​ You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this annual report. 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, including those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report. ​ A. Operating Results Overview ​ We are currently undergoing a strategic transformation from e-commerce retail into brand-focused apparel design with the launch of our new brands. ​ We serve customers globally without incurring the costs and complexities associated with establishing a traditional multinational retail infrastructure. Our major markets are Europe, North and South America, Oceania and Asia. We use global online marketing platforms such as Google and Facebook to reach our customers, we accept payments through all major credit cards and electronic payment platforms such as Visa, MasterCard, American Express, PayPal, Klarna, Apple Pay and Shop Pay and we deliver our goods through major international couriers, including DHL, UPS, FEDEX, EMS and other international couriers. ​ Our total revenues were $629.4 million, $255.3 million and $224.3 million in 2023, 2024 and 2025, respectively. We recorded net loss of $9.6 million and $2.5 million in 2023 and 2024, respectively, and net profit of $8.3 million in 2025. Cash used in operating activities was $20.7 million and $48.2 million in 2023 and 2024, respectively, and cash provided by operating activities was $6.2 million in 2025. ​ Factors Affecting Our Results of Operations ​ Our business and results of operations are affected by general factors affecting apparel markets around the world. Such factors include: ​ ● the growth of the global economy and of our targeted geographic markets, including the breakout of the pandemic that has an adverse impact on global economy; 52 Table of Contents ● per capita disposable income and consumer spending; ● growth of global Internet penetration and online retail; and ● government policies and initiatives in our targeted geographic markets that affect online retail and, in particular, the import of products into their respective countries or regions. ​ Unfavorable changes in any of these general industry conditions could materially and adversely affect demand for our products and our results of operations. In addition, our operating results are affected by the following company-specific factors: ​ ● our ability to acquire new customers and increase repeat purchases by customers at reasonable cost; ● our ability to control product sourcing costs, fulfillment and other operating expenses; ● our product selection and pricing; ● our ability to introduce new product offerings and categories; ● our ability to implement and adapt to the latest technologies; ● our ability to expand into new geographic markets; ● our ability to enhance our brand; and ● our ability to compete effectively. ​ Revenues ​ Since 2016, we generate revenue from two revenue streams: ​ ● Product sales. Our product sales segment is comprised of sales of our products to customers through our websites and mobile applications, other supplemental online platforms, and to third-party sellers that sell through our platforms utilizing our supply chain. Revenues from our product sales and other consumer products are recorded net of value added tax, sales and use tax, goods and services tax, discounts and allowances; and ​ ● Services and others. Our services and others segment is comprised of provision of logistics services to companies and individual customers. ​ In 2023, 2024 and 2025, we generated total revenues of $629.4 million, $255.3 million and $224.3 million, respectively. The following table sets forth information of our total revenues by segment in absolute amounts and as percentages of total revenues for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ (U.S. dollars in thousands, except for percentage) ​ ​ ​ ​ Revenues ​ ​ ​ % of Total ​ ​ ​ Revenues ​ ​ ​ % of Total ​ ​ ​ Revenues ​ ​ ​ % of Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales $ 617,240 98.1 $ 243,700 95.5 $ 215,775 96.2 Services and others ​ 12,188 1.9 ​ 11,587 4.5 ​ 8,540 3.8 Total revenues ​ $ 629,428 100.0 ​ $ 255,287 100.0 ​ $ 224,315 100.0 ​ Product sales ​ In response to evolving market dynamics and consumer preferences, we are undergoing a strategic transformation from a traditional e-commerce retail into brand-focused apparel design with the launch of our new brands. We face seasonality for the sale of our products. For example, during the fourth quarter of the past years, we experienced a general increase in the demand for our products as a result of holiday shopping, and we also had higher purchase demand in the second quarter due to the summer season. In addition, we recorded lower sales during the first quarter due to the decrease in consumers’ desire to purchase after the holiday seasons. 