providing services. Therefore, the revenue is recognized at a point in time when the customer is able to directly use and obtain substantially all of the benefits from the learning platforms at the time the services are delivered.
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Table of Contents
Note 2 — Summary of significant accounting policies (continued)
The Group determined it acts as the principal for its online course services performance obligation since it is in control of establishing the prices for these services and managing all aspects of services delivered to the personnel.
Customized equipment
The Group enters into sales contracts with the customer to provide customized equipment related to safety technology training. The equipment is created based on fixed price purchase orders and tailored to the construction of examination sites for safety technology training.
The Group fulfills its performance obligations by providing the customized equipment to the designated address till passed the customer’s acceptance inspection. Therefore, the revenue is recognized over time from the arrival of the equipment at the customer’s site to the final acceptance.
The Group determined it acts as the principal for its sales of customized equipment performance obligation since it is in control of establishing the prices for the equipment and managing all aspects of the equipment delivered to the customer.
The following table disaggregates the revenue for the six months ended June 30, 2025 and 2026 are as follows:
| | | | | | |
| | For the six months ended June 30, | ||||
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Revenue by services line | | | | |
| |
Adult education supporting services | | |
| |
| |
Safety technology training services | | |
| |
| |
Online course services | | |
| |
| |
Customized equipment | | — | | | | |
Total revenue | | |
| |
| |
| | | | | | |
| | For the six months ended June 30, | ||||
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Revenue by recognition method | | |
| |
| |
Revenue recognized over time | | |
| |
| |
Revenue recognized at a point in time | | |
| |
| |
Total revenue | | |
| |
| |
Value added tax (“VAT”)
Revenue represents the invoiced value of service, net of VAT. The VAT is based on gross sales price and VAT rates of
Income taxes
The Group follows the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). The Group accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the unaudited condensed consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
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Table of Contents
Note 2 — Summary of significant accounting policies (continued)
An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.
Employee defined contribution plan
Full-time employees of the Group in the PRC participate in a government-mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require that the Group make contributions to the government for these benefits based on government prescribed percentage of the employee’s salaries. The Group has no legal obligation for the benefits beyond the contributions. The total amount was expensed as incurred. For the six months ended June 30, 2025 and 2026, employee welfare contribution expenses amounted to RMB
Stock-based compensation
The Group accounts for share-based compensation awards issued to employees and non-employees in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). For unrestricted stock awards granted under the Company’s equity incentive plans that are fully vested and immediately exercisable upon grant with no service, performance or other vesting conditions, the fair value of each award is measured at the grant-date fair value, based on the closing market price of the Company’s ordinary shares on the grant date, and is recognized as compensation expense in full on the grant date in the unaudited condensed consolidated statements of operations and comprehensive loss. These awards are classified as equity-settled and are not remeasured subsequent to the grant date. Compensation expense is not reversed unless the awards are forfeited due to non-compliance with applicable laws or plan terms, in which case the previously recognized expense is reversed in the period of forfeiture.
Related parties
The Group adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. Parties are considered related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.
Segment reporting
ASC Topic 280, Segment Reporting, establishes standards for reporting information about operating segments on a basis consistent with the Group’s internal organizational structure, as well as information about geographical areas, business segments and major customers in the consolidated financial statements for detailing the Group’s business segments.
The Group’s chief operating decision maker (“CODM”) is the Chief Executive Officer, who reviews the financial information of each separate operating segment when making decisions about allocating resources and assessing the performance of the segment. The Group has determined that it has
F-14
Table of Contents
Note 2 — Summary of significant accounting policies (continued)
Earnings per Share
The Group computes earnings per share (“EPS”) in accordance with ASC 260, Earnings per Share. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common share outstanding for the period. Diluted EPS presents the dilutive effect on a per-share basis of the potential ordinary shares (such as convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (such as those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the six months ended June 30, 2025 and 2026, there were
Foreign currency translation
The Group’s reporting currency is Renminbi (“RMB”). The functional currency of the Company and the Company’s entities incorporated in the Cayman Islands and Hong Kong is the United States Dollar (“US$”). The functional currency of the Company’s PRC subsidiaries is the RMB.
Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency are measured and recorded in the functional currency at the exchange rate prevailing on the transaction date. Translation gains and losses are recognized in the condensed consolidated statements of operation and comprehensive loss.
The Group’s reporting currency is RMB. For entities within the Group that have a functional currency other than the reporting currency, assets and liabilities are translated from each entity’s functional currency to the reporting currency at the exchange rates in effect on the balance sheet date. Equity amounts are translated at historical exchange rates. Revenue, expenses, gains and losses are translated using the average rates for the period. Translation adjustments are reported as cumulative translation adjustments and are shown as a component of other comprehensive income in the condensed consolidated statements of operations and comprehensive loss and the condensed consolidated statements of changes in shareholders’ equity.
Convenience Translation into United States Dollars
Translations of balances in the condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss and condensed consolidated statements of cash flows from RMB into US$ are solely for the convenience of the reader and were calculated at the rate of US$1.00 =
Research and Development Expenses
Research and development (“R&D”) expenses consist primarily of salaries and related personnel costs, depreciation and the cost of services used for the development of the Group’s services management system. Other than software disclosed in intangible assets, all costs associated with R&D are expensed as incurred. For the six months ended June 30, 2025 and 2026, research and development expenses were RMB
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Table of Contents
Note 2 — Summary of significant accounting policies (continued)
Business Combinations
The Group recognizes and measures the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date, while transaction costs related to business combinations are expensed as incurred. An income, market or cost valuation method may be utilized to estimate the fair value of the assets acquired and liabilities assumed, if any, in a business combination. The income valuation method represents the present value of future cash flows over the life of the asset using: (i) discrete financial forecasts, which rely on management’s estimates of resource quantities and exploration potential, costs to produce and develop resources, revenues and operating expenses; (ii) appropriate discount rates; and (iii) expected future capital requirements (the “income valuation method”). The market valuation method uses prices paid for a similar asset by other purchasers in the market, normalized for any differences between the assets (the “market valuation method”). The cost valuation method is based on the replacement cost of a comparable asset at the time of the acquisition adjusted for depreciation and economic and functional obsolescence of the asset (the “cost valuation method”). If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate will be recorded. Subsequent to the acquisition date, and not later than one year from the acquisition date, the Group will record any material adjustments to the initial estimate based on new information obtained that would have existed as of the date of the acquisition. Any adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period in which the adjustment arises.
Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (the “FASB”) issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This pronouncement introduces new disclosure requirements aimed at enhancing transparency in financial reporting by requiring disaggregation of specific income statement expense captions. Under the new guidance, entities are required to disclose a breakdown of certain expense categories, such as: employee compensation; depreciation; amortization, and other material components. The disaggregated information can be presented either on the face of the income statement or in the notes to the financial statements, often using a tabular format. The ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. Early adoption is permitted. In January 2025, the FASB issued ASU 2025-01, which revises the effective date of ASU 2024-03 (on disclosures about disaggregation of income statement expenses) “to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.” Entities within the ASU’s scope are permitted to early adopt the ASU. The Group is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.
In July 2025, the FASB issued ASU 2025-05 - Financial Instruments—Credit Losses (Topic 326) (“ASU 2025-05”). The amendments in the ASU 2025-05 provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Group is evaluating the impact of the adoption of this guidance. The Group believes the future adoption of this ASU is not expected to have a material impact on its unaudited condensed consolidated financial statements.
In November 2025, the FASB issued ASU No. 2025-08, which expands the application of the gross-up approach to certain acquired loans. The amendments are effective for annual periods beginning after December 15, 2026, with early adoption permitted. The Group is currently evaluating the impact of adopting this guidance and does not expect it to have a material impact on its unaudited condensed consolidated financial statements.
Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the unaudited condensed consolidated financial statements upon adoption.
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Note 3 — Accounts receivable, net
Accounts receivable, net consisted of the following:
| | | | | | |
| | As of | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Accounts receivable – third parties |
| | | | | |
Less: allowance for credit losses |
| ( | | ( | | ( |
Accounts receivable, net |
| | | | | |
The following table presents the movements in the allowance for credit losses on accounts receivable for each of the two periods ended June 30, 2026:
| | | | | | |
| | As o | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Allowance for credit losses at beginning of the period | | | | | | |
Additions charged to expense | | | | | | |
Allowance for credit losses at end of the period |
| |
| |
| |
Expected credit losses for the six months ended June 30, 2025 and 2026 amounted to RMB
As of December 31, 2025 and June 30, 2026, the aging of accounts receivable based on the services provided were as follows:
| | | | | | |
| | As of | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Within 90 days |
| | | | | |
90 – 180 days |
| | | | | |
180 days – 1 year |
| | | | | |
Over 1 year | | — | | | | |
Accounts receivable |
| | | | | |
Note 4 — Prepayment and other current assets
Prepayment and other current assets consisted of the following:
| | | | | | |
| | As of | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Prepaid expenses | | | | | | |
Prepayment for intangible assets |
| | | | | |
Employee loans | | | | | | |
Other project investment | | | | — | | — |
Other receivables |
| | | | | |
Total |
| | | | | |
Prepayment for intangible assets consist of deposits paid to vendors for the development of course content.
The Group provided loans to certain employees, primarily for housing and other employee-related purposes and all employee loans are due within one year and expected to be repaid by December 31, 2026.
