UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September 2023
Commission File Number 001-38737
(Exact name of registrant as specified in its charter)
9F, Ruihai Building, No. 21 Yangfangdian Road
Haidian District
Beijing 100038, People’s Republic of China
(86-10) 6399-8902
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
EXPLANATORY NOTE
The documents attached as exhibits 99.2, 99.3 and 99.4 to this Form 6-K are hereby incorporated by reference into the Registrant’s Registration Statement on Form F-3 initially filed with the U.S. Securities and Exchange Commission on May 13, 2022 (Registration No. 333-264942) and shall be a part thereof from the date on which this current report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.
EXHIBIT INDEX
Exhibit Number |
| Description |
99.1 |
| |
99.2 | ||
99.3 | Reconciliation of Non-GAAP results of operations measures to the comparable GAAP financial measures | |
99.4 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
101.INS | Inline XBRL Instance Document - this instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
101.SCH | Inline XBRL Taxonomy Extension Schema | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | |
104 | Cover Page Interactive Data File (embedded within the Inline IXBRL document) |
Exhibit 99.1
TuanChe Announces Unaudited First Half 2023 Financial Results
BEIJING, September 28, 2023 (PRNewswire) – TuanChe Limited (“TuanChe,” “Company,” “we” or “our”) (NASDAQ: TC), a leading integrated automotive marketplace in China, today announced its unaudited financial results for the six months ended June 30, 2023.
Key First Half 2023 Financial and Operating Metrics Compared with the Prior Year Period
● | Net revenues increased by 3.3% to RMB92.2 million (US$12.7 million) from RMB89.2 million. |
● | Gross profit decreased by 19.1% to RMB58.4 million (US$8.1 million) from RMB72.3 million. |
● | The number of auto shows organized during the first half of 2023 increased by 200.0% to 183 in 80 cities from 61 auto shows in 49 cities across China. |
● | The number of automobile sale transactions facilitated during the first half of 2023 increased by 170.6% to 44,891 from 16,591, and the gross merchandise volume of new automobiles sold during the first half of 2023 increased by 200.0% to RMB7.2 billion (US$1.0 billion) from RMB2.4 billion. |
● | Sales operations covered 118 cities as of June 30, 2023, compared to 83 cities as of December 31, 2022 and 79 cities as of June 30, 2022. |
“In the first half of 2023, as consumers in China resumed offline activities, we capitalized on this opportunity, tripling the number of auto shows year-over-year and delivering a 172.3% year-over-year increase in net revenues from offline marketing services,” Mr. Wei Wen, TuanChe’s Chairman and CEO, commented. “Our total revenues reached RMB92.2 million, up 3.3% from the same period last year as our offline strength was partially offset by the decrease of our online marketing services, which we believe will gradually rebound as we direct dedicated resources to enhance our online offerings. We are also striving to advance our strategic electric vehicle manufacturing initiative and will provide updates on any material progress. Meanwhile, we are working diligently to strengthen our liquidity and secure our path for the future.”
Mr. Simon Li, TuanChe’s Chief Financial Officer, added, “While we meaningfully fueled our offline marketing business growth, we continued to streamline our operating expenses for the first half of 2023, which decreased by 14.0% year over year. Net loss attributable to the Company’s shareholders in the first half of 2023 narrowed by 45.3% year over year. Looking ahead, we will focus on cost and expense controls while optimizing resource allocations in marketing, data analysis, and user acquisitions to boost our overall business capabilities, aiming to achieve healthy development.”
1
Unaudited First Half 2023 Financial Results
Net Revenues
Net revenues in the first half of 2023 increased by 3.3% to RMB92.2 million (US$12.7 million) from RMB89.2 million in the same period of the prior year, primarily due to a 172.3% year-over-year increase in revenues generated from offline marketing services to RMB69.9 million (US$9.6 million) from RMB25.7 million in the same period of the prior year.
● | Offline marketing services. Net revenues generated from auto shows increased by 174.6% to RMB69.3 million (US$9.6 million) in the first half of 2023 from RMB25.2 million in the same period of the prior year, and net revenues generated from special promotion events increased by 37.3% to RMB0.6 million (US$0.1 million) in the first half of 2023 from RMB0.4 million in the same period of the prior year. The increase in revenues from offline marketing services was primarily due to an increased number of offline activities as a result of lifted pandemic restrictions. |
● | Referral service for a commercial bank. Net revenues generated from referral service for a commercial bank decreased by 90.3% to RMB2.6 million (US$0.4 million) in the first half of 2023 from RMB26.5 million in the same period of the prior year, primarily because the Company has ceased operation of the referral services since April 1, 2022. |
● | Online marketing services. Net revenues generated from online marketing services decreased by 44.0% to RMB8.8 million (US$1.2 million) in the first half of 2023 from RMB15.6 million in the same period of the prior year, primarily due to the decrease in the live streaming events held by the Company as the Company was in re-negotiation with key customers about the future cooperation plan and it had impact on the revenue scale from online marketing services. |
● | Other services. Net revenues from other services decreased by 48.9% to RMB11.0 million (US$1.5 million) in the first half of 2023 from RMB21.4 million in the same period of the prior year, primarily due to the decrease in aftermarket promotion service and SaaS service. |
Gross Profit
Gross profit decreased by 19.1% to RMB58.4 million (US$8.1 million) in the first half of 2023 from RMB72.3 million in the same period of the prior year. Gross margin was 63.4% in the first half of 2023 compared to 81.0% in the same period of the prior year, primarily attributable to the change in our revenue composition and the increase in cost of online marketing service.
2
Total Operating Expenses and Loss from Operations
Total operating expenses decreased by 14.0% to RMB113.6 million (US$15.7 million) in the first half of 2023 from RMB132.1 million in the same period of the prior year.
● | Selling and marketing expenses increased by 4.6% to RMB80.7 million (US$11.1 million) in the first half of 2023 from RMB77.2 million in the same period of the prior year, primarily due to an increase in promotion expenses, as a result of increased volume of offline events. |
● | General and administrative expenses decreased by 12.2% to RMB23.7 million (US$3.3 million) in the first half of 2023 from RMB26.9 million in the same period of the prior year, primarily due to decrease in amortization of intangible assets as a result of impairment in intangible assets and a decrease in the general and administrative staff compensation expenses as a result of the optimization of the company’s workforce. |
● | Research and development expenses decreased by 38.0% to RMB7.7 million (US$1.1 million) in the first half of 2023 from RMB12.4 million in the same period of the prior year, primarily due to decrease in the research and development staff compensation expenses, as a result of the optimization of the company’s workforce. |
● | Impairment of long-lived assets decreased by 90.3% to RMB1.5 million (US$0.2 million) in the first half of 2023 from RMB15.6 million in the same period of the prior year, primarily due to decrease in impairment in relation to intangible assets and right-of-use assets. |
As a result of the foregoing, loss from operations decreased by 7.9% to RMB55.2 million (US$7.6 million) in the first half of 2023 from RMB59.9 million in the same period of the prior year.
Net loss attributable to the Company’s Shareholders and Non-GAAP Measures
Net loss attributable to the Company’s shareholders in the first half of 2023 decreased by 45.3% to RMB30.7 million (US$4.2 million) from RMB56.2 million in the same period of the prior year. Basic and diluted loss per ordinary share were both RMB0.08 (US$0.01) in the first half of 2023 compared with RMB0.18 in the same period of the prior year.
Adjusted net loss attributable to the Company’s shareholders in the first half of 2023 increased by 6.8% to RMB36.7 million (US$5.1 million) from RMB34.4 million in the same period of the prior year. Adjusted basic and diluted net loss per ordinary share were both RMB0.09 (US$0.01) in the first half of 2023 compared with RMB0.11 in the same period of the prior year. (1)
Adjusted EBITDA was a loss of RMB36.8 million (US$5.1 million) in the first half of 2023 compared with a loss of RMB30.8 million in the same period of the prior year. (1)
(1) | For details on the calculation of and reconciliation to the nearest GAAP measures for each of adjusted net loss attributable to the Company’s shareholders, adjusted net loss per ordinary share and adjusted EBITDA, please refer to “Use of Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP and GAAP Results.” |
3
Balance Sheet and Cash Flow
As of June 30, 2023, the Company had RMB21.9 million (US$3.0 million) cash and cash equivalents and RMB6.7 million (US$0.9 million) restricted cash. Net cash used in operating activities in the first half of 2023 was RMB52.4 million (US$7.2 million) compared with net cash used in operating activities of RMB55.4 million in the same period of the prior year.
Business Outlook
For the second half of 2023, the Company expects net revenues to range from approximately RMB70.0 million to RMB100.0 million, representing an approximate year-over-year decrease of 25.5% to increase of 6.4%.
This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change.
Exchange Rate
This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB7.2513 to US$1.00, the noon buying rate in effect on June 30, 2023 in the City of New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on June 30, 2023, or at any other rate.
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, the Company’s business plans and development, business outlook, as well as the length and severity of the COVID-19 pandemic and its impact on the Company’s business and industry, which can be identified by terminology such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. Such statements are based upon management’s current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company’s control. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.
4
Use of Non-GAAP Financial Measures
To supplement the Company’s unaudited condensed consolidated interim financial information which are presented in accordance with U.S. GAAP, the Company also uses adjusted net loss attributable to the Company’s shareholders, adjusted net loss per ordinary share and adjusted EBITDA as additional non-GAAP financial measures. The Company presents these non-GAAP financial measures because they are used by the Company’s management to evaluate its operating performance. The Company also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the Company’s consolidated results of operations in the same manner as its management and in comparing financial results across accounting periods and to those of the Company’s peer companies.
The Company defines adjusted net loss as net loss excluding share-based compensation expenses, impairment of long-lived assets and change in fair value of warrant liability. The Company defines adjusted net loss per ordinary share as adjusted net loss divided by the weighted average number of ordinary shares. The Company defines adjusted EBITDA as net loss excluding depreciation and amortization, interest income, net, share-based compensation expenses, impairment of long-lived assets and change in fair value of warrant liability. The Company believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the Company’s operating results. These non-GAAP financial measures are adjusted for the impact of items that the Company does not consider indicative of the operational performance of the Company’s business, and should not be considered in isolation or construed as an alternative to net loss or any other measure of performance or as an indicator of the Company’s operating performance.
In addition, the non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using these non-GAAP financial measures is that they do not reflect all items of income and expense that affect the Company’s operations. Depreciation and amortization, interest income, net, share-based compensation expenses, impairment of long-lived assets and change in fair value of warrant liability have been and may continue to be incurred in the Company’s business and are not reflected in the presentation of these non-GAAP measures. Further, these non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data. The Company encourages investors and others to review the Company’s financial information in its entirety and not rely on a single financial measure. Investors are encouraged to compare the historical non-GAAP financial measures with the most directly comparable GAAP measures.
5
About TuanChe
Founded in 2010, TuanChe Limited (NASDAQ: TC) is a leading integrated automotive marketplace in China. TuanChe offers services to connect automotive consumers with various industry players such as automakers, dealers and other automotive service providers. TuanChe provides automotive marketing and transaction related services by integrating its online platforms with offline sales events. Through its integrated marketing solutions, TuanChe turns individual and isolated automobile purchase transactions into large-scale collective purchase activities by creating an interactive many-to-many environment. Furthermore, leveraging its proprietary data analytics and advanced digital marketing system, TuanChe’s online marketing service platform helps industry customers increase the efficiency and effectiveness of their advertising placements. For more information, please contact ir@tuanche.com.
For investor and media inquiries, please contact:
TuanChe Limited | |
Investor Relations | |
Tel: +86 (10) 6397-6232 | |
Email: ir@tuanche.com | |
Piacente Financial Communications | | |
Brandi Piacente | | |
Tel: | +1 (212) 481-2050 | |
| +86 (10) 6508-0677 | |
Email: tuanche@tpg-ir.com | |
6
Exhibit 99.2
INDEX TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| Page |
F-2 | |
F-3 | |
F-4 | |
F-5 | |
Notes to unaudited condensed consolidated financial statements | F-6 |
F-1
TUANCHE LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except for share and per share data, unless otherwise stated)
Note | December 31, 2022 | June 30, 2023 | ||||||
|
| RMB |
| RMB |
| US$ | ||
(As restated) | (unaudited) |
| Note 3(d) | |||||
ASSETS | ||||||||
Current assets: |
|
|
| |||||
Cash and cash equivalents |
| |
| |
| | ||
Restricted cash |
| |
| |
| | ||
Accounts and notes receivable, net | 5 | | | | ||||
Prepayment and other current assets, net |
| 6 | |
| |
| | |
Total current assets |
| |
| |
| | ||
Non-current assets: |
|
|
| |||||
Operating lease right-of-use assets | | | | |||||
Long-term investments |
| |
| |
| | ||
Goodwill | 4 | | | | ||||
Other non-current assets |
| |
| |
| | ||
Total non-current assets |
| |
| |
| | ||
Total assets |
| |
| |
| | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
| |||||
Current liabilities: |
|
|
| |||||
Accounts payable |
| |
| |
| | ||
Advance from customers |
| |
| |
| | ||
Salary and welfare benefits payable |
| |
| |
| | ||
Short-term borrowings |
| 8 | |
| |
| | |
Other taxes payable |
| |
| |
| | ||
Current portion of deferred revenue | | | | |||||
Short-term operating lease liabilities | | | | |||||
Other current liabilities |
| 9 | |
| |
| | |
Total current liabilities |
| |
| |
| | ||
Long-term borrowings | | — | — | |||||
Non-current portion of deferred revenue | | | | |||||
Long-term operating lease liabilities | | | | |||||
Warrant liability | 14 | | | | ||||
Other non-current liabilities |
| |
| |
| | ||
Total non-current liabilities |
| |
| |
| | ||
Total liabilities |
| |
| |
| | ||
Commitments and contingencies |
| 13 |
|
| ||||
Shareholders’ equity: |
| |||||||
Class A ordinary shares: US$ |
| | | | ||||
Class B ordinary shares: US$ |
| | | | ||||
Treasury stock ( |
| ( | ( | ( | ||||
Additional paid-in capital |
| | | | ||||
Accumulated deficit |
| ( | ( | ( | ||||
Accumulated other comprehensive loss |
| ( | ( | ( | ||||
Total TuanChe Limited shareholders’ equity |
| | | | ||||
Total equity | | | | |||||
TOTAL LIABILITIES AND EQUITY | | | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-2
TUANCHE LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(All amounts in thousands, except for share and per share data, unless otherwise stated)
| Note | For the six months ended June 30, | ||||||
2022 |
| 2023 | ||||||
|
|
| RMB |
| RMB |
| US$ | |
| Note 3(d) | |||||||
Net revenues |
|
|
|
| ||||
Offline Marketing Services: | ||||||||
Auto shows | | | | |||||
Special promotion events | | | | |||||
Referral service for commercial bank | | | | |||||
Online marketing | | | | |||||
Others | | | | |||||
Total net revenues | | | | |||||
Cost of revenues |
|
| ( |
| ( |
| ( | |
Gross profit |
|
| |
| |
| | |
Operating expenses: |
|
|
|
| ||||
Selling and marketing expenses |
|
| ( |
| ( |
| ( | |
General and administrative expenses |
|
| ( |
| ( |
| ( | |
Research and development expenses |
|
| ( |
| ( |
| ( | |
Impairment of long-lived assets | ( | ( | ( | |||||
Total operating expenses |
|
| ( |
| ( |
| ( | |
Loss from operations |
|
| ( |
| ( |
| ( | |
Other income/(expenses): |
|
|
|
|
|
|
| |
Interest income, net |
|
| |
| |
| | |
Foreign exchange loss |
|
| |
| ( |
| ( | |
(Loss)/gain from equity method investments |
|
| ( |
| |
| | |
Change in fair value of warrant liability |
|
| |
| |
| | |
Other income, net |
|
| |
| |
| | |
Loss before income taxes |
|
| ( |
| ( |
| ( | |
Income tax benefit | | | | |||||
Net loss |
|
| ( |
| ( |
| ( | |
Net loss attributable to TuanChe Limited’s ordinary shareholders | ( | ( |
| ( | ||||
Net loss |
|
| ( |
| ( |
| ( | |
Other comprehensive (loss)/income: |
|
|
|
| ||||
Foreign currency translation adjustments |
|
| |
| ( |
| ( | |
Total other comprehensive (loss)/income |
|
| |
| ( |
| ( | |
Total comprehensive loss |
|
| ( |
| ( |
| ( | |
Comprehensive loss attributable to: |
|
|
|
| ||||
TuanChe Limited’s shareholders | ( | ( | ( | |||||
Net loss attributable to the TuanChe Limited’s ordinary shareholders per share | ||||||||
Basic and diluted |
| 12 |
| ( |
| ( |
| ( |
Weighted average number of ordinary shares | ||||||||
Basic and diluted |
| 12 |
| |
| |
| |
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-3
TUANCHE LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(All amounts in thousands, except for share and per share data, unless otherwise stated)
| Ordinary shares | Treasury stock | ||||||||||||||||||||||
Number of | Number of | Accumulated | ||||||||||||||||||||||
Class A | Class B | Additional | other | TuanChe Limited | ||||||||||||||||||||
Ordinary | Ordinary | paid-in | Accumulated | comprehensive | shareholders’ | Non-controlling | Total | |||||||||||||||||
|
| Shares | Amounts | Shares |
| Amounts |
| Shares |
| Amounts |
| capital |
| deficit |
| (loss)/income |
| equity |
| interests |
| equity | ||
|
|
| RMB |
|
| RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | |||||||||||
Balance at December 31, 2021 |
| | | |
| |
| ( |
| ( |
| |
| ( |
| ( | | ( |
| | ||||
Shares issuance for vested restricted shares | | | — | — | — | — | ( | — | — | — | — | — | ||||||||||||
Share-based compensation | — | — | — | — | — | — | | — | — | | — | | ||||||||||||
Acquisition of non-controlling interests |
| — | — | — | — | — | — | ( | — | — | ( | | — | |||||||||||
Net loss |
| — | — | — |
| — |
| — |
| — |
| — |
| ( |
| — | ( | — |
| ( | ||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | | | — | | ||||||||||||
Balance at June 30, 2022 |
| | | |
| |
| ( |
| ( |
| |
| ( |
| ( | | — |
| | ||||
Balance at December 31, 2022 (As restated) |
| | | |
| |
| ( |
| ( |
| |
| ( |
| ( | | — |
| | ||||
Shares issuance for vested restricted shares | | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||
Share-based compensation | — | — | — | — | — | — | | — | — | | — | | ||||||||||||
Acquisition of non-controlling interests | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||
Net loss | — | — | — | — | — | — | — | ( | — | ( | — | ( | ||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | — | — | ( | ( | — | ( | ||||||||||||
Balance at June 30, 2023 |
| | | |
| |
| ( |
| ( |
| |
| ( |
| ( | | — |
| |
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-4
TUANCHE LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts in thousands, except for share and per share data, unless otherwise stated)
| For the six months ended June 30, | |||||
| 2022 | 2023 | ||||
|
| RMB |
| RMB |
| US$ |
Note 3(d) | ||||||
Net cash used in operating activities | ( | ( | ( | |||
Cash flows from investing activities: |
|
| ||||
Purchase of property, equipment and software, and other non-current assets |
| ( |
| — | — | |
Net cash used in investing activities |
| ( |
| — | — | |
Cash flows from financing activities: |
|
| ||||
Cash received from borrowings | | | | |||
Repayments of short-term borrowings |
| ( |
| ( | ( | |
Net cash (used in)/generated from financing activities |
| ( |
| | | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
| |
| | | |
Net decrease in cash, cash equivalents and restricted cash |
| ( |
| ( | ( | |
Cash, cash equivalents and restricted cash at beginning of the period |
| |
| | | |
Including : | ||||||
Cash and cash equivalents at the beginning of the period |
| |
| | | |
Restricted cash at the beginning of the period |
| |
| | | |
Cash, cash equivalents and restricted cash at end of the period |
| |
| | | |
Including : | ||||||
Cash and cash equivalents at the end of the period |
| |
| | | |
Restricted cash at the end of the period |
| |
| | | |
Supplemental disclosures of cash flow information: |
|
| ||||
Cash paid for interest expense |
| ( |
| ( | ( | |
Supplemental schedule of non-cash investing and financing activities: |
|
| ||||
Right-of-use assets obtained in exchange for new operating lease liabilities | | | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-5
1.Organization and Reorganization
TuanChe Limited (the “Company”) was incorporated in the Cayman Islands on September 28, 2012. The Company is a holding company and conducts its business mainly through its subsidiaries, variable interest entities (“VIEs”) and subsidiaries of VIEs (collectively referred to as the “Group”). The Group commenced operations through TuanChe Internet, a PRC company established by several PRC citizens in May 2012. TuanChe Internet holds an Internet Content Provider (“ICP”) license to operate Tuanche.com that provides internet information services to automobile manufacturers, car dealers and consumers.
