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Token Cat Ltd

Token Cat LtdTC決算レポート

Nasdaq · 産業 · その他のビジネスサービス

What changed in Token Cat Ltd's 20-F — 2023 vs 2024

Top changes in Token Cat Ltd's 2024 20-F

570 paragraphs added · 583 removed · 444 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

218 edited+65 added−77 removed542 unchanged
Although we and the VIEs have endeavored and will continue to endeavor to obtain all necessary permits according to our and the VIEs’ estimate of the condition of each specific event, we cannot assure you that we and the VIEs have been or will continue to be in full compliance with the licensing requirements for all the offline events we and the VIEs have held or will hold because the regulatory practices with respect to an offline event vary among different regions and the local authorities consider multiple factors in enforcing the licensing requirements.
Although we and the VIEs have endeavored and will continue to endeavor to obtain all necessary permits according to our and the VIEs’ estimate of the condition of each specific event, we cannot assure you that we and the VIEs have been or will continue to be in full compliance with the licensing requirements for all the offline events we and the VIEs have held or will hold because the regulatory practices with respect to an offline event vary among different regions and the local authorities would consider multiple factors in enforcing the licensing requirements.
In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our and the VIEs’ financial condition and results of operations. If we do not satisfy the requirements for continued listing on Nasdaq Stock Market, the ADSs could be suspended or delisted from Nasdaq.
In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our and the VIEs’ financial condition and results of operations. 50 If we do not satisfy the requirements for continued listing on Nasdaq Stock Market, the ADSs could be suspended or delisted from Nasdaq.
These factors may have a more pronounced impact on our business given our relatively smaller scale and less financial resources as compared to many traditional automakers. Our successful expansion into the NEV industry largely depends on our ability to develop, manufacture and deliver NEVs of high quality, safety, reliability and consumer appeal, on schedule and at a large scale.
These factors may have a more pronounced impact on our business given our relatively smaller scale and less financial resources as compared to many traditional automakers. 11 Our successful expansion into the NEV industry largely depends on our ability to develop, manufacture and deliver NEVs of high quality, safety, reliability and consumer appeal, on schedule and at a large scale.
They may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. Furthermore, on February 17, 2023, the CSRC issued the Overseas Listing Trial Measures, which adopts a filing-based regulatory regime for direct and indirect overseas offering and listing of securities of PRC domestic companies.
They may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. 36 Furthermore, on February 17, 2023, the CSRC issued the Overseas Listing Trial Measures, which adopts a filing-based regulatory regime for direct and indirect overseas offering and listing of securities of PRC domestic companies.
Under our memorandum and articles of association, the minimum notice period required for convening a general meeting is seven calendar days. When a general meeting is convened, you may not receive sufficient advance notice to withdraw the underlying Class A ordinary shares represented by your ADSs to allow you to vote with respect to any specific matter.
Under our memorandum and articles of association, the minimum notice period required for convening a general meeting is seven calendar days. When a general meeting is convened, you may not receive sufficient advance notice to withdraw the Class A ordinary shares represented by your ADSs to allow you to vote with respect to any specific matter.
As a result, we cannot assure you that we will be entitled to any preferential withholding tax rate under tax treaties for dividends received from our PRC subsidiaries. We face uncertainties with respect to indirect transfers of the equity interests in PRC resident enterprises by their non-PRC holding companies.
As a result, we cannot assure you that we will be entitled to any preferential withholding tax rate under tax treaties for dividends received from our PRC subsidiaries. 41 We face uncertainties with respect to indirect transfers of the equity interests in PRC resident enterprises by their non-PRC holding companies.
The liquidity risks could materially and adversely affect our business, results of our and the VIEs’ operations, and financial condition. We have entered into collaboration, and may establish or seek collaborations, strategic alliances or equity investment in connection with our expansion into the NEV industry in the future, and we may not timely realize the benefits of such arrangements.
The liquidity risks could materially and adversely affect our business, results of our and the VIEs’ operations, and financial condition. 12 We have entered into collaboration, and may establish or seek collaborations, strategic alliances or equity investment in connection with our expansion into the NEV industry in the future, and we may not timely realize the benefits of such arrangements.
The ability of our subsidiaries and the VIEs to operate in China may be impaired if we and the VIEs fail to meet requirement timely or at all under the changes in its laws and regulations, including those relating to value-added telecommunications service industry, taxation, foreign investment limitations, and other matters.
The ability of our subsidiaries and the VIEs to operate in China may be impaired if we and the VIEs fail to meet requirement timely or at all under the changes in its laws and regulations, including those relating to value-added telecommunications service industry, taxation, foreign investment limitations, and other matters, and we and the VIEs fail to meet such requirement timely or at all.
Pursuant to the latest Interim Provisions of Quantity Adjustment and Control for Small Passenger Cars in Beijing and the Implementing Rules of the Interim Provisions of Quantity Adjustment and Control for Small Passenger Cars in Beijing (Revised in 2020), both of which were came into force on January 1, 2021, the city imposes an annual quota on the issuance of new vehicle registration plates.
Pursuant to the latest Interim Provisions of Quantity Adjustment and Control for Small Passenger Cars in Beijing and the Implementing Rules of the Interim Provisions of Quantity Adjustment and Control for Small Passenger Cars in Beijing (Revised in 2020), both of which came into force on January 1, 2021, the city imposes an annual quota on the issuance of new vehicle registration plates.
Accordingly, we and the VIEs may need to sell additional equity or debt securities or obtain a credit facility. Future issuances of equity or equity-linked securities could significantly dilute our existing shareholders, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our ordinary shares.
Accordingly, we and the VIEs may need to sell additional equity or debt securities or obtain a credit facility. Future issuances of equity or equity-linked securities could significantly dilute our existing shareholders, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A ordinary shares.
As a result, our ability to generate net revenues, as well as our and the VIEs’ business, results of operations and financial condition, will be materially and adversely affected. We and the VIEs may not be able to successfully expand our and the VIEs’ operations into certain additional geographical markets in China.
As a result, our ability to generate net revenues, as well as our and the VIEs’ business, results of operations and financial condition, will be materially and adversely affected. 19 We and the VIEs may not be able to successfully expand our and the VIEs’ operations into certain additional geographical markets in China.
In addition, any severe or prolonged slowdown in the rate of growth of the Chinese economy may adversely affect our and the VIEs’ business and results of operations, leading to a reduction in demand for our and the VIEs’ products and services and adversely affect our and the VIEs’ competitive position.
In addition, any severe or prolonged slowdown in the rate of growth of the Chinese and global economy may adversely affect our and the VIEs’ business and results of operations, leading to a reduction in demand for our and the VIEs’ products and services and adversely affect our and the VIEs’ competitive position.