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Table of Contents
Note 5 — Property and equipment, net
Property and equipment, net, consisted of the following:
| | | | | | |
| | As of | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Motor vehicle |
| |
| |
| |
Office equipment |
| |
| |
| |
Leasehold improvement |
| |
| |
| |
Subtotal |
| |
| |
| |
Less: accumulated depreciation |
| ( |
| ( |
| ( |
Property and equipment, net |
| |
| |
| |
Depreciation expenses for the six months ended June 30, 2025 and 2026 amounted to RMB
Note 6 — Intangible assets, net
Intangible assets, net, consisted of the following:
| | | | | | |
| | As of | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Software purchased |
| |
| |
| |
Copyrights purchased | | | | | | |
Subtotal | | | | | | |
Less: accumulated amortization |
| ( |
| ( |
| ( |
Intangible assets, net |
| |
| |
| |
Copyrights purchased represent the acquired copyright rights for vocational education. For the six months ended June 30, 2026, the Group acquired software and copyright with a cost of RMB
Management regards the acquisitions of software and copyrights as strategic long-term investments to develop the Group’s vocational education and technology platform for future product rollouts, course development and regional expansion. The recent revenue decline and widening losses stem from short-term market and regulatory headwinds affecting our existing training programs and do not indicate that the newly acquired intangible assets will fail to generate future cash flows over their useful lives.
As of June 30, 2026, management completed an ASC 360 triggering event assessment and concluded no triggering event requiring impairment testing exists for these newly acquired intangible assets. The short-term downturn is not expected to continue over the assets’ remaining useful lives, and long-term demand for vocational education remains sound.
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Note 6 — Intangible assets, net (continued)
The following is a schedule, by fiscal years, of amortization amount of intangible assets as of June 30, 2026:
| | | | |
| | Intangible assets | ||
| | RMB | | US$ |
2027 |
| |
| |
2028 |
| |
| |
2029 |
| |
| |
2030 |
| |
| |
2031 and thereafter |
| |
| |
Total |
| |
| |
Note 7 — Right-of-use assets and lease liabilities
Leases are classified as operating leases or finance leases in accordance with ASC 842. The Group’s operating leases are mainly related to office facilities in the PRC. For leases with terms greater than 12 months, the Group records the related asset and liability at the present value of lease payments over the term. The Group’s lease agreements do not contain any material guarantees or restrictive covenants. The Group does not have any material finance leases or any sublease activities. Short-term leases, defined as leases with an initial term of 12 months or less, are not reflected on the unaudited condensed consolidated balance sheets.
| | | | | | |
| | For the six months ended June 30, | ||||
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Amortization of right of use assets and interest of lease liabilities | | | | | | |
Operating lease expenses with an initial term of 12 months or less | | — | | | | |
Total operating lease expenses |
| | | | | |
Other information about the Group’s lease is as follows:
| | | | | | | |
| | As of December 31, | | As of June 30, | | As of June 30, |
|
| | 2025 | | 2026 | | 2026 |
|
| | RMB | | RMB | | US$ |
|
Operating cash flows used in operating lease |
| |
| |
| | |
Right-of-use assets obtained in exchange for new operating lease liabilities |
| — |
| |
| | |
Right-of-use assets obtained in exchange for operating lease liabilities from modification |
| |
| — |
| — | |
Weighted-average remaining lease term-operating |
|
|
| | |||
Weighted-average discount rate-operating |
| | % | | % | | % |
The following is a maturity analysis of the annual undiscounted cash flows for the lease liabilities as of June 30, 2026:
| | | | |
| | Operating lease | ||
| | RMB | | US$ |
Years ending December 31, | | | | |
2027 | | | | |
2028 | | | | |
2029 | | | | |
2030 | | | | |
2031 | | | | |
Total undiscounted lease payments | | | | |
Less: Imputed interest | | ( | | ( |
Lease liabilities recognized in the unaudited condensed consolidated balance sheet | | | | |
F-19
Table of Contents
Note 8 — Other payables
Other payables consisted of the following:
| | | | | | |
| | As of | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Accrued expenses |
| |
| |
| |
Note 9 — Deferred revenue
| | | | | | |
| | As of | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Balance at the beginning of the period |
| |
| |
| |
Decrease in contract liabilities from recognizing revenue during the period included in the contract liabilities at the beginning of the period | | ( | | ( | | ( |
Increase in contract liabilities from billings in advance of performance obligation under contracts |
| |
| |
| |
Balance at the end of the period |
| |
| | | |
Note 10 — Bank loans
Outstanding balance of bank loans consisted of the following:
| | | | | | | | | | | | | |
| | Loan | | Loan | | | | | | Effective |
| ||
| | commencement | | maturity | | Loan | | Loan | | interest |
| ||
| | date | | date | | amount in | | amount in | | rate |
| ||
As of June 30, 2026 | | | | | | | | RMB | | US$ | | | |
Short-term bank loans | | | | | | | | | | | | | |
Bank of China (a) | | | August 21, 2025 | | | August 20, 2026 |
| |
| |
| | % |
Industrial and Commercial Bank of China (b) | | | March 23, 2026 | | | March 22, 2027 |
| |
| |
| | % |
Agricultural Bank of China (c) | | | December 26, 2025 | | | December 25, 2026 |
| |
| |
| | % |
Total short-term bank loans | | | | | | |
| |
| |
| | |
| | | | | | | | | | | | | |
Long-term bank loans | | | | | | |
| |
| |
| | |
China Construction Bank (d) | | | March 21, 2025 | | | March 21, 2028 |
| |
| |
| | % |
| (a) | On August 21, 2025, Kebiao Technology obtained an RMB |
| (b) | On March 23, 2026, Kebiao Technology obtained an RMB |
| (c) | On December 26, 2025, Kebiao Technology obtained an RMB |
| (d) | On March 21, 2025, Kebiao Technology obtained an RMB |
F-20
Table of Contents
Note 11 — Taxes
Corporate Income Taxes
Cayman Islands
The Company is incorporated in the Cayman Islands. The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to the Company levied by the government of the Cayman Islands save for certain stamp duties which may be applicable, from time to time, on certain instruments.
Hong Kong
Under Hong Kong tax laws, with effect from April 1, 2018, a two-tiered profits tax rate regime applies. The profits tax rate for the first HKD
The PRC
Under the Enterprise Income Tax (“EIT”) Law of the PRC, domestic enterprises and Foreign Investment Enterprises are usually subject to a unified
The components of the income tax provision are as follows:
| | | | | | |
| | For the six months ended June 30, | ||||
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Current | | | | | | |
Deferred | | ( | | ( | | ( |
Total income taxes benefit | | ( | | ( | | ( |
F-21
Table of Contents
Note 11 — Taxes (continued)
The following table reconciles the China statutory rates to the Group’s effective tax rate for the six months ended June 30, 2025 and 2026:
| | | | |
| For the six months ended June 30, | | ||
| 2025 | | 2026 | |
Statutory rate in the PRC | | % | | % |
Effect of the PRC preferential tax rate | ( | % | ( | % |
Foreign tax rate differential | ( | % | ( | % |
R&D additional deduction | | % | | % |
Non-deductible expenses* | | % | | % |
Change in valuation allowance | ( | % | ( | % |
Effective tax rate | | % | | % |
*Non-deductible expenses mainly represent expenditures not deductible for PRC tax purposes.
The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of December 31, 2025 and June 30, 2026, the Group did not have any significant unrecognized uncertain tax positions. The Group did not incur any interest and penalties related to potential underpaid income tax expenses for the six months ended June 30, 2025 and 2026.
Taxes payable
Taxes payable consist of the following:
| | | | | | |
| | As of | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Income tax payable |
| |
| |
| |
Value-added tax payable |
| |
| |
| |
Total taxes payable |
| |
| |
| |
F-22
Table of Contents
Note 12 — Segment reporting
ASC Topic 280, Segment Reporting, establishes standards for reporting information about operating segments on a basis consistent with the Group’s internal organizational structure, as well as information about geographical areas, business segments and major customers in financial statements for details on the Group’s business segments. Reportable operating segments include components of an entity about which separate financial information is available and which operating results are regularly reviewed by the chief operating decision maker (“CODM”), the Chief Executive Officer, Mr. Yuan Li, to make decisions about resources to be allocated to the segment and assess each operating segment’s performance.
The Group primarily offers (i) one-stop comprehensive adult education supporting services, (ii) safety technology training services, (iii) online course services and (iv) customized equipment sales.
Based on the management’s assessment, the Group determined that it operates in
The Group evaluates the performance of each operating segment based on several factors, of which the primary financial measures are operating segment profit or loss, as shown in the table below.