The Group is primarily engaged in the operation of providing auto shows, special promotion events services, referral service for a commercial bank, online marketing services, subscription and support service, aftermarket promotion service, customer referral services and other related businesses in the People’s Republic of China (the “PRC” or “China”).
Contractual arrangements with VIEs
PRC laws and regulations place certain restrictions on foreign investment in value-added telecommunication service businesses. The Group conduct operations in the PRC partially through TuanChe Internet, Drive New Media, Internet Drive Technology and Tansuojixian, which are variable interest entities, or VIEs, and their subsidiaries, collectively referred to as consolidated affiliated entities. The Group have entered into a series of contractual arrangements, through TuanYuan, Sangu Maolu and Chema, or its WFOEs, with each of its VIEs and their respective shareholders, respectively. The series of contractual arrangements include exclusive business cooperation agreement, exclusive call option agreement, equity pledge agreement, powers of attorney and spousal consent letters.
The Group believes that these contractual arrangements enable the Company to (1) have power to direct the activities that most significantly affects the economic performance of the VIEs, and (2) receive the economic benefits of the VIEs that could be significant to the VIEs. Accordingly, the Company is considered the primary beneficiary of the VIEs and is able to consolidate the VIEs and VIEs’ subsidiaries.
Risks in relation to the VIE structure
A significant part of the Company’s business is conducted through the VIEs of the Group, of which the Company is the ultimate primary beneficiary. In the opinion of management, the contractual arrangements with the VIEs and the nominee shareholders are in compliance with PRC laws and regulations and are legally binding and enforceable. The nominee shareholders are also shareholders of the Group and have indicated they will not act contrary to the contractual arrangements. However, there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including those that govern the contractual arrangements, which could limit the Group’s ability to enforce these contractual arrangements and if the nominee shareholders of the VIEs were to reduce their interests in the Group, their interest may diverge from that of the Group and that may potentially increase the risk that they would seek to act contrary to the contractual arrangements.
F-6
1.Organization and Reorganization (Continued)
Risks in relation to the VIE structure (Continued)
In January 2015, the Ministry of Commerce (“MOFCOM”), released for public comment a proposed PRC law, the Draft Foreign Investment Enterprises (“FIE”) Law, that appears to include VIEs within the scope of entities that could be considered to be FIEs, that would be subject to restrictions under existing PRC law on foreign investment in certain categories of industry. Specifically, the Draft FIE Law introduces the concept of “actual control” for determining whether an entity is considered to be an FIE. In addition to control through direct or indirect ownership or equity, the Draft FIE Law includes control through contractual arrangements within the definition of “actual control”. On March 15, 2019, the National People’s Congress adopted the Foreign Investment Law of the PRC, which became effective on January 1, 2020 and replaced three laws regulating foreign investment in China, namely, the Wholly Foreign-Invested Enterprise Law of the PRC, the Sino-Foreign Cooperative Joint Venture Enterprise Law of the PRC and the Sino-Foreign Equity Joint Venture Enterprise Law of the PRC, together with their implementation rules and ancillary regulations. On December 26, 2019, the State Council issued the Regulations on Implementing the Foreign Investment Law of the PRC, which came into effect on January 1, 2020, and replaced the Regulations on Implementing the Sino-Foreign Equity Joint Venture Enterprise Law, Provisional Regulations on the Duration of Sino-Foreign Equity Joint Venture Enterprise Law, the Regulations on Implementing the Wholly Foreign-Invested Enterprise Law, and the Regulations on Implementing the Sino-Foreign Cooperative Joint Venture Enterprise Law. The Foreign Investment Law of the PRC embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. Under the Foreign Investment Law of the PRC, VIEs that are controlled via contractual arrangement would not be absolutely deemed as Foreign-Invested Enterprises, or FIEs. Therefore, the current legal status of Contractual Arrangement as a whole and each of the agreements comprising the Contractual Arrangement will not be materially affected by the Foreign Investment Law of the PRC and its implementing regulations. However, since it is relatively new, uncertainties still exist in relation to its interpretation and implementation. For example, the Foreign Investment Law of the PRC adds a catch-all clause to the definition of “foreign investment” so that foreign investment, by its definition, includes “investments made by foreign investors in China through other means defined by other laws or administrative regulations or provisions promulgated by the State Council” without further elaboration on the meaning of “other means.” It leaves leeway for the future legislations promulgated by the State Council to provide for contractual arrangements as a form of foreign investment. It is therefore uncertain whether the Group’s corporate structure will be seen as violating the foreign investment rules as the Group is currently leverage the contractual arrangement to operate certain businesses in which foreign investors are prohibited from or restricted to investing. Furthermore, if future legislations prescribed by the State Council mandate further actions to be taken by companies with respect to existing contractual arrangement, the Group may face substantial uncertainties as to whether the Group can complete such actions in a timely manner, or at all. If the Group fails to take appropriate and timely measures to comply with any of these or similar regulatory compliance requirements, the Group’s current corporate structure, corporate governance and business operations could be materially and adversely affected.
The Company’s ability to control the VIEs also depends on the Power of Attorney the shareholders has to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Company believes these Power of Attorney are legally enforceable but may not be as effective as direct equity ownership.
F-7
1.Organization and Reorganization (Continued)
Risks in relation to the VIE structure (Continued)
In addition, if the Group’s corporate structure or the contractual arrangements with the VIEs were found to be in violation of any existing or future PRC laws and regulations, the PRC regulatory authorities could, within their respective jurisdictions:
● | revoke the Group’s business and operating licenses |
● | require the Group to discontinue or restrict its operations; |
● | restrict the Group’s right to collect revenues; |
● | block the Group’s websites; |
● | require the Group to restructure the operations, re-apply for the necessary licenses or relocate the Group’s businesses, staff and assets; |
● | impose additional conditions or requirements with which the Group may not be able to comply; or |
● | take other regulatory or enforcement actions against the Group that could be harmful to the Group’s business. |
The imposition of any of these restrictions or actions could result in a material adverse effect on the Group’s ability to conduct its business. In such case, the Group may not be able to operate or control the VIEs, which may result in deconsolidation of the VIEs in the Group’s consolidated financial statements. In the opinion of the Company’s management, the likelihood for the Group to lose such ability is remote based on current facts and circumstances. The Group believes that the contractual arrangements among each of the VIEs, their respective shareholders and relevant wholly foreign owned enterprise are in compliance with PRC law and are legally enforceable. The Group’s operations depend on the VIEs to honor their contractual arrangements with the Group. These contractual arrangements are governed by PRC law and disputes arising out of these agreements are expected to be decided by arbitration in the PRC. Management believes that each of the contractual arrangements constitutes valid and legally binding obligations of each party to such contractual arrangements under PRC laws. However, the interpretation and implementation of the laws and regulations in the PRC and their application on the legality, binding effect and enforceability of contracts are subject to the discretion of competent PRC authorities, and therefore there is no assurance that relevant PRC authorities will take the same position as the Group herein in respect of the legality, binding effect and enforceability of each of the contractual arrangements. Meanwhile, since the PRC legal system continues to evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to the Group to enforce the contractual arrangements should the VIEs or the nominee shareholders of the VIEs fail to perform their obligations under those arrangements.
F-8
1.Organization and Reorganization (Continued)
Risks in relation to the VIE structure (Continued)
The following combined financial information of the Group’s VIEs as of December 31, 2022 and June 30,2023 and for the six months ended June 30, 2022 and 2023 were included in the accompanying condensed consolidated financial statements of the Group as follows:
As of December 31, | As of June 30, | |||
|
| 2022 |
| 2023 |
| RMB | RMB | ||
(unaudited) | ||||
ASSETS | ||||
Current assets: |
|
|
|
|
Cash and cash equivalents |
| |
| |
Amount due from the subsidiaries of the Group |
| |
| |
Other current assets | | | ||
Total current assets |
| |
| |
Non-current assets: |
|
| ||
Long-term investments |
| |
| |
Operating lease right-of-use assets | | | ||
Total non-current assets |
| |
| |
TOTAL ASSETS |
| |
| |
Current liabilities: |
|
| ||
Short term borrowings | | | ||
Accounts payable | | | ||
Advance from customers |
| |
| |
Salary and welfare benefits payable |
| |
| |
Other taxes payable |
| |
| |
Short-term operating lease liabilities | | | ||
Current portion of deferred revenue | | | ||
Other current liabilities | | | ||
Account due to subsidiaries of the Group | | | ||
Total current liabilities | | | ||
Long-term borrowings |
| |
| |
Long-term operating lease liabilities | | | ||
Non-current portion of deferred revenue | | | ||
Total non-current liabilities | | | ||
TOTAL LIABILITIES |
| |
| |
| For the six months ended June 30, | |||
| 2022 |
| 2023 | |
RMB | RMB | |||
Net revenues |
| |
| |
Net (loss)/income |
| ( |
| |
| For the six months ended June 30, | |||
| 2022 |
| 2023 | |
RMB | RMB | |||
Net cash generated from/(used in) operating activities |
| |
| ( |
Net cash generated from investing activities |
| — |
| — |
Net cash (used in)/generated from financing activities |
| ( |
| |
Net increase/(decrease) in cash, cash equivalent and restricted cash |
| |
| ( |
F-9
1.Organization and Reorganization (Continued)
Risks in relation to the VIE structure (Continued)
In accordance with various contractual agreements, the Company has the power to direct the activities of the VIEs and subsidiaries of VIEs and can have assets transferred out of the VIEs. Therefore, the Company considers that there are no assets in the respective VIEs that can be used only to settle obligations of the respective VIEs, except for the registered capital of the VIEs amounting to approximately RMB
There is no VIE in the Group where the Company or any subsidiary has a variable interest but is not the primary beneficiary.
2.Going Concern and impact of COVID-19 pandemic
The Group has incurred recurring operating losses since its inception, including net losses of RMB
Historically, the Group has relied principally on both operational sources of cash and non-operational sources of financing from investors to fund its operations and business development. The Group’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan which includes strictly implemented the expenses, accelerating the collection of accounts receivable and increasing the proportion of advance from customers, pursuing cooperation opportunities for electric vehicles industry and potential financing to improve the Group’s cash flow from operations and financing. At present, China’s economy is still in the process of recovering from the COVID-19 epidemic. Due to that the control measurement of COVID-19 has been removed, the Group’s offline auto show business has greatly recovered compared to prior year. However, the Group’s live streaming business need to intensified renegotiation with live streaming customers to continue and enhance the cooperation with them, and this faces the risk of failure, which has significantly impacted and may continue to impact the Group’s business, result of operations, financial condition and liquidity.
If the Group fails to achieve these goals, the Group may need additional financing to execute its business plan. If additional financing is required, the Group cannot predict whether this additional financing will be in the form of equity, debt, or another form, and the Group may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In the event that financing sources are not available, or that the Group is unsuccessful in increasing its gross profit margin and reducing operating losses, the Group may be unable to implement its current plans for expansion, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on the Group’s business, financial condition and results of operations and would materially adversely affect its ability to continue as a going concern.
The Group’s condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of such uncertainties.
F-10
3.Significant Accounting Policies
a)Basis of presentation
The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and, therefore, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted.
In the opinion of management, the information reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature. Half year results are not necessarily indicative of results for the full year. The condensed consolidated balance sheet as of December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 20-F/A for the fiscal year ended December 31, 2022.
b)Principles of consolidation
The condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, VIEs and subsidiaries of VIEs for which the Company is the primary beneficiary.
Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.
A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity.
All transactions and balances among the Company, its subsidiaries, VIEs and subsidiaries of VIEs have been eliminated upon consolidation.
c)Use of estimates
The preparation of the Group’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the balance sheet date and reported revenues and expenses during the reported periods in the condensed consolidated financial statements and accompanying notes. Significant accounting estimates include, but are not limited to determining the provision for accounts receivable, provision for prepayment and other current assets, assessment for valuation allowance of deferred tax assets, valuation and recognition of share-based compensation expenses, impairment assessment on goodwill and long-lived assets, long-term investments, valuation of warrant liabilities.
d)Convenience Translation
Translations of balances in the condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss and condensed consolidated statements of cash flows from RMB into US$ as of and for the six months ended June 30, 2023 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB
F-11
3.Significant Accounting Policies (Continued)
e)Fair value measurements
Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value:
● | Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. |
● | Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
● | Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
The Group’s financial instruments include cash and cash equivalents, restricted cash, accounts and notes receivable, prepayment and other current assets, long-term investments, short-term borrowings, accounts payable, other payables and other liabilities of which the carrying values approximate their fair value due to their short term in nature and other liabilities.
The fair value of warrant liability was determined using the Black Scholes Model, with level 3 inputs (Note 14).
f)Accounts and notes receivables, net
The carrying value of accounts receivable is reduced by an allowance that reflects the Group’s best estimate of the amounts that will not be collected. An allowance for doubtful accounts is recorded in the period when a loss is probable based on an assessment of specific evidence indicating collection is unlikely, historical bad debt rates, accounts aging, financial conditions of the customer and industry trends. Starting from January 1, 2021, the Group adopted ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”). The Group’s accounts receivable and other receivables are within the scope of ASC Topic 326. To estimate expected credit losses, the Group has identified the relevant risk characteristics of the receivables which include size and nature. Receivables with similar risk characteristics have been grouped into pools. For each pool, the Group considers the past collection experience, current economic conditions and future economic conditions (external data and macroeconomic factors). This is assessed at each quarter based on the Group’s specific facts and circumstances. There have been no significant changes in the assumptions since adoption. Accounts receivable balances are written off against the allowance when they are determined to be uncollectible. Notes receivable represents notes receivable issued by reputable financial institutions that entitle the Group to receive the full face amount from the financial institutions at maturity. Refer to Note 5 for details.
F-12
3.Significant Accounting Policies (Continued)
g)Goodwill
Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an acquired business. The Group’s goodwill as of December 31, 2022 and June 30, 2023 was related to its acquisition of Longye in January 2020. In accordance with ASC 350, Goodwill and Other Intangible Assets, recorded goodwill amounts are not amortized, but rather are tested for impairment annually or more frequently if there are indicators of impairment present.
Goodwill is tested for impairment at the reporting unit level on an annual basis (December 31 for the Group) and between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. These events or circumstances include a significant change in stock prices, business environment, legal factors, financial performances, competition, or events affecting the reporting unit. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The estimation of fair value of reporting unit using a discounted cash flow methodology also requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the Group’s business, estimation of the useful life over which cash flows will occur, and determination of the Group’s weighted average cost of capital. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results and market conditions. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for the reporting unit.
Management has determined that the Group has one reporting unit within the entity at which goodwill is monitored for internal management purposes. Starting from January 1, 2020, the Group adopted ASU 2017-04, which simplifies the accounting for goodwill impairment by eliminating Step 2 from the goodwill impairment test. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, versus determining an implied fair value in Step 2 to measure the impairment loss. Management evaluated the recoverability of goodwill by performing a qualitative assessment before using the quantitative impairment test approach at the reporting unit level. Based on an assessment of the qualitative factors, management determined that it is more-likely-than-not that the fair value of the reporting unit is more than its carrying amount as of June 30, 2022 and 2023. Therefore, management performed quantitative assessment,
If the Group reorganizes its reporting structure in a manner that changes the composition of its reporting units, goodwill is reassigned based on the relative fair value of each of the affected reporting units.
h)Impairment of long-lived assets
Long-lived assets or asset group, including intangible assets with finite lives, are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. The Group recognized RMB
F-13
3.Significant Accounting Policies (Continued)
i)Revenue recognition
The Group recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services using the five steps defined under ASC Topic 606.
