Currency Fluctuations and Foreign Exchange Risk Chinese Renminbi Beginning on December 1, 1996, the RMB became fully convertible under the current accounts. There are no restrictions on trade-related foreign exchange receipts and disbursements in China. However, capital account foreign exchange receipts and disbursements are subject to control, and organizations in China are required to use designated banks for foreign currency transactions. Effective from April 1, 2015, our subsidiaries in China changed their functional currency from the U.S. dollar to the RMB. This change was made upon the progress of the property development projects in China causing our subsidiaries’ primary operating activities to be in RMB and making the RMB to be the currency of the economic environment in which the entities primarily generate and expend cash. We do not hedge against currency risk for our subsidiaries in China. For us and our subsidiaries outside China, the functional currencies are U.S. dollars and Hong Kong dollars, as expense transactions are generally denominated in U.S. dollars and Hong Kong dollars. Our exposure to foreign exchange risk primarily relates to a significant portion of our cash and cash equivalents denominated in RMB. If we need to convert RMB to U.S. dollars and Hong Kong dollars for our operations, depreciation of the RMB against the U.S. dollar would reduce the U.S. dollar amount and Hong Kong dollar amount we receive from the conversion. As of December 31, 2025, we had RMB-denominated cash and cash equivalents of RMB235.0 million ($33.4 million). If the RMB had depreciated by 10% against the U.S. dollar and assuming we converted RMB235.0 million into U.S. dollars, our U.S. dollar cash balance for the RMB235.0 million would have decreased to $30.1 million. Hong Kong Dollar Since 1983, the linked exchange rate system permits the Hong Kong dollars to range between HK$7.75 and HK$7.85 per U.S dollar, the range set by the Hong Kong Monetary Authority. Accordingly, this has not presented a currency exchange risk. This may or may not change in the future subject to the monetary policies in Hong Kong. Currency Hedging We have not used any hedging activities to manage our currency exchange risk exposure. However, from time to time, we may elect to hedge our currency exchange risk when we judge that such action is required. In an attempt to lower the costs of expenditures in foreign currencies, we may enter into forward contracts or option contracts to buy or sell foreign currency(ies) against the U.S. dollar through one of our banks. As a result, we may suffer losses resulting from the fluctuation between the buy forward exchange rate and the sell forward exchange rate, or from the price of the option premium. 106 Table of Contents Currencies included in Cash and Cash Equivalents, Restricted Cash and Short Term Investments The following table provides the U.S. dollar equivalent of amounts of currencies included in cash and cash equivalents, restricted cash and short term investments on our balance sheets as of December 31, 2024 and 2025: Currencies included in cash and cash equivalents, As of December 31 restricted cash and short term investments 2024 2025 United States dollars $ 16,132 $ 10,044 Chinese renminbi 17,109 61,349 Hong Kong dollars 34 32 Total $ equivalent $ 33,275 $ 71,425 For more information on impact of foreign currency fluctuations, see “Item 5. Operating And Financial Review And Prospects—Impact of Foreign Currency Fluctuations.” Interest Rate Risk Our interest expenses and income are sensitive to changes in interest rates. All of our cash reserves and long term investment are subject to interest rate changes. As of December 31, 2025, we held a RMB31 million ($4.4 million) large-denomination certificate of deposit issued by Shenzhen Rural Commercial Bank, with a 1-year term commencing March 28, 2025, and a fixed annual interest rate of 6.5%. Our interest income primarily consists of interest earned on cash at banks and short-term deposits, which fluctuates with changes in market interest rates. The loans we obtained are at floating interest rates based on the relevant basic interest rates issued by PBOC, which may change from time to time. We have not used any derivative financial instruments to manage the interest rate risk exposure. We may be exposed to significant risks due to changes in interest rates. If the interest rates increase, our future interest expense will increase accordingly.