The table below provides a summary of the Group’s reportable segment information for the six months ended June 30, 2026:
| | | | | | | | | | | | |
| | For the six months ended June 30, 2026 | ||||||||||
| | Adult | | Safety | | | | | | | | |
| | education | | technology | | Online | | Customized | | | | |
| | supporting | | training | | course | | equipment | | | | |
| | services | | services | | services | | sales | | Consolidation | ||
| | RMB | | RMB | | RMB | | RMB | | RMB | | US$ |
Revenue | | |
| |
| | | | | | | |
Operating costs and expenses | | |
| |
| | | | | | | |
Segment profit (loss) | | ( |
| |
| ( | | | | ( | | ( |
Unallocated (1): | | |
| |
| | | | | | | |
Other operating expenses | | |
| |
| | | | | ( | | ( |
Other income | | |
| |
| | | | | | | |
Loss before income taxes | | |
| |
| | | | | ( | | ( |
| | |
| |
| | | | | | | |
Long-lived assets | | |
| |
| | | — | | | | |
Goodwill | | |
| |
| | | | | | | |
Current assets | | |
| |
| | | | | | | |
Unallocated current assets (2) | | |
| |
| | | | | | | |
Consolidated total assets | | |
| |
| | | | | | | |
| (1) | The unallocated items consist of staff costs including share-based compensation at headquarters, legal and professional fee and other expenses. |
| (2) | The asset categories reviewed by CODM consist of long-lived assets and current assets. Assets are allocated to each segment based on operations or their physical location. The unallocated current assets include cash and cash equivalent and other receivables attributable to headquarter operations. |
F-23
Table of Contents
Note 12 — Segment reporting (continued)
| | | | | | | | |
| | For the six months ended June 30, 2025 | ||||||
| | Adult | | Safety | | | | |
| | education | | technology | | Online | | |
| | supporting | | training | | course | | |
| | services | | services | | services | | Consolidation |
|
| RMB |
| RMB |
| RMB |
| RMB |
Revenue | | | | | | | | |
Operating costs and expenses |
| |
| |
| |
| |
Segment profit (loss) |
| ( |
| |
| ( |
| ( |
Unallocated (3): |
| |
| |
| |
| |
Other operating expenses |
| |
| |
| |
| ( |
Other income |
| |
| |
| |
| |
Loss before income taxes |
| |
| |
| |
| ( |
| | | | | | | | |
Long-lived assets |
| |
| |
| |
| |
Goodwill |
| |
| |
| |
| |
Current assets |
| |
| |
| — |
| |
Unallocated current assets (4) |
| |
| |
| |
| |
Consolidated total assets |
| |
| |
| |
| |
| (3) | The unallocated items consist of staff costs at headquarters, legal and professional fee and other expenses. |
| (4) | The asset categories reviewed by CODM consist of long-lived assets and current assets. Assets are allocated to each segment based on operations or their physical location. The unallocated current assets include cash and cash equivalent and other receivables attributable to headquarter operations. |
The accounting policies of the operating segments are the same as the Group’s accounting policies described in note 2. Segment profit (loss) represents the profit or loss earned from each segment without allocation of certain other operating expenses and other income. This is the measure reported to the CODM for the purposes of resource allocation and performance assessment. The Group generates substantially all of its revenue from clients in China. Accordingly, no geographical segments are presented. Substantially majority of the Group’s long-lived assets are located in China.
F-24
Table of Contents
Note 13 — Shareholders’ equity
The Company was established as a holding company under the laws of the Cayman Islands on February 20, 2023. The original authorized number of ordinary shares is
On May 23, 2025, the Company’s shareholders authorized and approved a consolidation of the Company’s authorized issued and unissued ordinary shares on an 8:1 basis (“8:1 Share Consolidation”) from
On July 15, 2025, the Company adopted the 2025 Equity Incentive Plan, pursuant to which, on the same date, the Company issued an aggregate of
On September 11, 2025 and September 24, 2025, the Company entered into certain securities purchase agreements (the “September 2025 SPAs”) with certain investors (the “September Purchasers”). Pursuant to the September SPAs, the Company agreed to sell, and the September Purchasers agreed to purchase, an aggregate of
On December 11, 2025, the Company entered into certain securities purchase agreements (the “December 2025 SPAs”) with certain investors (the “December Purchasers”). Pursuant to the December SPAs, the Company agreed to sell, and the December Purchasers agreed to purchase, an aggregate of
F-25
Table of Contents
Note 13 — Shareholders’ equity (continued)
On February 18, 2026, the Company entered into a securities purchase agreement in a registered direct offering with certain investors named therein (collectively, the “Purchasers”), pursuant to which, the Company agreed to issue and sell (the “February 2026 Offering”): (i)
On March 11, 2026, the Company’s shareholders authorized and approved a consolidation of the Company’s authorized issued and unissued ordinary shares that every 25 issued and unissued Class A ordinary share of a par value of US$
On April 6, 2026, the Company adopted the 2026 Equity Incentive Plan, pursuant to which, on the same date, the Company issued an aggregate of
On May 4, 2026, the Company entered into a certain securities purchase agreement (the “May 2026 SPAs”) with each of certain purchasers (each, a “Purchaser”, and collectively, the “Purchasers”). Pursuant to the May 2026 SPAs, each Purchaser agreed to purchase, and the Company agreed to issue and sell to the Purchasers, an aggregate of
F-26
Table of Contents
Note 13 — Shareholders’ equity (continued)
On May 27, 2026, the Company announced that the Company plans to effect a consolidation of all of the Company’s authorized issued and unissued ordinary shares on a 10:1 basis (the “10:1 Share Consolidation”), which was approved by the Company’s board of directors on April 20, 2026 and May 12, 2026, and approved by the Company’s shareholders on May 4, 2026. As a result of the 10:1 Share Consolidation, each of the
As of December 31, 2025 and June 30, 2026,
Additional paid-in capital
As of December 31, 2025, additional paid-in capital in the unaudited condensed consolidated balance sheet represents the net proceeds from the September Offering and December Offering. As of June 30, 2026, additional paid-in capital in the unaudited condensed consolidated balance sheet represents the net proceeds from the February Offering, the May Offering, and the June offering during the six months ended June 30, 2026, and the fair value of the shares granted under the Company’s equity incentive plans.
Statutory reserves and restricted net assets
The Group is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least
F-27
Table of Contents
Note 13 — Shareholders’ equity (continued)
Because the Group’s operating subsidiaries in the PRC can only be paid out of distributable profits reported in accordance with PRC accounting standards, the Group’s operating subsidiaries in the PRC are restricted from transferring a portion of their net assets to the Company. The restricted amounts include the paid-in capital and statutory reserves of the Group’s entities in the PRC. The aggregate amount of paid-in capital and statutory reserves, which represented the amount of net assets of the Company’s operating subsidiaries in the PRC not available for distribution, was RMB
Ordinary shares subscribed
Subscribed shares are shares that shareholders have promised to buy. The total number of shares that shareholders have promised to buy are fully paid as of March 6, 2026.
Note 14 — Related party balances and transactions
The following is a list of related parties which the Group has transactions with:
- Mr. Yuan Li,
- Mr. Xiang Lan, key management of the Company.
- JD LIYUAN LIMITED, the Company’s largest shareholder.
Amounts due to related parties
The amounts due to related parties consisted of the following:
| | | | | | |
| | As of | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Mr. Yuan Li |
| |
| |
| |
JD LIYUAN LIMITED |
| |
| |
| |
Mr. Xiang Lan | | | | — | | — |
Total |
| |
| |
| |
Amounts due to Mr. Yuan Li are unsecured, interest-free, due in July 2029, and represent the purchase payments for a vehicle on behalf of Kebiao Technology, which is mainly because vehicle installment payments can only be processed on behalf of Kebiao Technology in the name of its legal representative. Amounts due to JD LIYUAN LIMITED are unsecured, interest-free and repayable on demand, which represent the advance expenses paid on behalf of the Group.
F-28
Table of Contents
Note 15 — Concentrations and risks
(a)Concentrations
Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of accounts receivable. The Group conducts credit evaluations of its customers, and generally does not require collateral or other security from them. The Group evaluates its collection experience and long outstanding balances to determine the need for an allowance for credit loss. The Group conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable.
The following table sets forth a summary of single customers who represent 10% or more of the Group’s total revenue:
| | | | | | |
| | For the six months ended June 30, | ||||
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Amount of the Group’s revenue |
| |
| | | |
Customer A | | | | |||
Customer B |
|
| NA(1) | | NA(1) | |
Customer C |
|
| | |||
(1)The amount was less than 10% of the Company’s total revenue for the six months ended June 30, 2026.
The following table sets forth a summary of single customers who represent 10% or more of the Group’s total accounts receivable:
| | | | | | |
| | As of | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Amount of the Group’s accounts receivable |
| |
| |
| |
Customer A |
| | | NA(2) |
| NA(2) |
Customer C |
| |
| |
| |
Customer D |
| | | NA(2) | | NA(2) |
(2)The amount was less than 10% of the Company’s accounts receivable as of June 30, 2026.
(b)Credit risk
Credit risk is the potential financial loss to the Group resulting from the failure of a customer or a counterparty to settle its financial and contractual obligations to the Group, as and when they fall due. As the Group does not hold any collateral, the maximum exposure to credit risk is the carrying amounts of accounts and other receivables (excluding prepayments) and cash and cash equivalents presented on the unaudited condensed consolidated balance sheets. The Group has no other financial assets which carry significant exposure to credit risk.
(c)Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s interest rate risk arises primarily from loans. Loans issued at variable rates and fixed rates expose the Group to cash flow interest rate risk and fair value interest rate risk respectively.
F-29
Table of Contents
Note 15 — Concentrations and risks (continued)
(d)Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
Typically, the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 90 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
Note 16 — COMMITMENTS
Operating lease commitments
The total future minimum lease payments including the agreed upon property management fee under the non-cancellable operating lease with respect to the contractual obligations were as follows:
| | | | | | |
| | As of | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Within 1 year | | |
| |
| |
1 – 2 years | | | | | | |
2 – 3 years | | — | | | | |
3 – 4 years | | — | | | | |
4 – 5 years | | — |
| |
| |
Total | | |
| |
| |
Note 17 — CONTINGENCIES
In the ordinary course of business, the Group may be subject to legal proceedings regarding contractual and employment relationships and a variety of other matters. The Group records contingent liabilities resulting from such claims, when a loss is assessed to be probable, and the amount of the loss is reasonably estimable. In the opinion of management, there were no pending or threatened claims and litigation as of June 30, 2026 and through the issuance date of these unaudited condensed consolidated financial statements.
