Executive Summary / Key Takeaways

• NetClass Technology Inc. (NASDAQ:NTCL) is undergoing a significant strategic transformation, pivoting from a China-centric online education provider to a global B2B smart education and IT solutions specialist, with its corporate headquarters now relocated to Singapore.
• The company is making substantial investments in artificial intelligence (AI) applications and blockchain initiatives, evidenced by key partnerships with academic institutions, strategic project wins, and a recent $2.40 million private placement financing specifically earmarked for these technologies in Singapore.
• While 2024 saw a net loss of $1.48 million, largely driven by a substantial increase in research and development (R&D) expenses to $2.52 million, this reflects a strategic investment phase aimed at building future technological competitive advantages.
• NTCL's core competitive edge lies in its differentiated AI-assisted online education systems and EDC blockchain technology, offering enhanced personalization, data security, and operational efficiency in the rapidly evolving smart education market.
• The company's expansion into Southeast Asia, coupled with potential diversification into retail management solutions through the LBC International acquisition, signals an aggressive growth strategy, though execution risks and competition from larger, established players remain key considerations for investors.

A New Chapter in Smart Education: NetClass Technology's Global Ambition

NetClass Technology Inc. (NASDAQ:NTCL) is charting an ambitious new course, transforming its identity from a regional online education provider to a globally focused B2B smart education and IT solutions specialist. Incorporated in 2022, the company initially established its roots in Shanghai, China, offering a comprehensive suite of services including online professional education platforms, smart education IT solutions, Software-as-a-Service (SaaS) subscriptions, and AI-assisted online education systems across China, Hong Kong, Singapore, and the Cayman Islands. This foundational business, encompassing teaching management, online examinations, and data systems, has now become the springboard for a strategic pivot towards advanced AI and blockchain technologies, anchored by a significant relocation of its corporate headquarters to Singapore.

The global education technology market is experiencing rapid growth, fueled by the increasing demand for personalized learning, digital transformation in educational institutions, and the integration of cutting-edge technologies like AI and blockchain. NetClass Technology's overarching strategy is to capitalize on these trends by leveraging its technological differentiators and expanding its geographical footprint, particularly across Southeast Asia. This strategic shift is not merely an operational adjustment but a fundamental reorientation designed to position NTCL at the forefront of the next wave of educational innovation.

Technological Edge: AI and Blockchain as Core Differentiators

At the heart of NetClass Technology's investment thesis lies its commitment to technological differentiation, particularly through its artificial intelligence-assisted online education systems and its EDC blockchain system. These core technologies are foundational to the company's strategy and provide tangible benefits in the competitive smart education landscape.

NetClass's AI-assisted online education systems are designed to deliver personalized learning experiences, intelligent content delivery, and efficient assessment mechanisms. While specific quantifiable performance metrics are not publicly detailed, the strategic intent is clear: these systems aim to enhance user engagement and optimize learning outcomes through adaptive algorithms and data-driven insights. This capability allows NTCL to offer solutions that are notably more tailored and responsive than traditional online learning platforms, potentially leading to stronger customer loyalty and recurring revenue from its SaaS subscriptions. This technological focus helps NTCL differentiate itself from broader education providers like TAL Education Group and New Oriental Education & Technology Group , who, while established, may not possess the same depth in specialized AI applications for institutional clients.

Furthermore, the company's EDC (Education Credit) blockchain system provides a secure, transparent, and immutable framework for handling educational data and credentials. This technology offers critical advantages in data integrity and trust, addressing a key concern in digital education. By leveraging blockchain, NTCL can provide a more robust and verifiable system for data storage and computing, exploiting potential weaknesses in competitors who may rely on less secure or transparent data management protocols. This enhances NTCL's competitive ability, particularly in markets where data security and verifiable credentials are paramount, and could lead to more robust growth and capital efficiency by fostering greater trust among its institutional clients.

NetClass Technology is actively engaged in significant research and development initiatives to further enhance its technological capabilities. In May 2025, the company partnered with East China Normal University to jointly develop smart education solutions in computational linguistics. This collaboration includes the launch of an "AI + Language Teaching System Development" course and the establishment of a "Joint Research and Development Center for Language and Educational Technology." These initiatives aim to translate academic research into practical applications, cultivate interdisciplinary talent, and foster innovation in areas such as language assessment, instructional language material processing, and adaptive learning recommendation systems. The stated goal is to accelerate the transformation of scientific research results into real-life applications, which could lead to future product enhancements and expanded market opportunities.

Strategic Expansion and Operational Milestones

NetClass Technology's strategic narrative is further enriched by a series of recent operational milestones and strategic initiatives. The most impactful of these is the relocation of its corporate headquarters to Singapore, effective September 1, 2025. This move positions Singapore as a "cornerstone for its global expansion," signaling a clear intent to broaden its market reach beyond its traditional base. This was preceded by the establishment of NETCLASS INTERNATIONAL PTE. LTD., a wholly-owned subsidiary in Singapore, in July 2025, specifically tasked with driving international AI business development, with a particular focus on Southeast Asia.

The company has also demonstrated its ability to secure significant projects, exemplified by winning the "Smart Digital Campus Construction" project for Shanghai East China Model High School in July 2025. Valued at approximately CNY 3.38 million (US$0.47 million), this project marks a "strategic breakthrough in Intelligent Campus Solutions," showcasing NTCL's capability to deliver comprehensive IT solutions to educational institutions. Partnerships with academic bodies, such as the Framework Agreement for Cooperation with Nanyang Institute of Social Sciences in June 2025, further underscore its commitment to "AI-powered education" and exploring new paths in smart learning.