In addition to market and industry factors, the price and trading volume for the ADSs may be highly volatile due to a number of factors, including the following: ● regulatory developments affecting us and the VIEs or our industry, and users of our and the VIEs’ online platform; ● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; ● changes in the market condition, market potential and competition in automobile industry; ● announcements by us, the VIEs or our and the VIEs’ competitors of new automobile services, expansions, investments, acquisitions, strategic partnerships or joint ventures; 54 Table of Contents ● fluctuations in global and Chinese economies; ● changes in financial estimates by securities analysts; ● adverse publicity about us and the VIEs; ● additions or departures of our and the VIEs’ key personnel and senior management; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● potential litigation or regulatory investigations; and ● sales or perceived potential sales of additional Class A ordinary shares, the ADSs and the ADSs issuable upon the exercise of the Warrants.
In addition to market and industry factors, the price and trading volume for the ADSs may be highly volatile due to a number of factors, including the following: ● regulatory developments affecting us and the VIEs or our industry, and users of our and the VIEs’ online platform; ● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; ● changes in the market condition, market potential and competition in automobile industry; ● announcements by us, the VIEs or our and the VIEs’ competitors of new automobile services, expansions, investments, acquisitions, strategic partnerships or joint ventures; ● fluctuations in global and Chinese economies; ● changes in financial estimates by securities analysts; ● adverse publicity about us and the VIEs; ● additions or departures of our and the VIEs’ key personnel and senior management; ● release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● potential litigation or regulatory investigations; and ● sales or perceived potential sales of additional Class A ordinary shares, the ADSs and the ADSs issuable upon the exercise of the Warrants.
Wei Wen, our chairman of the board and chief executive officer, is the beneficial owner of a majority of the voting power of our issued and outstanding share capital following, we qualify as a “controlled company” under the Nasdaq Stock Market Rules.
Wei Wen, our chairman of the board and chief executive officer, is the beneficial owner of a majority of the voting power of our issued and outstanding share capital, we qualify as a “controlled company” under the Nasdaq Stock Market Rules.
We cannot assure you that the net proceeds will be used in a manner that will improve our results of operations or increase the price of the ADSs, nor that these net proceeds will be placed only in investments that generate income or appreciate in value. ​
We cannot assure you that the net proceeds will be used in a manner that will improve our results of operations or increase the price of the ADSs, nor that these net proceeds will be placed only in investments that generate income or appreciate in value. 57
Furthermore, such collaborations are subject to numerous risks, which may include the following: ● such collaboration may fail to integrate into our current product and service offerings; ● collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration project; ● collaborators may not pursue the research, development and commercialization of our NEVs or may elect not to continue or renew our collaboration due to availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; ● collaborators could independently develop, or develop with third parties, NEVs that compete directly or indirectly with our NEV products or product candidates; 14 Table of Contents ● disputes may arise between us and collaborators that cause delays in or termination of the research, development or commercialization of our NEVs, or that result in costly litigation or arbitration that diverts management’s attention and resources; and/or ● collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further research, development or commercialization initiatives.
Furthermore, such collaborations are subject to numerous risks, which may include the following: ● such collaboration may fail to integrate into our current product and service offerings; ● collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration project; ● collaborators may not pursue the research, development and commercialization of our NEVs or may elect not to continue or renew our collaboration due to availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; ● collaborators could independently develop, or develop with third parties, NEVs that compete directly or indirectly with our NEV products or product candidates; ● disputes may arise between us and collaborators that cause delays in or termination of the research, development or commercialization of our NEVs, or that result in costly litigation or arbitration that diverts management’s attention and resources; and/or ● collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further research, development or commercialization initiatives.
In addition, the local police security authorities may prevent consumers from entering our and the VIEs’ auto shows and impose administrative penalties on us and the VIEs if the visitor flow exceeds the prescribed limit.
In addition, the local police security authorities may prevent other consumers from entering our and the VIEs’ auto shows and impose administrative penalties on us and the VIEs if the visitor flow exceeds the prescribed limit.
Without an active market, the liquidity of the Warrants and the Pre-Funded Warrants will be limited. Further, the existence of the Warrants and the Pre-Funded Warrants may act to reduce both the trading volume and the trading price of the ADSs. The Warrants are speculative in nature.
Without an active market, the liquidity of the warrants and the pre-funded warrants will be limited. Further, the existence of the warrants and the pre-funded warrants may act to reduce both the trading volume and the trading price of the ADSs. 52 The Warrants are speculative in nature.
The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to vote your Class A ordinary shares.
The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to vote the Class A ordinary shares represented by your ADSs.
At the press conference held for the Overseas Listing Trial Measures on the same day, officials from the CSRC clarified that, as for companies seeking overseas listing with contractual arrangements, the CSRC will solicit opinions from relevant regulatory authorities and complete the filing of the overseas listing of such companies if they duly meet the compliance requirements, and support the development and growth of these companies by enabling them to utilize two markets and two kinds of resources.
At the press conference held for the Overseas Listing Trial Measures on the same day, officials from the CSRC clarified that, as for companies seeking overseas listing with contractual arrangements, the CSRC may solicit opinions from relevant regulatory authorities and complete the filing of the overseas listing of such companies if they duly meet the compliance requirements, and support the development and growth of these companies by enabling them to utilize two markets and two kinds of resources.
The Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version) (the “Negative List (2021 version)”) stipulates that any domestic enterprise in China engaging in prohibited business under the Negative List shall be subject to review by and shall obtain the consent of the relevant competent PRC authorities for overseas listing, and the foreign investors shall not participate in the operation and management of such enterprise, and the shareholding percentage of the foreign investors in such enterprise shall be subject, mutatis mutandis, to the relevant administrative provisions of the PRC domestic securities investment by foreign investors.
The Special Administrative Measures (Negative List) for Foreign Investment Access (2024 Version) (the “Negative List (2024 version)”) stipulates that any domestic enterprise in China engaging in prohibited business under the Negative List shall be subject to review by and shall obtain the consent of the relevant competent PRC authorities for overseas listing, and the foreign investors shall not participate in the operation and management of such enterprise, and the shareholding percentage of the foreign investors in such enterprise shall be subject, mutatis mutandis, to the relevant administrative provisions of the PRC domestic securities investment by foreign investors.
Risk Factors—Risks Related to Our Business and Industry—Our and the VIEs’ failure to obtain necessary permits for offline events may subject us and the VIEs to penalties and adversely affect our business, results of operations, and financial condition.” However, the licensing requirements in China are constantly evolving, and we may be subject to more stringent regulatory requirements due to changes in the relevant jurisdictions in the future.
Risk Factors-Risks Related to Our Business and Industry-Our and the VIEs’ failure to obtain necessary permits for offline events may subject us and the VIEs to penalties and adversely affect our business, results of operations, and financial condition.” However, the licensing requirements in China are constantly evolving, and we may be subject to more stringent regulatory requirements in the relevant jurisdictions in the future.