The Group determines revenue recognition through the following steps:
● | identification of the contract, or contracts, with a customer; |
● | identification of the performance obligations in the contract; |
● | determination of the transaction price; |
● | allocation of the transaction price to the performance obligations in the contract; and |
● | recognition of revenue when, or as, the Group satisfies a performance obligation |
Revenue is recognized upon transfer of control of promised goods or services to a customer.
Revenue is recorded net of Value Added Tax (“VAT”) and related surcharges collected from customers, which are subsequently remitted to government authorities.
Offline marketing services revenue
Auto shows revenue
The Group’s online website and offline infrastructure allow them to organize auto shows, which aim at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers. The Group charges a fixed admission fee per auto show event from its industry customers for arranging, decorating and providing booth space at auto shows. The Group has identified one performance obligation for the transaction - providing a decorated venue for auto dealers, automakers and automotive service providers, as the individual service promised in auto show contracts are not distinct individually. As the Group has control of the auto show services and discretion in establishing the price of auto show admission fee to auto dealers, automakers and other automotive service providers, it is considered to be a principal in accordance with ASC 606. The auto shows revenue is recognized on a straight-line basis over the period of the contract, which is usually from two days to four days, when the services are provided.
Special promotion events revenue
The Group provides integrated services to support auto dealers’ own special promotion events during a specific period. The services include event planning and execution, marketing, training and onsite coaching, etc. The Group charges a fixed service fee per special promotion event. The Group has identified one performance obligation as the individual service promised in service contracts are not distinct individually. As the Group has control of the service and discretion in establishing the price of the fee to auto dealers, it is considered to be a principal in accordance with ASC 606. The special promotion events revenue is recognized on a straight-line basis over the promotion period of the contract, which is usually one week, when the services are provided.
F-14
3.Significant Accounting Policies (Continued)
i)Revenue recognition (Continued)
Referral service for commercial bank revenue
In October 2019, the Group commenced its auto loan referral services in collaboration with a commercial bank. The referral services provided to the bank include (i) referral services and (ii) periodic guarantee for the following time periods: (a) from the date of loan issuance by the commercial bank to the consumer to the date when the consumer’s vehicle mortgage registration is completed (the mortgage registration procedures should be completed within 120 days after the loan issuance) and (b) no overdue of more than 30 days for any of the first 3 monthly repayment. The referral service and periodic guarantee are two separate performance obligations that meet the criteria to be considered distinct, of which, referral services revenue is recognized at a point in time upon the delivery of the services and a guarantee liability is recorded at fair value at inception of the loans. Revenue from the periodic guarantee is recognized by a systematic and rational amortization method over the term of guarantee period. The Company has ceased the cooperation since April 2022.
Online marketing services revenue
The Group’s online marketing services revenue primarily include (i) live streaming promotion events services, (ii) customer referral services, (iii) marketing information services and (iv) demand-side platform services.
The Group commenced its live streaming promotion events services from the first quarter of 2020, holding promotional events on the live streaming platform of Zhejiang Tmall Technology Co., Ltd. (“Tmall”), which aims at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers. The Group identified only one performance obligation that is to provide the industry customers with arranging, decorating and providing the platform for live show. The Group charges a fixed admission fee per live streaming promotion event from its industry customers. As the Group has control of the services and discretion in establishing the price of live streaming promotion admission fee to auto dealers, automakers and other automotive service providers, it is considered to be a principal in accordance with ASC 606. The live streaming promotion events services revenue is recognized on a straight-line basis over the promotion period of the contract, which is usually one week, when the services are provided.
Other revenue
The Group also commenced its customer referral services from the first quarter of 2020 by referring its industry customers to Beijing Baidu Netcom Science Technology Co., Ltd. (“Baidu”) to use the membership services of a Baidu’s auto content distribution platform. The Group identified only one performance obligation that is to provide referral service to Baidu. The Group charges Baidu a fixed rate commission fee based on the membership fee amount for the services rendered. Revenue is recognized at point-in-time when the industry customers successfully register as a membership of Baidu’s auto content distribution platform.
For the marketing information services, the Group generates consumers’ demand information through its online channels and provides to the industry customers upon consumers’ consent. The Group identified only one performance obligation that is to provide consumer’s demand information to the industry customers. The marketing information service fee is charged based on the quantity of consumers’ demand information delivered. Revenue is recognized at a point in time upon the delivery of such consumers’ demand information.
On January 13, 2020, the Company completed the acquisition of Longye a Software-as-a-Service (“SaaS”) company who mainly provides subscription and support services to industry customers, including auto dealers, automakers and automotive service providers, with access to cloud services, software licenses and related support and updates during the term of the arrangement. Cloud services allow industry customers to use the Group’s multi-tenant software without taking possession of the software. The Group identified the only one performance obligation that is to provide integrated cloud services to industry customers. The Group initially records the subscription and support services fee as deferred revenue upon receipt and then recognizes the revenue on a straight-line basis over the service period, which is usually from one year to five years. The subscription and support services revenue is recognized on a straight-line basis over the period of the contract when the services are provided.
F-15
3.Significant Accounting Policies (Continued)
i)Revenue recognition (Continued)
Starting from August 2021, the Group provides aftermarket promotion service to support auto dealers’ aftermarket promotion events during a period. The Group identified one performance obligation that is to provide promotion support services to industry customers. The promotion support service revenue is recognized over the period of the contract when the services are provided.
Contract balances
Contract liabilities primarily result from the timing difference between the Group’s satisfaction of performance obligation and the customers’ payment. Substantial all auto show revenue and referral service for commercial bank revenue and SaaS revenue are recognized over time during the six months ended June 30, 2022 and 2023.
Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represent amounts invoiced and revenues recognized prior to invoicing when the Group has satisfied the Group’s performance obligation and has the unconditional rights to payment.
The Group applied a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. The Group has no material incremental costs of obtaining contracts with customers that the Group expects the benefit of those costs to be longer than one year which need to be recognized as assets.
j)Taxation
Income taxes
Current income taxes are provided on the basis of income/(loss) for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and any tax loss and tax credit carry forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates or tax laws is recognized in the consolidated statements of operations and comprehensive loss in the period the change in tax rates or tax laws is enacted. A valuation allowance is provided to reduce the amount of deferred income tax assets if it is considered more likely than not that some portion or all of the deferred income tax assets will not be realized.
Uncertain tax positions
In order to assess uncertain tax positions, the Group applies a more likely than not threshold and a two-step approach for the tax position measurement and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Group recognizes interest and penalties, if any, under accrued expenses and other current liabilities on its consolidated balance sheet and under other expenses in its consolidated statements of operations and comprehensive loss. The Group did not have any significant unrecognized uncertain tax positions as of December 31, 2022 and June 30, 2023.
F-16
3.Significant Accounting Policies (Continued)
k)Warrant liability
In connection with the issuances of ordinary shares, the Group issued warrants to purchase ordinary shares on November 23, 2022. The Group evaluates the warrants under Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging-Contracts in Entity’s Own Equity. Warrants recorded as liabilities are recorded at their fair value and remeasured on each reporting date with change in estimated fair value of warrant liability in the condensed consolidated statement of operations and comprehensive loss.
l)Concentrations and Risks
Advertising and promotional service provider
The Group relied on advertising and promotional service providers and their affiliates for advertising and promotional service to support its operations during the six months ended June 30, 2022 and 2023. Total number of advertising and promotional service providers accounting for more than 10% is
Credit risk
Financial instruments that potentially subject the Group to the concentration of credit risk consist of cash and cash equivalents, restricted cash and accounts and notes receivable. As of December 31, 2022 and June 30, 2023, all of the Group’s cash and cash equivalents and restricted cash were held in large reputable financial institutions located in the United States of America or China, which management consider being of high credit quality. Accounts receivable is typically unsecured and is derived from revenue earned from the Company’s businesses.
Major customers
There were
There were
4.Goodwill
The following table presents the Group’s goodwill as of the respective balance sheet dates:
| December 31, 2022 |
| June 30, 2023 | |
| RMB |
| RMB | |
(Unaudited) | ||||
Goodwill |
| |
| |
Less: impairment |
| ( |
| ( |
Goodwill, net |
| |
| |
F-17
5.Accounts and notes receivables, net
Accounts and notes receivables are consisted of the following:
| December 31, 2022 |
| June 30, 2023 | |
RMB | RMB | |||
(Unaudited) | ||||
Notes receivable | | | ||
Accounts receivable |
| |
| |
Less: allowance for doubtful accounts |
| ( |
| ( |
Accounts receivable, net |
| |
| |
The Group recognized the allowance for doubtful accounts of RMB
6.Prepayment and other current assets, net
The following is a summary of prepayments and other current assets:
| December 31, 2022 |
| June 30, 2023 | |
RMB | RMB | |||
(Unaudited) | ||||
Deductible VAT |
| |
| |
Deposits |
| |
| |
Receivables due from third-party online payment platforms |
| |
| |
Staff advances |
| |
| |
Prepaid promotion expenses |
| |
| |
Receivable from borrowers for the guarantee payment to commercial bank | | | ||
Advance to suppliers | — | | ||
Others |
| |
| |
Less: provisions for prepayment and other current assets | ( | ( | ||
Total prepayment and other current assets, net |
| |
| |
The Group recognized provisions for prepayment and other current assets of RMB
F-18
7.Taxation
a)Income taxes
Cayman Islands
Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends by the Company in the Cayman Islands to their shareholders, no Cayman Islands withholding tax will be imposed.
Hong Kong
Commencing from the year of assessment 2018/2019, the first HK$
China
Effective from January 1, 2008, the PRC’s statutory income tax rate is
The following table presents a unaudited reconciliation of the differences between the statutory income tax rate and the Company’s effective income tax rate for the six months ended June 30, 2022 and 2023:
| For the six months ended | |||
June 30, | ||||
| 2022 |
| 2023 | |
% | % | |||
Statutory income tax rate of the PRC |
| |
| |
Permanent differences |
| |
| ( |
Change in valuation allowance |
| ( |
| ( |
Effect of preferential tax rate | ( | ( | ||
Others | ( | | ||
Effective income tax rate |
| |
|
F-19
8.Short-term borrowings
The borrowings as of December 31, 2022 were fully repaid in 2023. As of June 30, 2023, the Group had RMB
Term loan |
| Maturity date |
| Principal amount |
| Interest rate per annum |
| Name of bank |
Loan 1 |
|
| |
| | % | ||
Loan 2 |
|
| |
| | % | ||
Loan 3 |
|
| |
| | % | ||
Loan 4 |
|
| |
| | % | ||
Loan 5 |
|
| |
| | % | ||
Loan 6 |
|
| |
| | % | ||
Loan 7 |
|
| |
| | % | ||
Total |
|
| |
|
|
|
|
As of June 30, 2023, the loan 1 and 2 are guaranteed by a third party.
9.Other current liabilities
The following is a summary of other current liabilities as of December 31, 2022 and June 30, 2023:
| December 31, 2022 |
| June 30, 2023 | |
| RMB |
| RMB | |
(Unaudited) | ||||
Professional service fee |
| |
| |
Advertising expense payables |
| |
| |
Promotional expense payables |
| |
| |
Others |
| |
| |
Total |
| |
| |
10.Share-based Compensation
Description of stock option plan and Share option replacement
In July 2012, the Group permits the grant of options of the Company to relevant directors, officers, other employees and consultants of the Company. Option awards are granted with an exercise price determined by the Board of Directors. Those option awards generally vest over a period of
The Group recognizes share-based compensation expenses in the condensed consolidated statements of operations and comprehensive loss based on awards ultimately expected to vest, after considering actual forfeitures.
The Company has replaced these share options with restricted shares for all employees and nonemployees on June 15, 2018.
In June 2018, the directors of the Company (the “Directors”) approved the TuanChe Limited Share Incentive Plan (the “Share Incentive Plan”). Under the Share Incentive Plan,
F-20
10.Share-based Compensation (Continued)
On May 4, 2023, the directors of the Company (the “Directors”) approved the 2023 Share Incentive Plan (the “2023 Plan”). Under the Share Incentive Plan,
For the six months ended June 30, 2023, the Company has granted
A summary of the restricted shares activities is presented below:
Number of restricted | Weighted-Average | |||
| shares |
| Grant-Date Fair Value | |
US$ | ||||
Outstanding as of December 31, 2022 | | | ||
Granted | | | ||
Forfeit | | | ||
Vested | ( | | ||
Outstanding as of June 30, 2023 (unaudited) |
| |
| |
For the six months ended June 30, 2022 and 2023, total share-based compensation expenses recognized by the Group for the restricted shares granted were RMB
As of June 30, 2023, there was RMB
11.Equity
Ordinary shares and Pre-funded Warrant
On November 23, 2022, the Company issued
The Company determined that the Pre-Funded Warrant meet the requirements for equity classification. The Pre-Funded warrants were recorded at their fair value on the date of issuance as a component of total equity. In addition, since these Pre-Funded warrants are exercisable for a nominal amount, they have been shown as exercised when issued and as outstanding common stock in the consolidated financial statements and earnings per share calculations.
Warrant
On November 23, 2022, the Warrant are classified as a liability and the fair value allocated to the Warrant was RMB
F-21
12.Net Loss Per Share
As the Group incurred losses for the six months ended June 30, 2022 and 2023, the potential and restricted shares granted were anti-dilutive and excluded from the calculation of diluted net loss per share of the Company.
The following table sets unaudited forth the computation of basic and diluted net loss per share for the six months ended June 30, 2022 and 2023:
For the six months ended June 30, | ||||
| 2022 |
| 2023 | |
Numerator : | ||||
Net loss attributable to TuanChe Limited’s shareholders |
| ( |
| ( |
Denominator: |
|
| ||
Weighted average number of ordinary shares outstanding, basic and diluted |
| |
| |
Basic and diluted net loss per share attributable to TuanChe Limited’s shareholders |
| ( |
| ( |
13.Commitments and contingencies
Litigation
From time to time, the Group is involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, management does not believe that the ultimate outcome of any unresolved matters, individually and in the aggregate, is reasonably possible to have a material adverse effect on the Group’s financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and the Group’s view of these matters may change in the future. The Group records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Group reviews the need for any such liability on a regular basis. The Group has not recorded any material liabilities in this regard as of December 31, 2022 and June 30, 2023.
14.Fair Value Measurement
For the year ended | For the six months ended | |||||
December 31, 2022 | June 30, 2023 | |||||
| RMB |
| RMB |
| US$ | |
Warrant liability: |
|
|
|
|
|
|
Level 1 Inputs |
| — |
| — |
| — |
Level 2 Inputs |
| — |
| — |
| — |
Level 3 Inputs |
| |
| |
| |
Balance at fair value |
| |
| |
| |
| As of December 31, 2022 |
| As of June 30, 2023 | ||
Expiration of warrant (years) |
| |
| | |
Fair market value per share (US$) |
| |
| | |
Exercise price (US$) |
| |
| | |
Risk-free rate |
| | % | | % |
Dividend yield |
| — |
| — | |
Standard derivation in the value of stock |
| | % | | % |
F-22
14.Fair Value Measurement (Continued)
| For the six months endedJune 30, 2023 | |
RMB | ||
Fair value of warrants at beginning of the period (Level 3) |
| |
Issuances |
| — |
Change in fair value |
| ( |
Effect of exchange rate changes |
| |
Fair value of warrants at end of the period (Level 3) |
| |
15.Related party transactions and balance
The Company entered into outsourcing service agreements with Shanghai Three Drivers Culture Media Co., Limited (“STDC”). The outsourcing service expenses provided by STDC for the Company are RMB
For the six months ended June 30, 2022 and 2023, the Company provided
16.Subsequent event
The Group has performed an evaluation of subsequent events through the date the financial statements were issued and has determined that there are no events that would have required adjustment or disclosure in the financial statements.
F-23
Exhibit 99.3
TUANCHE LIMITED
RECONCILIATION OF NON-GAAP AND GAAP RESULTS
(Amount in thousands, except share and per share data)
| | For the six months ended June 30, | | ||||
| | 2022 | | 2023 | | ||
|
| RMB |
| RMB |
| US$ | |
Net loss | | (56,166) | | (30,698) | | (4,235) | |
Add: | | | | | | | |
Depreciation and amortization | | 3,673 | | — | | — | |
Subtract: | | | | | | | |
Interest income, net | | 29 | | 69 | | 9 | |
EBITDA | | (52,522) | | (30,767) | | (4,244) | |
Add: | | | | | | | |
Share-based compensation expenses | | 6,148 | | 4,007 | | 553 | |
Change in fair value of warrant liability | | — | | (11,551) | | (1,593) | |
Impairment of long-lived assets | | 15,614 | | 1,515 | | 209 | |
Adjusted EBITDA | | (30,760) | | (36,796) | | (5,075) | |
| | | | | | | |
Net loss | | (56,166) | | (30,698) | | (4,235) | |
Add: | | | | | | | |
Share-based compensation expenses | | 6,148 | | 4,007 | | 553 | |
Change in fair value of warrant liability | | — | | (11,551) | | (1,593) | |
Impairment of long-lived assets | | 15,614 | | 1,515 | | 209 | |
Adjusted net loss | | (34,404) | | (36,727) | | (5,066) | |
Adjusted net loss attributable to TuanChe Limited’s shareholders | | (34,404) | | (36,727) | | (5,066) | |
Weighted average number of ordinary shares | | | | | | | |
Basic and diluted | | 309,041,616 | | 399,544,700 | | 399,544,700 | |
Adjusted net loss per share from operations | | | | | | | |
Basic and diluted | | (0.11) | | (0.09) | | (0.01) | |
Exhibit 99.4
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This management’s discussion and analysis is designed to provide you with a narrative explanation of our financial condition and results of operations for the six months ended June 30, 2022 and 2023. This section should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this interim report. See “Exhibit 99.2 —Condensed Consolidated Financial Statements of TuanChe Limited as of December 31, 2022 and June 30, 2023 (unaudited) and for the six months ended June 30, 2022 (unaudited) and 2023 (unaudited).” We also recommend that you read our management’s discussion and analysis and our audited consolidated financial statements for fiscal year 2022, and the notes thereto, which appear in our annual report on Form 20-F for the year ended December 31, 2022, or the Annual Report, filed with the U.S. Securities and Exchange Commission, or the SEC, on March 29, 2023.