53 Table of Contents Services and others ​ We also record revenues from the provision of logistics services to companies and individual customers. Such logistics services include product collection, packaging and labeling, shipment and delivery of products from our warehouses to locations designated by our customers. ​ Cost of Revenues and Operating Expenses ​ The following table sets forth our cost of revenues and operating expenses, both in absolute amounts and as percentages of total revenues for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ (U.S. dollar in thousands, except for percentage) ​ ​ ​ ​ ​ ​ ​ % of Total ​ ​ ​ ​ ​ ​ % of Total ​ ​ ​ ​ ​ ​ % of Total ​ ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues Cost of revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of product sales ​ $ 265,964 42.3 ​ $ 98,926 38.8 ​ $ 76,683 34.2 Cost of services and others ​ 3,532 0.5 ​ 2,869 1.1 ​ 1,756 0.8 Total cost of revenues ​ $ 269,496 42.8 ​ $ 101,795 39.9 ​ $ 78,439 35.0 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fulfillment ​ $ 34,916 5.5 ​ $ 18,932 7.4 ​ $ 16,593 7.4 Selling and marketing ​ 302,694 48.1 ​ 111,919 43.8 ​ 102,498 45.7 General and administrative ​ 34,078 5.4 ​ 25,735 10.1 ​ 19,562 8.7 Other operating income, net ​ (1,361) (0.2) ​ (876) (0.3) ​ (743) (0.3) Total operating expenses ​ $ 370,327 58.8 ​ $ 155,710 61.0 ​ $ 137,910 61.5 ​ Cost of revenues ​ Our cost of revenues is comprised of cost of product sales and cost of services. ​ Our cost of product sales consists primarily of cost of consumer products and shipping charges, and to a much lesser degree, packaging supplies and inventory write-downs. We write down the cost of slow-moving and broken inventory to the net realizable value based on historical trends for such inventory, inventory aging, historical and forecasted consumer demand and such write-down is recorded as part of cost of product sales. Shipping charges to receive products from our suppliers are included in inventory and recognized as cost of product sales upon the sale of such products. Our cost of product sales as percentage of our total revenues during a specific period is affected by the composition of the type of products sold during that period. ​ Our cost of services consists primarily of shipping charges and to a lesser extent, packaging supplies in connection with the provision of such services to our customers. Shipping charges primarily include shipping fees that we pay to third-party international couriers and are recognized as cost of services when delivery services are rendered. ​ Operating Expenses ​ Fulfillment Expenses. Fulfillment expenses include costs incurred in operating and staffing our warehouses and customer service centers, including (i) costs attributable to buying, receiving, inspecting and warehousing inventories, (ii) picking, packaging, and preparing customer orders for shipment, (iii) payment processing and related transaction costs, and (iv) rental expenses of leased warehouses and depreciation of logistics and electronic equipment. Our fulfillment expenses are primarily affected by the cost of personnel at our warehouses and our ability to strengthen our logistic management capabilities and increase our economies of scale as our volume of products shipped increases. ​ 54 Table of Contents Selling and Marketing Expenses. Selling and marketing expenses include marketing program expenses and marketing personnel expenses. Marketing program expenses are comprised of targeted online marketing expenses, such as search engine marketing, display advertising and affiliate marketing program expenses. Marketing personnel expenses are comprised of payroll and related expenses for personnel engaged in selling, marketing and business development. The fluctuation of selling and marketing expenses as a percentage of our total revenues relates to our business expansion into and the testing of new geographic markets, product categories, marketing channels and promotional activities. In the near term, we expect to focus our selling and marketing efforts on growing our customer base, but we expect our selling and marketing expenses as a percentage of our total revenues to decrease in the long term as we achieve economies of scale, utilize our selling and marketing channels more efficiently, enhance customer’ shopping experience and accordingly increase repeat purchases. ​ General and Administrative Expenses. General and administrative expenses include payroll and related expenses for employees involved in general corporate functions such as accounting, finance, tax, legal, human resources, as well as facility and equipment cost attributable to these functions such as depreciation and rental expenses, professional fees, provision for credit losses and other general corporate costs. Also included in general and administrative expenses are payroll and related expenses for employees involved in product research and development, and systems support, as well as server charges and telecommunications cost. In addition, general and administrative expenses include chargebacks relating to fraudulent credit card activities from payment processing agencies. We expect our general and administrative expenses as a percentage of our total revenues to decrease in the future as we achieve economies of scale. ​ Share-based Compensation Expenses ​ The table below shows the effect of the share-based compensation expenses on our operating expense line items for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ ​ % of Total ​ ​ ​ ​ ​ ​ % of Total ​ ​ ​ ​ ​ ​ % of Total ​ ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues ​ ​ (U.S. dollar in thousands, except for percentage) Selling and marketing ​ 34 0.0 ​ 89 0.0 ​ 20 0.0 General and administrative ​ 381 0.0 ​ 256 0.0 ​ 72 0.0 Total share-based compensation expenses ​ $ 415 0.0 ​ $ 345 0.0 ​ $ 92 0.0 ​ We expect to continue to grant share options, restricted shares and other share-based awards under our share incentive plan and incur further share-based compensation expenses in future periods. For information regarding share options and restricted shares granted to our officers and directors, see “—Share Incentive Plan.” ​ Taxation ​ Cayman Islands Taxation ​ The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or brought within, the jurisdiction of the Cayman Islands. The Cayman Islands is not a party to any double tax treaties which are applicable to any payments made by or to our company. There are no exchange control regulations or currency restrictions in the Cayman Islands. ​ Payments of dividends and capital in respect of our ordinary shares or our ADSs will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our ordinary shares or our ADSs, nor will gains derived from the disposal of our ordinary shares or our ADSs be subject to Cayman Islands income or corporation tax. ​ No stamp duty is payable in respect of the issue of our ordinary shares or on an instrument of transfer in respect of our ordinary shares. ​ 55 Table of Contents Singapore Taxation ​ Our subsidiaries incorporated in Singapore are subject to the Singapore corporate tax of 17% with respect to the profit generated from Singapore. Dividends received in respect of our ADSs or our ordinary shares whether by a Singapore tax resident or a non-Singapore tax resident as a shareholder are not subject to any withholding tax in Singapore. ​ Hong Kong Taxation ​ Our wholly owned subsidiaries in Hong Kong are subject to the uniform profit tax rate of 16.5% in Hong Kong. It is exempted from income tax on its foreign-derived income. ​ PRC Taxation ​ Our subsidiaries incorporated in the PRC are subject to the general corporate tax of 25%, except for Beijing Lanting, which is subject to 15% of corporate tax rate from 2024 to 2026, and Shanghai Lanting, which is subject to 15% of corporate tax rate from 2022 to 2024 according to the new EIT Law and its implementation rules that permit certain High and New Technologies Enterprises, or HNTEs, to enjoy a reduced 15% enterprise income tax rate if they meet certain criteria and are officially acknowledged. ​ Under the New EIT Law and its implementation rules, dividends from our PRC subsidiaries paid out of profits generated after January 1, 2008, are subject to a withholding tax of 20%, although under the detailed implementation rules to the New EIT Law promulgated by the PRC State Council, the withholding tax rate is 10%, unless there is a tax treaty with China that provides for a different withholding arrangement. Pursuant to the Double Taxation Avoidance Arrangement, dividends that Light in The Box Limited and other Hong Kong subsidiaries receive from our PRC subsidiaries may be subject to withholding tax at a rate of 5%, provided that the conditions and requirements under the Double Taxation Avoidance Arrangement have been satisfied. ​ International Value Added Tax / Sales and use tax / Goods and Services Tax ​ The European Union value-added tax (or EU VAT) is a value added tax on goods and services within the European Union (EU). The EU’s institutions do not collect the tax, but EU member states are each required to adopt in national legislation a value added tax that complies with the EU VAT code. Different rates of VAT apply in different EU Member States, ranging from 17% in Luxembourg to 27% in Hungary. Within the EU, new VAT rules on cross-border business-to-consumer (B2C) e-commerce activities have been in effect since 1 July 2021. Online sellers, including online marketplaces/platforms can register the Import One-Stop Shop (IOSS) in one EU Member State. The IOSS scheme enables suppliers and electronic interfaces selling goods with an intrinsic value of EUR150 or less to EU consumers to collect, declare and pay the VAT to the tax authorities. ​ For non-EU European countries, such as United Kingdom, Norway and Switzerland also have issued new VAT policies on foreign suppliers (businesses and marketplaces) of low-value goods to domestic individual consumers, where foreign suppliers are obliged to register and collect VAT on their B2C sales. Meanwhile, there are other non-EU European countries that still charge VAT at the border when the goods are imported. ​ In the United States, most states have enacted laws or adopted formal positions that apply an economic nexus standard and require remote sellers with no in-state physical presence to register for sales and use tax purposes, collecting and remitting tax on sales directed to customers in the state. Sales and use tax rates vary from state to state. Most states also allow a local option that permits local jurisdictions, such as cities and counties, to impose an additional percentage on top of the state-level tax and to keep the related revenues. ​ In Australia, the supply of low value imported goods of AUD1,000 or less to an Australian non-registered consumer will be taken to have necessary connection with Australia and may be subject to goods and services tax, or GST, unless otherwise exempted. Nonresident suppliers and/or re-deliverers to consumers in Australia are liable to remit that GST to the Commissioner of Taxation. ​ In the PRC, according to the Notice on the Taxation Policies for Cross-border E-Commerce Retail Export, or the E-Commerce Export Taxation Notice, which was jointly issued by the MOF and the STA and took effect on January 1, 2014, an e-commerce export enterprise may be exempt from or refunded with consumption tax and VAT upon satisfaction of certain conditions or requirements under such notice. In addition, our PRC subsidiaries are exempted from VAT on revenue from provision of professional services to its overseas affiliates. 