Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ...

Core Viewpoint - TCTM Kids IT Education Inc. has entered into share purchase agreements to sell 25 million Class A ordinary shares for a total of $2.0 million, indicating investor confidence in the company's strategic initiatives and expansion plans into the AI-driven medical software industry [1][2]. Group 1: Share Purchase Agreement - The company will sell and issue 25,000,000 Class A ordinary shares at a purchase price of approximately $0.08 per share, totaling $2.0 million [1]. - The closing of the transactions is expected to occur no later than April 7, 2025, subject to customary closing conditions [2]. Group 2: Business Expansion - The financing proceeds from the share sale will support TCTM's expansion into the AI-driven medical software industry, diversifying its business operations [2]. - The company aims to create long-term value for its investors through the execution of its strategic plans [2]. Group 3: Company Overview - TCTM is a leading provider of IT-focused supplementary STEM education services in China, targeting students aged three to eighteen [6]. - The company offers programs such as computer coding and robotics programming, utilizing a combination of live distance instruction, classroom-based tutoring, and online learning modules [6].

BEIJING, April 7, 2025 /PRNewswire/ -- TCTM Kids IT Education Inc. (NASDAQ: TCTM) ("TCTM" or the "Company"), a leading provider of IT-focused supplementary STEM education services in China, today announced that it has entered into an intangible asset purchase agreement with Jeethen International Co., Limited ("Jeethen") on April 1, 2025 (the "Agreement"). Under the Agreement, the Company will acquire from Jeethen core algorithms and related software and hardware systems for brain-computer interfaces, valued ...

Core Insights - TCTM Kids IT Education Inc. has announced a leadership restructuring, appointing Mr. Heng Wang as CEO, Mr. Xiaolan Tang as CFO, and Mr. Robert L. Angell as CTO, effective February 28, 2025, to enhance its focus on AI-driven technology [1] Group 1: Leadership Changes - Mr. Heng Wang has over 30 years of experience in the financial industry, specializing in financial technologies, IT strategy, and compliance, previously serving as a senior manager at Charles Schwab Corporation [2] - Dr. Robert L. Angell is an expert in healthcare AI and data science, currently serving as CEO and co-founder of EmbraceNFT.io and has held various advisory roles in data science and healthcare organizations [3] - Mr. Xiaolan Tang has been re-designated as the CFO, indicating a strategic shift in the company's financial leadership [1] Group 2: Company Overview - TCTM is a leading provider of IT-focused supplementary STEM education services in China, targeting students aged three to eighteen [4] - The company offers innovative education programs, including computer coding and robotics programming, through a combination of live distance instruction, classroom-based tutoring, and online learning modules [4] - TCTM aims to foster logical thinking and learning abilities in children while helping them discover their interests and potential through its "code to learn" initiative [4]

Core Points - TCTM Kids IT Education Inc. received a notification from Nasdaq indicating that its American depositary shares (ADSs) have been trading below the minimum bid price of US$1.00 for the last 30 consecutive business days [1] - The company has a grace period of 180 calendar days, until July 2, 2025, to regain compliance with the minimum bid price requirement [2] - The notification does not impact the company's business operations, and TCTM plans to take measures to regain compliance within the grace period [3] Company Overview - TCTM is a leading provider of IT-focused supplementary STEM education services in China, targeting students aged three to eighteen [4] - The company offers a range of programs, including computer coding and robotics programming courses, through a combination of live distance instruction, classroom-based tutoring, and online learning modules [4] - TCTM aims to enhance children's logical thinking and learning abilities while fostering their interests and potential in STEM education [4]