If we intend to distribute dividends through TuanChe Limited, our WFOEs will transfer the dividends to TuanChe Information Limited in accordance with the laws and regulations of the PRC, and then TuanChe Information Limited will transfer the dividends to TuanChe Limited, and the dividends will be distributed from TuanChe Limited to all shareholders respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors or investors in other countries or regions.
If we intend to distribute dividends through Token Cat Limited, our WFOEs will transfer the dividends to TuanChe Information Limited in accordance with the laws and regulations of the PRC, and then TuanChe Information Limited will transfer the dividends to Token Cat Limited, and the dividends will be distributed from Token Cat Limited to all shareholders respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors or investors in other countries or regions.
The Warrants and the Pre-Funded Warrants offered in the November 2022 Offering do not confer any rights as shareholders of our company on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire the ADSs at a fixed price for a limited period of time.
The warrants and the pre-funded warrants offered in the November 2022 Offering and October 2024 Offering do not confer any rights as shareholders of our company on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire the ADSs at a fixed price for a limited period of time.
Other than the above distributions by and through our PRC subsidiaries which are permitted to be made without the necessity to obtain further approvals, any conversion of the Renminbi-denominated net revenues generated by the VIEs for direct investment, loan or investment in securities outside China will be subject to the limitations discussed above.
Other than the above distributions by and through our PRC subsidiaries which are permitted to be made without the necessity to obtain further approvals, any conversion of the Renminbi-denominated net revenues generated by the VIEs for direct investment, loan or investment in securities outside China will be subject to the regulations discussed above.
In March 2023, our directors approved the 2023 Share Incentive Plan (the “2023 Plan”), pursuant to which 169,172,564 ordinary shares have been reserved for future issuance to our employees, directors and consultants, representing 43.0% of our total issued and outstanding ordinary shares as of December 31, 2022.
In March 2023, our directors approved the 2023 Share Incentive Plan (the “2023 Plan”), pursuant to which 169,172,564 Class A ordinary shares have been reserved for future issuance to our employees, directors and consultants, representing 43.0% of our total issued and outstanding Class A ordinary shares as of December 31, 2022.
For example, our board of directors has the authority, subject to any resolution of the shareholders to the contrary, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our Class A ordinary shares, in the form of ADS or otherwise.
For example, our board of directors has the authority, subject to any resolution of the shareholders to the contrary, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our Class A ordinary shares, represented by the ADS or otherwise.
Therefore, such cooperation might be deemed as operating financing guarantee business without proper qualification under the Regulations on the Supervision and Administration of Financing Guarantee Companies (the “Financing Guarantee Regulations”), which were promulgated by State Council on August 2, 2017 and became effective on October 1, 2017, and the Supplementary Provisions on the Supervision and Administration of Financing Guarantee Companies (the “Financing Guarantee Supplementary Provisions”), which were promulgated by the China Banking and Insurance Regulatory Commission (the “CBIRC”), and other eight PRC regulatory agencies and became effective on October 9, 2019. 22 Table of Contents Pursuant to the Financing Guarantee Regulations, “financing guarantee” refers to the activities in which guarantors provide guarantee to the guaranteed parties as to the debt financing (including but not limited to the extension of loans or issuance of bonds), and “financing guarantee companies” refer to companies legally established and operating financing guarantee business.
Therefore, such cooperation might be deemed as operating financing guarantee business without proper qualification under the Regulations on the Supervision and Administration of Financing Guarantee Companies (the “Financing Guarantee Regulations”), which were promulgated by State Council on August 2, 2017 and became effective on October 1, 2017, and the Supplementary Provisions on the Supervision and Administration of Financing Guarantee Companies (the “Financing Guarantee Supplementary Provisions”), which were promulgated by the China Banking and Insurance Regulatory Commission (the “CBIRC”), and other eight PRC regulatory agencies and became effective on October 9, 2019. 20 Pursuant to the Financing Guarantee Regulations, “financing guarantee” refers to the activities in which guarantors provide guarantee to the guaranteed parties as to the debt financing (including but not limited to the extension of loans or issuance of bonds), and “financing guarantee companies” refer to companies legally established and operating financing guarantee business.
GAAP and SEC reporting requirements, (3) hire qualified consultant to assess Sarbanes-Oxley Act compliance readiness, to assess where we can improve our overall internal control over financial reporting function, and to assist us in implementing improvements where necessary, and (4) set up a proper policy for operating department to timely handover related documents to the financial department for timely account closing. 23 Table of Contents Once we cease to be a “non-accelerated filer” as such term is defined in Rule 12b-2 under the Exchange Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting.
GAAP and SEC reporting requirements, (3) hire qualified consultant to assess Sarbanes-Oxley Act compliance readiness, to assess where we can improve our overall internal control over financial reporting function, and to assist us in implementing improvements where necessary, and (4) set up a proper policy for operating department to timely handover related documents to the financial department for timely account closing. 21 Once we cease to be a “non-accelerated filer” as such term is defined in Rule 12b-2 under the Exchange Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting.
Any investigation of any potential violations of the FCPA or other anti-corruption laws by U.S. or foreign authorities, including Chinese authorities, could adversely impact our and the VIEs’ reputation, cause us and the VIEs to lose customer relationships, subject us and the VIEs to administrative penalties or sanctions, and lead to other adverse impacts on our and the VIEs’ business, results of operations, and financial condition. 24 Table of Contents If we and the VIEs lose the services of any of our and the VIEs’ key executive officers, senior management, or other key employees, or are unable to retain, recruit and hire sufficiently qualified staff, our and the VIEs’ ability to effectively manage and execute our and the VIEs’ operations and meet our and the VIEs’ strategic objectives could be harmed.
Any investigation of any potential violations of the FCPA or other anti-corruption laws by U.S. or foreign authorities, including Chinese authorities, could adversely impact our and the VIEs’ reputation, cause us and the VIEs to lose customer relationships, subject us and the VIEs to administrative penalties or sanctions, and lead to other adverse impacts on our and the VIEs’ business, results of operations, and financial condition. 22 If we and the VIEs lose the services of any of our and the VIEs’ key executive officers, senior management, or other key employees, or are unable to retain, recruit and hire sufficiently qualified staff, our and the VIEs’ ability to effectively manage and execute our and the VIEs’ operations and meet our and the VIEs’ strategic objectives could be harmed.
Any uninsured occurrence of business disruption, litigation or natural disaster, or significant damages to our and the VIEs’ uninsured equipment or technology infrastructure could result in substantial costs and diversion of resources for us and the VIEs and could adversely affect our and the VIEs’ financial condition and results of operations.