Note 18 — SUBSEQUENT EVENTS
The Group has performed an evaluation of subsequent events through to the date the unaudited condensed consolidated financial statements were issued, and determined that no events would have required adjustment to or disclosure in the unaudited condensed consolidated financial statements, except for the events mentioned below:
On August 12, 2026, Kebiao Technology obtained an RMB
F-30
Table of Contents
Note 19 — UNAUDITED CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY
The Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company. The payment of dividends by entities organized in the PRC is subject to limitations, procedures and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in the PRC. The Company’s subsidiaries are also required to set aside at least
In addition, the Group’s operations and revenue are conducted and generated in the PRC, and all of the Group’s revenue earned and currency received are denominated in RMB. RMB is subject to the foreign exchange control regulation in China, and, as a result, the Group may be unable to distribute any dividends outside of China due to PRC foreign exchange control regulations that restrict the Group’s ability to convert RMB into U.S. dollars.
Regulation S-X requires the condensed financial information of the registrant shall be filed when the restricted net assets of consolidated subsidiaries exceed 25% of consolidated net assets as of the end of the most recently completed fiscal year. The condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of the Company’s PRC subsidiary exceed 25% of the consolidated net assets of the Company.
Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been condensed or omitted. The Company’s investment in subsidiary is stated at cost plus equity in undistributed earnings of subsidiaries.
The condensed financial information has been prepared using the same accounting policies as set out in the unaudited condensed consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries. For the parent company, the Company records its investments in subsidiaries under the equity method of accounting as prescribed in ASC 323, Investments — Equity Method and Joint Ventures.
For the six months ended June 30, 2025 and 2026, there were no material contingencies, significant provisions of long-term obligations, or guarantees of the Company.
F-31
Table of Contents
PARENT COMPANY CONDENSED BALANCE SHEETS
| | | | | | |
| | As of | | As of | | As of |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
ASSETS: | | | | | | |
Cash and cash equivalents | | | | | | |
Prepayment and other current assets | | | | | | |
Amounts due from related parties | | | | | | |
Intangible assets | | — | | | | |
Investment in subsidiaries | | | | | | |
TOTAL ASSETS | | | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY: | | | | | | |
Payroll payables | | | | | | |
Other payables | | | | — | | — |
Amounts due to related parties | | | | | | |
TOTAL LIABILITIES | | | | | | |
SHAREHOLDERS’ EQUITY | | | | | | |
Class A ordinary shares, US$ | | | | | | |
Class B ordinary shares, US$ | | | | | | |
Additional paid-in capital | | | | | | |
Statutory reserves | | | | | | |
Ordinary shares subscribed | | ( | | — | | — |
Accumulated other comprehensive loss | | ( | | ( | | ( |
Retained earnings (Accumulated deficit) | | | | ( | | ( |
TOTAL SHAREHOLDERS’ EQUITY | | | | | | |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | |
* | Shares have been retroactively adjusted to reflect the decreased number of shares resulting from the Share Consolidations, Change of Authorized Share Capital and Issue of Dual Class Shares effective from June 24, 2025, March 23, 2026 and June 1, 2026. |
F-32
Table of Contents
Note 20 — UNAUDITED CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (continued)
PARENT COMPANY CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| | | | | | |
| | For the six months ended June 30, | ||||
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
General and administrative expenses | | | | | | |
Research and development expenses | | | | | | |
LOSS FROM OPERATIONS | | ( | | ( | | ( |
Interest income | | — | | | | |
Other expenses, net | | ( | | ( | | ( |
Equity in loss of subsidiaries | | ( | | ( | | ( |
LOSS BEFORE INCOME TAX | | ( | | ( | | ( |
NET LOSS | | ( | | ( | | ( |
OTHER COMPREHENSIVE LOSS | | | | | | |
Foreign currency translation adjustment | | ( | | ( | | ( |
TOTAL COMPREHENSIVE LOSS | | ( | | ( | | ( |
F-33
Table of Contents
Note 20 — UNAUDITED CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (continued)
PARENT COMPANY CONDENSED STATEMENTS OF CASH FLOWS
| | | | | | |
| | For the six months ended June 30, | ||||
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | |
Total net loss | | ( | | ( | | ( |
Adjustments to reconcile net income to net cash used in operating activities: | | | | | | |
Equity in loss of subsidiaries | | | | | | |
Employee stock compensation | | — | | | | |
Unrealized foreign exchange gain | | ( | | ( | | ( |
Changes in operating assets and liabilities: | | | | | | |
Prepayment and other current assets | | | | ( | | ( |
Other payables | | | | ( | | ( |
Payroll payables | | | | ( | | ( |
NET CASH USED IN OPERATING ACTIVITIES | | ( | | ( | | ( |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | |
Purchase of intangible assets | | — | | ( | | ( |
NET CASH USED IN INVESTING ACTIVITIES | | — | | ( | | ( |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | |
Proceeds from issuance of ordinary shares, net of issuance costs | | — | | | | |
Net repayment from related parties | | | | ( | | ( |
Deferred costs related to initial public offering | | ( | | — | | — |
NET CASH PROVIDED BY FINANCING ACTIVITIES | | | | | | |
EFFECT OF FOREIGN EXCHANGE RATE ON CASH AND CASH EQUIVALENT | | — | | ( | | ( |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENT | | ( | | | | |
TOTAL CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | | | | | | |
TOTAL CASH AND CASH EQUIVALENTS, END OF PERIOD | | | | | | |
F-34
Exhibit 99.2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the related notes. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors.
Overview
JIADE LIMITED (the “Company,” “we,” “our,” or “us”) (Nasdaq: JDZG) is an exempted company with limited liability incorporated in the Cayman Islands and not a Chinese operating company, and this corporate structure involves unique risks to investors. As an exempted company with no material operations of our own, we conduct all of our operations primarily through our subsidiaries in the People’s Republic of China (the “PRC”); namely, Shenzhen Kebiao Technology Co., Ltd., a limited liability company organized under the laws of the PRC (“Shenzhen Kebiao”), Sichuan Jiade Zhigao Technology Co., Ltd., a limited liability company organized under the laws of the PRC (“Jiade Zhigao”), Sichuan Kebiao Technology Co., Ltd., a PRC limited liability company (“Kebiao Technology”), Sichuan Jiazhi Taizhang Safety Technology Co., Ltd., a PRC limited liability company (“Jiazhi”) and Sichuan Kunyuan Safety Technology Services Co., Ltd., a PRC limited liability company (“Kunyuan”). Our PRC subsidiaries are companies that specialize in providing one-stop comprehensive education supporting services to adult education institutions, through a wide spectrum of software platform and auxiliary solutions, to meet the evolving needs of their customers in the rapidly changing adult education industry, safety technology training for personnel engaged in five major categories of conventional special operations: (i) fusion welding and thermal cutting operations; (ii) work at height (scaffolding and erection operations); (iii) high-altitude installation, maintenance, and dismantling operations; (iv) high-voltage electrical work; and (v) low-voltage electrical work, online course services and sales of customized equipment.
Our one-stop comprehensive education supporting services are primarily offered through the Kebiao Technology Educational Administration Platform (the “KB Platform”), which facilitates streamlined information and data management throughout the teaching cycle of adult education services, from pre-enrollment to post-graduation. The KB Platform has enabled adult education institutions to improve student management efficiency, save labor costs, and reduce human errors in data management. The KB Platform supports a broad range of functions, such as enrollment consultation, student information collection, enrollment status management, learning progress management, grade inquiry, and graduation management. As part of the one-stop comprehensive education supporting services, our PRC subsidiaries also provide auxiliary solutions to adult education institutions, which encompass teaching support services throughout the entire teaching cycle and related exam administration services. Specifically, our PRC subsidiaries offer pre-enrollment guidance on school/major selection and application strategy development, training for entrance exams, as well as assistance in the application process. They also provide offline tutoring, exam administration services, and guidance on graduation thesis preparation.
Our safety technology training services primarily offer initial training, refresher training, and certification renewal programs for these types of operations with both theoretical instruction and practical training components. After obtaining the required certificates issued by the Ministry of Emergency Management of China, personnel are required to complete refresher training every three years and certification renewal training every six years. As a result, our Group benefit from a high rate of repeat business, providing a recurring revenue stream.
Our online course revenue is primarily generated from the safety technology online learning courses developed by our PRC subsidiary, which are authorized for use on a third-party platform for which we charge service fees.
Our customized equipment is primarily designed for safety technology training and customized for the development of safety technology training examination sites.
Our PRC subsidiaries place a great premium on technology research and development. As of the date of this report, our PRC subsidiaries have acquired 36 software copyrights and eight copyright registration certificates since their incorporation in April 2020. In November 2022, Kebiao Technology was designated a High and New Technology Enterprise (“HNTE”) (No. GR202251000919) by Sichuan Provincial Department of Science and Technology, Sichuan Provincial Department of Finance, and Sichuan Provincial Tax Bureau of the State Taxation Administration. In December 2025, Kebiao Technology was approved to continue to be an HNTE until 2028. This certification is awarded to companies that have engaged in continuous research and development and technology commercialization leading to significant independent intellectual property rights within certain high-tech sectors.