Financial Performance - Revenues from continuing operations contributed by variable interest entities accounted for 6.6% of net revenues in 2023, up from 1.3% in 2021[23]. - The divestiture of the professional education business was completed in March 2024, significantly impacting the company's operations and financial results[24]. - Net revenues from continuing operations for the year ended December 31, 2023, were RMB 1,375,192,000, compared to RMB 1,399,844,000 in 2022, indicating a slight decline[43][44]. - The net income for the year ended December 31, 2023, was RMB 10,354,000, a recovery from a net loss of RMB 85,233,000 in 2022[43][44]. - Gross profit for 2023 was RMB 624,352 thousand, down 7.0% from RMB 671,428 thousand in 2022[47]. - Operating income for 2023 was RMB 13,451 thousand, a significant recovery from an operating loss of RMB 26,353 thousand in 2022[47]. - Net income from continuing operations for 2023 was RMB 22,334 thousand (USD 3,146 thousand), compared to a net loss of RMB 2,062 thousand in 2022[47]. - The company reported net cash used in operating activities of RMB 118,935,000 for 2023, compared to a net cash used of RMB 27,528,000 in 2022[43][44]. - The company has recognized an investment deficit in the VIEs and Non-VIE subsidiaries amounting to RMB 1,702,776,000 as of December 31, 2023[43]. - The company reported a total deficit attributable to shareholders of RMB 1,497,783 thousand (USD 210,959 thousand) in 2023, slightly improved from RMB 1,499,894 thousand in 2022[52]. Dividends and Distributions - As of December 31, 2023, restricted amounts for dividends from subsidiaries and variable interest entities totaled RMB1,228.2 million (approximately US$173.0 million)[35]. - No dividends or distributions were made to the holding company from its subsidiaries or variable interest entities for the years ended December 31, 2021, 2022, and 2023[35]. - The company has not declared or paid any cash dividends since 2019 and intends to retain available funds for business expansion[36]. - The variable interest entities have not paid service fees to the holding company for the years ended December 31, 2021, 2022, and 2023[34]. - The company relies on dividends and other distributions from its subsidiaries in mainland China to fund cash and financing requirements, which could be limited by local regulations[138]. Strategic Changes and Future Outlook - The divestiture is part of a strategic shift aimed at focusing on continuing operations, which may lead to future market expansion opportunities[40]. - The company anticipates that the strategic divestiture will enhance operational efficiency and financial performance in the upcoming periods[40]. - The company plans to focus on IT-focused supplementary STEM education programs following the divestiture of its professional education business, which is expected to impact future revenues[61]. - The company may face significant costs and challenges in complying with new data security and personal information protection regulations in China, which could adversely affect its operations and reputation[101]. Regulatory Environment - The PRC government has implemented regulations requiring domestic companies to file with the CSRC for overseas offerings, affecting future capital raising efforts[32]. - The Ministry of Education's Interim Measures for Administrative Penalties on After-school Tutoring became effective on October 15, 2023, imposing penalties for illegal after-school tutoring activities[84]. - The Alleviating Burden Opinions prohibit new academic after-school tutoring institutions for students in compulsory education and require existing institutions to register as non-profit organizations[87]. - The PRC tax authorities may scrutinize the company's contractual arrangements with variable interest entities, potentially leading to increased tax liabilities and reduced consolidated net income[136]. - The PRC government controls the conversion of RMB into foreign currencies, potentially limiting the ability to remit dividends[197]. Market and Economic Conditions - The company’s business and financial condition may be adversely affected by a downturn in the global or Chinese economy, impacting parents' disposable income and willingness to spend on education[70]. - The ongoing geopolitical tensions and macroeconomic challenges could lead to reduced demand for the company's education services, impacting financial results[151]. - Economic growth in China has been uneven and slowing, with potential adverse effects on the company's financial condition due to government regulations and inflation[150]. Operational Challenges - The company may face challenges in recruiting, training, and retaining qualified instructors and teaching assistants, which are essential for maintaining educational quality[67]. - The company’s learning centers face capacity constraints, which could lead to losing potential students to competitors if expansion does not keep pace with demand[106]. - The company has faced challenges in protecting its intellectual property rights, which could harm its competitive advantage if not adequately managed[103]. Compliance and Legal Risks - The uncertainties in the PRC legal system could limit the company's ability to enforce contractual arrangements with variable interest entities[132]. - The company may have to engage in administrative and court proceedings to enforce its legal rights, with outcomes being difficult to predict due to the discretion of PRC authorities[147]. - The company has not been involved in any formal investigations regarding cybersecurity reviews by the Cyberspace Administration of China as of the date of the annual report[100]. Employee and Operational Metrics - The company employed 7,022 employees in mainland China as of December 31, 2023, with 5,385 associated with continuing operations[117]. - The company closed 4 non-performing learning centers and opened 7 new centers in 2023, resulting in a total of 220 learning centers as of December 31, 2023[79]. - As of December 31, 2023, the company operates 220 learning centers across 53 cities in mainland China, providing STEM education programs[86]. Currency and Financial Risks - Fluctuations in exchange rates could adversely affect the company's results of operations and investment value[201]. - The company has not entered into any foreign currency forward contracts since 2017, which may limit its ability to hedge against currency fluctuations[203].

