CPOP Boosts Capital, Reaffirms VIE Model Amid Share Restructuring

TL;DR

**CPOP's complex VIE structure and recent capital maneuvers scream high risk, but the re-election of key leadership suggests a push for stability in a volatile market.**

AI Summary

Pop Culture Group Co., Ltd. (CPOP) filed its 20-F for the fiscal year ended June 30, 2025, revealing significant corporate structure changes and a focus on its Variable Interest Entity (VIE) model in China. The company's revenue and net income figures are not explicitly detailed in the provided excerpt, but the filing highlights its reliance on the VIE, Xiamen Pop Culture Co., Ltd., for most operations. Key business changes include a 10-to-1 Share Consolidation effective October 26, 2023, increasing the par value of Class A and Class B Ordinary Shares from $0.001 to $0.01. Furthermore, the company created a new class of non-voting Class C Ordinary Shares on February 5, 2024, and significantly increased its authorized share capital from $760,000 to $2,960,000 on February 10, 2025. Risks are primarily associated with the VIE structure, as investors hold securities in the Cayman Islands holding company, not the PRC operating entities, exposing them to regulatory and contractual uncertainties in China. The strategic outlook appears to involve expanding its capital base and maintaining its operational model through the VIE, with ongoing business operations including developing metaverse platforms and operating live music concerts.

Why It Matters

This filing is crucial for investors as it details significant changes to Pop Culture Group's capital structure, including a 10-to-1 share consolidation and a substantial increase in authorized share capital to $2,960,000. These moves could impact share liquidity and valuation, while the re-election of key directors like Zhuoqin Huang signals continuity in leadership. The continued reliance on a VIE structure in China presents inherent regulatory risks, which could affect investor confidence and the company's competitive standing against directly owned entities. For employees and customers, the stability of the company's operational model through its PRC subsidiaries, like Xiamen Pop Culture, is vital for ongoing business activities, including metaverse platform development and live music concerts.

Risk Assessment

Risk Level: high — The risk level is high due to the company's reliance on a Variable Interest Entity (VIE) structure, where investors do not directly hold equity in the PRC operating entities, creating significant regulatory and contractual risks. The filing explicitly states, "The VIE structure provides contractual exposure to foreign investment in China-based companies where PRC laws and regulations prohibit direct foreign investment in the operating companies. As a result of our use of the VIE structure, investors may never hold equity interests in the VIE or its subsidiaries." This fundamental structural risk is compounded by the potential for changes in PRC laws and regulations.

Analyst Insight

Investors should exercise extreme caution and thoroughly understand the inherent risks of the VIE structure before considering an investment in CPOP. Given the significant capital structure changes and the lack of direct equity in the operating entities, a deep dive into the company's financial performance (not detailed in this excerpt) and the specific terms of the VIE agreements is essential.

Key Numbers

• $0.01 — Par value per share (Increased from $0.001 after 10-to-1 Share Consolidation on October 26, 2023)
• 10 — Share Consolidation Ratio (Each 10 ordinary shares consolidated into one on October 26, 2023)
• $2,960,000 — Authorized Share Capital (Increased from $760,000 on February 10, 2025)
• 16,362,733 — Class A Ordinary Shares outstanding (As of June 30, 2025)
• 576,308 — Class B Ordinary Shares outstanding (As of June 30, 2025)
• 100 — Votes per Class B Ordinary Share (Approved on March 26, 2024, significantly impacting voting power)
• 64.00% — Zhuoqin Huang's ownership in Xiamen Pop Culture (Direct equity interest in the VIE)
• 7.1636 — RMB to USD exchange rate (As of June 30, 2025)

Key Players & Entities

• Pop Culture Group Co., Ltd (company) — Cayman Islands holding company
• Zhuoqin Huang (person) — Chief Executive Officer and major shareholder of Xiamen Pop Culture
• Xiamen Pop Culture Co., Ltd. (company) — Variable Interest Entity (VIE) in the PRC
• Weiyi Lin (person) — Shareholder of Xiamen Pop Culture
• Rongdi Zhang (person) — Shareholder of Xiamen Pop Culture
• Chunxiao Cui (person) — Shareholder of Xiamen Pop Culture
• Xiayu Cui (person) — Shareholder of Xiamen Pop Culture
• Junlong He (person) — Shareholder of Xiamen Pop Culture
• Azhen Lin (person) — Shareholder of Xiamen Pop Culture and re-elected director
• Wuyang Chen (person) — Shareholder of Xiamen Pop Culture