For the six months ended June 30, 2025 and 2026, we had total revenue of approximately RMB9,384,000 and RMB8,274,000 (US$1,219,000), respectively. Our net loss was approximately RMB4,345,000 and RMB50,548,000 (US$7,450,000) for the six months ended June 30, 2025 and 2026, respectively. As of December 31, 2025 and June 30, 2026, we had cash of approximately RMB19,774,000 and RMB51,837,000 (US$7,640,000), respectively, and had working capital of approximately RMB66,163,000 and RMB75,779,000 (US$11,168,000), respectively. As of June 30, 2026, our PRC subsidiaries had collectively provided one-stop comprehensive education supporting services to over 17 adult education institutions and had collectively provided education supporting services to approximately 115,114 students, newly provided safety technology training services for approximately 21,834 individuals and online course services for approximately 138,473 individuals.
Factors Affecting Results of Operations
In addition to the general factors affecting the Chinese and global economy and our industry, our results of operations and financial condition are affected by a number of industry- and company-specific factors, including those set out below:
Relationships with Partner Education Institutions: Our revenue will depend significantly on our PRC subsidiaries’ ability to manage their relationships with partner education institutions. The success of our PRC subsidiaries’ business primarily depends on the number of students they serve. Therefore, their ability to continue to attract partner education institutions to purchase their services to serve students is critical to our PRC subsidiaries’ sustainable growth and continued success. This in turn depends on the reputation of our PRC subsidiaries and their ability to develop new offerings or adapt existing education supporting services to meet evolving market trends and student demands.
Competition in the Adult Education Supporting Service Industry: The adult education supporting service industry in the PRC is highly fragmented, with a large number of service providers throughout the country. Our PRC subsidiaries compete primarily with adult education supporting service providers in the PRC and new entrants to the market, and some of their competitors may have better access to market resources, lower cost structures, more advanced technologies or longer operating histories. If our PRC subsidiaries are unable to improve their service quality, diversify their product and service range, or manage their costs, they may not be able to compete effectively against their existing or new competitors, and their sustainability and growth opportunities may be limited, which will materially and adversely affect their revenue and profitability.
Changes in the rules and regulations governing our clients or potential clients could affect the demand for our services: A significant portion of our safety technology training services is provided under regulations that mandate specific safety training standards for employees, especially for special operation positions that require qualified certificates to work legally. Compliance with regulatory requirements for safety training impacts our operational continuity and financial performance. Failure to meet mandatory safety training standards set by local, national, or international regulatory bodies can result in significant fines, legal liabilities, operational shutdowns, and damage to our reputation. For example, non-compliance with occupational safety regulations may lead to penalties that increase operational costs, while a poor safety record can reduce customer trust and market competitiveness. Conversely, proactive compliance through comprehensive training not only avoids regulatory risks but also enhances our brand image, attracting more clients and improving long-term operational sustainability.
Results of Operations for the Six Months Ended June 30, 2026
The following is a summary of our result of operations for the six months ended June 30, 2025 and 2026, respectively.
| | | | | | |
| | For the six months ended June 30, | ||||
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | USD |
REVENUE | | 9,383,590 | | 8,274,218 | | 1,219,469 |
Cost of revenue |
| 5,708,984 |
| 5,733,766 |
| 845,053 |
GROSS PROFIT |
| 3,674,606 |
| 2,540,452 |
| 374,416 |
OPERATING EXPENSES |
| |
| |
| |
Selling expenses |
| 317,169 |
| 4,466,752 |
| 658,318 |
General and administrative expenses |
| 7,490,194 |
| 48,848,922 |
| 7,199,440 |
Research and development expenses |
| 873,959 |
| 1,547,422 |
| 228,062 |
Total operating expenses |
| 8,681,322 |
| 54,863,096 |
| 8,085,820 |
LOSS FROM OPERATIONS |
| (5,006,716) |
| (52,322,644) |
| (7,711,404) |
OTHER INCOME (EXPENSES) |
| |
| |
| |
Interest income |
| 442 |
| 189 |
| 28 |
Interest expense |
| (109,609) |
| (279,730) |
| (41,227) |
Other income, net |
| 572,740 |
| 1,197,824 |
| 176,537 |
Total other income, net |
| 463,573 |
| 918,283 |
| 135,338 |
LOSS BEFORE INCOME TAXES |
| (4,543,143) |
| (51,404,361) |
| (7,576,066) |
INCOME TAXES BENEFIT |
| (197,766) |
| (856,578) |
| (126,244) |
NET LOSS |
| (4,345,377) |
| (50,547,783) |
| (7,449,822) |
Revenue
| | | | | | | | | | | | | | | |
| | For the six months ended June 30, | | | | |
| ||||||||
| | 2025 | | 2026 | | Increase/(Decrease) |
| ||||||||
Revenue | | RMB | | % | | RMB | | US$ | | % | | RMB | | % |
|
Adult education supporting services |
| 5,671,628 |
| 60 | % | 5,074,720 |
| 747,921 |
| 61 | % | (596,908) | | (11) | % |
Safety technology training services |
| 3,503,890 |
| 38 | % | 2,290,080 |
| 337,516 |
| 28 | % | (1,213,810) | | (35) | % |
Online course services | | 208,072 | | 2 | % | 66,081 | | 9,740 | | 1 | % | (141,991) | | (68) | % |
Customized equipment |
| — |
| — | % | 843,337 |
| 124,292 |
| 10 | % | 843,337 | | 100 | % |
Total revenue |
| 9,383,590 |
| 100 | % | 8,274,218 |
| 1,219,469 |
| 100 | % | (1,109,372) | | (12) | % |
Our PRC subsidiaries generate revenue from providing adult education supporting services, safety technology training services, online course services and customized equipment. Our adult education supporting services primarily contain services through (i) software platform solutions, which facilitate streamlined information and data management throughout the teaching cycle of adult education services, from pre-enrollment to post- graduation, and (ii) auxiliary solutions to students designated by adult education institutions, which encompass teaching support services throughout the entire teaching cycle and related exam administration services. Our safety technology training services are primarily offer initial training, refresher training, and certification renewal programs for these types of operations with both theoretical instruction and practical training components. Our online course revenue is primarily generated from the safety technology online learning courses developed by our PRC subsidiary, which authorize for use on third-party platform and charges services fee. Our customized equipment is primarily designed for safety technology training and customized for the development of safety technology training examination sites.
Total revenue decreased by approximately RMB1,109,000 (US$163,000), or 12%, to approximately RMB8,274,000 (US$1,219,000) for the six months ended June 30, 2026 from approximately RMB9,384,000 for the six months ended June 30, 2025. The decrease in revenue was mainly attributable to: (i) a decrease in revenue generated from adult education supporting services, amounting to approximately RMB597,000 (US$88,000), mainly due to the served students decreased from 52,919 students for the six months ended June 30, 2025 to 46,825 students for the six months ended June 30, 2026, mainly as a result of the fact that part of students graduated and the services completed in the fiscal year 2025 and fewer new students enrolled for the six months ended June 30, 2026; (ii) a decrease in revenue generated from safety technology training services, amounting to approximately RMB1,214,000 (US$179,000), mainly due to the decreased number of trainees served from 6,831 trainees for the six months ended June 30, 2025 to 5,536 trainees for the six months ended June 30, 2026; (iii) a decrease in revenue generated from online course services, amounting to approximately RMB142,000 (US$21,000), primarily attributable to intensified market competition resulting in lower service pricing; and (iv) partially offset by the new revenue generated from sales of customized equipment, amounting to approximately RMB843,000 (US$124,000), for the six months ended June 30, 2026.
Adult education supporting services
The following table sets forth the breakdown of our net revenue generated from adult education supporting services for the periods presented:
| | | | | | | | | | | | | | | |
| | For the six months ended June 30, | | | | |
| ||||||||
| | 2025 | | 2026 | | Increase/(Decrease) |
| ||||||||
Revenue from adult education supporting services | | RMB | | % | | RMB | | US$ | | % | | RMB | | % |
|
National Unified | | | | | | | | | | | | | | | |
Examination for College |
| |
| |
| |
| |
| |
| |
| | |
Admissions for Adults |
| 2,801,509 |
| 49 | % | 2,406,888 |
| 354,731 |
| 47 | % | (394,621) |
| (14) | % |
Open University of China |
| 1,907,311 |
| 34 | % | 2,492,855 |
| 367,401 |
| 49 | % | 585,544 |
| 31 | % |
Self-taught Higher |
| — |
| — |
| — |
| — |
| — |
| — |
| — | |
Education Examinations |
| 962,808 |
| 17 | % | 174,977 |
| 25,789 |
| 4 | % | (787,831) |
| (82) | % |
Total |
| 5,671,628 |
| 100 | % | 5,074,720 |
| 747,921 |
| 100 | % | (596,908) |
| (11) | % |
Revenue from providing services related to National Unified Examination for College Admissions decreased by approximately RMB395,000 (US$58,000), or 14%, primarily due to (i) the decreased number of students served from 21,771 for the six months ended June 30, 2025 to 21,370 for the six months ended June 30, 2026, mainly as a decrease in the new enrolled students for the six months ended June 30, 2026, and (ii) the decrease in the average service price per student (for services related to National Unified Examination for College Admissions for Adults) from RMB129 for the six months ended June 30, 2025 to RMB113 for the six months ended June 30, 2026. The reduction in the service price per student was mainly due to the increased number of graduating students we served, for whom we charged lower fees.
Revenue from providing services related to the Open University of China increased by approximately RMB586,000 (US$86,000), or 31%, primarily due to (i) an increase in the number of students served from 16,183 for the six months ended June 30, 2025 to 21,298 for the six months ended June 30, 2026, mainly as a result of the increased number of new enrolled students, and (ii) the average service price per student (for services related to the Open University of China) remained stable from RMB118 for the six months ended June 30, 2025 to RMB117 for the six months ended June 30, 2026.