Financial Data and Key Metrics Changes - The company achieved total net revenues of RMB649 million in Q2 2022, an 11.4% increase from RMB582 million in Q2 2021, exceeding previous revenue guidance [10][28] - Operating income was RMB48 million in Q2 2022, a significant turnaround from an operating loss of RMB90.7 million in the same period last year [28] - Gross profit margin improved to 58.0%, up 7.4 percentage points year-over-year [8] - Net profit reached RMB47.92 million, compared to a net loss of RMB76.7 million in Q2 2021 [32] Business Line Data and Key Metrics Changes - Childhood and adolescent quality education business generated RMB346 million in revenue, a 19.6% increase from RMB289 million in Q2 2021, accounting for 53.4% of total revenue [14] - Adult professional education business revenue was RMB303 million, up 3.3% from RMB293 million in the same period last year [20] - Gross profit margin for childhood and adolescent education reached a record high of 47.1%, while adult professional education gross profit margin increased to 70.5% [21][14] Market Data and Key Metrics Changes - Enrollment in childhood and adolescent education increased by 25.9% to 176,500 students [14] - The number of fee-paying enrollments rose by 33.8% to 43,500 [15] - The employment rate of students within six months after graduation was 97% [23] Company Strategy and Development Direction - The company plans to optimize its OMO (Online-Merge-Offline) based customer acquisition and product delivery system to enhance competitiveness and trust among students [36] - Continued focus on improving operational efficiency to maintain profitability despite potential challenges from future pandemic outbreaks [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve sustainable growth despite challenges posed by COVID-19 [8] - The company anticipates total net revenues for Q3 2022 to be between RMB620 million and RMB650 million, reflecting a year-over-year increase of 2.8% to 5.7% [38] Other Important Information - The company appointed Ms. Wei Ping as the new CFO, bringing valuable experience in education and internet sectors [24] - Cash balance as of June 30, 2022, was RMB425.6 million, with a net cash inflow from operating activities of RMB19.4 million [33] Q&A Session Summary Question: What will be the competitive edge of the company now? - The CEO highlighted the company's rich experience in adult IT professional education, strong customer acquisition, product delivery, and R&D capabilities as competitive advantages [42] Question: What is the opinion on the competition landscape? - The CEO noted favorable government policies supporting professional education, contributing to stable growth and a promising future for the adult professional education business [43][44]

Financial Data and Key Metrics Changes - The company achieved a net income of RMB 27.1 million in Q1 2022, compared to a net loss of RMB 121.9 million in Q1 2021, marking a significant turnaround [9][40] - Operating income reached RMB 28.6 million in Q1 2022, a recovery from an operating loss of RMB 129.5 million in the same period last year [38] - Total net revenues increased by 16.8% to RMB 623.5 million in Q1 2022 from RMB 533.8 million in Q1 2021 [29] - Gross profit rose by 43.6% to RMB 358.9 million, with a gross margin of 57.6%, up from 46.8% in the same period last year [14][33] Business Line Data and Key Metrics Changes - The adult professional education business generated net revenue of RMB 269.6 million, up 5.5% from RMB 255.5 million in Q1 2021, despite a decrease in student enrollments [31][16] - The childhood and adolescent quality education business saw net revenue increase by 27.2% to RMB 363.9 million, with student enrollments rising from 135,500 to 173,100 [21][30] - The gross profit for the childhood and adolescent quality education business increased by 79.3% year-over-year, with a gross margin of 49.4% [25] Market Data and Key Metrics Changes - The number of student enrollments in the adult professional education business decreased by 5.5% to 29,300, while the average revenue per learning center increased by 5.5% [15][19] - The childhood and adolescent quality education business experienced a 43% increase in new contracted students, with a renewal rate of over 83.4% for students enrolled for more than one year [22][23] Company Strategy and Development Direction - The company plans to continue focusing on operational efficiency and cost reduction, which has been a key factor in achieving profitability [11][13] - The strategy includes optimizing the business structure and enhancing the online merge offline model to improve customer acquisition and service delivery [26][27] - The management expressed confidence in the growth potential of both business segments, supported by government policies promoting vocational education [61] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the seasonal impact of the Chinese New Year but highlighted breakthroughs in operational efficiency and cost management as key contributors to the positive results [47][48] - The company remains optimistic about future growth, citing high customer satisfaction and retention rates as critical factors for continued success [51][52] Other Important Information - The company expects total net revenues for Q2 2022 to be in the range of RMB 600 million to RMB 630 million, reflecting a year-over-year increase of 3.1% to 8.2% [43][44] - The company recorded a decrease in total operating expenses by 12.9% to RMB 330.3 million, indicating effective cost management strategies [34] Q&A Session Summary Question: What breakthroughs did Tarena achieve in the first quarter despite it being an off-season for the education industry? - Management attributed the gains to continuous cost reduction and operational efficiency improvements, leading to positive growth in both adult professional and childhood education segments [48][49] Question: With the company now profitable, what are the future plans regarding potential offers for acquisition? - Management confirmed that there are no current offers for acquisition and emphasized their commitment to continue building the business and maintaining profitability [65]