FAQ

Risk Factors

• VIE Structure Uncertainty [high — legal]: Investors hold securities in the Cayman Islands holding company, not the PRC operating entities, exposing them to significant regulatory and contractual uncertainties in China. The reliance on the VIE model, Xiamen Pop Culture Co., Ltd., for most operations creates inherent risks.
• Chinese Regulatory Environment [high — regulatory]: The company's operations are subject to the evolving and potentially restrictive regulatory landscape in China. Changes in PRC laws and regulations could impact the enforceability of VIE agreements and the company's ability to repatriate profits or conduct business.
• Share Capital Structure Changes [medium — financial]: Significant increases in authorized share capital from $760,000 to $2,960,000 and the creation of Class C Ordinary Shares introduce complexity. The 10-to-1 Share Consolidation on October 26, 2023, also altered the share structure and par value.

Industry Context

Pop Culture Group operates in the dynamic Chinese entertainment and media sector, which is characterized by rapid digital adoption and evolving consumer preferences. The company's focus on metaverse platforms and live music concerts places it within segments experiencing significant growth potential but also intense competition from both domestic and international players. Regulatory shifts within China's tech and entertainment industries can significantly impact market access and operational strategies.

Regulatory Implications

The company's reliance on the VIE structure subjects it to significant regulatory scrutiny in China. Changes in PRC laws concerning foreign investment, data security, or internet content could directly impact the enforceability of contractual arrangements and the overall viability of its business model. Compliance with evolving regulations is paramount for sustained operations.

What Investors Should Do

1. Scrutinize VIE agreement details and potential regulatory risks.
2. Monitor changes in China's regulatory landscape for the tech and entertainment sectors.
3. Evaluate the impact of the new Class C Ordinary Shares on voting control and future capital raises.

Key Dates

• 2023-10-26: 10-to-1 Share Consolidation — Increased the par value of Class A and Class B Ordinary Shares from $0.001 to $0.01, impacting share count and per-share metrics.
• 2024-02-05: Creation of Class C Ordinary Shares — Introduced a new class of non-voting shares, potentially altering the control dynamics and capital structure.
• 2025-02-10: Increase in Authorized Share Capital — Authorized share capital was significantly increased from $760,000 to $2,960,000, providing greater flexibility for future fundraising or stock issuances.

Glossary

Variable Interest Entity (VIE)

A structure used by Chinese companies to bypass foreign ownership restrictions in certain industries by having a foreign-registered company contractually control a PRC operating entity. (Pop Culture Group relies heavily on its VIE, Xiamen Pop Culture Co., Ltd., for its core operations, making this structure central to its business model and a significant risk factor.)

Share Consolidation

A corporate action where a company reduces the number of its outstanding shares by combining existing shares into a smaller number of new shares. (The company executed a 10-to-1 Share Consolidation on October 26, 2023, which increased the par value of its shares and reduced the total number of outstanding shares.)

Class C Ordinary Shares

A new class of shares created by Pop Culture Group, similar to Class A shares but without voting rights. (The introduction of non-voting shares on February 5, 2024, could affect the voting power distribution among shareholders and is a change in the company's capital structure.)

PRC operating entities

Refers to the actual business operations and subsidiaries located within mainland China. (Investors in Pop Culture Group's Cayman Islands holding company do not directly own these PRC operating entities, highlighting the risks associated with the VIE structure.)

Year-Over-Year Comparison

The 20-F filing for the fiscal year ended June 30, 2025, highlights significant corporate restructuring, including a 10-to-1 Share Consolidation and the creation of Class C Ordinary Shares, alongside a substantial increase in authorized share capital. While specific revenue and net income figures are not detailed in the provided excerpt, the filing emphasizes the continued reliance on the VIE model, Xiamen Pop Culture Co., Ltd., for operations. New risks associated with the VIE structure and the Chinese regulatory environment are prominent, suggesting a focus on maintaining the existing operational framework despite structural changes.