Any uninsured occurrence of business disruption, litigation or natural disaster, or significant damage to our and the VIEs’ uninsured equipment or technology infrastructure could result in substantial costs and diversion of resources for us and the VIEs and could adversely affect our and the VIEs’ financial condition and results of operations.
Our independent registered public accounting firm included an explanatory paragraph expressing substantial doubt relating to our ability to continue as a going concern in its report on our consolidated financial statements for the year ended December 31, 2023.
Our independent registered public accounting firm included an explanatory paragraph expressing substantial doubt relating to our ability to continue as a going concern in its report on our consolidated financial statements for the year ended December 31, 2024.
For example, foreign investors are not allowed to own more than 50% of the equity interests in a value-added telecommunications service provider with certain exceptions relating to e-commerce business, domestic multi-party communications services business, store-and-forward business and call center business in accordance with the special management measures for the entry of foreign investment (as amended) (the “Negative List”), and other applicable laws and regulations. 30 Table of Contents We are a Cayman Islands company and our wholly-owned subsidiaries in China are currently considered foreign-invested enterprises.
For example, foreign investors are not allowed to own more than 50% of the equity interests in a value-added telecommunications service provider with certain exceptions relating to e-commerce business, domestic multi-party communications services business, store-and-forward business and call center business in accordance with the special management measures for the entry of foreign investment (as amended) (the “Negative List”), and other applicable laws and regulations. 28 We are a Cayman Islands company and our wholly-owned subsidiaries in China are currently considered foreign-invested enterprises.
In addition, potential volatility in the NEV industry may materially and adversely affect our business, prospects, operating results and financial condition. The sales volume of NEVs in China may not grow at the rate that we expect, or at all.
In addition, potential volatility in the NEV industry may materially and adversely affect our business, prospects, operating results and financial condition. Our and other competitors’ sales volume of NEVs in China may not grow at the rate that we expect, or at all.
As a result, we do not expect to be identified as a “commission-identified issuer” under the HFCA Act for the fiscal year ended December 31, 2023 after we file our annual report on Form 20-F for the fiscal year of 2023.
As a result, we do not expect to be identified as a “commission-identified issuer” under the HFCA Act for the fiscal year ended December 31, 2024 after we file our annual report on Form 20-F for the fiscal year of 2024.
However, any regional outbreak of COVID-19 may still subject our and the VIEs’ business, results of operations, financial condition and cash flows to uncertainties, and we and the VIEs may resort to other cost cutting measures if the outbreak of COVID-19 and its impact persist or escalate, which may result in labor disputes and have a material adverse effect on our and the VIEs’ business, results of operations and financial condition. 18 Table of Contents We and the VIEs face various forms of competition, and if we and the VIEs fail to compete effectively, we and the VIEs may lose market shares and our and the VIEs’ business, prospects, and results of operations may be materially and adversely affected.
However, any regional outbreak of COVID-19 may still subject our and the VIEs’ business, results of operations, financial condition and cash flows to uncertainties, and we and the VIEs may resort to other cost cutting measures if the outbreak of COVID-19 and its impact persist or escalate, which may result in labor disputes and have a material adverse effect on our and the VIEs’ business, results of operations and financial condition. 16 We and the VIEs face various forms of competition, and if we and the VIEs fail to compete effectively, we and the VIEs may lose market shares and our and the VIEs’ business, prospects, and results of operations may be materially and adversely affected.
Our management has concluded that, as of December 31, 2023, our existing disclosure controls and procedures and internal control over financial reporting were ineffective, due to two material weaknesses. In accordance with U.S.
Our management has concluded that, as of December 31, 2024, our existing disclosure controls and procedures and internal control over financial reporting were ineffective, due to two material weaknesses. In accordance with U.S.
Acquisitions, strategic alliances and investments involve numerous risks, including: ● the potential failure to achieve the expected benefits and synergies of the combination or acquisition; ● difficulties in, and the cost of, integrating operations, technologies, services and personnel; ● lack of knowledge and experience in the new business; ● inability to obtain funding for the investments; ● potential write-offs of acquired assets or investments; and ● downward effect on ou r results of operations.
Acquisitions, strategic alliances and investments involve numerous risks, including: ● the potential failure to achieve the expected benefits and synergies of the combination or acquisition; ● difficulties in, and the cost of, integrating operations, technologies, services and personnel; ● lack of knowledge and experience in the new business; ● inability to obtain funding for the investments; ● potential write-offs of acquired assets or investments; and ● downward effect on our results of operations.
On November 25, 2022, we completed a registered direct offering (the “November 2022 Offering”) with investors for the purchase and sale of (1) 3,654,546 ADSs, (2) certain pre-funded warrants to purchase 1,800,000 ADSs (the “Pre-Funded Warrants”) in lieu of the ADSs being offered, and (3) certain warrants to purchase up to 5,454,546 ADSs (the “Warrants”), to certain institutional investors pursuant to a securities purchase agreement dated November 21, 2022.
On November 25, 2022, we completed a registered direct offering with investors for the purchase and sale of (1) 3,654,546 ADSs, (2) certain pre-funded warrants to purchase 1,800,000 ADSs in lieu of the ADSs being offered, and (3) certain warrants to purchase up to 5,454,546 ADSs, to certain institutional investors pursuant to a securities purchase agreement dated November 21, 2022 (the “November 2022 Offering”).
The foregoing cash flows include all distributions and transfers between our Cayman Islands holding company, our subsidiaries and the VIEs as of the date of this annual report. 8 Table of Contents Our Operations in China and Permissions Required from the PRC Authorities for Our Operations We and the VIEs have obtained all licenses, permits or approvals from the PRC regulatory authorities for our and the VIEs’ business operations of offline marketing services and online marketing services, except that we and/or the VIEs may need to obtain certain permits each time before we and/or the VIEs hold an offline event.
The foregoing cash flows include all distributions and transfers between our Cayman Islands holding company, our subsidiaries and the VIEs as of the date of this annual report. 6 Our Operations in China and Permissions Required from the PRC Authorities for Our Operations We and the VIEs have obtained all licenses, permits or approvals from the PRC regulatory authorities for our and the VIEs’ business operations of offline marketing services and online marketing services, except that we and/or the VIEs may need to obtain certain permits each time before we and/or the VIEs hold an offline event.
Pursuant to the Negative List (2021 Version), if a company in China engaging in the prohibited business stipulated in the Negative List (2021 Version) seeks an overseas offering and listing, it shall obtain the approval from the competent governmental authorities.
Pursuant to the Negative List (2024 Version), if a company in China engaging in the prohibited business stipulated in the Negative List (2024 Version) seeks an overseas offering and listing, it shall obtain the approval from the competent governmental authorities.