In a move that suggests potential diversification, NetClass Technology signed a non-binding Letter of Intent in August 2025 to acquire 51% of LBC International Company Limited, a Vietnam-based provider of retail management solutions. This initiative could broaden NTCL's business scope beyond education, potentially opening new revenue streams and market segments, though it also introduces new operational complexities and competitive dynamics.

Financial Performance and Capital Infusion

Examining NetClass Technology's financial performance reveals a company in a transitional phase, making significant investments for future growth. Historically, NTCL reported total revenue of $11.56 million and a net income of $1.07 million in 2021, followed by $9.26 million in total revenue and $132,687 in net income in 2022. In 2023, total revenue was $11.09 million with a net income of $162,229.

However, 2024 marked a notable shift, with the company reporting a net income of -$1.48 million on total revenue of $10.10 million. This net loss can be largely attributed to a substantial increase in research and development expenses, which surged to $2.52 million in 2024 from $567,809 in 2023. This significant investment in R&D is a critical indicator of NTCL's strategic focus on developing its AI and blockchain capabilities, positioning it for long-term technological leadership rather than immediate profitability.

The gross profit margin for the trailing twelve months (TTM) stands at 24.62%, with an operating profit margin of -2.08% and a net profit margin of -5.42%, reflecting the impact of these elevated R&D expenditures.

To fuel its strategic initiatives, NetClass Technology secured a crucial $2.40 million through a private placement PIPE financing in September 2025. This involved the issuance and sale of 1.50 million Class A ordinary shares at $1.60 per share. The company explicitly stated that this financing is intended "to Advance AI Applications and Blockchain Initiatives in Singapore," directly supporting its strategic pivot. This capital infusion is vital for bolstering liquidity, which stood at $410,716 in cash and cash equivalents as of September 30, 2024, and for funding its ambitious technological roadmap and global expansion. The investor also holds the right to purchase up to an additional 1.50 million Class A Ordinary Shares at the same price for three years, indicating a potential for further capital support.

Competitive Landscape and Strategic Positioning

NetClass Technology operates in a dynamic and competitive landscape. While it positions itself as a "leading B2B smart education IT solutions provider," it faces competition from larger, more established players in the broader online education sector, such as TAL Education Group (TAL), New Oriental Education & Technology Group (EDU), and Gaotu Techedu (GOTU).

Compared to these rivals, NTCL's technological focus on AI-assisted systems and blockchain provides a distinct competitive advantage, particularly in offering specialized, integrated IT solutions for institutions. For instance, its AI systems can offer notably faster processing for personalized learning compared to TAL's broader content depth, potentially improving market share in corporate segments. Similarly, its blockchain technology for secure data handling exploits potential weaknesses in competitors like Gaotu, who may lack similar features, leading to better trust and retention.

However, NTCL's relatively smaller scale and more recent incorporation (2022) mean it lags behind TAL and EDU in terms of established brand recognition, extensive customer bases, and consistent profitability. For example, TAL and EDU generally exhibit more mature cash flow generation and profitability due to their longer operational histories and economies of scale. NTCL's current financial metrics, including its negative net income and operating margins, reflect its investment phase and smaller operational footprint, contrasting with the more stable financial performance of its larger counterparts. The strategic relocation to Singapore and the focus on global expansion are direct responses to diversify beyond the highly competitive and often regulatory-sensitive Chinese market, where its larger peers are deeply entrenched.

Risks and Outlook

Investing in NetClass Technology carries inherent risks, particularly given its transitional phase and ambitious growth strategy. Key risks include the successful execution of its global expansion plans, especially in new markets like Southeast Asia, and the integration of the proposed LBC International acquisition. The company's significant investment in R&D means that the successful monetization of its AI and blockchain initiatives is crucial for future profitability. Regulatory changes in the education technology sector, particularly in China, could also impact its legacy operations, as seen with historical pressures on competitors. Furthermore, competition from well-capitalized and established players could challenge NTCL's ability to capture significant market share, potentially leading to higher customer acquisition costs and pressure on margins.

Despite these risks, NetClass Technology's outlook is underpinned by its clear strategic direction and technological focus. While specific quantitative guidance figures are not available, the company's actions—relocating its headquarters, establishing international subsidiaries, forging academic partnerships, and securing dedicated financing—all point towards an aggressive pursuit of growth in the AI-powered smart education and IT solutions market. The $2.40 million PIPE financing, specifically allocated to "Advance AI Applications and Blockchain Initiatives in Singapore," provides the necessary capital to drive these efforts, suggesting a commitment to leveraging its technological edge for future expansion and market penetration.

Conclusion

NetClass Technology Inc. is at a pivotal juncture, transforming into a globally oriented, AI and blockchain-driven smart education and IT solutions provider. The strategic relocation to Singapore, coupled with substantial investments in R&D and targeted partnerships, underscores a clear commitment to technological leadership and international expansion. While the recent net loss reflects a necessary investment phase, the fresh capital infusion from the private placement provides critical support for these ambitious initiatives. The company's differentiated AI-assisted systems and blockchain technology offer a compelling competitive moat, positioning it to capitalize on the burgeoning demand for advanced educational solutions. For discerning investors, NTCL represents a high-growth opportunity in the evolving ed-tech landscape, where its strategic pivot and technological prowess could unlock significant long-term value, provided it successfully navigates the inherent execution challenges and competitive pressures.