Revenue from providing services related to Self-taught Higher Education Examinations decreased by approximately RMB788,000 (US$116,000), or 82%, primarily due to (i) the decreased number of students served from 14,965 for the six months ended June 30, 2025 to 4,157 for the six months ended June 30, 2026, mainly as a result of the increased number of graduated students we served in the fiscal year 2025, and (ii) the decrease in the average service price per student (for services related to Self-taught Higher Education Examinations) from RMB64 for the six months ended June 30, 2025 to RMB42 for the six months ended June 30, 2026. The reduction in the service price per student was mainly due to the increased number of graduating students we served, for whom we charged lower fees.
Safety technology training services
Revenue generated from safety technology training services covers initial training, refresher training, and certification renewal programs for relevant operations, encompassing both theoretical instruction and practical training components. Revenue from safety technology training services decreased by approximately RMB1,214,000 (US$179,000), from approximately RMB3,504,000 for the six months ended June 30, 2025 to approximately RMB2,290,000 (US$338,000) for the six months ended June 30, 2026. The decrease was mainly attributable to (i) a reduction in the number of trainees served from 6,831 for the six months ended June 30, 2025 to 5,536 for the six months ended June 30, 2026, and (ii) a decline in the average training price from approximately RMB513 to RMB414 (US$61) over the same period. The lower average training price was primarily a result of a reduction in initial training enrollments, as initial training commands a higher average price. The reduction in initial training enrollments reflects near-term policy adjustments applicable to weaker construction activity and slower recruitment of construction workers in the PRC during the period.
Online course services
Revenue generated from online course services related to the course services fee which was generated from the safety technology online learning courses developed by our PRC subsidiary then authorized for use on a third-party platform. Revenue generated from online course services decreased by approximately RMB142,000 (US$21,000), from approximately RMB208,000 for the six months ended June 30, 2025 to approximately RMB66,000 (US$10,000) for the six months ended June 30, 2026. The decrease was primarily attributable to intensified market competition resulting in lower service pricing.
Customized equipment
Revenue generated from sales of customized equipment related to safety technology training. The equipment is tailored to the examination of construction sites for safety technology training. For the six months ended June 30, 2026, we sold an aggregate of approximately RMB843,000 (US$124,000) to one customer.
Costs and expenses
Our costs and expenses consist of direct cost of revenue, selling expenses, general and administrative expenses, and research and development expenses.
Cost of revenue
The following table sets forth the breakdown of our cost of revenue for the six months ended June 30, 2025 and 2026:
| | | | | | | | | | | | | | | |
| | For the six months ended June 30, | | | | |
| ||||||||
| | 2025 | | 2026 | | Increase/(Decrease) |
| ||||||||
cost of revenue | | RMB | | % | | RMB | | US$ | | % | | RMB | | % |
|
Cost of services |
| 4,762,385 |
| 84 | % | 4,245,439 |
| 625,700 |
| 74 | % | (516,946) |
| (11) | % |
Employee benefit costs |
| 938,683 |
| 16 | % | 861,119 |
| 126,913 |
| 15 | % | (77,564) |
| (8) | % |
Others |
| 7,916 |
| — | % | 627,208 |
| 92,440 |
| 11 | % | 619,292 |
| >100 | % |
Total cost of revenue |
| 5,708,984 |
| 100 | % | 5,733,766 |
| 845,053 |
| 100 | % | 24,782 |
| 0.4 | % |
Total cost of revenue remained stable from approximately RMB5,709,000 for the six months ended June 30, 2025 to approximately RMB5,734,000 (US$845,000) for the six months ended June 30, 2026.
Cost of services decreased by approximately RMB517,000 (US$76,000), or 11%, from approximately RMB4,762,000 for the six months ended June 30, 2025 to approximately RMB4,245,000 (US$626,000) for the six months ended June 30, 2026, primarily due to the decrease in outsourced training and examination services fees related to safety technology training services as a result of the decreased training services provided.
Employee benefit costs decreased by approximately RMB78,000 (US$11,000), or 8%, from approximately RMB939,000 for the six months ended June 30, 2025 to approximately RMB861,000 (US$127,000) for the six months ended June 30, 2026, primarily due to a reduction in headcount for staff engaged in our safety technology training services at our PRC subsidiaries, reflecting our staffing adjustments to match the impact of such near-term policy changes.
Other costs primarily consisted of procurement costs for customized equipment, short-term rental expenses for examination venues, business taxes and surcharges, and other miscellaneous expenses. Other costs increased mainly due to the increased procurement costs for customized equipment amounting to approximately RMB627,000 (US$92,000) for the six months ended June 30, 2026.
Selling expenses
| | | | | | | | | | | | | | | |
| | For the six months ended June 30, | | | | |
| ||||||||
| | 2025 | | 2026 | | Increase/(Decrease) |
| ||||||||
Selling expenses | | RMB | | % | | RMB | | US$ | | % | | RMB | | % |
|
Promotion fee | | — | | — | % | 4,190,721 | | 617,636 | | 94 | % | 4,190,721 | | 100 | % |
Employee benefits |
| 158,842 |
| 50 | % | 171,777 |
| 25,317 |
| 4 | % | 12,935 |
| 8 | % |
Entertainment expenses |
| 98,425 |
| 31 | % | 45,132 |
| 6,652 |
| 1 | % | (53,293) |
| (54) | % |
Depreciation | | 52,890 | | 17 | % | 58,922 | | 8,684 | | 1 | % | 6,032 | | 11 | % |
Others |
| 7,012 |
| 2 | % | 200 |
| 29 |
| — | % | (6,812) |
| (97) | % |
Total selling expenses |
| 317,169 |
| 100 | % | 4,466,752 |
| 658,318 |
| 100 | % | 4,149,583 |
| 1,308 | % |
Total selling expenses increased by approximately RMB4,150,000 (US$611,000), or 1,308%, to approximately RMB4,467,000 (US$658,000) for the six months ended June 30, 2026, compared to approximately RMB317,000 for the six months ended June 30, 2025. The increase in selling expenses was mainly due to promotion expenses of approximately RMB4,191,000 (US$618,000) incurred for the marketing of our services and platforms, partially offset by the decreased entertainment expenses.
General and administrative expenses
| | | | | | | | | | | | | | | |
| | For the six months ended June 30, | | | | |
| ||||||||
| | 2025 | | 2026 | | Increase/(Decrease) |
| ||||||||
General and administrative expenses | | RMB | | % | | RMB | | US$ | | % | | RMB | | % |
|
Employee benefits |
| 1,128,836 |
| 15 | % | 33,984,887 |
| 5,008,752 |
| 70 | % | 32,856,051 |
| >100 | % |
Consulting expenses |
| 3,308,126 |
| 44 | % | 11,562,307 |
| 1,704,073 |
| 23 | % | 8,254,181 |
| 250 | % |
Annual listing fee |
| 506,508 |
| 7 | % | 383,465 |
| 56,516 |
| 1 | % | (123,043) |
| (24) | % |
Property management expenses |
| 108,063 |
| 1 | % | 80,202 |
| 11,820 |
| — | % | (27,861) |
| (26) | % |
Rental expenses |
| 486,034 |
| 6 | % | 289,794 |
| 42,710 |
| 1 | % | (196,240) |
| (40) | % |
Depreciation |
| 99,993 |
| 1 | % | 815,466 |
| 120,185 |
| 2 | % | 715,473 |
| 716 | % |
Office expenses |
| 91,863 |
| 1 | % | 141,247 |
| 20,817 |
| — | % | 49,384 |
| 54 | % |
Travelling expenses |
| 54,071 |
| 1 | % | 75,390 |
| 11,111 |
| — | % | 21,319 |
| 39 | % |
Expected credit loss for accounts receivable |
| 1,550,481 |
| 21 | % | 1,430,109 |
| 210,772 |
| 3 | % | (120,372) |
| (8) | % |
Others |
| 156,219 |
| 3 | % | 86,055 |
| 12,684 |
| — | % | (70,164) |
| (45) | % |
Total general and administrative expenses |
| 7,490,194 |
| 100 | % | 48,848,922 |
| 7,199,440 |
| 100 | % | 41,358,728 |
| 552 | % |
Total general and administrative expenses increased by approximately RMB41,359,000 (US$6,096,000), or 552%, to approximately RMB48,849,000 (US$7,199,000) for the six months ended June 30, 2026 from approximately RMB7,490,000 for the six months ended June 30, 2025. As a percentage of revenue, general and administrative expenses were approximately 80% and 590% of our total revenue for the six months ended June 30, 2025 and 2026, respectively. The increase in total general and administrative expenses was primarily attributable to: (i) the share-based compensation expense of approximately RMB32,964,000 (US$4,858,000) recognized for the grant of Class B ordinary shares to JD LIYUAN LIMITED for Mr. Yuan Li’s services rendered to the Company pursuant to the 2026 Equity Incentive Plan, (ii) the increase in consulting expenses resulting from the increase in the professional service fees for legal, audit and other compliance services, and (iii) the increase in depreciation and office expenses related to the newly acquired assets, partially offset by the decreases in rental expenses, expected credit loss for accounts receivable and property management expenses.