If we and the VIEs fail to resolve a particular complaint from industry customers or consumers, whether or not such resolutions are within our and the VIEs’ control, our and the VIEs’ perceived reputation and the confidence these industry customers and consumers place in us and the VIEs may diminish, which could materially and adversely affect our and the VIEs’ business, financial condition and results of operations. ​ 20 Table of Contents Acquisitions, strategic alliances and investments could prove difficult to integrate, disrupt our and the VIEs’ business and lower our and the VIEs’ results of operations and the value of your investment.
If we and the VIEs fail to resolve a particular complaint from industry customers or consumers, whether or not such resolutions are within our and the VIEs’ control, our and the VIEs’ perceived reputation and the confidence these industry customers and consumers place in us and the VIEs may diminish, which could materially and adversely affect our and the VIEs’ business, financial condition and results of operations. 18 Acquisitions, strategic alliances and investments could prove difficult to integrate, disrupt our and the VIEs’ business and lower our and the VIEs’ results of operations and the value of your investment.
Trading in our securities on any U.S. stock exchange and the U.S. over-the-counter market may be prohibited under the HFCA Act or the Accelerating Holding Foreign Companies Accountable Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and as a result, U.S. national securities exchanges, such as the Nasdaq, may determine to delist our securities, and our securities may be prohibited from being traded over the counter.
Risks Related to Our Securities, including the ADSs ● Trading in our securities on any U.S. stock exchange and the U.S. over-the-counter market may be prohibited under the HFCA Act or the Accelerating Holding Foreign Companies Accountable Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and as a result, U.S. national securities exchanges, such as the Nasdaq, may determine to delist our securities, and our securities may be prohibited from being traded over the counter.
Any such restrictions may materially affect such entities’ ability to make dividends or make payments, in service fees or otherwise, to us, which may materially and adversely affect our and the VIEs’ business, financial condition and results of operations. ​ 45 Table of Contents Fluctuations in exchange rates may have a material adverse effect on your investment.
Any such restrictions may materially affect such entities’ ability to make dividends or make payments, in service fees or otherwise, to us, which may materially and adversely affect our and the VIEs’ business, financial condition and results of operations. Fluctuations in exchange rates may have a material adverse effect on your investment.
Accordingly, there is no guarantee for future cooperation after the event and there is no assurance that we and the VIEs can maintain stable and long-term business relationships with any such industry customers.
Accordingly, there is no guarantee of future cooperation after the event and there is no assurance that we and the VIEs can maintain stable and long-term business relationships with any such industry customers.
Moreover, existing PRC privacy, cybersecurity and data protection-related laws and regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new laws and regulations regarding privacy, cybersecurity and data protection-related matters. These developments could adversely affect our and the VIEs’ business, operating results and financial condition.
Moreover, existing PRC privacy, cybersecurity and data protection-related laws and regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may enact new laws and regulations regarding privacy, cybersecurity and data protection-related matters. These developments could adversely affect our and the VIEs’ business, operating results and financial condition.
ITEM 3. KEY INFORMATION Holding Company Structure TuanChe Limited is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries and the VIEs in China. As a result, our ability to pay dividends depends upon dividends paid by our subsidiaries and fees paid by the VIEs.
ITEM 3. KEY INFORMATION Holding Company Structure Token Cat Limited is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries and the VIEs in China. As a result, our ability to pay dividends depends upon dividends paid by our subsidiaries and fees paid by the VIEs.
As of the date of this annual report, except as disclosed above, we and the VIEs have obtained requisite licenses in full compliance with applicable laws and regulations for offline events held, and we and the VIEs have not received any inquiry or investigation from any PRC government authority regarding non-compliance of the offline events. ​ 17 Table of Contents Relevant government authorities may suspend our and the VIEs’ offline events due to various reasons beyond our and the VIEs’ control.
As of the date of this annual report, except as disclosed above, we and the VIEs have obtained requisite licenses in full compliance with applicable laws and regulations for offline events held, and we and the VIEs have not received any inquiry or investigation from any PRC government authority regarding non-compliance of the offline events. 15 Relevant government authorities may suspend our and the VIEs’ offline events due to various reasons beyond our and the VIEs’ control.
We have not determined a specific use for a portion of the net proceeds of the November 2022 Offering, and our management will have considerable discretion in deciding how to apply these proceeds. You will not have the opportunity to assess whether the proceeds are being used appropriately before you make your investment decision.
We have not determined a specific use for a portion of the net proceeds of the October Offering, and our management will have considerable discretion in deciding how to apply these proceeds. You will not have the opportunity to assess whether the proceeds are being used appropriately before you make your investment decision.
In addition, in the event of any infrastructure disruption or failure, we and the VIEs would have no access to alternative networks and services on a timely basis, if at all, which could have a material adverse effect on our and the VIEs’ business, results of operations, and prospects. 26 Table of Contents Unintended leakage of consumer information or privacy breaches may materially and adversely affect our and the VIEs’ reputation and business performance.
In addition, in the event of any infrastructure disruption or failure, we and the VIEs would have no access to alternative networks and services on a timely basis, if at all, which could have a material adverse effect on our and the VIEs’ business, results of operations, and prospects. 24 Unintended leakage of consumer information or privacy breaches may materially and adversely affect our and the VIEs’ reputation and business performance.
Therefore, our contractual arrangements with the VIEs and their respective shareholders may not be as effective in ensuring our significant influence over the relevant portion of our business operations as direct ownership would be. 35 Table of Contents Furthermore, we are a holding company incorporated in the Cayman Islands.
Therefore, our contractual arrangements with the VIEs and their respective shareholders may not be as effective in ensuring our significant influence over the relevant portion of our business operations as direct ownership would be. Furthermore, we are a holding company incorporated in the Cayman Islands.
However, we would continue to experience a future slump in the demand for automobiles, due to various factors such as the impact of COVID-19 and macroeconomic environment.
However, we could continue to experience a future slump in the demand for automobiles, due to various factors such as the impact of COVID-19 and macroeconomic environment.
As of the date of this annual report, we and the VIEs have obtained requisite licenses in full compliance with applicable laws and regulations for offline events held, and we and the VIEs have not received any inquiry or investigation from any PRC government authority regarding non-compliance of the offline events.
As of the date of this annual report, except as disclosed above, we and the VIEs have obtained requisite licenses in full compliance with applicable laws and regulations for offline events held, and we and the VIEs have not received any inquiry or investigation from any PRC government authority regarding non-compliance of the offline events.
See “—Our and the VIEs’ business operations have been and may continue to be materially and adversely affected by the COVID-19 pandemic.” 21 Table of Contents In addition, the economic downturn may reduce the number of automakers and auto dealers in China resulting in the decrease of the demand for our and the VIEs’ services.
See “-Our and the VIEs’ business operations have been and may continue to be materially and adversely affected by the COVID-19 pandemic.” In addition, the economic downturn may reduce the number of automakers and auto dealers in China resulting in the decrease of the demand for our and the VIEs’ services.