Unless otherwise indicated or the context otherwise requires, all references to “our company,” “we,” “our,” “ours,” “us” or similar terms refer to TuanChe Limited and its subsidiaries. “VIEs” refers to TuanChe Internet Information Service (Beijing) Co., Ltd., Shenzhen Drive New Media Co., Ltd., Beijing Internet Drive Technology Co., Ltd., and Tansuojixian Technology (Beijing) Co., Ltd., and their respective subsidiaries, as the context requires. All references to “China” or “PRC” refer to the People’s Republic of China. All references to “industry customer(s)” refer to business customers to which we offer services, including auto dealers, automakers, automobile accessory manufacturers and other automotive related goods and service providers. All references to “RMB” or “Renminbi” refer to the legal currency of China. All references to “US$,” “U.S. dollars,” “$” or “dollars” refer to the legal currency of the United States of America.
All such financial statements were prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. We have made rounding adjustments to some of the figures included in this management’s discussion and analysis. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors.
Overview
We believe we, together with the VIEs, are a leading omni-channel automotive marketplace in China. We, together with the VIEs, provide a scalable omni-channel automotive marketplace approach to automobile marketing and distribution. We and the VIEs offer marketing solutions by integrating online platform and offline sales events. In the six months ended June 30, 2022 and 2023, we and the VIEs hosted 61 and 183 auto shows across 49 and 80 cities in mainland China, respectively. Our and the VIEs’ auto shows offered a total of 1,303 and 4,301 booth spaces in the six months ended June 30, 2022 and 2023, respectively. The total number of automobile sales transactions we and the VIEs facilitated was 16,591 and 44,891 in the six months ended June 30, 2022 and 2023, respectively, with a total gross merchandise value of approximately RMB2.4 billion and RMB7.2 billion (US$1.0 billion) in the same period, respectively.
Historically, we generated our net revenues primarily through our and the VIEs’ offline events. Our net revenues were RMB89.2 million and RMB92.2 million (US$12.7 million) in the six months ended June 30, 2022 and 2023, respectively. Our net loss was RMB56.2 million and RMB30.7 million (US$4.2 million) in the six months ended June 30, 2022 and 2023, respectively. Our adjusted EBITDA was a loss of RMB30.8 million and a loss of RMB36.8 million (US$5.1 million) in the six months ended June 30, 2022 and 2023, respectively. We recorded adjusted net loss of RMB34.4 million and RMB36.7 million (US$5.1 million) in the six months ended June 30, 2022 and 2023, respectively. For a detailed description of our non-GAAP measures, see “—Non-GAAP Financial Measures.”
1
Results of Operations
The following table sets forth a summary of our unaudited condensed consolidated statements of operations and comprehensive loss, both in absolute amount, for the periods indicated. This information has been derived from and should be read together with our unaudited condensed consolidated financial statements. The results of operations in any period are not necessarily indicative of the results that may be expected for any future period.
|
| Six Months Ended June 30, | ||||
| | 2022 | | 2023 | ||
|
| RMB |
| RMB |
| US$ |
| | (in thousands, except for share and per share data) | ||||
Summary Condensed Consolidated Statements of Operations and Comprehensive Loss |
|
|
|
|
|
|
Net Revenues |
| 89,211 |
| 92,152 |
| 12,708 |
Cost of revenues |
| (16,955) |
| (33,726) |
| (4,651) |
Gross profit |
| 72,256 |
| 58,426 |
| 8,057 |
Total operating expenses |
| (132,126) |
| (113,582) |
| (15,664) |
Net loss attributable to TuanChe Limited’s shareholders |
| (56,166) |
| (30,698) |
| (4,235) |
Net loss attributable to the TuanChe Limited’s ordinary shareholders per share |
|
|
|
|
|
|
Basic and diluted |
| (0.18) |
| (0.08) |
| (0.01) |
Weighted average number of ordinary shares |
| |
| |
| |
Basic and diluted |
| 309,041,616 |
| 399,544,700 |
| 399,544,700 |
Non-GAAP Financial Data (1) |
| |
| |
| |
Adjusted EBITDA |
| (30,760) |
| (36,796) |
| (5,075) |
Adjusted net loss |
| (34,404) |
| (36,727) |
| (5,066) |
(1) | See “— Non-GAAP Financial Measures.” |
Non-GAAP Financial Measures
To supplement our unaudited condensed consolidated financial statements which are presented in accordance with U.S. GAAP, we also use adjusted EBITDA and adjusted net loss as additional non-GAAP financial measures. We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance. We also believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our unaudited consolidated results of operations in the same manner as our management and in comparing financial results across accounting periods and to those of our peer companies.
We define adjusted EBITDA as net loss excluding depreciation and amortization, interest income, net, share-based compensation expenses, impairment of long-lived assets and change in fair value of warrant liability. We define adjusted net loss as net loss excluding share-based compensation expenses, impairment of long-lived assets and change in fair value of warrant liability. We believe that adjusted EBITDA and adjusted net loss provide useful information to investors and others in understanding and evaluating our operating results. These non-GAAP financial measures adjust for the impact of items that we do not consider indicative of the operational performance of our business and should not be considered in isolation or construed as an alternative to net loss or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to compare the historical non-GAAP financial measures with the most directly comparable GAAP measures. Adjusted EBITDA and adjusted net loss presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.
2
The following tables set forth a reconciliation of our adjusted EBITDA and adjusted net loss to net loss for the periods indicated.
| | Six Months Ended June 30, | ||||
| | 2022 | | 2023 | ||
|
| RMB |
| RMB |
| US$ |
| | (in thousands, except for share and per share data) | ||||
Net loss |
| (56,166) |
| (30,698) |
| (4,235) |
Add: |
| |
| |
| |
Depreciation and amortization |
| 3,673 |
| — |
| — |
Subtract: |
| |
| |
| |
Interest income, net |
| 29 |
| 69 |
| 9 |
EBITDA |
| (52,522) |
| (30,767) |
| (4,244) |
Add: |
| |
| |
| |
Share-based compensation expenses |
| 6,148 |
| 4,007 |
| 553 |
Change in fair value of warrant liability |
| — |
| (11,551) |
| (1,593) |
Impairment of long-lived assets |
| 15,614 |
| 1,515 |
| 209 |
Adjusted EBITDA |
| (30,760) |
| (36,796) |
| (5,075) |
| | Six Months Ended June 30, | ||||
| | 2022 | | 2023 | ||
|
| RMB |
| RMB |
| US$ |
| | (in thousands, except for share and per share data) | ||||
Net loss |
| (56,166) |
| (30,698) |
| (4,235) |
Add: |
| |
|
|
|
|
Share-based compensation expenses |
| 6,148 |
| 4,007 |
| 553 |
Change in fair value of warrant liability |
| — |
| (11,551) |
| (1,593) |
Impairment of long-lived assets |
| 15,614 |
| 1,515 |
| 209 |
Adjusted net loss |
| (34,404) |
| (36,727) |
| (5,066) |
Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022
Net Revenues
Our net revenues increased by 3.3% from RMB89.2 million in the six months ended June 30, 2022 to RMB92.2 million (US$12.7 million) in the six months ended June 30, 2023, primarily representing the increase in revenue generated from offline marketing services.
● | Net revenues from auto show services increased by 174.6% from RMB25.2 million in the six months ended June 30, 2022 to RMB69.3 million (US$9.6 million) in the six months ended June 30, 2023, primarily due to an increased number of offline activities as a result of lifted pandemic restrictions. In the six months ended June 30, 2022 and 2023, we and the VIEs organized 61 and 183 auto shows in 49 and 80 cities, offering a total of 1,303 and 4,301 booths, respectively. |
● | Net revenues from special promotion event services increased by 37.3% from RMB0.4 million in the six months ended June 30, 2022 to RMB0.6 million (US$0.1 million) in the six months ended June 30, 2023, primarily due to an increased number of special promotion events as a result of lifted pandemic restrictions. |
● | Net revenues from referral service for a commercial bank decreased by 90.3% from RMB26.5 million in the six months ended June 30, 2022 to RMB2.6 million (US$0.4 million) in the six months ended June 30, 2023, primarily because we and the VIEs have ceased operation of the referral services since April 1, 2022. |
● | Net revenues from our online marketing services decreased by 44.0% from approximately RMB15.6 million in the six months ended June 30, 2022 to RMB8.8 million (US$1.2 million) in the six months ended June 30, 2023, primarily due to the decrease in the live streaming events held by the Company as the Company was in re-negotiation with key customers about the future cooperation plan and it had impact on the revenue scale from online marketing services. |
3
● | Net revenues from others services decreased by 48.9% from approximately RMB21.4 million in the six months ended June 30, 2022 to RMB11.0 million (US$1.5 million) in the six months ended June 30, 2023, primarily due to the decrease in aftermarket promotion service and SaaS service. |
Cost of Revenues
Our cost of revenues increased by 98.9% from RMB17.0 million in the six months ended June 30, 2022 to RMB33.7 million (US$4.7 million) in the six months ended June 30, 2023, primarily due to the following reasons.
● | Our venue set-up costs increased by 182.2% from RMB3.1 million in the six months ended June 30, 2022 to RMB8.8 million (US$1.2 million) in the six months ended June 30, 2023, generally in line with the increases in net revenues from auto show services and special promotion event services. |
● | Our venue rental costs increased by 164.3% from RMB4.0 million in the six months ended June 30, 2022 to RMB10.7 million (US$1.5 million) in the six months ended June 30, 2023. Both are primarily due to an increase in the number of auto shows we organized and set up from 61 in the six months ended June 30, 2022 to 183 in the six months ended June 30, 2023. |
● | Our other direct costs increased by 45.6% from RMB9.8 million in the six months ended June 30, 2022 to RMB14.3 million (US$2.0 million) in the six months ended June 30, 2023, primarily due to an increase in information acquisition costs in connection with our and the VIEs’ online marketing services. |
Gross Profit
As a result of the foregoing, our gross profit decreased by 19.1% from RMB72.3 million in the six months ended June 30, 2022 to RMB58.4 million (US$8.1 million) in the six months ended June 30, 2023.
Operating Expenses
Our total operating expenses decreased by 14.0% to RMB113.6 million (US$15.7 million) in the first half of 2023 from RMB132.1 million in the same period of the prior year.
● | Our selling and marketing expenses increased by 4.6% to RMB80.7 million (US$11.1 million) in the first half of 2023 from RMB77.2 million in the same period of the prior year, primarily due to an increase in promotion expenses, as a result of increased volume of offline events. |
● | Our general and administrative expenses decreased by 12.2% to RMB23.7 million (US$3.3 million) in the first half of 2023 from RMB26.9 million in the same period of the prior year, primarily due to a decrease in amortization of intangible assets as a result of impairment of in intangible assets and a decrease in the general and administrative staff compensation expenses as a result of the optimization of the company’s workforce. |
● | Our research and development expenses decreased by 38.0% to RMB7.7 million (US$1.1 million) in the first half of 2023 from RMB12.4 million in the same period of the prior year, primarily due to decrease in the research and development staff compensation expenses, as a result of the optimization of the company’s workforce. |
● | Impairment of long-lived assets decreased by 90.3% to RMB1.5 million (US$0.2 million) in the first half of 2023 from RMB15.6 million in the same period of the prior year, primarily due to decrease in impairment in relation to intangible assets and right-of-use assets. |
Operating Loss
As a result of the foregoing, our operating loss decreased by 7.9% from RMB59.9 million in the six months ended June 30, 2022 to RMB55.2 million (US$7.6 million) in the six months ended June 30, 2023.
4
Net Loss
As a result of the foregoing, we had net loss of RMB56.2 million and RMB30.7 million (US$4.2 million) in the six months ended June 30, 2022 and 2023, respectively.
Liquidity and Capital Resources
Our principal sources of liquidity have been cash generated from operations, proceeds from our initial public offering and loans from banks.
As of June 30, 2023, we had RMB21.9 million (US$3.0 million) in cash and cash equivalents and RMB6.7 million (US$0.9 million) in restricted cash. As of the same date, we held a cash balance of RMB8.3 million (US$1.1 million) denominated in RMB, representing 37.6% of our total cash, cash equivalents and restricted cash.
We have incurred recurring operating losses since our inception, including net losses of RMB56.2 million and RMB30.7 million (US$4.2 million) in the six months ended June 30, 2022 and 2023, respectively. Net cash used in operating activities was RMB55.4 million and RMB52.4 million (US$7.2 million) in the six months ended June 30, 2022 and 2023, respectively. Accumulated deficit was RMB1,180.8 million (US$162.8 million) as of June 30, 2023. As of June 30, 2023, we had a net current asset of RMB28.1 million (US$3.9 million). The control measurement of COVID-19 has been removed and the Company’s business is recovering from COVID-19, especially offline auto show business. However, the recovery of the company’s business still encountered some difficulties, including weak economic growth of China and resignation of staffs, negatively impacted the Group’s business operations for the six months ended June 30, 2023 and has continued to impact the Group’s financial position, results of operations and cash flows. These conditions raise substantial doubt about the Group’s ability to continue as a going concern.
Historically, we have relied principally on cash from operating activities, non-operational sources of financing from investors to fund our operations and business development. Our ability to continue as a going concern is dependent on our management’s ability to successfully execute the business plan which includes strictly implemented the expenses, accelerating the collection of accounts receivable and increasing the proportion of advance from customers, pursuing potential financing to improve our cash flow from operating and financing activities. Based on cash flow projections from operating and financing activities, our current balance of cash and cash equivalents on our operations, our management believes that our current cash and cash equivalents and anticipated cash flow from operations upon successful execution of our business plans will be sufficient to meet our anticipated cash needs from operations and other commitments for at least the next 12 months from the date of this interim report. However, there is no assurance that the plans will be successfully implemented. Failure to successfully implement the plan will have a material adverse effect on our business, results of operations and financial position, and may materially and adversely affect our ability to continue as a going concern.
We have not yet achieved a business scale that is able to generate a sufficient level of revenues to achieve net profit and positive cash flows from operating activities, and we expect the operating losses and negative cash flows from operations will continue for the foreseeable future. While we believe that our current cash and cash equivalents and other current assets are sufficient to meet the cash requirements to fund planned operations and other commitments for at least the next 12 months from the date of this interim report, if we fail to grow our business in a way that generates sufficient returns, we may need additional financing to execute our business plans. If additional financing is required, we cannot predict whether this additional financing will be in the form of equity, debt, or another form, and we may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. If financing sources are not available, or if we are unsuccessful in increasing our gross profit margin and reducing operating losses, we may be unable to implement our current plans for expansion, repay debt obligations or compete with other market participants effectively, any of which would have a material adverse effect on our business, financial condition and results of operations and would materially and adversely affect our ability to continue as a going concern.
Our unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of uncertainties described above.
5
The following table sets forth a summary of our cash flows for the periods indicated.
| | Six Months Ended June 30, | ||||
| | 2022 | | 2023 | ||
|
| RMB |
| RMB |
| US$ |
| | (in thousands, except for share and per share data) | ||||
Net cash used in operating activities |
| (55,372) |
| (52,408) |
| (7,227) |
Net cash used in investing activities |
| (116) |
| — |
| — |
Net cash (used in)/generated from financing activities |
| (2,060) |
| 3,435 |
| 474 |
Effect of exchange rate on cash and cash equivalents |
| 380 |
| 791 |
| 109 |
Net decrease in cash, cash equivalents and restricted cash |
| (57,168) |
| (48,182) |
| (6,644) |
Cash and cash equivalents, and restricted cash at beginning of the period |
| 97,298 |
| 76,843 |
| 10,597 |
Cash and cash equivalents, and restricted cash at end of the period |
| 40,130 |
| 28,661 |
| 3,953 |
Operating Activities
Cash used in operating activities was RMB52.4million (US$7.2 million) in the six months ended June 30, 2023. In the six months ended June 30, 2023, the difference between our cash used in operating activities and our net loss of RMB30.7 million (US$4.2 million) resulted primarily from (1) a decrease in accounts receivable of RMB10.4 million (US$1.4 million), (2) allowance of doubtful accounts of RMB5.2 million (US$0.7 million), (3) an increase in advance from customers of RMB4.2 million (US$0.6 million), (4)share-based compensation of RMB4.0 million (US$0.6 million) and (5) provisions for long-lived asset impairment of RMB1.5 million (US$0.2 million), partially offset by (1) a decrease in prepayment and other current assets of RMB12.4 million (US$1.7 million), (2) gain on changes in fair value of warrant liability of RMB11.6 million (US$1.6 million), (3) other income on reverse of unpaid tax of RMB8.8 million (US$1.2 million), (4) a decrease in accounts payable of RMB4.4 million (US$0.6 million), (5) a decrease in other current liabilities of RMB4.3 million (US$0.6 million) and (6) a decrease in salary and welfare benefits payable of RMB4.3 million (US$0.6 million).
Cash used in operating activities was RMB55.4 million in the six months ended June 30, 2022. In the six months ended June 30, 2022, the difference between our cash used in operating activities and our net loss of RMB56.2 million resulted primarily from (1) provisions for long-lived asset impairment of RMB15.6 million, (2) share-based compensation of RMB6.1 million, (3) allowance of doubtful accounts of RMB3.8 million, (4) depreciation and amortization of RMB3.7 million and (5) a decrease in accounts receivable of RMB7.4 million, partially offset by (1) a decrease in accounts payable of RMB16.4 million, (2) a decrease in advance from customers of RMB10.6 million, (3) a decrease in salary and welfare benefits payable of RMB3.5 million, (4) a decrease in guarantee liabilities of RMB2.5 million and (5) a decrease in other current liabilities of RMB1.6 million.
Investing Activities
Net cash used in investing activities was nil in the six months ended June 30, 2023.
Net cash used in investing activities was RMB0.1 million in the six months ended June 30, 2022, primarily due to purchase of software of RMB0.1 million.
Financing Activities
Net cash generated from financing activities was RMB3.4 million (US$0.5 million) in the six months ended June 30, 2023, primarily due to RMB7.1 million (US$1.0 million) received from short-term borrowings, partially offset by repayments of short-term borrowings of RMB3.7 million (US$0.5million).
Net cash used in financing activities was RMB2.1 million in the six months ended June 30, 2022, primarily due to repayments of short-term borrowings of RMB7.0 million, partially offset by RMB4.9 million received from short-term and long-term borrowings.
Indebtedness
As of June 30, 2023, the Group had RMB8.2 million (US$1.1 million) of short-term borrowings. The interest was payable on a monthly basis in the first three installments and payable on a monthly basis by equal principal and interest from the fourth installment.