Key Financial Figures

• $0.01 — ,733 Class A ordinary shares, par value $0.01 per share, 576,308 Class B ordinary sha
• $0.001 — ry Shares of the Company increased from $0.001 per share to $0.01 per share; "Class
• $ — l currency of China; "U.S. dollars," "$," and "dollars" are to the legal curren
• $50,000.00 — zed share capital of the Company became $50,000.00 divided into 4,400,000 Class A Ordinary
• $50,000 — rized share capital of the Company from $50,000 divided into 4,400,000 Class A ordinary
• $60,000 — nary shares of par value $0.01 each, to $60,000 divided into 5,400,000 Class A ordinary
• $760,000 — nary shares of par value $0.01 each, to $760,000 divided into 64,400,000 Class A ordinar
• $2,960,000 — Shares of par value US$0.01 each, to US$2,960,000 divided into 264,400,000 Class A Ordina
• $1.00 — he end of the year - RMB RMB 7.1636 to $1.00 RMB 7.2672 to $1.00 RMB 7.2513 to $1.

Filing Documents

• ea0263918-20f_popcult.htm (20-F) — 2530KB
• ea026391801ex2-1_popcult.htm (EX-2.1) — 4KB
• ea026391801ex2-3_popcult.htm (EX-2.3) — 92KB
• ea026391801ex4-28_popcult.htm (EX-4.28) — 86KB
• ea026391801ex4-32_popcult.htm (EX-4.32) — 177KB
• ea026391801ex8-1_popcult.htm (EX-8.1) — 7KB
• ea026391801ex12-1_popcult.htm (EX-12.1) — 10KB
• ea026391801ex12-2_popcult.htm (EX-12.2) — 10KB
• ea026391801ex13-1_popcult.htm (EX-13.1) — 4KB
• ea026391801ex13-2_popcult.htm (EX-13.2) — 4KB
• ea026391801ex15-1_popcult.htm (EX-15.1) — 3KB
• ea026391801ex15-2_popcult.htm (EX-15.2) — 5KB
• image_001.jpg (GRAPHIC) — 126KB
• image_002.jpg (GRAPHIC) — 1KB
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• image_009.jpg (GRAPHIC) — 6KB
• ex4-28_001.jpg (GRAPHIC) — 61KB
• ex4-32_001.jpg (GRAPHIC) — 6KB
• ex4-32_002.jpg (GRAPHIC) — 6KB
• ex4-32_003.jpg (GRAPHIC) — 3KB
• ex15-1_001.jpg (GRAPHIC) — 27KB
• ex15-1_002.jpg (GRAPHIC) — 55KB
• ex15-2_001.jpg (GRAPHIC) — 7KB
• 0001213900-25-111512.txt ( ) — 12705KB
• cpop-20250630.xsd (EX-101.SCH) — 104KB
• cpop-20250630_cal.xml (EX-101.CAL) — 93KB
• cpop-20250630_def.xml (EX-101.DEF) — 468KB
• cpop-20250630_lab.xml (EX-101.LAB) — 807KB
• cpop-20250630_pre.xml (EX-101.PRE) — 496KB
• ea0263918-20f_popcult_htm.xml (XML) — 1450KB