For example, in China, there are significant legal and other obstacles for the SEC, the DOJ and other U.S. authorities to obtaining information needed for shareholder investigations or litigation.
For example, in China, there are significant legal and other procedures for the SEC, the DOJ and other U.S. authorities to obtaining information needed for shareholder investigations or litigation.
However, as we and the VIEs provide mobile applications to mobile device users, it is uncertain if we and the VIEs will be required to obtain a separate operating license for our mobile applications in addition to the value-added telecommunications service licenses, although we believe that not obtaining such separate license is in line with the current market practice. 27 Table of Contents We and the VIEs may need additional capital, and we and the VIEs may be unable to obtain such capital in a timely manner or on acceptable terms, or at all.
However, as we and the VIEs provide mobile applications to mobile device users, it is uncertain if we and the VIEs will be required to obtain a separate operating license for our mobile applications in addition to the value-added telecommunications service licenses, although we believe that not obtaining such separate license is in line with the current market practice. 25 We and the VIEs may need additional capital, and we and the VIEs may be unable to obtain such capital in a timely manner or on acceptable terms, or at all.
If we and the VIEs are not successful in protecting our and the VIEs’ intellectual property rights, our and the VIEs’ business, results of operations and financial condition may be adversely affected. 25 Table of Contents Third parties may claim that we and the VIEs infringe their proprietary intellectual property rights, which could cause us and the VIEs to incur significant legal expenses and prevent us and the VIEs from promoting our and the VIEs’ services.
If we and the VIEs are not successful in protecting our and the VIEs’ intellectual property rights, our and the VIEs’ business, results of operations and financial condition may be adversely affected. 23 Third parties may claim that we and the VIEs infringe their proprietary intellectual property rights, which could cause us and the VIEs to incur significant legal expenses and prevent us and the VIEs from promoting our and the VIEs’ services.
Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas, and adopting new measures to extend the scope of cybersecurity reviews and new laws and regulations relating to data security.
Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas, and adopting new measures to extend the scope of cybersecurity reviews and new laws and regulations relating to data security.
Where there is unclear or controversial whether or not the concerned materials are related to state secrets, the materials shall be reported to the relevant secrecy administrative departments for determination. 41 Table of Contents We cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on us and the VIEs.
Where there is unclear or controversial whether or not the concerned materials are related to state secrets, the materials shall be reported to the relevant secrecy administrative departments for determination. We cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on us and the VIEs.
With respect to the underpaid statutory social welfare benefits, we and the VIEs may be required to make up the contributions for these plans as well as to pay late fees and fines; with respect to the underwithheld individual income tax, we and the VIEs may be required to make up sufficient withholding and pay late fees and fines.
With respect to the underpaid statutory social welfare benefits, we and the VIEs may be required to make up the contributions for these plans as well as to pay late fees and fines; with respect to the under withheld individual income tax, we and the VIEs may be required to make up sufficient withholding and pay late fees and fines.
See “—Our and the VIEs’ failure to obtain necessary permits for our and the VIEs’ offline events may subject us and the VIEs to penalties and adversely affect our and the VIEs’ business, results of operations, and financial condition.” However, the licensing requirements in China may change from time to time, and we and the VIEs may be subject to more stringent regulatory requirements due to changes in the relevant jurisdictions in the future.
See “-Our and the VIEs’ failure to obtain necessary permits for our and the VIEs’ offline events may subject us and the VIEs to penalties and adversely affect our and the VIEs’ business, results of operations, and financial condition.” However, the licensing requirements in China may evolve from time to time, and we and the VIEs may be subject to more stringent regulatory requirements in the relevant jurisdictions in the future.
Business Overview—Regulation—Regulations Relating to Consumer Rights Protection and Tort Liabilities” in this annual report. 29 Table of Contents In addition, we, our WFOEs and the VIEs do not currently maintain any third-party liability insurance or product liability insurance in relation to most of the automobiles sold during our and the VIEs’ events.
Business Overview—Regulation—Regulations Relating to Consumer Rights Protection and Tort Liabilities” in this annual report. 27 In addition, we, our WFOEs and the VIEs do not currently maintain any third-party liability insurance or product liability insurance in relation to most of the automobiles sold during our and the VIEs’ events.
Our and the VIEs’ business operation could be disrupted if any of our and the VIEs’ employees is suspected of having any of the aforementioned epidemics or another contagious disease or condition, since it could require our and the VIEs’ employees to be quarantined and/or our and the VIEs’ offices to be disinfected.
Our and the VIEs’ business operation could be disrupted if any of our and the VIEs’ employees is suspected of having any of the aforementioned epidemic diseases or another contagious disease or condition, since it could require our and the VIEs’ employees to be quarantined and/or our and the VIEs’ offices to be disinfected.
Taxation—United States Federal Income Taxation”) may incur significantly increased United States federal income tax on gain recognized on the sale or other disposition of the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants and on the receipt of distributions on the ADSs or ordinary shares (and, if applicable, the Warrants or the Pre-Funded Warrants) to the extent such gain or distribution is treated as an “excess distribution” under the United States federal income tax rules, and such holders may be subject to burdensome reporting requirements.
Holder (as defined in “Taxation-United States Federal Income Taxation”) may incur significantly increased United States federal income tax on gain recognized on the sale or other disposition of the ADSs, ordinary shares, the Warrants or the Pre-Funded Warrants and on the receipt of distributions on the ADSs or ordinary shares (and, if applicable, the Warrants or the Pre-Funded Warrants) to the extent such gain or distribution is treated as an “excess distribution” under the United States federal income tax rules, and such holders may be subject to burdensome reporting requirements.
These conditions raise substantial doubt about our ability to continue as a going concern. ​ 19 Table of Contents Our ability to continue as a going concern is dependent on our management’s ability to successfully execute the business plan of improving staff efficiency and pursuing potential financing to improve our cash flow from operating and financing activities.
These conditions raise substantial doubt about our ability to continue as a going concern. 17 Our ability to continue as a going concern is dependent on our management’s ability to successfully execute the business plan of improving staff efficiency and pursuing potential financing to improve our cash flow from operating and financing activities.
The applicable foreign exchange circulars and rules may limit our ability to convert, transfer and use the net proceeds from our overseas offerings or any offering of additional equity securities in China, which may adversely affect our and the VIEs’ business, financial condition and results of operations.
Our ability to convert, transfer and use the net proceeds from our overseas offerings or any offering of additional equity securities in China may be affected by the applicable foreign exchange circulars and rules and our ability to convert, transfer and use the net proceeds from our overseas offerings or any offering of additional equity securities, which may adversely affect our and the VIEs’ business, financial condition and results of operations.
Mr. Wei Wen beneficially owns 69.4% of the aggregate voting power of our company as of the date of this annual report. See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” As a result of the dual-class share structure and the concentration of ownership, Mr.