Capital Expenditures
We incurred capital expenditures of RMB0.1 million and nil in the six months ended June 30, 2022 and 2023, respectively, primarily in connection with the purchase of property, equipment and software. We intend to fund our future capital expenditures with
6
our existing cash balance, proceeds from debt or equity financing and other financing alternatives. We will continue to incur capital expenditures to support the growth of our business.
Financial Information Related to the VIEs
The following table presents the unaudited condensed consolidated balance sheet information relating to TuanChe Limited (the “Parent”), the VIEs and the non-variable interest entities as of June 30, 2023.
| | As of June 30, 2023 | ||||||||||
| | | | | | Non-VIE | | | | | ||
| | | | VIE | | | | Other | | Intercompany | | Group |
|
| Parent |
| Consolidated |
| WFOE |
| subsidiaries |
| Elimination |
| Consolidated |
Cash, cash equivalents and restricted cash |
| 13,725 |
| 4,324 |
| 10,600 |
| 12 |
| — |
| 28,661 |
Amount due from the subsidiaries of the Group |
| 137,780 |
| 120,743 |
| 143,560 |
| 11,685 |
| (413,768) |
| — |
Other current assets |
| 10,186 |
| 31,213 |
| 52,704 |
| 75 |
| — |
| 94,178 |
Total current assets |
| 161,691 |
| 156,280 |
| 206,864 |
| 11,772 |
| (413,768) |
| 122,839 |
Long-term investments |
| — |
| 5,478 |
| — |
| — |
| — |
| 5,478 |
Investments in subsidiaries, VIEs and subsidiaries of VIEs |
| (72,147) |
| — |
| — |
| 754,858 |
| (682,711) |
| — |
Operating lease right-of-use assets, net |
| — |
| 578 |
| 7,258 |
| — |
| — |
| 7,836 |
Goodwill |
| — |
| — |
| 45,561 |
| — |
| — |
| 45,561 |
Other non-current assets |
| — |
| — |
| 522 |
| — |
| — |
| 522 |
Total non-current assets |
| (72,147) |
| 6,056 |
| 53,341 |
| 754,858 |
| (682,711) |
| 59,397 |
Total assets |
| 89,544 |
| 162,336 |
| 260,205 |
| 766,630 |
| (1,096,479) |
| 182,236 |
Accounts payable |
| — |
| 3,957 |
| 5,344 |
| — |
| — |
| 9,301 |
Amount due to the subsidiaries of the Group |
| 2,755 |
| 249,025 |
| 143,035 |
| 14,049 |
| (408,864) |
| — |
Short-term borrowings | | — | | 6,950 | | 1,200 | | — | | — | | 8,150 |
Short-term operating lease liabilities |
| — |
| 628 |
| 3,937 |
| — |
| — |
| 4,565 |
Other current liabilities |
| 7,260 |
| 30,750 |
| 34,700 |
| 39 |
| — |
| 72,749 |
Total current liabilities |
| 10,015 |
| 291,310 |
| 188,216 |
| 14,088 |
| (408,864) |
| 94,765 |
Warrant liability | | 13,245 | | — | | — | | — | | — | | 13,245 |
Lease liabilities, non-current |
| — |
| 333 |
| 7,537 |
| — |
| — |
| 7,870 |
Other non-current liabilities |
| 225 |
| 72 |
| — |
| — |
| — |
| 297 |
Total non-current liabilities |
| 13,470 |
| 405 |
| 7,537 |
| — |
| — |
| 21,412 |
Total liabilities |
| 23,485 |
| 291,715 |
| 195,753 |
| 14,088 |
| (408,864) |
| 116,177 |
Total equity/(deficit) |
| 66,059 |
| (129,379) |
| 64,452 |
| 752,542 |
| (687,615) |
| 66,059 |
The following table presents the unaudited condensed consolidated statements of operations and comprehensive loss and cash flows relating to the Parent, the VIEs and the non-variable interest entities for the six months ended June 30, 2022 and 2023.
7
Unaudited condensed statements of operations and comprehensive loss data
| | Six Months Ended June 30, 2023 | ||||||||||
| | | | | | Non-VIE | | | | | ||
| | | | VIE | | | | Other | | Intercompany | | Group |
|
| Parent |
| Consolidated |
| WFOE |
| subsidiaries |
| Elimination |
| Consolidated |
Net revenues |
| — |
| 34,220 |
| 60,399 |
| — |
| (2,467) |
| 92,152 |
Cost of revenues |
| — |
| (9,448) |
| (24,278) |
| — |
| — |
| (33,726) |
Operating expenses |
| (7,996) |
| (31,700) |
| (76,317) |
| (36) |
| 2,467 |
| (113,582) |
Loss from operations |
| (7,996) |
| (6,928) |
| (40,196) |
| (36) |
| — |
| (55,156) |
Equity in loss of subsidiaries, VIEs and subsidiaries of VIEs |
| (34,675) |
| — |
| — |
| — |
| 34,675 |
| — |
Other income net |
| 11,973 |
| 11,501 |
| 984 |
| — |
| — |
| 24,458 |
Net (loss)/income |
| (30,698) |
| 4,573 |
| (39,212) |
| (36) |
| 34,675 |
| (30,698) |
| | | | | | | | | | | | |
| | Six Months Ended June 30, 2022 | ||||||||||
| | | | | | Non-VIE | | | | | ||
| | | | VIE | | | | Other | | Intercompany | | Group |
|
| Parent |
| Consolidated |
| WFOE |
| subsidiaries |
| Elimination |
| Consolidated |
Net revenues |
| — |
| 43,012 |
| 48,572 |
| — |
| (2,373) |
| 89,211 |
Cost of revenues |
| — |
| (2,501) |
| (14,454) |
| — |
| — |
| (16,955) |
Operating expenses |
| (2,950) |
| (38,444) |
| (76,424) |
| (1,067) |
| 2,373 |
| (116,512) |
(Loss)/ income from operations |
| (2,950) |
| 2,067 |
| (42,306) |
| (1,067) |
| — |
| (44,256) |
Equity in loss of subsidiaries, VIEs and subsidiaries of VIEs |
| (53,527) |
| — |
| — |
| — |
| 53,527 |
| — |
Other income/(expenses), net |
| 311 |
| (12,888) |
| 476 |
| 191 |
| — |
| (11,910) |
Net loss |
| (56,166) |
| (10,821) |
| (41,830) |
| (876) |
| 53,527 |
| (56,166) |
Unaudited consolidated cash flow information
|
| Six Months Ended June 30, 2023 | ||||||||||
| | | | | | Non-VIE | | | | | ||
| | | | VIE | | | | Other | | Intercompany | | Group |
|
| Parent |
| Consolidated |
| WFOE |
| subsidiaries |
| Elimination |
| Consolidated |
Net cash generated from/(used in) operating activities |
| 13,041 |
| (6,083) |
| (59,340) |
| (26) |
| — |
| (52,408) |
Net cash used in investing activities |
| (58,274) |
| — |
| — |
| (56,565) |
| 114,839 |
| — |
Net cash generated from financing activities |
| — |
| 4,235 |
| 57,474 |
| 56,565 |
| (114,839) |
| 3,435 |
Effect of exchange rate changes |
| 1,790 |
| — |
| (999) |
| — |
| — |
| 791 |
Net decrease in cash,cash equivalents and restricted cash |
| (43,443) |
| (1,848) |
| (2,865) |
| (26) |
| — |
| (48,182) |
| | | | | | | | | | | | |
| | Six Months Ended June 30, 2022 | ||||||||||
| | | | | | Non-VIE | | | | | ||
| | | | VIE | | | | Other | | Intercompany | | Group |
|
| Parent |
| Consolidated |
| WFOE |
| subsidiaries |
| Elimination |
| Consolidated |
Net cash (used in)/generated from operating activities |
| (1,248) |
| 3,523 |
| (55,414) |
| 55 |
| (2,288) |
| (55,372) |
Net cash used in investing activities |
| (31,769) |
| — |
| (126) |
| (31,090) |
| 62,869 |
| (116) |
Net cash (used in)/generated from financing activities |
| — |
| (1,060) |
| 28,973 |
| 32,896 |
| (62,869) |
| (2,060) |
Effect of exchange rate changes |
| 1,312 |
| — |
| 864 |
| (1,796) |
| — |
| 380 |
Net (decrease)/increase in cash,cash equivalents and restricted cash |
| (31,705) |
| 2,463 |
| (25,703) |
| 65 |
| (2,288) |
| (57,168) |
8
Off-Balance Sheet Arrangements
We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our unaudited 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. 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 product development services with us.
Cautionary Statement Regarding Forward-Looking Statements
We have made statements in this report that constitute forward-looking statements. Forward-looking statements involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “we believe,” “we intend,” “may,” “should,” “could” and similar expressions. These statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements.
These forward-looking statements include statements about:
The ultimate correctness of these forward-looking statements depends upon a number of known and unknown risks and events. Many factors could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Consequently, you should not place undue reliance on these forward-looking statements.
The forward-looking statements speak only as of the date on which they are made; and, except as required by law we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
● | the continued growth of the automotive industry in mainland China; |
● | the impact of the COVID-19 pandemic on the PRC economy and our operations and financial performance; |
● | our and the VIEs’ ability to manage the expansion of our and the VIEs’ business and implement business strategies; |
● | our and the VIEs’ ability to maintain and develop favorable relationships with industry customers; |
● | our and the VIEs’ ability to attract and retain automobile consumers; |
● | our and the VIEs’ ability to compete effectively; and |
● | relevant government policies and regulations relating to our industry. |
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update this forward-looking information. Nonetheless, we reserve the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this interim report. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.
9
Document and Entity Information |
6 Months Ended |
---|---|
Jun. 30, 2023 | |
Document and Entity Information | |
Document Type | 6-K |
Document Period End Date | Jun. 30, 2023 |
Entity Registrant Name | TuanChe Ltd |
Entity Central Index Key | 0001743340 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY ¥ in Thousands, $ in Thousands |
Ordinary shares
Class A ordinary shares
CNY (¥)
shares
|
Ordinary shares
Class B ordinary shares
CNY (¥)
shares
|
Treasury stock
CNY (¥)
shares
|
Additional paid-in capital
CNY (¥)
|
Accumulated deficit
CNY (¥)
|
Accumulated other comprehensive gain/(loss)
CNY (¥)
|
TuanChe limited shareholders' equity
CNY (¥)
|
Non-controlling interests
CNY (¥)
|
Class A ordinary shares
shares
|
Class B ordinary shares
shares
|
CNY (¥) |
USD ($) |
---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2021 | ¥ 182 | ¥ 35 | ¥ (45,886) | ¥ 1,231,135 | ¥ (983,645) | ¥ (7,408) | ¥ 194,413 | ¥ (1,103) | ¥ 193,310 | |||
Balance (in shares) at Dec. 31, 2021 | shares | 267,408,260 | 55,260,580 | (14,907,047) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Shares issuance for vested restricted shares | ¥ 1 | (1) | ||||||||||
Shares issuance for vested restricted shares (in Shares) | shares | 1,775,750 | |||||||||||
Share-based compensation | 6,148 | 6,148 | 6,148 | |||||||||
Acquisition of non-controlling interests | (1,103) | (1,103) | ¥ 1,103 | |||||||||
Net loss | (56,166) | (56,166) | (56,166) | |||||||||
Foreign currency translation adjustment | 88 | 88 | 88 | |||||||||
Balance at Jun. 30, 2022 | ¥ 183 | ¥ 35 | ¥ (45,886) | 1,236,179 | (1,039,811) | (7,320) | 143,380 | 143,380 | ||||
Balance (in shares) at Jun. 30, 2022 | shares | 269,184,010 | 55,260,580 | (14,907,047) | |||||||||
Balance at Dec. 31, 2022 | ¥ 235 | ¥ 35 | ¥ (45,886) | 1,296,951 | (1,150,135) | (8,416) | 92,784 | 92,784 | ||||
Balance (in shares) at Dec. 31, 2022 | shares | 342,329,496 | 55,260,580 | (14,907,047) | 327,422,449 | 55,260,580 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Shares issuance for vested restricted shares (in Shares) | shares | 3,712,500 | |||||||||||
Share-based compensation | 4,007 | 4,007 | 4,007 | |||||||||
Net loss | (30,698) | (30,698) | (30,698) | $ (4,235) | ||||||||
Foreign currency translation adjustment | (34) | (34) | (34) | (5) | ||||||||
Balance at Jun. 30, 2023 | ¥ 235 | ¥ 35 | ¥ (45,886) | ¥ 1,300,958 | ¥ (1,180,833) | ¥ (8,450) | ¥ 66,059 | ¥ 66,059 | $ 9,109 | |||
Balance (in shares) at Jun. 30, 2023 | shares | 346,041,996 | 55,260,580 | (14,907,047) | 331,134,949 | 55,260,580 |
Organization and Reorganization |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization and Reorganization | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Reorganization | 1.Organization and Reorganization TuanChe Limited (the “Company”) was incorporated in the Cayman Islands on September 28, 2012. The Company is a holding company and conducts its business mainly through its subsidiaries, variable interest entities (“VIEs”) and subsidiaries of VIEs (collectively referred to as the “Group”). The Group commenced operations through TuanChe Internet, a PRC company established by several PRC citizens in May 2012. TuanChe Internet holds an Internet Content Provider (“ICP”) license to operate Tuanche.com that provides internet information services to automobile manufacturers, car dealers and consumers. The Group is primarily engaged in the operation of providing auto shows, special promotion events services, referral service for a commercial bank, online marketing services, subscription and support service, aftermarket promotion service, customer referral services and other related businesses in the People’s Republic of China (the “PRC” or “China”). Contractual arrangements with VIEs PRC laws and regulations place certain restrictions on foreign investment in value-added telecommunication service businesses. The Group conduct operations in the PRC partially through TuanChe Internet, Drive New Media, Internet Drive Technology and Tansuojixian, which are variable interest entities, or VIEs, and their subsidiaries, collectively referred to as consolidated affiliated entities. The Group have entered into a series of contractual arrangements, through TuanYuan, Sangu Maolu and Chema, or its WFOEs, with each of its VIEs and their respective shareholders, respectively. The series of contractual arrangements include exclusive business cooperation agreement, exclusive call option agreement, equity pledge agreement, powers of attorney and spousal consent letters. The Group believes that these contractual arrangements enable the Company to (1) have power to direct the activities that most significantly affects the economic performance of the VIEs, and (2) receive the economic benefits of the VIEs that could be significant to the VIEs. Accordingly, the Company is considered the primary beneficiary of the VIEs and is able to consolidate the VIEs and VIEs’ subsidiaries. Risks in relation to the VIE structure A significant part of the Company’s business is conducted through the VIEs of the Group, of which the Company is the ultimate primary beneficiary. In the opinion of management, the contractual arrangements with the VIEs and the nominee shareholders are in compliance with PRC laws and regulations and are legally binding and enforceable. The nominee shareholders are also shareholders of the Group and have indicated they will not act contrary to the contractual arrangements. However, there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations including those that govern the contractual arrangements, which could limit the Group’s ability to enforce these contractual arrangements and if the nominee shareholders of the VIEs were to reduce their interests in the Group, their interest may diverge from that of the Group and that may potentially increase the risk that they would seek to act contrary to the contractual arrangements. 1.Organization and Reorganization (Continued) Risks in relation to the VIE structure (Continued) In January 2015, the Ministry of Commerce (“MOFCOM”), released for public comment a proposed PRC law, the Draft Foreign Investment Enterprises (“FIE”) Law, that appears to include VIEs within the scope of entities that could be considered to be FIEs, that would be subject to restrictions under existing PRC law on foreign investment in certain categories of industry. Specifically, the Draft FIE Law introduces the concept of “actual control” for determining whether an entity is considered to be an FIE. In addition to control through direct or indirect ownership or equity, the Draft FIE Law includes control through contractual arrangements within the definition of “actual control”. On March 15, 2019, the National People’s Congress adopted the Foreign Investment Law of the PRC, which became effective on January 1, 2020 and replaced three laws regulating foreign investment in China, namely, the Wholly Foreign-Invested Enterprise Law of the PRC, the Sino-Foreign Cooperative Joint Venture Enterprise Law of the PRC and the Sino-Foreign Equity Joint Venture Enterprise Law of the PRC, together with their implementation rules and ancillary regulations. On December 26, 2019, the State Council issued the Regulations on Implementing the Foreign Investment Law of the PRC, which came into effect on January 1, 2020, and replaced the Regulations on Implementing the Sino-Foreign Equity Joint Venture Enterprise Law, Provisional Regulations on the Duration of Sino-Foreign Equity Joint Venture Enterprise Law, the Regulations on Implementing the Wholly Foreign-Invested Enterprise Law, and the Regulations on Implementing the Sino-Foreign Cooperative Joint Venture Enterprise Law. The Foreign Investment Law of the PRC embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. Under the Foreign Investment Law of the PRC, VIEs that are controlled via contractual arrangement would not be absolutely deemed as Foreign-Invested Enterprises, or FIEs. Therefore, the current legal status of Contractual Arrangement as a whole and each of the agreements comprising the Contractual Arrangement will not be materially affected by the Foreign Investment Law of the PRC and its implementing regulations. However, since it is relatively new, uncertainties still exist in relation to its interpretation and implementation. For example, the Foreign Investment Law of the PRC adds a catch-all clause to the definition of “foreign investment” so that foreign investment, by its definition, includes “investments made by foreign investors in China through other means defined by other laws or administrative regulations or provisions promulgated by the State Council” without further elaboration on the meaning of “other means.” It leaves leeway for the future legislations promulgated by the State Council to provide for contractual arrangements as a form of foreign investment. It is therefore uncertain whether the Group’s corporate structure will be seen as violating the foreign investment rules as the Group is currently leverage the contractual arrangement to operate certain businesses in which foreign investors are prohibited from or restricted to investing. Furthermore, if future legislations prescribed by the State Council mandate further actions to be taken by companies with respect to existing contractual arrangement, the Group may face substantial uncertainties as to whether the Group can complete such actions in a timely manner, or at all. If the Group fails to take appropriate and timely measures to comply with any of these or similar regulatory compliance requirements, the Group’s current corporate structure, corporate governance and business operations could be materially and adversely affected. The Company’s ability to control the VIEs also depends on the Power of Attorney the shareholders has to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Company believes these Power of Attorney are legally enforceable but may not be as effective as direct equity ownership. 1.Organization and Reorganization (Continued) Risks in relation to the VIE structure (Continued) In addition, if the Group’s corporate structure or the contractual arrangements with the VIEs were found to be in violation of any existing or future PRC laws and regulations, the PRC regulatory authorities could, within their respective jurisdictions:
The imposition of any of these restrictions or actions could result in a material adverse effect on the Group’s ability to conduct its business. In such case, the Group may not be able to operate or control the VIEs, which may result in deconsolidation of the VIEs in the Group’s consolidated financial statements. In the opinion of the Company’s management, the likelihood for the Group to lose such ability is remote based on current facts and circumstances. The Group believes that the contractual arrangements among each of the VIEs, their respective shareholders and relevant wholly foreign owned enterprise are in compliance with PRC law and are legally enforceable. The Group’s operations depend on the VIEs to honor their contractual arrangements with the Group. These contractual arrangements are governed by PRC law and disputes arising out of these agreements are expected to be decided by arbitration in the PRC. Management believes that each of the contractual arrangements constitutes valid and legally binding obligations of each party to such contractual arrangements under PRC laws. However, the interpretation and implementation of the laws and regulations in the PRC and their application on the legality, binding effect and enforceability of contracts are subject to the discretion of competent PRC authorities, and therefore there is no assurance that relevant PRC authorities will take the same position as the Group herein in respect of the legality, binding effect and enforceability of each of the contractual arrangements. Meanwhile, since the PRC legal system continues to evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to the Group to enforce the contractual arrangements should the VIEs or the nominee shareholders of the VIEs fail to perform their obligations under those arrangements. 1.Organization and Reorganization (Continued) Risks in relation to the VIE structure (Continued) The following combined financial information of the Group’s VIEs as of December 31, 2022 and June 30,2023 and for the six months ended June 30, 2022 and 2023 were included in the accompanying condensed consolidated financial statements of the Group as follows:
1.Organization and Reorganization (Continued) Risks in relation to the VIE structure (Continued) In accordance with various contractual agreements, the Company has the power to direct the activities of the VIEs and subsidiaries of VIEs and can have assets transferred out of the VIEs. Therefore, the Company considers that there are no assets in the respective VIEs that can be used only to settle obligations of the respective VIEs, except for the registered capital of the VIEs amounting to approximately RMB40.1 million and RMB40.1 million as of December 31, 2022 and June 30, 2023, respectively. As the respective VIEs are incorporated as limited liability companies under the PRC Company Law, creditors do not have recourse to the general credit of the Company for the liabilities of the respective VIEs. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. As the Group is conducting certain businesses in the PRC through the VIEs, the Group may provide additional financial support on a discretionary basis in the future, which could expose the Group to a loss. There is no VIE in the Group where the Company or any subsidiary has a variable interest but is not the primary beneficiary. |
Going Concern and impact of COVID-19 pandemic |
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Jun. 30, 2023 | |
Going Concern and impact of COVID-19 pandemic | |