56 Table of Contents In addition to the above countries, other regions or countries also have developed and introduced their own VAT or GST regulations. ​ Results of Operations ​ The following table sets forth a summary of our consolidated results of operations for the years indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The results of operations in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ (U.S. dollar in thousands, except for percentage) ​ ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues ​ ​ ​ ​ Revenues Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ $ 617,240 98.1 ​ $ 243,700 95.5 ​ $ 215,775 96.2 Services and others ​ 12,188 1.9 ​ 11,587 4.5 ​ 8,540 3.8 Total revenue ​ 629,428 100.0 ​ 255,287 100.0 ​ 224,315 100.0 Cost of revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ 265,964 42.3 ​ 98,926 38.8 ​ 76,683 34.2 Services and others ​ 3,532 0.5 ​ 2,869 1.1 ​ 1,756 0.8 Total cost of revenues ​ 269,496 42.8 ​ 101,795 39.9 ​ 78,439 35.0 Gross profit ​ 359,932 57.2 ​ 153,492 60.1 ​ 145,876 65.0 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fulfillment ​ 34,916 5.5 ​ 18,932 7.4 ​ 16,593 7.4 Selling and marketing ​ 302,694 48.1 ​ 111,919 43.8 ​ 102,498 45.7 General and administrative ​ 34,078 5.4 ​ 25,735 10.1 ​ 19,562 8.7 Other operating income, net ​ (1,361) (0.2) ​ (876) (0.3) ​ (743) (0.3) Total operating expenses ​ 370,327 58.8 ​ 155,710 61.0 ​ 137,910 61.5 (Loss) / income from operations ​ (10,395) (1.6) ​ (2,218) (0.9) ​ 7,966 3.5 Interest income ​ 350 0.0 ​ 90 0.0 ​ 7 0.0 Interest expense ​ (4) (0.0) ​ — — ​ (17) (0.0) Other income / (expense), net ​ 499 0.1 ​ (400) (0.1) ​ 262 0.2 (Loss) / income before tax ​ (9,550) (1.5) ​ (2,528) (1.0) ​ 8,218 3.7 Income tax (expense) / benefit ​ (40) (0.0) ​ 39 0.0 ​ 61 0.0 Net (loss) / income ​ $ (9,590) (1.5) ​ $ (2,489) (1.0) ​ $ 8,279 3.7 ​ Comparison of the Years Ended December 31, 2023, 2024 and 2025 ​ Revenues ​ Our total revenues in 2023, 2024 and 2025 were $629.4 million, $255.3 million and $224.3 million, respectively, reflecting a decrease of 59.4% from 2023 to 2024 and a decrease of 12.1% from 2024 to 2025. ​ Product sales ​ The decrease in our revenues from product sales from $617.2 million in 2023 to $243.7 million in 2024 was primarily due to the intense competition across the e-commerce industry, and also due to the strategic transformation we are undergoing from e-commerce retail into brand-focused apparel. Product sales represented 98.1% and 95.5% of total revenues in 2023 and 2024, respectively. ​ The decrease in our revenues from product sales from $243.7 million in 2024 to $215.8 million in 2025 was primarily due to our deliberate focus on margin preservation over market share in a competitive market. Product sales represented 95.5% and 96.2% of total revenues in 2024 and 2025, respectively. 57 Table of Contents Services and other ​ The revenues from services and others in 2023, 2024 and 2025 were $12.2 million, $11.6 million and $8.5 million, respectively, representing a decrease of 4.9% from 2023 to 2024 and a decrease of 26.3% from 2024 to 2025. The decrease from 2024 to 2025 was mainly due to the strategic reduction of external promotional activities in 2025. ​ Cost of revenues ​ Our cost of revenues in 2023, 2024 and 2025 were $269.5 million, $101.8 million and $78.4 million, respectively, representing a decrease of 62.2% from 2023 to 2024 and a decrease of 22.9% from 2024 to 2025. ​ Cost of product sales ​ Our cost of product sales decreased from $266.0 million in 2023 to $98.9 million in 2024, and further to $76.7 million in 2025, primarily due to the decrease of product sales volumes. ​ Cost of services and others ​ The decrease in our cost of services from $3.5 million in 2023 to $2.9 million in 2024, and further to $1.8 million in 2025 was primarily due to the reduced service revenue. ​ Gross profit ​ As a result of the foregoing, our gross profits in 2023, 2024 and 2025 were $359.9 million, $153.5 million and $145.9 million, respectively, reflecting a decrease of 57.4% from 2023 to 2024 and a decrease of 5.0% from 2024 to 2025. Our gross margins in 2023, 2024 and 2025 were 57.2%, 60.1% and 65.0%, respectively. ​ Product sales ​ The gross profits of our product sales segment in 2023, 2024 and 2025 were $351.3 million, $144.8 million and $139.1 million, respectively, reflecting a decrease of 58.8% from 2023 to 2024 and a decrease of 3.9% from 2024 to 2025. The gross margins of our product sales segment in 2023, 2024 and 2025 were 56.9%, 59.4% and 64.5%, respectively. The increase in gross margin was mainly due to higher-margin