Wei Wen beneficially owns approximately 89% of the aggregate voting power of our company as of the date of this annual report. See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” As a result of the dual-class share structure and the concentration of ownership, Mr.
As a holder of the ADSs, you will only be able to exercise the voting rights with respect to the underlying Class A ordinary shares represented by your ADSs in accordance with the provisions of the deposit agreement. Under the deposit agreement, you must vote by giving voting instructions to the depositary.
As a holder of the ADSs, you will only be able to exercise the voting rights with respect to the Class A ordinary shares represented by your ADSs in accordance with the provisions of the deposit agreement. Under the deposit agreement, you may only vote by giving timely voting instructions to the depositary.
Upon receipt of your voting instructions, the depositary will vote the underlying Class A ordinary shares represented by your ADSs in accordance with these instructions. You will not be able to directly exercise your right to vote with respect to the underlying Class A ordinary shares represented by your ADSs unless you withdraw such shares.
Upon receipt of your timely voting instructions, the depositary will vote the Class A ordinary shares represented by your ADSs in accordance with those instructions. You will not be able to directly exercise your right to vote with respect to the Class A ordinary shares represented by your ADSs unless you withdraw such shares.
These short attacks have, in the past, led to selling of shares in the market. 56 Table of Contents Public companies that have substantially all of their operations in China have been the subject of short selling.
These short attacks have, in the past, led to selling of shares in the market. Public companies that have substantially all of their operations in China have been the subject of short selling.
For more information, see “Item 10. Additional Information—E. Taxation—United States Federal Income Taxation.” Our memorandum and articles of association contains anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A ordinary shares and ADSs.
For more information, see “Taxation-United States Federal Income Taxation.” Our memorandum and articles of association contains anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A ordinary shares and the ADSs.
We and the VIEs organized auto shows in 142, 76 and 81 cities across China in 2021, 2022 and 2023, and we had sales representatives located in 119, 83 and 79 cities as of December 31, 2021, 2022 and 2023, respectively. We and the VIEs plan to expand our and the VIEs’ operations to more cities and counties in China.
We and the VIEs organized auto shows in 76, 81 and 47 cities across China in 2022, 2023 and 2024, and we had sales representatives located in 83, 79 and 47 cities as of December 31, 2022, 2023 and 2024, respectively. We and the VIEs plan to expand our and the VIEs’ operations to more cities and counties in China.
If a significant number of our and the VIEs’ industry customers terminate or do not renew their agreements with us or the VIEs and we and the VIEs are not able to replace these business partners on commercially reasonable terms in a timely manner, or at all, our and the VIEs business, results of operations and financial condition would be materially and adversely affected.
If a significant number of our and the VIEs’ industry customers terminate or do not renew their agreements with us or the VIEs and we and the VIEs are not able to replace these business partners on commercially reasonable terms in a timely manner, or at all, our and the VIEs business, results of operations and financial condition would be materially and adversely affected. 10 If we and the VIEs fail to attract and retain automobile consumers, our and the VIEs’ business and results of operations may be materially and adversely affected.
Historically we and the VIEs relied upon certain online advertising service providers to advertise our and the VIEs’ service offerings. Our and the VIEs’ two largest online advertising service providers accounted for approximately 62.2%, 38.9% and 52.1% of our total online advertising expenses in 2021, 2022 and 2023, respectively.
Historically we and the VIEs relied upon certain online advertising service providers to advertise our and the VIEs’ service offerings. Our and the VIEs’ two largest online advertising service providers accounted for approximately 38.9%, 52.1% and 36.1% of our total online advertising expenses in 2022, 2023 and 2024, respectively.
As a result, our and the VIEs’ business operations and our ability to make distributions to you could be materially and adversely affected. 47 Table of Contents Failure to comply with governmental regulations and other legal obligations concerning data protection and cybersecurity may materially and adversely affect our and the VIEs’ business.
As a result, our and the VIEs’ business operations and our ability to make distributions to you could be materially and adversely affected. 44 Failure to comply with governmental regulations and other legal obligations concerning data protection and cybersecurity may materially and adversely affect our and the VIEs’ business.
We do not intend to apply for any listing of the warrant instruments issued in connection with our November 2022 Offering on any exchange or nationally recognized trading system, and we do not expect a market to develop for such warrants.
We do not intend to apply for any listing of the warrant instruments issued in connection with our past offerings on any exchange or nationally recognized trading system, and we do not expect a market to develop for such warrants.
As a result, restrictions on currency exchange may limit our ability to use net revenues generated in Renminbi to fund any business activities we may have outside China in the future or to make dividend payments to our shareholders and ADS holders in U.S. dollars.
As a result, our ability to use net revenues generated in Renminbi to fund any business activities we may have outside China in the future or to make dividend payments to our shareholders and ADS holders in U.S. dollars may be affected by regulations on currency exchange.
We have not determined a specific use for a portion of the net proceeds from the November 2022 Offering, and we may use these proceeds in ways with which you may not agree.
We have not determined a specific use for a portion of the net proceeds from the October 2024 Offering, and we may use these proceeds in ways with which you may not agree.
For example, foreign exchange transactions under our subsidiary’s capital account, including principal payments in respect of foreign currency-denominated obligations, remain subject to significant foreign exchange controls and the approval requirement of SAFE. These limitations could affect our ability to obtain foreign exchange for capital expenditures.
For example, foreign exchange transactions under our subsidiary’s capital account, including principal payments in respect of foreign currency-denominated obligations, remain subject to significant foreign exchange controls and the approval requirement of SAFE. Our ability to obtain foreign exchange for capital expenditures could be affected by these regulations.
As the foreign exchange related regulatory regime and practice are complex and still evolving and involve many uncertainties, we cannot assure you that we have complied or will be able to comply with all applicable foreign exchange circulars and rules, or that we will be able to complete the necessary government registrations or filings on a timely basis, if at all, with respect to future loans by us to our PRC subsidiaries or with respect to future capital contributions by us to our PRC subsidiaries.
As the foreign exchange related regulatory regime and practice are complex and may change from time to time, we cannot assure you that we have complied or will be able to comply with all applicable foreign exchange circulars and rules, or that we will be able to complete the necessary government registrations or filings on a timely basis, if at all, with respect to future loans by us to our PRC subsidiaries or with respect to future capital contributions by us to our PRC subsidiaries.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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For information regarding our principal capital expenditures, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Liquidity and Capital Resources.” SEC maintains an Internet site, http://www.sec/gov , which contains reports, proxy and information statements, and other information regarding us. We also maintain an Internet site, http://ir.tuanche.com/ , for investors’ information.