Going Concern and impact of COVID-19 pandemic | 2.Going Concern and impact of COVID-19 pandemic The Group has incurred recurring operating losses since its inception, including net losses of RMB101.9 million and RMB166.5 million (as restated) for the years ended December 31, 2021 and 2022, respectively and net losses of RMB30.7 million for the six months ended June 30, 2023. Net cash used in operating activities were RMB92.3 million and RMB109.7 million for the years ended December 31, 2021 and 2022, respectively and cash used in operating activities of RMB52.4 million for the six months ended June 30, 2023. Accumulated deficit was RMB1,180.8 million as of June 30, 2023. As of June 30, 2023, the Company had cash and cash equivalents of RMB21.9 million. The control measurement of COVID-19 has been removed and the Company’s business is recovering from COVID-19, especially offline auto show business. However, the recovery of the company’s business still encountered some difficulties, including weak economic growth of China and resignation of staffs, negatively impacted the Group’s business operations for the six months ended June 30, 2023 and has continued to impact the Group’s financial position, results of operations and cash flows. These conditions raise substantial doubt about the Group’s ability to continue as a going concern. Historically, the Group has relied principally on both operational sources of cash and non-operational sources of financing from investors to fund its operations and business development. The Group’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan which includes strictly implemented the expenses, accelerating the collection of accounts receivable and increasing the proportion of advance from customers, pursuing cooperation opportunities for electric vehicles industry and potential financing to improve the Group’s cash flow from operations and financing. At present, China’s economy is still in the process of recovering from the COVID-19 epidemic. Due to that the control measurement of COVID-19 has been removed, the Group’s offline auto show business has greatly recovered compared to prior year. However, the Group’s live streaming business need to intensified renegotiation with live streaming customers to continue and enhance the cooperation with them, and this faces the risk of failure, which has significantly impacted and may continue to impact the Group’s business, result of operations, financial condition and liquidity. If the Group fails to achieve these goals, the Group may need additional financing to execute its business plan. If additional financing is required, the Group cannot predict whether this additional financing will be in the form of equity, debt, or another form, and the Group may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In the event that financing sources are not available, or that the Group is unsuccessful in increasing its gross profit margin and reducing operating losses, the Group may be unable to implement its current plans for expansion, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on the Group’s business, financial condition and results of operations and would materially adversely affect its ability to continue as a going concern. The Group’s condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of such uncertainties. |
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Significant Accounting Policies | 3.Significant Accounting Policies a)Basis of presentation The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and, therefore, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted. In the opinion of management, the information reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature. Half year results are not necessarily indicative of results for the full year. The condensed consolidated balance sheet as of December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 20-F/A for the fiscal year ended December 31, 2022. b)Principles of consolidation The condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, VIEs and subsidiaries of VIEs for which the Company is the primary beneficiary. Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All transactions and balances among the Company, its subsidiaries, VIEs and subsidiaries of VIEs have been eliminated upon consolidation. c)Use of estimates The preparation of the Group’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the balance sheet date and reported revenues and expenses during the reported periods in the condensed consolidated financial statements and accompanying notes. Significant accounting estimates include, but are not limited to determining the provision for accounts receivable, provision for prepayment and other current assets, assessment for valuation allowance of deferred tax assets, valuation and recognition of share-based compensation expenses, impairment assessment on goodwill and long-lived assets, long-term investments, valuation of warrant liabilities. d)Convenience Translation Translations of balances in the condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss and condensed consolidated statements of cash flows from RMB into US$ as of and for the six months ended June 30, 2023 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB7.2513 representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York on June 30, 2023. No representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate on June 30, 2023, or at any other rate. 3.Significant Accounting Policies (Continued) e)Fair value measurements Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value:
The Group’s financial instruments include cash and cash equivalents, restricted cash, accounts and notes receivable, prepayment and other current assets, long-term investments, short-term borrowings, accounts payable, other payables and other liabilities of which the carrying values approximate their fair value due to their short term in nature and other liabilities. The fair value of warrant liability was determined using the Black Scholes Model, with level 3 inputs (Note 14). f)Accounts and notes receivables, net The carrying value of accounts receivable is reduced by an allowance that reflects the Group’s best estimate of the amounts that will not be collected. An allowance for doubtful accounts is recorded in the period when a loss is probable based on an assessment of specific evidence indicating collection is unlikely, historical bad debt rates, accounts aging, financial conditions of the customer and industry trends. Starting from January 1, 2021, the Group adopted ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”). The Group’s accounts receivable and other receivables are within the scope of ASC Topic 326. To estimate expected credit losses, the Group has identified the relevant risk characteristics of the receivables which include size and nature. Receivables with similar risk characteristics have been grouped into pools. For each pool, the Group considers the past collection experience, current economic conditions and future economic conditions (external data and macroeconomic factors). This is assessed at each quarter based on the Group’s specific facts and circumstances. There have been no significant changes in the assumptions since adoption. Accounts receivable balances are written off against the allowance when they are determined to be uncollectible. Notes receivable represents notes receivable issued by reputable financial institutions that entitle the Group to receive the full face amount from the financial institutions at maturity. Refer to Note 5 for details. 3.Significant Accounting Policies (Continued) g)Goodwill Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an acquired business. The Group’s goodwill as of December 31, 2022 and June 30, 2023 was related to its acquisition of Longye in January 2020. In accordance with ASC 350, Goodwill and Other Intangible Assets, recorded goodwill amounts are not amortized, but rather are tested for impairment annually or more frequently if there are indicators of impairment present. Goodwill is tested for impairment at the reporting unit level on an annual basis (December 31 for the Group) and between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. These events or circumstances include a significant change in stock prices, business environment, legal factors, financial performances, competition, or events affecting the reporting unit. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The estimation of fair value of reporting unit using a discounted cash flow methodology also requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the Group’s business, estimation of the useful life over which cash flows will occur, and determination of the Group’s weighted average cost of capital. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results and market conditions. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for the reporting unit. Management has determined that the Group has one reporting unit within the entity at which goodwill is monitored for internal management purposes. Starting from January 1, 2020, the Group adopted ASU 2017-04, which simplifies the accounting for goodwill impairment by eliminating Step 2 from the goodwill impairment test. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, versus determining an implied fair value in Step 2 to measure the impairment loss. Management evaluated the recoverability of goodwill by performing a qualitative assessment before using the quantitative impairment test approach at the reporting unit level. Based on an assessment of the qualitative factors, management determined that it is more-likely-than-not that the fair value of the reporting unit is more than its carrying amount as of June 30, 2022 and 2023. Therefore, management performed quantitative assessment, nil and nil impairment loss was recognized for the six months ended June 30, 2022 and 2023, respectively. If the Group reorganizes its reporting structure in a manner that changes the composition of its reporting units, goodwill is reassigned based on the relative fair value of each of the affected reporting units. h)Impairment of long-lived assets Long-lived assets or asset group, including intangible assets with finite lives, are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. The Group recognized RMB15.6 million and RMB1.5 million impairment charge related to long-lived assets for the six months ended June 30, 2022 and 2023, respectively. 3.Significant Accounting Policies (Continued) i)Revenue recognition The Group recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services using the five steps defined under ASC Topic 606. The Group determines revenue recognition through the following steps:
Revenue is recognized upon transfer of control of promised goods or services to a customer. Revenue is recorded net of Value Added Tax (“VAT”) and related surcharges collected from customers, which are subsequently remitted to government authorities. Offline marketing services revenue Auto shows revenue The Group’s online website and offline infrastructure allow them to organize auto shows, which aim at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers. The Group charges a fixed admission fee per auto show event from its industry customers for arranging, decorating and providing booth space at auto shows. The Group has identified one performance obligation for the transaction - providing a decorated venue for auto dealers, automakers and automotive service providers, as the individual service promised in auto show contracts are not distinct individually. As the Group has control of the auto show services and discretion in establishing the price of auto show admission fee to auto dealers, automakers and other automotive service providers, it is considered to be a principal in accordance with ASC 606. The auto shows revenue is recognized on a straight-line basis over the period of the contract, which is usually from two days to four days, when the services are provided. Special promotion events revenue The Group provides integrated services to support auto dealers’ own special promotion events during a specific period. The services include event planning and execution, marketing, training and onsite coaching, etc. The Group charges a fixed service fee per special promotion event. The Group has identified one performance obligation as the individual service promised in service contracts are not distinct individually. As the Group has control of the service and discretion in establishing the price of the fee to auto dealers, it is considered to be a principal in accordance with ASC 606. The special promotion events revenue is recognized on a straight-line basis over the promotion period of the contract, which is usually one week, when the services are provided. 3.Significant Accounting Policies (Continued) i)Revenue recognition (Continued) Referral service for commercial bank revenue In October 2019, the Group commenced its auto loan referral services in collaboration with a commercial bank. The referral services provided to the bank include (i) referral services and (ii) periodic guarantee for the following time periods: (a) from the date of loan issuance by the commercial bank to the consumer to the date when the consumer’s vehicle mortgage registration is completed (the mortgage registration procedures should be completed within 120 days after the loan issuance) and (b) no overdue of more than 30 days for any of the first 3 monthly repayment. The referral service and periodic guarantee are two separate performance obligations that meet the criteria to be considered distinct, of which, referral services revenue is recognized at a point in time upon the delivery of the services and a guarantee liability is recorded at fair value at inception of the loans. Revenue from the periodic guarantee is recognized by a systematic and rational amortization method over the term of guarantee period. The Company has ceased the cooperation since April 2022. Online marketing services revenue The Group’s online marketing services revenue primarily include (i) live streaming promotion events services, (ii) customer referral services, (iii) marketing information services and (iv) demand-side platform services. The Group commenced its live streaming promotion events services from the first quarter of 2020, holding promotional events on the live streaming platform of Zhejiang Tmall Technology Co., Ltd. (“Tmall”), which aims at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers. The Group identified only one performance obligation that is to provide the industry customers with arranging, decorating and providing the platform for live show. The Group charges a fixed admission fee per live streaming promotion event from its industry customers. As the Group has control of the services and discretion in establishing the price of live streaming promotion admission fee to auto dealers, automakers and other automotive service providers, it is considered to be a principal in accordance with ASC 606. The live streaming promotion events services revenue is recognized on a straight-line basis over the promotion period of the contract, which is usually one week, when the services are provided. Other revenue The Group also commenced its customer referral services from the first quarter of 2020 by referring its industry customers to Beijing Baidu Netcom Science Technology Co., Ltd. (“Baidu”) to use the membership services of a Baidu’s auto content distribution platform. The Group identified only one performance obligation that is to provide referral service to Baidu. The Group charges Baidu a fixed rate commission fee based on the membership fee amount for the services rendered. Revenue is recognized at point-in-time when the industry customers successfully register as a membership of Baidu’s auto content distribution platform. For the marketing information services, the Group generates consumers’ demand information through its online channels and provides to the industry customers upon consumers’ consent. The Group identified only one performance obligation that is to provide consumer’s demand information to the industry customers. The marketing information service fee is charged based on the quantity of consumers’ demand information delivered. Revenue is recognized at a point in time upon the delivery of such consumers’ demand information. On January 13, 2020, the Company completed the acquisition of Longye a Software-as-a-Service (“SaaS”) company who mainly provides subscription and support services to industry customers, including auto dealers, automakers and automotive service providers, with access to cloud services, software licenses and related support and updates during the term of the arrangement. Cloud services allow industry customers to use the Group’s multi-tenant software without taking possession of the software. The Group identified the only one performance obligation that is to provide integrated cloud services to industry customers. The Group initially records the subscription and support services fee as deferred revenue upon receipt and then recognizes the revenue on a straight-line basis over the service period, which is usually from one year to five years. The subscription and support services revenue is recognized on a straight-line basis over the period of the contract when the services are provided. 3.Significant Accounting Policies (Continued) i)Revenue recognition (Continued) Starting from August 2021, the Group provides aftermarket promotion service to support auto dealers’ aftermarket promotion events during a period. The Group identified one performance obligation that is to provide promotion support services to industry customers. The promotion support service revenue is recognized over the period of the contract when the services are provided. Contract balances Contract liabilities primarily result from the timing difference between the Group’s satisfaction of performance obligation and the customers’ payment. Substantial all auto show revenue and referral service for commercial bank revenue and SaaS revenue are recognized over time during the six months ended June 30, 2022 and 2023. Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represent amounts invoiced and revenues recognized prior to invoicing when the Group has satisfied the Group’s performance obligation and has the unconditional rights to payment. The Group applied a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. The Group has no material incremental costs of obtaining contracts with customers that the Group expects the benefit of those costs to be longer than one year which need to be recognized as assets. j)Taxation Income taxes Current income taxes are provided on the basis of income/(loss) for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and any tax loss and tax credit carry forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates or tax laws is recognized in the consolidated statements of operations and comprehensive loss in the period the change in tax rates or tax laws is enacted. A valuation allowance is provided to reduce the amount of deferred income tax assets if it is considered more likely than not that some portion or all of the deferred income tax assets will not be realized. Uncertain tax positions In order to assess uncertain tax positions, the Group applies a more likely than not threshold and a two-step approach for the tax position measurement and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Group recognizes interest and penalties, if any, under accrued expenses and other current liabilities on its consolidated balance sheet and under other expenses in its consolidated statements of operations and comprehensive loss. The Group did not have any significant unrecognized uncertain tax positions as of December 31, 2022 and June 30, 2023. 3.Significant Accounting Policies (Continued) k)Warrant liability In connection with the issuances of ordinary shares, the Group issued warrants to purchase ordinary shares on November 23, 2022. The Group evaluates the warrants under Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging-Contracts in Entity’s Own Equity. Warrants recorded as liabilities are recorded at their fair value and remeasured on each reporting date with change in estimated fair value of warrant liability in the condensed consolidated statement of operations and comprehensive loss. l)Concentrations and Risks Advertising and promotional service provider The Group relied on advertising and promotional service providers and their affiliates for advertising and promotional service to support its operations during the six months ended June 30, 2022 and 2023. Total number of advertising and promotional service providers accounting for more than 10% is three and one for the six months ended June 30, 2022 and 2023, respectively. Credit risk Financial instruments that potentially subject the Group to the concentration of credit risk consist of cash and cash equivalents, restricted cash and accounts and notes receivable. As of December 31, 2022 and June 30, 2023, all of the Group’s cash and cash equivalents and restricted cash were held in large reputable financial institutions located in the United States of America or China, which management consider being of high credit quality. Accounts receivable is typically unsecured and is derived from revenue earned from the Company’s businesses. Major customers There were three and three customers whose receivable balances exceeded 10% of the total accounts receivable balances of the Group as December 31, 2022 and June 30, 2023, respectively. The aggregated percentage of the three and three customers as December 31, 2022 and June 30, 2023 was 76% and 69%, respectively. There were one customer (17%) and nil whose revenue exceed 10% of the total revenue of the Group for the six months ended June 30, 2022 and 2023, respectively. |
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Goodwill | 4.Goodwill The following table presents the Group’s goodwill as of the respective balance sheet dates:
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Accounts and notes receivables, net | 5.Accounts and notes receivables, net Accounts and notes receivables are consisted of the following:
The Group recognized the allowance for doubtful accounts of RMB135 and RMB1,840 for the six months ended June 30, 2022 and 2023, respectively. The Group recognized the write-off for doubtful accounts of nil and RMB770 for the six months ended June 30, 2022 and 2023, respectively |