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 119 ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 120 i PART II ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 121 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 121 ITEM 15.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 121 ITEM 16. [RESERVED] 122 ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT 122 ITEM 16B. CODE OF ETHICS 122 ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES 122 ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 122 ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 122 ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT 122 ITEM 16G. CORPORATE GOVERNANCE 123 ITEM 16H. MINE SAFETY DISCLOSURE 123 ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 123 ITEM 16J. INSIDER TRADING POLICIES 123 ITEM 16K CYBERSECURITY 123 PART III ITEM 17.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 124 ITEM 18.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 124 ITEM 19. EXHIBITS 124 ii INTRODUCTION In this annual report on Form 20-F, unless the context otherwise requires, references to: "China" or the "PRC" are to the People's Republic of China; "Class A Ordinary Shares" or "Class A ordinary shares" are to Class A ordinary shares of Pop Culture Group (defined below), par value $0.01 per share. On October 26, 2023, we effected a 10-to-1 Share Consolidation (as defined below), as a result of which the par value of Class A Ordinary Shares of the Company increased from $0.001 per share to $0.01 per share; "Class B Ordinary Shares" or "Class B ordinary shares" are to Class B ordinary shares of Pop Culture Group, par value $0.01 per share. On October 26, 2023, we effected a 10-to-1 Share Consolidation, as a result of which the par value of Class B Ordinary Shares of the Company increased from $0.001 per share to $0.01 per share; "Class C Ordinary Shares" or "Class C ordinary shares" are to Class C ordinary shares of Pop Culture Group, par value $0.01 per share. On February 5, 2024, shareholders of the Company held an extraordinary general meeting and approved the creation of a new class of shares, Class C Ordinary Shares. The terms of the Class C ordinary shares are the same as Class A ordinary shares, except that holders of Class C ordinary shares are not entitled to vote; "Heliheng" or "Original WFOE" are to Heliheng Culture Co., Ltd., a limited liability company organized under the laws of the PRC, which is wholly owned by Pop Culture HK (defined below); "Hualiu" are to Fujian Hualiu Culture & Sports Industry Development Co., Ltd., a limited liability company organized under the laws of the PRC, which is wholly owned by Pop Culture HK (defined below); "Ordinary Shares" or "ordinary shares" are to are to Class A Ordinary Shares, Class B Ordinary Shares, and Class C Ordinary Shares, as the context requires; "PRC operating entities" are to Xiamen Pop Culture (defined below) an

Forward-looking statements appear in a number

Forward-looking statements appear in a number of places in this annual report and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management's beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to of various factors, including, but not limited to, those identified under the section entitled "Item 3. Key Information—3.D. Risk Factors" in this annual report. These risks and uncertainties include factors relating to: assumptions about our future financial and operating results, including revenue, income, expenditures, cash balances, and other financial items; our ability to execute our growth, and expansion, including our ability to meet our goals; current and future economic and political conditions; our ability to compete in the highly-competitive Chinese Pop Culture industry; our capital requirements and our ability to raise any additional financing that we may require; our ability to attract clients and further enhance our brand recognition; our ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business; trends and competition in the Chinese Pop Culture industry; and other assumptions described in this annual report underlying or relating to any forward-looking statements. These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from our expectations. Other sections of this annual report include additional factors that could adversely impact our business and financial performance

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS Not Applicable.

OFFER STATISTICS AND EXPECTED TIMETABLE

Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE Not Applicable.

KEY INFORMATION

Item 3. KEY INFORMATION We are a holding company incorporated in the Cayman Islands as an exempted company on January 3, 2020 and not a Chinese operating company. As a holding company, we conduct most of our operations through the VIE and its subsidiaries in the PRC. As of the date of this annual report, the Cayman holding company has conducted certain business operations, include contracting with third-party companies for developing metaverse platforms and operating live music concerts of two popular mandarin singers during 2022 to 2025. For accounting purposes, we control and receive the economic benefits of the business operations of the VIE and its subsidiaries through the VIE Agreements, which enables us to consolidate the financial results of the VIE and its subsidiaries in our consolidated financial statements under generally accepted accounting principles in the United States ("U.S. GAAP"), and the structure involves unique risks to investors. Our securities are securities of Pop Culture Group, the offshore holding company in the Cayman Islands, instead of securities of the VIE or its subsidiaries in the PRC. The VIE structure provides contractual exposure to foreign investment in China-based companies where PRC laws and regulations prohibit direct foreign investment in the operating companies. As a result of our use of the VIE structure, investors may never hold equity interests in the VIE or its subsidiaries. The following diagram illustrates our corporate structure, including our subsidiaries and the VIE and its subsidiaries, as of November 17, 2025: 1 Notes: All percentages reflect the voting ownership interests instead of the equity interests held by each of our shareholders given that each holder of Class B Ordinary Shares is entitled to 100 votes per one Class B Ordinary Share and each holder of Class A Ordinary Shares is entitled to one vote per one Class A Ordinary Share. Holders of our Class C Ordinary Shares carry no vote. As of the date of t

View Full Filing

View this 20-F filing on SEC EDGAR