proprietary product lines and bespoke legacy offerings like print-on-demand apparel. ​ Services and others ​ The gross profits of our services and others segment in 2023, 2024 and 2025 were $8.7 million, $8.7 million and $6.8 million, respectively, reflecting an increase of 0.7% from 2023 to 2024 and a decrease of 22.2% from 2024 to 2025. The gross margins of our services segment in 2023, 2024 and 2025 were 71.0%, 75.2% and 79.4%, respectively. ​ Fulfillment Expenses ​ Our fulfillment expenses in 2023, 2024 and 2025 were $34.9 million, $18.9 million and $16.6 million, respectively. Fulfillment expenses as a percentage of our total revenues in 2023, 2024 and 2025 were 5.5%, 7.4% and 7.4%, respectively. ​ The increase in the fulfillment expenses as a percentage of the total revenues from 2023 to 2024 was mainly due to decreased revenues from 2023 to 2024. The fulfillment expenses as a percentage of our total revenues from 2024 to 2025 was relative stable. ​ Selling and Marketing Expenses ​ Our selling and marketing expenses in 2023, 2024 and 2025 were $302.7 million, $111.9 million and $102.5 million, respectively. Selling and marketing expenses as a percentage of our total revenues were 48.1%, 43.8% and 45.7% in 2023, 2024 and 2025, respectively. 58 Table of Contents The decrease in our selling and marketing expenses as a percentage of our total revenues from 2023 to 2024 was primarily due to our cost control and enhanced requirement on the return of digital marketing. The increase in our selling and marketing expenses as a percentage of our total revenues from 2024 to 2025 was primarily due to the industry-wide increase in traffic acquisition costs. ​ General and Administrative Expenses ​ Our general and administrative expenses in 2023, 2024 and 2025 were $34.1 million, $25.7 million and $19.6 million, respectively, reflecting a decrease of 24.5% from 2023 to 2024 and a decrease of 24.0% from 2024 to 2025. General and administrative expenses as a percentage of our total revenues in 2023, 2024 and 2025 were 5.4%, 10.1% and 8.7%, respectively. ​ The general and administrative expenses as a percentage of total revenues increased by 4.7% from 2023 to 2024 was due to the decreased revenues. The general and administrative expenses as a percentage of total revenues decreased by 1.4% from 2024 to 2025, despite a 12.1% decreased revenue from 2024 to 2025, primarily driven by our improved workforce efficiency and effective cost management initiatives. Share-based compensation expenses included in general and administrative expenses in 2023, 2024 and 2025 were $0.4 million, $0.3 million and $0.1 million, respectively. R&D expenses included in general and administrative expenses in 2023, 2024 and 2025 were $19.1 million, $15.5 million and $10.3 million, respectively. ​ (Loss) / Income from Operations ​ As a result of the foregoing, our loss from operations in 2023 and 2024 were $10.4 million and $2.2 million, respectively, and our income from operations in 2025 was $8.0 million. ​ Other Income / (Expense), net ​ Other income, net was $0.5 million in 2023 and $0.3 million in 2025, respectively. Other expense, net in 2024 was $0.4 million. ​ Income Tax (Expense) / Benefit ​ Our income tax expense was $40 thousand in 2023. Our income tax benefit in 2024 and 2025 was $39 thousand and $61 thousand, respectively. ​ Net (loss) / Income ​ As a result of the foregoing, our net loss in 2023 and 2024 were $9.6 million and $2.5 million, respectively, and our net income in 2025 was $8.3 million. ​ B. Liquidity and Capital Resources ​ Cash Flows and Working Capital ​ Previously, we have financed our operations primarily through the proceeds from the issuance of our preferred shares and the net proceeds of our initial public offering and subsequent private placements, bank loans and cash inflow from operating activities. In addition, we had net working capital deficit of $39.9 million as of December 31, 2025, and we may continue to experience net current liabilities in the future. At the end of December 2024, Shanghai Lanting obtained a one-year bank facility of $4.1 million from a local bank. As of the date of issuance of the consolidated financial statements, we have drawn down approximately $0.7 million from the bank facility. As of December 31, 2025, we had approximately $25.9 million in cash and cash equivalents and restricted cash. 59 Table of Contents The following table sets forth a summary of our cash flows for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ ​ ​ (U.S. dollars in thousands) Net cash (used in) / provided by operating activities ​ $ (20,715) $ (48,163) $ 6,212 Net cash (used in) / provided by investing activities ​ ​ (1,078) ​ (2,256) ​ 12 Net cash used in financing activities ​ ​ (2,295) ​ (586) ​ (724) Net (decrease) / increase in cash and cash equivalents and restricted cash ​ ​ (24,088) ​ (51,005) ​ 5,500 Effect of exchange rate changes on cash and cash equivalents and restricted cash ​ ​ 1,224 ​ (954) ​ 703 Cash and cash equivalents and restricted cash at beginning of the year ​ ​ 94,568 ​ 71,704 ​ 19,745 Cash and cash equivalents and restricted cash at end of the year ​ $ 71,704 $ 19,745 $ 25,948 ​ Operating Activities ​ We generated positive cash flow of $6.2 million from operating activities in 