Prepayment and other current assets, net |
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Prepayment and other current assets, net | 6.Prepayment and other current assets, net The following is a summary of prepayments and other current assets:
The Group recognized provisions for prepayment and other current assets of RMB3,648 and RMB3,360 for the six months ended June 30, 2022 and 2023, respectively. |
Taxation |
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Taxation | 7.Taxation a)Income taxes Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends by the Company in the Cayman Islands to their shareholders, no Cayman Islands withholding tax will be imposed. Hong Kong Commencing from the year of assessment 2018/2019, the first HK$2.0 million of profits earned by the Group’s subsidiaries incorporated in Hong Kong will be taxed at half the current tax rate (i.e., 8.25%) while the remaining profits will continue to be taxed at the existing 16.5% tax rate. Payments of dividends by the subsidiary to the Company are not subject to withholding tax in Hong Kong. China Effective from January 1, 2008, the PRC’s statutory income tax rate is 25%. The Company’s PRC subsidiaries are subject to income tax at the statutory rate of 25% except for TuanChe Internet, Tuan Yuan and Drive New Media, TuanChe Internet and Tuan Yuan have been reconfirmed as a “High and New Technology Enterprise” (“HNTE”) in 2018 for a period of 3 years and renewed in 2021, are subject to a preferential income tax rate of 15% from 2018 to 2023. Drive New Media, has been confirmed as a “High and New Technology Enterprise” (“HNTE”) in 2019 for a period of 3 years and renewed in 2022, is subject to a preferential income tax rate of 15% from 2019 to 2024. The following table presents a unaudited reconciliation of the differences between the statutory income tax rate and the Company’s effective income tax rate for the six months ended June 30, 2022 and 2023:
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Short-term borrowings |
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Short-term borrowings | 8.Short-term borrowings The borrowings as of December 31, 2022 were fully repaid in 2023. As of June 30, 2023, the Group had RMB8.2 million of short-term borrowings which were obtained in 2023. The interest was payable on a monthly or quarterly basis and the principal was due upon maturity or installments, as follows:
As of June 30, 2023, the loan 1 and 2 are guaranteed by a third party. |
Other current liabilities |
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Other current liabilities | 9.Other current liabilities The following is a summary of other current liabilities as of December 31, 2022 and June 30, 2023:
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Share-based Compensation |
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Share-based Compensation | 10.Share-based Compensation Description of stock option plan and Share option replacement In July 2012, the Group permits the grant of options of the Company to relevant directors, officers, other employees and consultants of the Company. Option awards are granted with an exercise price determined by the Board of Directors. Those option awards generally vest over a period of four years. The Group recognizes share-based compensation expenses in the condensed consolidated statements of operations and comprehensive loss based on awards ultimately expected to vest, after considering actual forfeitures. The Company has replaced these share options with restricted shares for all employees and nonemployees on June 15, 2018. In June 2018, the directors of the Company (the “Directors”) approved the TuanChe Limited Share Incentive Plan (the “Share Incentive Plan”). Under the Share Incentive Plan, 38,723,321 ordinary shares were issued to Best Cars for the restricted share awards at consideration of nil. Meanwhile, the incentive share options granted to employees and nonemployees of the Company were replaced by the restricted shares. As a result of the Share Incentive Plan, on June 15, 2018, a total of 15,473,653 share options of the Company were replaced by 13,740,480 restricted shares. The restricted shares awards are subject to the original vesting schedule of the replaced share options. The Company has recognized the incremental expenses immediately for those vested share options, the unvested portion will be recognized as expenses over the remaining vesting periods. 10.Share-based Compensation (Continued) On May 4, 2023, the directors of the Company (the “Directors”) approved the 2023 Share Incentive Plan (the “2023 Plan”). Under the Share Incentive Plan, 169,172,564 ordinary shares will issuance to our employees. For the six months ended June 30, 2023, the Company has granted 5,200,000 restricted shares to its employees. The total fair value of RMB1.3 million for those granted restricted shares will be recognized as expenses over the vesting periods of nil to 4 years. A summary of the restricted shares activities is presented below:
For the six months ended June 30, 2022 and 2023, total share-based compensation expenses recognized by the Group for the restricted shares granted were RMB6.1 million and RMB4.0 million, respectively. As of June 30, 2023, there was RMB3.7 million of unrecognized share-based compensation expenses related to the restricted shares granted. That expenses are expected to be recognized over a weighted-average period of 1.52 years. |
Equity |
6 Months Ended |
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Jun. 30, 2023 | |
Equity | |
Equity | 11.Equity Ordinary shares and Pre-funded Warrant On November 23, 2022, the Company issued 58,472,736 ordinary shares for a registered direct offering of approximately $15.0 million. The aggregate proceeds the Company received from this offering, net of commissions and other offering expenses, were $13.7 million. The offering consisted of (1) 3,654,546 ADSs and 1,800,000 pre-funded warrants to purchase ADSs (“Pre-Funded Warrant”) and (2) 5,454,546 ADSs warrants to purchase ADSs(“Warrant”). Each Warrant is exercisable to purchase one ADS for $2.75 and each Pre-Funded Warrant is exercisable to purchase one ADS for $0.001. Each ADS represents sixteen (16) Class A ordinary shares of the Company. The Pre-Funded Warrant became immediately exercisable upon issuance and may be exercised at any time until all of the Pre-Funded Warrant are exercised in full. The Warrant has a term of five years from the issuance date. On November 25, 2022, 800,000 pre-funded warrants had been exercised, 12,800,000 ordinary shares were issued upon such exercise. The Company determined that the Pre-Funded Warrant meet the requirements for equity classification. The Pre-Funded warrants were recorded at their fair value on the date of issuance as a component of total equity. In addition, since these Pre-Funded warrants are exercisable for a nominal amount, they have been shown as exercised when issued and as outstanding common stock in the consolidated financial statements and earnings per share calculations. 1,000,000 pre-funded warrants have not been exercised as of June 30, 2023. Warrant On November 23, 2022, the Warrant are classified as a liability and the fair value allocated to the Warrant was RMB36.8 million. The Warrant liability will be re-measured at each reporting period until the warrant are exercised or expire and any changes will be recognized in the statement of operations and comprehensive loss. The fair value of Warrant were RMB24.4 million and RMB13.2 million as of December 31, 2022 and June 30, 2023, respectively. No warrants were exercised as of June 30, 2023. |
Net Loss Per Share |
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Net Loss Per Share | 12.Net Loss Per Share As the Group incurred losses for the six months ended June 30, 2022 and 2023, the potential and restricted shares granted were anti-dilutive and excluded from the calculation of diluted net loss per share of the Company. The following table sets unaudited forth the computation of basic and diluted net loss per share for the six months ended June 30, 2022 and 2023:
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Commitments and contingencies |
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Jun. 30, 2023 | |
Commitments and contingencies. | |
Commitments and contingencies | 13.Commitments and contingencies Litigation From time to time, the Group is involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, management does not believe that the ultimate outcome of any unresolved matters, individually and in the aggregate, is reasonably possible to have a material adverse effect on the Group’s financial position, results of operations or cash flows. However, litigation is subject to inherent uncertainties and the Group’s view of these matters may change in the future. The Group records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Group reviews the need for any such liability on a regular basis. The Group has not recorded any material liabilities in this regard as of December 31, 2022 and June 30, 2023. |
Fair Value Measurement |
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Fair Value Measurement | 14.Fair Value Measurement
14.Fair Value Measurement (Continued)
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Related party transactions and balance |
6 Months Ended |
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Jun. 30, 2023 | |
Related party transactions and balance | |
Related party transactions and balance | 15.Related party transactions and balance The Company entered into outsourcing service agreements with Shanghai Three Drivers Culture Media Co., Limited (“STDC”). The outsourcing service expenses provided by STDC for the Company are RMB602 and RMB1,286 for the six months ended June 30, 2022 and 2023, respectively.The Company entered into promotion service agreements with STDC, under which the promotion service expenses provided by the Company for STDC are nil and RMB565 for the six months ended June 30, 2022 and 2023. The prepayment balance is RMB248 and RMB2,298 as for December 31, 2022 and June 30, 2023, respectively. For the six months ended June 30, 2022 and 2023, the Company provided nil and RMB12,591 to CEO, Mr. Wen, who assisted business development with third parties on behalf of the Group and RMB12,461 has been repaid by CEO within the six months ended June 30, 2023. The other payable balance due to CEO are RMB130 and nil as of December 31, 2022 and June 30, 2023, respectively, which is included in other current liabilities in the consolidated balance sheets. |
Subsequent event |
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Jun. 30, 2023 | |
Subsequent event | |
Subsequent event | 16.Subsequent event The Group has performed an evaluation of subsequent events through the date the financial statements were issued and has determined that there are no events that would have required adjustment or disclosure in the financial statements. |
Significant Accounting Policies (Policies) |
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Significant Accounting Policies | ||||||||||||||||
Basis of presentation | a)Basis of presentation The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and, therefore, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted. In the opinion of management, the information reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature. Half year results are not necessarily indicative of results for the full year. The condensed consolidated balance sheet as of December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements included in the Company’s Annual Report on Form 20-F/A for the fiscal year ended December 31, 2022. |
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Principles of consolidation | b)Principles of consolidation The condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, VIEs and subsidiaries of VIEs for which the Company is the primary beneficiary. Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All transactions and balances among the Company, its subsidiaries, VIEs and subsidiaries of VIEs have been eliminated upon consolidation. |
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Use of estimates | c)Use of estimates The preparation of the Group’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the balance sheet date and reported revenues and expenses during the reported periods in the condensed consolidated financial statements and accompanying notes. Significant accounting estimates include, but are not limited to determining the provision for accounts receivable, provision for prepayment and other current assets, assessment for valuation allowance of deferred tax assets, valuation and recognition of share-based compensation expenses, impairment assessment on goodwill and long-lived assets, long-term investments, valuation of warrant liabilities. |
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Convenience Translation | d)Convenience Translation Translations of balances in the condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss and condensed consolidated statements of cash flows from RMB into US$ as of and for the six months ended June 30, 2023 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB7.2513 representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York on June 30, 2023. No representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate on June 30, 2023, or at any other rate. |
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Fair value measurements | e)Fair value measurements Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value:
The Group’s financial instruments include cash and cash equivalents, restricted cash, accounts and notes receivable, prepayment and other current assets, long-term investments, short-term borrowings, accounts payable, other payables and other liabilities of which the carrying values approximate their fair value due to their short term in nature and other liabilities. The fair value of warrant liability was determined using the Black Scholes Model, with level 3 inputs (Note 14). |
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Accounts and notes receivables, net | f)Accounts and notes receivables, net The carrying value of accounts receivable is reduced by an allowance that reflects the Group’s best estimate of the amounts that will not be collected. An allowance for doubtful accounts is recorded in the period when a loss is probable based on an assessment of specific evidence indicating collection is unlikely, historical bad debt rates, accounts aging, financial conditions of the customer and industry trends. Starting from January 1, 2021, the Group adopted ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”). The Group’s accounts receivable and other receivables are within the scope of ASC Topic 326. To estimate expected credit losses, the Group has identified the relevant risk characteristics of the receivables which include size and nature. Receivables with similar risk characteristics have been grouped into pools. For each pool, the Group considers the past collection experience, current economic conditions and future economic conditions (external data and macroeconomic factors). This is assessed at each quarter based on the Group’s specific facts and circumstances. There have been no significant changes in the assumptions since adoption. Accounts receivable balances are written off against the allowance when they are determined to be uncollectible. Notes receivable represents notes receivable issued by reputable financial institutions that entitle the Group to receive the full face amount from the financial institutions at maturity. Refer to Note 5 for details. |
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Goodwill | g)Goodwill Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an acquired business. The Group’s goodwill as of December 31, 2022 and June 30, 2023 was related to its acquisition of Longye in January 2020. In accordance with ASC 350, Goodwill and Other Intangible Assets, recorded goodwill amounts are not amortized, but rather are tested for impairment annually or more frequently if there are indicators of impairment present. Goodwill is tested for impairment at the reporting unit level on an annual basis (December 31 for the Group) and between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. These events or circumstances include a significant change in stock prices, business environment, legal factors, financial performances, competition, or events affecting the reporting unit. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The estimation of fair value of reporting unit using a discounted cash flow methodology also requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the Group’s business, estimation of the useful life over which cash flows will occur, and determination of the Group’s weighted average cost of capital. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results and market conditions. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for the reporting unit. Management has determined that the Group has one reporting unit within the entity at which goodwill is monitored for internal management purposes. Starting from January 1, 2020, the Group adopted ASU 2017-04, which simplifies the accounting for goodwill impairment by eliminating Step 2 from the goodwill impairment test. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, versus determining an implied fair value in Step 2 to measure the impairment loss. Management evaluated the recoverability of goodwill by performing a qualitative assessment before using the quantitative impairment test approach at the reporting unit level. Based on an assessment of the qualitative factors, management determined that it is more-likely-than-not that the fair value of the reporting unit is more than its carrying amount as of June 30, 2022 and 2023. Therefore, management performed quantitative assessment, nil and nil impairment loss was recognized for the six months ended June 30, 2022 and 2023, respectively. If the Group reorganizes its reporting structure in a manner that changes the composition of its reporting units, goodwill is reassigned based on the relative fair value of each of the affected reporting units. |
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Impairment of long-lived assets | h)Impairment of long-lived assets Long-lived assets or asset group, including intangible assets with finite lives, are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. The Group recognized RMB15.6 million and RMB1.5 million impairment charge related to long-lived assets for the six months ended June 30, 2022 and 2023, respectively. |
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Revenue recognition | i)Revenue recognition The Group recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services using the five steps defined under ASC Topic 606. The Group determines revenue recognition through the following steps:
Revenue is recognized upon transfer of control of promised goods or services to a customer. Revenue is recorded net of Value Added Tax (“VAT”) and related surcharges collected from customers, which are subsequently remitted to government authorities. Offline marketing services revenue Auto shows revenue The Group’s online website and offline infrastructure allow them to organize auto shows, which aim at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers. The Group charges a fixed admission fee per auto show event from its industry customers for arranging, decorating and providing booth space at auto shows. The Group has identified one performance obligation for the transaction - providing a decorated venue for auto dealers, automakers and automotive service providers, as the individual service promised in auto show contracts are not distinct individually. As the Group has control of the auto show services and discretion in establishing the price of auto show admission fee to auto dealers, automakers and other automotive service providers, it is considered to be a principal in accordance with ASC 606. The auto shows revenue is recognized on a straight-line basis over the period of the contract, which is usually from two days to four days, when the services are provided. Special promotion events revenue The Group provides integrated services to support auto dealers’ own special promotion events during a specific period. The services include event planning and execution, marketing, training and onsite coaching, etc. The Group charges a fixed service fee per special promotion event. The Group has identified one performance obligation as the individual service promised in service contracts are not distinct individually. As the Group has control of the service and discretion in establishing the price of the fee to auto dealers, it is considered to be a principal in accordance with ASC 606. The special promotion events revenue is recognized on a straight-line basis over the promotion period of the contract, which is usually one week, when the services are provided. 3.Significant Accounting Policies (Continued) i)Revenue recognition (Continued) Referral service for commercial bank revenue In October 2019, the Group commenced its auto loan referral services in collaboration with a commercial bank. The referral services provided to the bank include (i) referral services and (ii) periodic guarantee for the following time periods: (a) from the date of loan issuance by the commercial bank to the consumer to the date when the consumer’s vehicle mortgage registration is completed (the mortgage registration procedures should be completed within 120 days after the loan issuance) and (b) no overdue of more than 30 days for any of the first 3 monthly repayment. The referral service and periodic guarantee are two separate performance obligations that meet the criteria to be considered distinct, of which, referral services revenue is recognized at a point in time upon the delivery of the services and a guarantee liability is recorded at fair value at inception of the loans. Revenue from the periodic guarantee is recognized by a systematic and rational amortization method over the term of guarantee period. The Company has ceased the cooperation since April 2022. Online marketing services revenue The Group’s online marketing services revenue primarily include (i) live streaming promotion events services, (ii) customer referral services, (iii) marketing information services and (iv) demand-side platform services. The Group commenced its live streaming promotion events services from the first quarter of 2020, holding promotional events on the live streaming platform of Zhejiang Tmall Technology Co., Ltd. (“Tmall”), which aims at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers. The Group identified only one performance obligation that is to provide the industry customers with arranging, decorating and providing the platform for live show. The Group charges a fixed admission fee per live streaming promotion event from its industry customers. As the Group has control of the services and discretion in establishing the price of live streaming promotion admission fee to auto dealers, automakers and other automotive service providers, it is considered to be a principal in accordance with ASC 606. The live streaming promotion events services revenue is recognized on a straight-line basis over the promotion period of the contract, which is usually one week, when the services are provided. Other revenue The Group also commenced its customer referral services from the first quarter of 2020 by referring its industry customers to Beijing Baidu Netcom Science Technology Co., Ltd. (“Baidu”) to use the membership services of a Baidu’s auto content distribution platform. The Group identified only one performance obligation that is to provide referral service to Baidu. The Group charges Baidu a fixed rate commission fee based on the membership fee amount for the services rendered. Revenue is recognized at point-in-time when the industry customers successfully register as a membership of Baidu’s auto content distribution platform. For the marketing information services, the Group generates consumers’ demand information through its online channels and provides to the industry customers upon consumers’ consent. The Group identified only one performance obligation that is to provide consumer’s demand information to the industry customers. The marketing information service fee is charged based on the quantity of consumers’ demand information delivered. Revenue is recognized at a point in time upon the delivery of such consumers’ demand information. On January 13, 2020, the Company completed the acquisition of Longye a Software-as-a-Service (“SaaS”) company who mainly provides subscription and support services to industry customers, including auto dealers, automakers and automotive service providers, with access to cloud services, software licenses and related support and updates during the term of the arrangement. Cloud services allow industry customers to use the Group’s multi-tenant software without taking possession of the software. The Group identified the only one performance obligation that is to provide integrated cloud services to industry customers. The Group initially records the subscription and support services fee as deferred revenue upon receipt and then recognizes the revenue on a straight-line basis over the service period, which is usually from one year to five years. The subscription and support services revenue is recognized on a straight-line basis over the period of the contract when the services are provided. 3.Significant Accounting Policies (Continued) i)Revenue recognition (Continued) Starting from August 2021, the Group provides aftermarket promotion service to support auto dealers’ aftermarket promotion events during a period. The Group identified one performance obligation that is to provide promotion support services to industry customers. The promotion support service revenue is recognized over the period of the contract when the services are provided. Contract balances Contract liabilities primarily result from the timing difference between the Group’s satisfaction of performance obligation and the customers’ payment. Substantial all auto show revenue and referral service for commercial bank revenue and SaaS revenue are recognized over time during the six months ended June 30, 2022 and 2023. Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represent amounts invoiced and revenues recognized prior to invoicing when the Group has satisfied the Group’s performance obligation and has the unconditional rights to payment. The Group applied a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. The Group has no material incremental costs of obtaining contracts with customers that the Group expects the benefit of those costs to be longer than one year which need to be recognized as assets. |
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Taxation | j)Taxation Income taxes Current income taxes are provided on the basis of income/(loss) for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and any tax loss and tax credit carry forwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates or tax laws is recognized in the consolidated statements of operations and comprehensive loss in the period the change in tax rates or tax laws is enacted. A valuation allowance is provided to reduce the amount of deferred income tax assets if it is considered more likely than not that some portion or all of the deferred income tax assets will not be realized. Uncertain tax positions In order to assess uncertain tax positions, the Group applies a more likely than not threshold and a two-step approach for the tax position measurement and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Group recognizes interest and penalties, if any, under accrued expenses and other current liabilities on its consolidated balance sheet and under other expenses in its consolidated statements of operations and comprehensive loss. The Group did not have any significant unrecognized uncertain tax positions as of December 31, 2022 and June 30, 2023. |
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Warrant liability | k)Warrant liability In connection with the issuances of ordinary shares, the Group issued warrants to purchase ordinary shares on November 23, 2022. The Group evaluates the warrants under Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging-Contracts in Entity’s Own Equity. Warrants recorded as liabilities are recorded at their fair value and remeasured on each reporting date with change in estimated fair value of warrant liability in the condensed consolidated statement of operations and comprehensive loss. |
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Concentrations and Risks | l)Concentrations and Risks Advertising and promotional service provider The Group relied on advertising and promotional service providers and their affiliates for advertising and promotional service to support its operations during the six months ended June 30, 2022 and 2023. Total number of advertising and promotional service providers accounting for more than 10% is three and one for the six months ended June 30, 2022 and 2023, respectively. Credit risk Financial instruments that potentially subject the Group to the concentration of credit risk consist of cash and cash equivalents, restricted cash and accounts and notes receivable. As of December 31, 2022 and June 30, 2023, all of the Group’s cash and cash equivalents and restricted cash were held in large reputable financial institutions located in the United States of America or China, which management consider being of high credit quality. Accounts receivable is typically unsecured and is derived from revenue earned from the Company’s businesses. Major customers There were three and three customers whose receivable balances exceeded 10% of the total accounts receivable balances of the Group as December 31, 2022 and June 30, 2023, respectively. The aggregated percentage of the three and three customers as December 31, 2022 and June 30, 2023 was 76% and 69%, respectively. |
Organization and Reorganization (Tables) |
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Reorganization | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of condensed consolidated financial statements |
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Goodwill (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||
Goodwill. | ||||||||||||||||||||||||||||||||||||
Schedule of goodwill |
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Accounts and notes receivables, net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
Accounts and notes receivables, net | |||||||||||||||||||||||||||||||||||||||||
Schedule of accounts and notes receivables |
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Prepayment and other current assets, net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepayment and other current assets, net | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of prepayments and other current assets |
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Taxation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of the differences between the statutory income tax rate |
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Short-term borrowings (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term borrowings | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of short-term borrowings interest payable on monthly or quarterly basis and principal due upon maturity or installments |
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Other current liabilities (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
Other current liabilities | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of summary of other current liabilities |
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Share-based Compensation (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation. | ||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restricted shares |
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Net Loss Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | |||||||||||||||||||||||||||||||||||||||||
Schedule of computation of basic and diluted net loss per share |
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Fair Value Measurement (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of warrant liability |
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Schedule of inputs related to the Black Scholes model for the valuation of the fair value of warrants |
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Schedule of fair value of warrants |
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Organization and Reorganization - Comprehensive loss of the Group's VIEs (Details) - Consolidated VIEs primary beneficiary - CNY (¥) ¥ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Organization and Reorganization | ||
Net revenues | ¥ 34,220 | ¥ 43,012 |
Net (loss)/ income | ¥ 4,573 | ¥ (10,821) |
Organization and Reorganization - Cash flow of the Group's VIEs (Details) ¥ in Thousands, $ in Thousands |
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2023
CNY (¥)
|
Jun. 30, 2023
USD ($)
|
Jun. 30, 2022
CNY (¥)
|
Dec. 31, 2022
CNY (¥)
|
Dec. 31, 2021
CNY (¥)
|
|
Organization and Reorganization | |||||
Net cash generated from/(used in) operating activities | ¥ (52,408) | $ (7,227) | ¥ (55,372) | ¥ (109,700) | ¥ (92,300) |
Net cash generated from investing activities | (116) | ||||
Net cash (used in)/generated from financing activities | 3,435 | 474 | (2,060) | ||
Net increase/(decrease) in cash, cash equivalent and restricted cash | (48,182) | $ (6,644) | (57,168) | ||
Consolidated VIEs primary beneficiary | |||||
Organization and Reorganization | |||||
Net cash generated from/(used in) operating activities | (6,083) | 3,523 | |||
Net cash (used in)/generated from financing activities | 4,235 | (1,060) | |||
Net increase/(decrease) in cash, cash equivalent and restricted cash | ¥ (1,848) | ¥ 2,463 |
Organization and Reorganization - Additional information (Details) - CNY (¥) ¥ in Millions |
Nov. 23, 2022 |
Jun. 30, 2023 |
Dec. 31, 2022 |
Nov. 25, 2022 |
---|---|---|---|---|
Organization and Reorganization | ||||
Variable interest entity registered capital | ¥ 40.1 | ¥ 40.1 | ||
Prefunded Warrants [Member] | ||||
Organization and Reorganization | ||||
Number of warrants issued to purchase shares | 800,000 | |||
Registered Direct Offering | ADS | ||||
Organization and Reorganization | ||||
Number of shares issued | 3,654,546 | |||
Registered Direct Offering | ADS | Warrants [Member] | ||||
Organization and Reorganization | ||||
Number of warrants issued to purchase shares | 5,454,546 | |||
Registered Direct Offering | ADS | Prefunded Warrants [Member] | ||||
Organization and Reorganization | ||||
Number of warrants issued to purchase shares | 1,800,000 |
Going Concern and impact of COVID-19 pandemic (Details) ¥ in Thousands, $ in Thousands |
6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2023
CNY (¥)
|
Jun. 30, 2023
USD ($)
|
Jun. 30, 2022
CNY (¥)
|
Dec. 31, 2022
CNY (¥)
|
Dec. 31, 2021
CNY (¥)
|
Jun. 30, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
|
Going Concern and impact of COVID-19 pandemic | |||||||
Incurred recurring operating losses including net losses | ¥ 30,700 | ¥ 166,500 | ¥ 101,900 | ||||
Net cash used in operating activities | (52,408) | $ (7,227) | ¥ (55,372) | (109,700) | (92,300) | ||
Accumulated deficit | 1,180,833 | 1,150,135 | $ 162,845 | ||||
Cash and cash equivalents | ¥ 21,900 | ¥ 32,184 | ¥ 69,895 | ¥ 63,461 | $ 3,026 | $ 9,639 |
Significant Accounting Policies - Additional information (Details) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2023
CNY (¥)
$ / ¥
|
Jun. 30, 2023
USD ($)
$ / ¥
|
Jun. 30, 2022
CNY (¥)
|
|
Significant Accounting Policies | |||
Exchange rate (US$1.00) | $ / ¥ | 7.2513 | 7.2513 | |
Impairment loss | ¥ | ¥ 0 | ¥ 0 | |
Impairment charges | ¥ 1,515,000 | $ 209 | ¥ 15,614,000 |
Significant Accounting Policies - Concentrations and Risks (Details) |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2023
item
customer
|
Jun. 30, 2022
item
customer
|
Dec. 31, 2022
customer
|
|
Number of advertising and promotional service providers that accounted for more than 10% of the Group's advertising and promotional service | item | 1 | 3 | |
Number of customer | 3 | 0 | 3 |
Customer One | |||
Number of customer | 1 | ||
Customer Concentration Risk Member | Accounts receivable | Customer Three | |||
Concentration risk (as a percent) | 69.00% | 76.00% | |
Customer Concentration Risk Member | Revenue From Contract With Customer Member | Customer One | |||
Concentration risk (as a percent) | 17.00% |
Goodwill (Details) ¥ in Thousands, $ in Thousands |
Jun. 30, 2023
CNY (¥)
|
Jun. 30, 2023
USD ($)
|
Dec. 31, 2022
CNY (¥)
|
---|---|---|---|
Goodwill. | |||
Goodwill | ¥ 115,414 | ¥ 115,414 | |
Less: impairment | (69,853) | (69,853) | |
Goodwill, net | ¥ 45,561 | $ 6,283 | ¥ 45,561 |
Accounts and notes receivables, net - Accounts receivable, net (Details) ¥ in Thousands, $ in Thousands |
Jun. 30, 2023
CNY (¥)
|
Jun. 30, 2023
USD ($)
|
Dec. 31, 2022
CNY (¥)
|
---|---|---|---|
Accounts and notes receivables, net | |||
Notes receivable | ¥ 180 | ¥ 505 | |
Accounts receivable | 70,032 | 80,845 | |
Less: allowance for doubtful accounts | (32,451) | (31,381) | |
Accounts receivable, net | ¥ 37,761 | $ 5,207 | ¥ 49,969 |
Accounts and notes receivables, net - Additional information (Details) - CNY (¥) ¥ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Accounts and notes receivables, net | ||
Allowance for doubtful accounts | ¥ 1,840 | ¥ 135 |
Write-off of bad debt allowance | ¥ 770 | ¥ 0 |
Prepayment and other current assets, net (Details) ¥ in Thousands, $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2023
CNY (¥)
|
Jun. 30, 2022
CNY (¥)
|
Jun. 30, 2023
USD ($)
|
Dec. 31, 2022
CNY (¥)
|
|
Deductible VAT | ¥ 541 | ¥ 1,625 | ||
Deposits | 7,331 | 7,984 | ||
Receivables due from third-party online payment platforms | 639 | 1,197 | ||
Staff advances | 1,524 | 1,336 | ||
Prepaid promotion expenses | 39,275 | 40,295 | ||
Receivable from borrowers for the guarantee payment to commercial bank | 18,218 | 14,857 | ||
Advance to suppliers | 7,700 | |||
Others | 16,282 | 11,295 | ||
Less: provisions for prepayment and other current assets | (35,093) | (31,733) | ||
Total prepayment and other current assets, net | 56,417 | $ 7,780 | ¥ 46,856 | |
Provisions for prepayment and other current assets | ¥ 3,360 | ¥ 3,648 |
Taxation - Additional information (Details) - HKD ($) $ in Millions |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2023 |
Dec. 31, 2022 |
|
Income Tax Expense | ||
Effective income tax rate | 0.00% | 0.00% |
China | State Administration of Taxation, China [Member] | ||
Income Tax Expense | ||
Effective income tax rate | 25.00% | |
Number of years reconfirmed as high and new technology enterprise | 3 years | |
Effective income tax rate for high and new technology enterprise | 15.00% | |
Hong Kong | Inland Revenue, Hong Kong | ||
Income Tax Expense | ||
Assessable profits | $ 2.0 | |
First HK$2 million of profits, tax rate | 8.25% | |
Effective income tax rate | 16.50% |
Taxation - Reconciliation of differences between statutory income tax rate (Details) |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2023 |
Dec. 31, 2022 |
|
Taxation | ||
Statutory income tax rate of the PRC | 25.00% | 25.00% |
Permanent differences | (1.10%) | 1.10% |
Change in valuation allowance | (24.50%) | (24.10%) |
Effect of preferential tax rate | (3.50%) | (0.80%) |
Others | 4.10% | (1.20%) |
Effective income tax rate | 0.00% | 0.00% |
Short-term borrowings - Additional Information (Details) ¥ in Thousands, $ in Thousands |
Jun. 30, 2023
CNY (¥)
|
Jun. 30, 2023
USD ($)
|
Dec. 31, 2022
CNY (¥)
|
---|---|---|---|
Short-term borrowings | |||
Short-term borrowings | ¥ 8,150 | $ 1,124 | ¥ 3,169 |
Short term debt | |||
Short-term borrowings | |||
Short-term borrowings | ¥ 8,200 |
Other current liabilities (Details) ¥ in Thousands, $ in Thousands |
Jun. 30, 2023
CNY (¥)
|
Jun. 30, 2023
USD ($)
|
Dec. 31, 2022
CNY (¥)
|
---|---|---|---|
Other current liabilities | |||
Professional service fee | ¥ 6,627 | ¥ 9,391 | |
Advertising expense payables | 5,567 | 5,893 | |
Promotional expense payables | 1,411 | 1,099 | |
Others | 7,319 | 7,438 | |
Total | ¥ 20,924 | $ 2,887 | ¥ 23,821 |
Share-based Compensation - Summary of the restricted shares activities (Details) - Restricted shares - TuanChe Limited Share Incentive Plan (the "Plan") |
6 Months Ended |
---|---|
Jun. 30, 2023
$ / shares
shares
| |
Number of restricted shares | |
Outstanding Balance | shares | 3,573,750 |
Granted | shares | 5,200,000 |
Forfeit | shares | 0 |
Vested | shares | (3,712,500) |
Outstanding Balance | shares | 5,061,250 |
Weighted-Average Grant-Date Fair Value | |
Outstanding Balance | $ / shares | $ 0.457 |
Granted | $ / shares | 0.035 |
Forfeit | $ / shares | 0 |
Vested | $ / shares | 0.113 |
Outstanding Balance | $ / shares | $ 0.276 |
Net Loss Per Share - Computation of basic and diluted net loss per share (Details) ¥ / shares in Units, ¥ in Thousands, $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2023
CNY (¥)
¥ / shares
shares
|
Jun. 30, 2023
USD ($)
shares
|
Jun. 30, 2022
CNY (¥)
¥ / shares
shares
|
|
Numerator : | |||
Net loss attributable to TuanChe Limited's shareholders | ¥ (30,698) | $ (4,235) | ¥ (56,166) |
Denominator: | |||
Weighted average number of ordinary shares outstanding, basic | shares | 399,544,700 | 399,544,700 | 309,041,616 |
Weighted average number of ordinary shares outstanding, diluted | shares | 399,544,700 | 399,544,700 | 309,041,616 |
Basic net loss per share attributable to TuanChe Limited's shareholders | ¥ / shares | ¥ (0.08) | ¥ (0.18) | |
Diluted net loss per share attributable to TuanChe Limited's shareholders | ¥ / shares | ¥ (0.08) | ¥ (0.18) |
Fair Value Measurement - Fair value of warrant liability (Details) ¥ in Thousands, $ in Thousands |
Jun. 30, 2023
CNY (¥)
|
Jun. 30, 2023
USD ($)
|
Dec. 31, 2022
CNY (¥)
|
---|---|---|---|
Warrant liability: | |||
Balance at fair value | ¥ 13,245 | $ 1,827 | ¥ 24,376 |
Level 3 | |||
Warrant liability: | |||
Balance at fair value | ¥ 13,245 | $ 1,827 | ¥ 24,376 |
Fair Value Measurement - Black Scholes Model For The Valuation Of Fair Value Of Warrants (Details) |
Jun. 30, 2023
Y
$ / shares
|
Dec. 31, 2022
$ / shares
Y
|
---|---|---|
Expiration of warrant (years) | ||
Fair Value Measurements | ||
Fair value of warrants | Y | 4.4 | 4.9 |
Fair market value per share (US$) | ||
Fair Value Measurements | ||
Fair value of warrants | 0.5 | 0.84 |
Exercise price (US$) | ||
Fair Value Measurements | ||
Fair value of warrants | 2.75 | 2.75 |
Risk-free rate | ||
Fair Value Measurements | ||
Fair value of warrants | 0.0423 | 0.0405 |
Standard derivation in the value of stock | ||
Fair Value Measurements | ||
Fair value of warrants | 1.312 | 1.312 |
Fair Value Measurement - Summary Of Fair Value Of Warrants (Details) ¥ in Thousands, $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2023
CNY (¥)
|
Jun. 30, 2023
USD ($)
|
Jun. 30, 2022
CNY (¥)
|
|
Fair Value Measurements | |||
Fair value of warrants at beginning of the period | ¥ 24,376 | ||
Change in fair value | 11,551 | $ 1,593 | ¥ 0 |
Fair value of warrants at end of the period | 13,245 | $ 1,827 | |
Level 3 | |||
Fair Value Measurements | |||
Fair value of warrants at beginning of the period | 24,376 | ||
Change in fair value | (11,551) | ||
Effect of exchange rate changes | 420 | ||
Fair value of warrants at end of the period | ¥ 13,245 |
Related party transactions and balance (Details) ¥ in Thousands, $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2023
CNY (¥)
|
Jun. 30, 2022
CNY (¥)
|
Jun. 30, 2023
USD ($)
|
Dec. 31, 2022
CNY (¥)
|
|
Related party transactions and balance | ||||
Other Liabilities, Current | ¥ 20,924 | $ 2,887 | ¥ 23,821 | |
Shanghai Three Drivers Culture Media Co Limited | Outsourcing service agreements | ||||
Related party transactions and balance | ||||
Related party expenses | 1,286 | ¥ 602 | ||
Prepayment balance | 2,298 | 248 | ||
Shanghai Three Drivers Culture Media Co Limited | Promotion Service Agreements | ||||
Related party transactions and balance | ||||
Related party expenses | 565 | 0 | ||
Mr. Wei Wen | ||||
Related party transactions and balance | ||||
Other payable due to related parties | 0 | ¥ 130 | ||
Amount given to related party | 12,591 | ¥ 0 | ||
Proceeds from related party debt | ¥ 12,461 |
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