Financial Performance - Net revenue for the year ended December 31, 2021, was RMB 2,386,520 thousand, representing an increase from RMB 1,897,883 thousand in 2020, which is a growth of approximately 25.7%[42] - The net loss for 2021 was RMB 475,780 thousand, a decrease from a net loss of RMB 771,193 thousand in 2020, indicating an improvement of about 38.3%[42] - Operating loss for 2021 was RMB 369,112 thousand, significantly reduced from RMB 806,380 thousand in 2020, showing a decrease of approximately 54.5%[42] - Research and development expenses for 2021 were RMB 106,098 thousand, slightly up from RMB 100,466 thousand in 2020, indicating a growth of about 5.1%[42] - The company reported a gross profit of RMB 1,185,101 thousand in 2021, up from RMB 831,041 thousand in 2020, representing an increase of approximately 42.6%[42] Assets and Liabilities - Total assets as of December 31, 2021, were RMB 1,641,782 thousand, compared to RMB 1,959,249 thousand as of December 31, 2020, reflecting a decrease of approximately 16.2%[40] - Total liabilities as of December 31, 2021, were RMB 3,234,202 thousand, a decrease from RMB 3,098,518 thousand in 2020, reflecting an increase of approximately 4.4%[40] - The company reported a total equity deficit attributable to shareholders of RMB (1,583,920) thousand as of December 31, 2021, compared to a deficit of RMB (1,132,002) thousand in 2020[47] - Deferred revenue, including non-current portion, was RMB 2,024,852 thousand as of December 31, 2021, a slight increase from RMB 1,998,198 thousand in 2020[47] Dividend and Capital Structure - As of December 31, 2021, the amounts restricted from being remitted as dividends totaled RMB1,523.2 million (approximately US$239.0 million)[34] - Tarena International, Inc. has not declared or paid any cash dividends since the beginning of 2019 and does not plan to do so in the foreseeable future[37] - The company’s ability to pay dividends depends on the retained earnings of its PRC subsidiaries, which are determined according to PRC accounting standards[32] Regulatory Environment - The company may be required to obtain additional licenses or permits for its operations in China due to regulatory uncertainties[29] - The company has not been subject to any cybersecurity review by the Cyberspace Administration of China as of the date of the report[31] - The PRC government has significant oversight and discretion over business operations, which may lead to material adverse changes in operations and the value of the company's ADSs[188] - The uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to the company[182] Market Conditions and Competition - The professional education services market in China is highly competitive, posing risks to market share and financial results[58] - Economic conditions in China and globally may adversely affect student enrollment and spending on education services, particularly in the context of a slowing economy[92] - The company faces competition in the childhood and adolescent quality education market, which may impact student enrollment rates[87] Operational Challenges - The COVID-19 pandemic has adversely affected business activities, including student recruitment and service delivery since 2020[58] - The company has experienced temporary closures of learning centers due to COVID-19, impacting student recruitment and operational activities[81] - The company may face challenges in managing its expansion effectively, which could harm its financial condition and operational results[97] Student Recruitment and Course Offerings - The ability to attract students is critical for business success, dependent on course quality, market trends, and effective marketing strategies[73] - In 2021, childhood and adolescent robotics programming and computer programming courses contributed 27.9% and 19.4% of total net revenues, respectively, highlighting reliance on specific course offerings[78] - The average six-month post-course job placement rate for 2019, 2020, and 2021 was approximately 91%, with a majority of reported employment being full-time and relevant to the fields of study[84] Compliance and Legal Risks - The company may face significant penalties if it fails to comply with evolving regulations, including fines and potential suspension of noncompliant learning centers[110] - The legal system in the PRC may limit the company's ability to enforce contractual arrangements, potentially affecting financial control over Beijing Tarena[167] - The company may incur substantial costs and resources to enforce contractual arrangements if Beijing Tarena or its shareholders fail to perform their obligations[165] Intellectual Property and Data Security - The company’s intellectual property rights, including copyrights and trademarks, are crucial for maintaining competitive advantage[132] - The company has not experienced breaches of information security measures in the past, but future risks remain[116] - Compliance with PRC data security laws may require significant capital and resources, potentially increasing operational costs[129] Franchise and Learning Centers - The company has 40 franchisees for childhood and adolescent quality education programs and 1 franchisee for adult professional education programs as of 2021[214] - The number of learning centers for childhood and adolescent quality education programs increased from 217 as of December 31, 2019, to 238 as of December 31, 2021[97] - As of December 31, 2021, the company operated a total of 338 learning centers, with 23.7% of student enrollments coming from centers without professional education services[102] Financial Obligations and Risks - The company has extended loans to employees totaling RMB20.6 million (US$3.2 million) as of December 31, 2021, which could impact financial condition if not collected timely[137] - The company may face potential risks from intellectual property claims that could divert financial and management resources[133] - Labor costs in China have increased, with the company employing 10,009 employees as of December 31, 2021, which may adversely affect profitability[148]