Research and development expenses
| | | | | | | | | | | | | | | |
| | For the six months ended June 30, | | | | |
| ||||||||
| | 2025 | | 2026 | | Increase/(Decrease) |
| ||||||||
Research and development expenses | | RMB | | % | | RMB | | US$ | | % | | RMB | | % |
|
Employee benefits |
| 398,836 |
| 46 | % | 360,474 |
| 53,127 |
| 23 | % | (38,362) |
| (10) | % |
Depreciation |
| 379,796 |
| 43 | % | 1,100,943 |
| 162,259 |
| 71 | % | 721,147 |
| 190 | % |
Office expenses |
| 9,432 |
| 1 | % | 3,654 |
| 539 |
| — | % | (5,778) |
| (61) | % |
Rental expenses |
| 62,316 |
| 7 | % | 60,054 |
| 8,851 |
| 4 | % | (2,262) |
| (4) | % |
Others |
| 23,579 |
| 3 | % | 22,297 |
| 3,286 |
| 1 | % | (1,282) |
| (5) | % |
Total research and development expenses |
| 873,959 |
| 100 | % | 1,547,422 |
| 228,062 |
| 100 | % | 673,463 |
| 77 | % |
Total research and development expenses increased by approximately RMB673,000 (US$99,000), or 77%, to approximately RMB1,547,000 (US$228,000) for the six months ended June 30, 2026 from approximately RMB874,000 for the six months ended June 30, 2025. The increase in total research and development expenses was primarily due to the increase in depreciation and amortization of approximately RMB721,000 (US$106,000) related to the newly acquired intangible assets, partially offset by a decrease in employee benefits of approximately RMB38,000.
As a percentage of revenue, research and development expenses were approximately 9% and 19% of our total revenue for the six months ended June 30, 2025 and 2026, respectively. Our PRC subsidiaries expect to continue to invest in research and development to maintain their competitive edge against other market participators.
Other income (expenses)
Our other income (expenses) primarily represented interest income, interest expenses, rent subsidies, tax relief, net loss on disposal of property and equipment and foreign exchange gain/loss. Other income increased by approximately RMB455,000 (US$67,000), or 98%, from approximately RMB464,000 for the six months ended June 30, 2025 to approximately RMB918,000 (US$135,000) for the six months ended June 30, 2026, primarily due to a foreign exchange gain of approximately RMB1,199,000 (US$177,000) for the six months ended June 30, 2026 compared to foreign exchange gain of approximately RMB579,000 for the six months ended June 30, 2025, and partially offset by an increase in interest expenses of approximately RMB170,000 (US$25,000) for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Loss before income taxes
Loss before income taxes was approximately RMB51,404,000 (US$7,576,000) for the six months ended June 30, 2026, an increase of approximately RMB46,861,000 (US$6,906,000) in loss as compared to approximately RMB4,543,000 for the six months ended June 30, 2025. The increase was primarily attributable to the share-based compensation expense and the increased operating expenses.
Benefit for income taxes
Our income taxes benefit was approximately RMB857,000 (US$126,000) for the six months ended June 30, 2026, compared to income taxes benefit of approximately RMB198,000 for the six months ended June 30, 2025. The increased income tax benefit was mainly due to the increased losses of our PRC subsidiaries.
Under the Enterprise Income Tax Law (“EIT Law”), domestic enterprises and Foreign Investment Enterprises are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays, and even tax exemption may be granted on a case-by-case basis. The EIT Law grants preferential tax treatment to HNTEs. Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. Kebiao Technology, one of our PRC subsidiaries, was approved as an HNTE on November 2, 2022 and renewed the HNTE status on December 8, 2025, and is entitled to the reduced tax rate of 15% in 2025, 2026 and 2027.
According to the Announcement of the State Taxation Administration on the Implementation of Income Tax Preferential Policies to Support the Development of Small Low Profit Enterprises and Individual Businesses, 25% of the annual taxable income of small low profit enterprises that does not exceed RMB3 million will be included in the taxable income, and the enterprise income tax will be paid at the rate of 20%. Jiade Zhigao, Shenzhen Kebiao, Jiazhi and Kunyuan are eligible for the above preferential tax policies for small and micro enterprises in 2025 and 2026 and will continue to be eligible for such policies until 2027.
The following table reconciles the China statutory rates to our effective tax rate for the six months ended June 30, 2025 and 2026:
| | | | | |
| | For the six months ended June 30, |
| ||
| | 2025 | | 2026 |
|
Statutory rate in the PRC | | 25.0 | % | 25.0 | % |
Effect of the PRC preferential tax rate |
| (2.0) | % | (0.9) | % |
Foreign tax rate differential |
| (19.3) | % | (23.4) | % |
R&D additional deduction |
| 2.7 | % | 0.4 | % |
Non-deductible expenses |
| 3.2 | % | 0.6 | % |
Change in valuation allowance |
| (5.2) | % | (0.0) | % |
Effective tax rate |
| 4.4 | % | 1.7 | % |
Net loss
Our net loss was approximately RMB50,548,000 (US$7,450,000) for the six months ended June 30, 2026, an increase of approximately RMB46,202,000 (US$6,809,000) in loss from net loss of approximately RMB4,345,000 for the six months ended June 30, 2025. The increase in net loss was primarily due to the share-based compensation expense recognized for the grant of Class B ordinary shares and the higher operating expenses for the six months ended June 30, 2026, as discussed above under cost of revenue and operating expenses sections.
Liquidity and Capital Resources
The following table sets forth our current assets and current liabilities as of the dates indicated:
| | | | | | |
| | December 31, | | June 30, | | June 30, |
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
CURRENT ASSETS: | | | | | | |
Cash and cash equivalents |
| 19,773,580 |
| 51,837,277 |
| 7,639,869 |
Accounts receivable, net |
| 6,259,004 |
| 6,019,542 |
| 887,171 |
Deferred offering costs |
| 228,213 |
| — |
| — |
Prepayment and other current assets |
| 61,640,567 |
| 38,024,812 |
| 5,604,164 |
TOTAL CURRENT ASSETS |
| 87,901,364 |
| 95,881,631 |
| 14,131,204 |
CURRENT LIABILITIES: |
| |
| |
| |
Bank loans |
| 15,240,000 |
| 12,240,000 |
| 1,803,953 |
Accounts payable |
| — |
| 2,941,374 |
| 433,505 |
Payroll payables |
| 1,952,234 |
| 1,978,255 |
| 291,559 |
Other payables |
| 2,050,459 |
| 33,120 |
| 4,881 |
Deferred revenue |
| 40,942 |
| 625,320 |
| 92,161 |
Operating lease liabilities – current |
| 482,275 |
| 554,406 |
| 81,709 |
Amounts due to related party |
| 462,837 |
| 257,756 |
| 37,989 |
Taxes payable |
| 1,509,134 |
| 1,472,760 |
| 217,058 |
TOTAL CURRENT LIABILITIES |
| 21,737,881 |
| 20,102,991 |
| 2,962,815 |
WORKING CAPITAL |
| 66,163,483 |
| 75,778,640 |
| 11,168,389 |
Accounts receivable, net
Our accounts receivable, net represent receivables from adult education institutions of comprehensive education supporting services. Billings to the customers are made generally on an annual basis over the contract term. Our accounts receivable balance decreased by approximately RMB239,000 (US$35,000) from approximately RMB6,259,000 as of December 31, 2025, to approximately RMB6,020,000 (US$887,000) as of June 30, 2026. These decreases were mainly because the accounts receivable as of December 31, 2025 had been partially collected as of June 30, 2026.
Prepayment and other current assets
Prepayment and other current assets consist of deposits, prepaid expenses and others. Our prepayment and other current assets decreased by approximately RMB23,616,000 (US$3,481,000) from approximately RMB61,641,000 as of December 31, 2025, to approximately RMB38,025,000 (US$5,604,000) as of June 30, 2026, mainly due to the decrease in prepayment for intangible assets of approximately RMB18,282,000 (US$2,694,000) as deposits paid for course content development were transferred to intangible assets upon completion, the settlement of other project investment of approximately RMB1,684,000 and the repayment of employee loans of approximately RMB855,000, partially offset by the increase in other receivables of approximately RMB1,070,000.
Loans
As of December 31, 2025 and June 30, 2026, we had total loans of approximately RMB16,240,000 and RMB13,230,000 (US$1,950,000), respectively. The following table sets forth the breakdown of our loans as of the dates indicated:
| | | | | | | | | | | |
| | Loan | | Loan | | Loan | | Loan | | Effective |
|
As of June 30, 2026 | | commencement | | maturity | | amount in | | amount in | | interest |
|
Short-term bank loans | | date | | date | | RMB | | USD | | rate |
|
Bank of China (a) | | August 21, 2025 | | August 20, 2026 | | 5,000,000 | | 736,909 | | 3.35 | % |
Industrial and Commercial Bank of China (b) | | March 23, 2026 | | March 22, 2027 | | 3,740,000 | | 551,208 | | 3.00 | % |
Agricultural Bank of China (c) | | December 26, 2025 | | December 25, 2026 | | 3,500,000 | | 515,836 | | 3.25 | % |
Total short-term bank loans | | | | | | 12,240,000 | | 1,803,953 | | | |
| | | | | | | | | | | |
Long-term bank loans | | | | | | | | | | | |
China Construction Bank (d) | | March 21, 2025 | | March 21, 2028 | | 990,000 | | 145,908 | | 3.05 | % |
(a) On August 21, 2025, Kebiao Technology obtained an RMB5,000,000 unsecured loan from Bank of China for a term of twelve months, with Mr. Yuan Li as a co-borrower, at a fixed annual interest rate of 3.35% per annum. The loan was fully repaid on August 18, 2026.
(b) On March 23, 2026, Kebiao Technology obtained an RMB3,740,000 unsecured loan from Industrial and Commercial Bank of China for a term of twelve months, at a fixed annual interest rate of 3.00% per annum.