2025, primarily attributable to our net profit of $8.3 million, adjusted by the reconciliation of certain non-cash items of $1.2 million, which mainly included depreciation and amortization of $1.6 million, unrealized foreign exchange gain of $0.4 million and share-based compensation of $0.1 million. Cash generated in operating activities was also attributable to an increase of $1.9 million in accounts payable and an increase of $0.8 million in advance from customers, contributed by the sales increase in 2025Q4, and a decrease of $0.7 million in prepayments and other current assets and a decrease of $0.4 million in long-term rental deposits, partially offset by the decrease of $5.1 million in the accrued expenses and other current liabilities, and the increase of $1.3 million in inventories and the increase of $0.4 million in accounts receivable. ​ We incurred negative cash flow of $48.2 million from operating activities in 2024, primarily attributable to our net loss of $2.5 million, adjusted by the reconciliation of certain non-cash items of $2.8 million, which mainly included depreciation and amortization of $2.2 million, unrealized foreign exchange loss of $0.3 million and share-based compensation of $0.3 million. Cash used in operating activities was also attributable to a decrese of $40.5 million in accrued expenses and other current liabilities, a decrease of $5.5 million in accounts payable and a decrease of $8.6 million in advance from customers, contributed by the sales decrease in 2024Q4, and an increase of $0.4 million in accounts receivables, partially offset by the decrease of $2.1 million in inventories and the decrease of $4.3 million in prepayments and other current asset. ​ We incurred negative cash flow of $20.7 million from operating activities in 2023, primarily attributable to our net loss of $9.6 million, adjusted by the reconciliation of certain non-cash items of $2.5 million, which mainly included depreciation and amortization of $3.2 million, unrealized foreign exchange gain of $1.1 million and share-based compensation of $0.4 million. Cash used in operating activities was also attributable to a decrease of $10.7 million in accounts payable and a decrease of $15.2 million in advance from customers, contributed by the sales decrease in 2023Q4, partially offset by the decrease of $8.5 million in inventories and the increase of $4.3 million in accrued expenses and other current liabilities. ​ Investing Activities ​ Net cash provided by investing activities was approximately $12 thousand in 2025, primarily due to the purchase of property and equipment of $42 thousand and the proceeds from disposal of property and equipment of $54 thousand. ​ Net cash used in investing activities was $2.3 million in 2024, primarily due to the purchase of property and equipment of $0.8 million and the purchase of land use right of $1.5 million. ​ Net cash used in investing activities was $1.1 million in 2023, primarily due to the purchase of property and equipment of $1.1 million. ​ Financing Activities ​ Net cash used in financing activities was $0.7 million in 2025, which was primarily due to the repurchase of ordinary shares of $0.7 million. ​ 60 Table of Contents Net cash used in financing activities was $0.6 million in 2024, which was primarily due to the repurchase of ordinary shares of $1.2 million, offset by the proceeds from short-term borrowings of $0.7 million. ​ Net cash used in financing activities was $2.3 thousand in 2023, which was primarily due to the repurchase of ordinary shares of $2.3 million. ​ Capital Expenditures ​ Our capital expenditures amounted to $1.1 million, $2.3 million and $42 thousand in 2023, 2024 and 2025, respectively. Our capital expenditures have historically been comprised of leasehold improvements, purchase of equipment for our warehouses and our information technology infrastructure, and the purchase of land use right. Our capital expenditures may increase in the future as we continue to invest in our fulfillment and technology infrastructure. ​ Material Cash Requirements ​ Off-Balance Sheet Arrangements ​ We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ 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. Moreover, 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 research and development services with us. ​ Contractual Obligations ​ The following table sets forth our contractual obligations as of December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment due by period ​ ​ ​ ​ Total ​ ​ ​ Less than 1 year ​ ​ ​ 1-3 years ​ ​ ​ 3-5 years ​ ​ ​ More than 5 years ​ ​ (U.S. dollars in thousands) Short-term borrowings ​ $ 732 ​ $ 732 ​ $ — ​ $ — ​ $ — Operating lease obligations ​ ​ 4,829 ​ ​ 2,914 ​ 1,915 ​ ​ — ​ — Total $ 5,561 $ 3,646 $ 1,915 ​ $ — $ — ​ Holding Company Structure ​ We are a Cayman Islands holding company with no material operations of our own. We conduct our operations primarily through our subsidiaries in Singapore, Hong Kong, the PRC, the United States and Netherlands and generate our revenue from countries outside the PRC. As a result, our ability to pay dividends depends upon, among others, dividends paid by our subsidiaries outside the PRC. If our subsidiaries or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. ​ ​ 61 Table of Contents In addition, as determined in accordance with local regulations, our subsidiaries in certain of our markets may be restricted from paying us dividends offshore or from transferring a portion of their assets to us, either in the form of dividends, loans or advances, unless certain requirements are met, and regulatory approvals are obtained. See “Item 3. Key Information—D. Risk Factors—Our subsidiaries or the holding company may be required to obtain approval in the future and may be denied permission from Chinese authorities to list on U.S. exchanges, we may not be able to continue listing on U.S. exchange, which could have a material adverse effect on our business, financial condition and results of operations as well as the trading price of the ADSs.” Our subsidiaries in the PRC are also required to set aside a portion of their net income, if any, each year to fund general reserves for appropriations until this reserve has reached 50% of the related subsidiary’s registered capital. These reserves are not distributable as cash dividends. In addition, registered share capital and capital reserve accounts are also restricted from distribution. Cash and Asset Flows Through Our Organization LightInTheBox Holding Co., Ltd., our Cayman Islands holding company may transfer cash to its wholly owned subsidiaries by making capital contributions or providing intra-group loans, subject to certain restrictions under the applicable local laws, including the laws of mainland China. For the years ended December 31, 2023, 2024 and 2025, LightInTheBox Holding Co., Ltd. received cash transfers of US$4.2 million, US$1.9 million and US$1.8 million, respectively, from our wholly owned Hong Kong subsidiary, Light In The Box Limited. For the years ended December 31, 2023, 2024 and 2025, no assets other than above cash transactions were transferred between our Cayman Islands holding company and a subsidiary, no subsidiaries paid dividends or made other distributions to the holding company. For further details, please see Schedule I to our audited consolidated financial statements included in this annual report. The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. ​ As of the date of this annual report, no dividends or distributions were made to LightInTheBox Holding Co., Ltd. by our subsidiaries, and no dividends or distributions have been made to U.S. investors. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and transform our business and we have no present plan to pay any dividends on our ordinary shares in the foreseeable future. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividend Policy.” Under the laws and regulations of mainland China, cash transfers, distributions or dividend payments from our PRC subsidiaries to entities or individuals outside of mainland China, including to LightInTheBox Holding Co., Ltd. and U.S. investors, are subject to PRC government control of currency conversion and the satisfaction of applicable government registration and approval requirements for cross-border cash transfers. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated after-tax profits upon satisfaction of relevant statutory conditions and procedures, if any, determined in accordance with Chinese accounting standards and regulations. In addition, our PRC subsidiaries are required to set aside at least 10% of its after-tax profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. These reserves, together with the registered capital, are not distributable as cash dividends. Additionally, if our PRC subsidiaries incur debt on its own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends or make other distributions to us. In addition, the revenue and assets of our PRC subsidiaries are denominated in Renminbi, which is not freely convertible into other currencies. As a result, any restriction on currency exchange may limit the ability of our PRC subsidiaries to pay dividends to us, including to LightInTheBox Holding Co., Ltd. and U.S. investors. However, we generate all cash from operating activities from countries outside of the PRC, and we do not expect to distribute cash from our PRC subsidiaries to subsidiaries outside of mainland China. Currently, there are no restrictions (1) of transferring funds between LightInTheBox Holding Co., Ltd., our Cayman Islands holding company, and its subsidiaries in Hong Kong or other jurisdictions, or (2) of distributing earnings from LightInTheBox Holding Co., Ltd. and its subsidiaries in Hong Kong or other jurisdictions to U.S. investors. For the tax obligations of an investment in our ADSs and/or ordinary shares, please see “Item 10. Additional Information—E. Taxation—Material United States Federal Income Tax Considerations.” ​ 62 Table of Contents See “Item 18. Financial Statements” for additional details. ​ As we generate all of our revenue from countries outside of the PRC, we do not expect to rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have. To the extent cash or assets in our business is in mainland China or Hong Kong or in our PRC subsidiaries or Hong Kong subsidiaries, the funds or assets may not be available to fund operations or for other use outside of mainland China or Hong Kong due to interventions in or the imposition of restrictions