Financial Data and Key Metrics Changes - Total net revenues for Q4 2021 were RMB655.3 million, a 0.8% increase from RMB650.3 million in Q4 2020, and a 6.5% increase from RMB615.2 million in Q3 2021 [9][28] - Operating loss decreased by 29.1% to RMB60.4 million in Q4 2021 from RMB85.1 million in Q4 2020, with an operating margin improvement to 9.2% from 13.1% [10][13] - Net loss for Q4 2021 was RMB182.5 million, compared to a net loss of RMB94.7 million in Q4 2020 [40][52] Business Line Data and Key Metrics Changes - Adult professional education net revenue decreased by 9.4% to RMB319.3 million in Q4 2021 from RMB352.4 million in Q4 2020, with student enrollments down 14% to 30,200 [16][30] - Childhood & adolescent quality education net revenue increased by 12.8% to RMB336 million in Q4 2021 from RMB297.9 million in Q4 2020, with student enrollments up 17.9% to 151,300 [20][29] Market Data and Key Metrics Changes - The number of learning centers for adult professional education decreased by four, while childhood & adolescent quality education centers increased to 238 from 236 year-over-year [15][23] - The average annual net revenue per learning center for childhood & adolescent quality education increased by 55.4% to RMB5.22 million in 2021 from RMB3.36 million in 2020 [23] Company Strategy and Development Direction - The company aims to achieve long-term sustainable development and profitability, focusing on optimizing business structures and improving operational efficiency [26][64] - For childhood & adolescent quality education, the focus is on achieving a profitable business model, with indications of profitability already in Q4 2021 [65][66] - The adult professional education business, being more mature, will continue to optimize its structure and improve profitability, with a target of positive revenue by the end of 2024 [67] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving healthy growth despite challenges posed by COVID-19, emphasizing the adaptability of their business model to online formats [62][71] - The company anticipates a revenue increase for Q1 2022, with guidance set between RMB580 million to RMB610 million, reflecting an 8.6% to 14.2% increase compared to Q1 2021 [55][56] Other Important Information - The company recorded a significant increase in gross profit for 2021, up 42.6% to RMB1,185.1 million from RMB831 million in 2020, with a gross margin improvement to 49.7% [46] - Total operating expenses decreased by 5.1% to RMB1,554.2 million in 2021, indicating effective cost control measures [47] Q&A Session Summary Question: Impact of COVID-19 on Offline Learning Centers - Management acknowledged the challenges posed by COVID-19 but emphasized the company's ability to transition to online formats, maintaining high-quality educational services [70][72] Question: Future Growth and Business Model Adaptation - Management highlighted the dual nature of COVID-19 as both a challenge and an opportunity, expressing confidence in the company's sustainable growth model and adaptability to market conditions [74]