(c) On December 26, 2025, Kebiao Technology obtained an RMB3,500,000 loan from Agricultural Bank of China for a term of twelve months, with Mr. Yuan Li as the guarantor, at a fixed annual interest rate of 3.25% per annum.
(d) On March 21, 2025, Kebiao Technology obtained an RMB1,000,000 unsecured loan from China Construction Bank for a term of three years, with Mr. Yuan Li as a co-borrower, at a fixed interest rate of 3.05% per annum. Kebiao Technology repaid RMB10,000 of loan principal for the six months ended June 30, 2026, and the outstanding principal balance was RMB990,000 as of June 30, 2026.
Lease Liabilities
We recognized total lease liabilities of approximately RMB963,000 and RMB1,405,000 (US$207,000) as of December 31, 2025 and June 30, 2026, respectively. As compared with the balance as of December 31, 2025, our lease liabilities as of June 30, 2026 increased by approximately RMB442,000 (US$65,000) as our PRC subsidiaries signed new lease agreements.
Contractual Obligations
The following table sets forth our contractual obligations as of December 31, 2025:
| | | | | | | | | | |
| | Payment due by Period | ||||||||
| | | | Less than | | | | | | More than |
| | Total | | 1 Year | | 1 – 3 Years | | 3 – 5 Years | | 5 Years |
| | RMB | | RMB | | RMB | | RMB | | RMB |
Bank loans | | 16,240,000 | | 15,240,000 | | 1,000,000 | | — | | — |
Lease liabilities |
| 963,116 |
| 482,275 |
| 480,841 |
| — |
| — |
Deferred revenue |
| 40,942 |
| 40,942 |
| — |
| — |
| — |
Total |
| 17,244,058 |
| 15,763,217 |
| 1,480,841 |
| — |
| — |
The following table sets forth our contractual obligations as of June 30, 2026:
| | | | | | | | | | |
| | Payment due by Period | ||||||||
| | | | Less than | | | | | | More than |
| | Total | | 1 Year | | 1 – 3 Years | | 3 – 5 Years | | 5 Years |
| | RMB | | RMB | | RMB | | RMB | | RMB |
Bank loans | | 13,230,000 | | 12,240,000 | | 990,000 | | — | | — |
Lease liabilities |
| 1,481,058 |
| 590,405 |
| 890,653 |
| — |
| — |
Deferred revenue |
| 625,320 |
| 625,320 |
| — |
| — |
| — |
Total |
| 15,336,378 |
| 13,455,725 |
| 1,880,653 |
| — |
| — |
Apart from what is shown above, we did not have any significant capital commitments, long-term obligations or guarantees as of December 31, 2025 and June 30, 2026.
Capital Expenditures
Our capital expenditures consist primarily of the purchase of fixed assets and intangible assets as strategic long-term investments to build out the Group’s vocational education and internal AI technology platform to support future product rollouts, new course development and targeted regional expansion. Our capital expenditures amounted to approximately RMB66,496,000 (US$9,800,000) for the six months ended June 30, 2026, primarily consisting of the purchase of intangible assets of approximately RMB66,328,000 (US$9,776,000) and property and equipment of approximately RMB168,000 (US$25,000).
We have historically funded our working capital needs primarily from cash generated from our operations, bank loans, advance payments from shareholders, and proceeds from shares offering. Our working capital requirements are affected by the efficiency of our operations, the numerical volume and dollar value of our revenue contracts, the progress or execution on our customer contracts, and the timing of accounts receivable collections. Our management believes that current levels of cash and cash flows from operations will be sufficient to meet our anticipated cash needs for at least the next 12 months from the date of this report. However, we may need additional cash resources in the future if we experience changed business conditions or other developments, and may also need additional cash resources in the future if we wish to pursue opportunities for acquisitions, strategic partnerships, or other similar initiatives. If it is determined that the cash requirements exceed our amounts of cash on-hand, we may seek to issue debt or equity securities or obtain a credit facility.
Cash flows for the six months ended June 30, 2025 and 2026
| | | | | | |
| | For the six months ended June 30, | ||||
| | 2025 | | 2026 | | 2026 |
| | RMB | | RMB | | US$ |
Net cash used in operating activities | | (5,133,238) | | (9,069,368) | | (1,336,660) |
Net cash used in investing activities |
| (526,888) |
| (66,496,390) |
| (9,800,355) |
Net cash provided by financing activities |
| 9,644,071 |
| 107,645,831 |
| 15,865,033 |
Effect of foreign exchange rate on cash and cash equivalent |
| (38) |
| (16,376) |
| (2,414) |
Net increase in cash and cash equivalent |
| 3,983,907 |
| 32,063,697 |
| 4,725,604 |
Total cash and cash equivalent, beginning of period |
| 3,918,146 |
| 19,773,580 |
| 2,914,265 |
Total cash and cash equivalent, end of period |
| 7,902,053 |
| 51,837,277 |
| 7,639,869 |
Operating activities
Net cash used in operating activities was approximately RMB9,069,000 (US$1,337,000) for the six months ended June 30, 2026, compared to approximately RMB5,133,000 used in operating activities for the six months ended June 30, 2025. The change was primarily attributable to the following:
(i) net loss increased by approximately RMB46,202,000 (US$6,809,000) for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to the non-cash share-based compensation expense of approximately RMB32,964,000 (US$4,858,000) recognized for the grant of Class B ordinary shares;
(ii) accounts receivable increased by approximately RMB1,191,000 (US$175,000) for the six months ended June 30, 2026, compared to a decrease of approximately RMB592,000 for the six months ended June 30, 2025;
(iii) prepayment and other current assets decreased by approximately RMB5,340,000 (US$787,000) for the six months ended June 30, 2026, compared to an increase of approximately RMB2,400,000 for the six months ended June 30, 2025;
(iv) accounts and other payables increased by approximately RMB924,000 (US$136,000) for the six months ended June 30, 2026, compared to a decrease of approximately RMB392,000 for the six months ended June 30, 2025;
(v) payroll payables increased by approximately RMB26,000 (US$4,000) for the six months ended June 30, 2026, compared to an increase of approximately RMB363,000 for the six months ended June 30, 2025;
(vi) deferred revenue increased by approximately RMB584,000 (US$86,000) for the six months ended June 30, 2026, compared to a decrease of approximately RMB103,000 for the six months ended June 30, 2025;
(vii) changes in lease liabilities — operating lease decreased by approximately RMB252,000 (US$37,000) for the six months ended June 30, 2026, compared to a decrease of approximately RMB575,000 for the six months ended June 30, 2025; and
(viii) taxes payable decreased by approximately RMB36,000 (US$5,000) for the six months ended June 30, 2026, compared to a decrease of approximately RMB226,000 for the six months ended June 30, 2025.
Investing activities
Net cash used in investing activities was approximately RMB66,496,000 (US$9,800,000) for the six months ended June 30, 2026, compared to approximately RMB527,000 for the six months ended June 30, 2025. During the six months ended June 30, 2026, we spent approximately RMB168,000 (US$25,000) and approximately RMB66,328,000 (US$9,776,000) on the purchase of property and equipment and intangible assets, respectively. During the six months ended June 30, 2025, we spent approximately RMB30,000 and approximately RMB943,000 on the purchase of fixed assets and intangible assets, respectively.
Financing activities
Net cash provided by financing activities was approximately RMB107,646,000 (US$15,865,000) for the six months ended June 30, 2026, compared to approximately RMB9,644,000 for the six months ended June 30, 2025.
During the six months ended June 30, 2026, net cash provided by financing activities included (i) approximately RMB110,861,000 (US$16,339,000) in proceeds from issuance of ordinary shares, net of issuance costs, (ii) approximately RMB3,010,000 (US$444,000) in repayment of bank loans, and (iii) approximately RMB205,000 (US$30,000) in net repayments to related parties. During the six months ended June 30, 2025, net cash provided by financing activities included (i) approximately RMB7,740,000 in proceeds from bank loans, (ii) approximately RMB1,000,000 in repayment of loans, (iii) approximately RMB1,488,000 in deferred costs related to the IPO, and (iv) approximately RMB4,392,000 in net proceeds from related parties.
Off-Balance Sheet Arrangements
As of the date of this report, we have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity, or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk, or credit support to us or engages in leasing, hedging, or product development services with us. The Group has performed an evaluation of subsequent events through to the date the unaudited condensed consolidated financial statements were issued, and determined that no events would have required adjustment to or disclosure in the unaudited condensed consolidated financial statements, except for the events mentioned below:
On August 12, 2026, Kebiao Technology obtained an RMB4,500,000 loan from Bank of China for a term of twenty-four months, at a fixed annual interest rate of 2.80% per annum.
Critical Accounting Policies, Judgements and Estimates
We prepare our unaudited condensed consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates, and assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although there were no material changes made to the accounting estimates and assumptions in the past two periods, we continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience, and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.
We believe that the estimates required to be made by management include, but are not limited to, useful lives of property and equipment and intangible assets, the incremental borrowing rate used in operating lease right-of-use assets and lease liabilities, the valuation of accounts receivable, the recoverability of long-lived assets, goodwill, contingencies and realization of deferred tax assets. We consider an accounting estimate critical if: (i) it requires us to make assumptions because the information was not available at the time or it includes matters highly uncertain at the time we were making our estimate and (ii) changes in the estimate could have a material impact on our condensed financial condition or results of operations. We determined there were no critical accounting estimates.