and limitations by the PRC government on our and our subsidiaries’ ability to transfer cash or assets. As of the date of this annual report, there is no equivalent or similar restriction or limitation in Hong Kong on cash transfers in, or out of, our Hong Kong subsidiaries. However, if restrictions or limitations were to become applicable to cash transfers in and out of Hong Kong subsidiaries in the future, the funds in our Hong Kong subsidiaries may not be available to fund operations or for other use outside of Hong Kong. ​ The Company’s management is directly supervising cash management. Our finance department is responsible for establishing the cash management policies and procedures among our subsidiaries and departments. Each subsidiary or department initiates a cash request by putting forward a cash demand plan, which explains the specific amount and timing of cash requested, and submitting it to designated management members of the Company, based on the amount and the use of cash requested. The designated management member examines and approves the allocation of cash based on the sources of cash and the priorities of the needs, and submits it to the cashier specialists of our finance department for a second review. Other than the above, we currently do not have other cash management policies or procedures that dictate how funds are transferred. Prior to the completion of our initial public offering in June 2013, the sources of funding of the Company and its subsidiaries primarily consisted of capital injections by shareholders and cash generated from operations. For the last three fiscal years, cash transfers and transfers of other assets between LightInTheBox Holding Co., Ltd. and its subsidiaries are disclosed above. ​ Recent Accounting Pronouncements ​ A list of recent accounting pronouncements that are relevant to us is included in Note 2 to our consolidated financial statements, which are included in this annual report. ​ C. Research and Development, Patents and Licenses, etc. ​ Research and Development ​ We have focused on and will continue to invest in our information technology infrastructure and applications. We have built a proprietary modularized and scalable technology infrastructure, which enables us to quickly upgrade our system capacity and add new features and functionalities in response to our business needs and evolving customer demand without affecting our existing operations or incurring significant costs. ​ Intellectual Property ​ We rely on a combination of trademark, trade secret, patent and other intellectual property laws as well as confidentiality agreements with our employees, manufacturers and others to protect our intellectual property. We have registered domain names for all of our websites, including www.lightinthebox.com, www.ador.com and www.ezbuy.sg. We have in total 317 trademarks and service marks registered in China, the United States, European Union, Hong Kong, etc. Our trademarks include Lightinthebox and ezbuy etc. We also have 87 copyrights registered in the U.S. and 84 registered computer software copyrights in China and in the United States. We have two registered patents in the United States and one registered patent in China. ​ In addition to the protection of our intellectual property, we are also focused on ensuring that our product offerings do not infringe the intellectual property of others. We have adopted internal policies and guidelines during product design and procurement process to make sure our suppliers and products we offer do not infringe on third-party intellectual property rights. All our supplier agreements contain provisions to safeguard against potential intellectual property infringement by our suppliers and impose severe penalties in the event of any infringement. We will also refuse to work with or terminate our partnership with suppliers in the event of intellectual property right violations. In addition, we have also engaged third-party advisors to assist us in ensuring compliance with third-party intellectual property rights. ​ 63 Table of Contents D. Trend Information ​ Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the current fiscal year that are reasonably likely to have a material effect on our total revenues, income, profitability, liquidity or capital reserves, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions. E. Critical Accounting Estimates ​ We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect (i) the reported amounts of our assets and liabilities; (ii) the disclosure of our contingent assets and liabilities at the end of each reporting period; and (iii) the reported amounts of revenues and expenses during each reporting period. We continually evaluate these judgments, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions and our expectations regarding the future based on available information, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application. There was no critical accounting estimate for the year ended December 31, 2025. When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. Our critical accounting policies and practices include the following: (i) revenue recognition; and (ii) income taxes. See Note 2—Summary of Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies. ​