For information regarding our principal capital expenditures, see “Item 5. Operating and Financial Review and Prospects-B. Liquidity and Capital Resources-Liquidity and Capital Resources.” SEC maintains an Internet site, http://www.sec/gov, which contains reports, proxy and information statements, and other information regarding us. We also maintain an Internet site, http://ir.tuanche.com/, for investors’ information. B.
As a result of these contractual arrangements, we are the primary beneficiary of the VIEs and their respective subsidiaries, and, therefore, have consolidated the financial results of the VIEs in our consolidated financial statements, provided that we meet the conditions for consolidation under U.S. GAAP.
As a result of these contractual arrangements, we are the primary beneficiary of the VIEs and their respective subsidiaries, and, therefore, have consolidated the financial results of the VIEs in our consolidated financial statements, provided that we meet the conditions for consolidation under U.S. GAAP.
B. Business Overview We operate the following businesses: Offline marketing solutions . We and the VIEs turn individual and isolated automobile purchase transactions into large-scale collective purchase activities through our auto shows. By attracting a large number of consumers, these events serve as integrated marketing solutions to industry customers, which include automakers, franchised dealerships, secondary dealers and automotive service providers.
Business Overview We operate the following businesses: Offline marketing solutions . We and the VIEs turn individual and isolated automobile purchase transactions into large-scale collective purchase activities through our auto shows. By attracting a large number of consumers, these events serve as integrated marketing solutions to industry customers, which include automakers, franchised dealerships, secondary dealers and automotive service providers.
Other Services Social CRM cloud services In January 2020, we acquired Longye International Limited, a leading system developer that develops and implements social customer relationship management cloud systems (“social CRM cloud systems”) to provide social CRM services to the automotive industry in China.
Social CRM cloud services In January 2020, we acquired Longye International Limited, a leading system developer that develops and implements social customer relationship management cloud systems (“social CRM cloud systems”) to provide social CRM services to the automotive industry in China.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders.” 85 Table of Contents Income Tax for Share Transfers According to the Public Notice Regarding Certain Enterprise Income Tax Matters on Indirect Transfer of Properties by Non-resident Enterprise (“SAT Bulletin 7”), promulgated by the SAT in February 2015, if a non-resident enterprise transfers the equity interests of a PRC resident enterprise indirectly by transfer of the equity interests of an offshore holding company (other than a purchase and sale of shares issued by a PRC resident enterprise in public securities market) without a reasonable commercial purpose, the PRC tax authorities have the power to reassess the nature of the transaction and the indirect equity transfer will be treated as a direct transfer.
Risk Factors-Risks Related to Doing Business in China-If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders.” Income Tax for Share Transfers According to the Public Notice Regarding Certain Enterprise Income Tax Matters on Indirect Transfer of Properties by Non-resident Enterprise (“SAT Bulletin 7”), promulgated by the SAT in February 2015, if a non-resident enterprise transfers the equity interests of a PRC resident enterprise indirectly by transfer of the equity interests of an offshore holding company (other than a purchase and sale of shares issued by a PRC resident enterprise in public securities market) without a reasonable commercial purpose, the PRC tax authorities have the power to reassess the nature of the transaction and the indirect equity transfer will be treated as a direct transfer.
In addition, it also lifted the restriction, that foreign exchange capital under the capital accounts and the corresponding Renminbi capital obtained from foreign exchange settlement should not be used for repaying the inter-enterprise borrowings (including advances by the third party) or repaying bank loans in Renminbi that have been sub-lent to the third party. 88 Table of Contents In January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification (“SAFE Circular 3”), which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (1) under the principle of genuine transaction, banks shall check board resolutions regarding profit distribution, the original version of tax filing records and audited financial statements; and (2) domestic entities shall hold income to account for previous years’ losses before remitting profits.
In addition, it also lifted the restriction, that foreign exchange capital under the capital accounts and the corresponding Renminbi capital obtained from foreign exchange settlement should not be used for repaying the inter-enterprise borrowings (including advances by the third party) or repaying bank loans in Renminbi that have been sub-lent to the third party. 82 In January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification (“SAFE Circular 3”), which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (1) under the principle of genuine transaction, banks shall check board resolutions regarding profit distribution, the original version of tax filing records and audited financial statements; and (2) domestic entities shall hold income to account for previous years’ losses before remitting profits.
In February 2021, the CBIRC promulgated the Circular 24, which sets forth several requirements on the online lending business of the commercial banks, including: (i) the commercial banks shall conduct the risk control measures independently and the core credit assessment and risk control business are prohibited to be outsourced; (ii) except for the commercial banks which have no actual business sites, mainly conduct online business and meet other requirements stipulated by the CBIRC, local commercial banks shall conduct online lending within the jurisdiction where such commercial banks are registered; and (iii) with respect to the online loan business conducted in cooperation with third-party institutions, the capital contribution of cooperative institutions shall not be less than 30% in a single loan. 83 Table of Contents Regulations Relating to Intellectual Property Rights The PRC has adopted comprehensive legislation governing intellectual property rights, including copyrights, patents, trademarks and domain names.
In February 2021, the CBIRC promulgated the Circular 24, which sets forth several requirements on the online lending business of the commercial banks, including: (i) the commercial banks shall conduct the risk control measures independently and the core credit assessment and risk control business are prohibited to be outsourced; (ii) except for the commercial banks which have no actual business sites, mainly conduct online business and meet other requirements stipulated by the CBIRC, local commercial banks shall conduct online lending within the jurisdiction where such commercial banks are registered; and (iii) with respect to the online loan business conducted in cooperation with third-party institutions, the capital contribution of cooperative institutions shall not be less than 30% in a single loan. 77 Regulations Relating to Intellectual Property Rights The PRC has adopted comprehensive legislation governing intellectual property rights, including copyrights, patents, trademarks and domain names.
In addition, the Outbound Data Transfer Security Assessment Measures sets forth a 6-month grace period, any entity or data controller may within 6 months upon February 28, 2023, take corrective actions and apply for the CAC security assessment. 80 Table of Contents In January 2019, the Office of the Central Cyberspace Affairs Commission, the MIIT, the Ministry of Public Security, and the SAMR jointly issued an Announcement of Launching Special Crackdown Against Illegal Collection and Use of Personal Information by Apps to carry out special campaigns against mobile apps collecting and using personal information in violation of applicable laws and regulations, which prohibits business operators from collecting personal information irrelevant to their services, or forcing users to give authorization in a disguised manner.
In addition, the Outbound Data Transfer Security Assessment Measures sets forth a 6-month grace period, any entity or data controller may within 6 months upon February 28, 2023, take corrective actions and apply for the CAC security assessment. 74 In January 2019, the Office of the Central Cyberspace Affairs Commission, the MIIT, the Ministry of Public Security, and the SAMR jointly issued an Announcement of Launching Special Crackdown Against Illegal Collection and Use of Personal Information by Apps to carry out special campaigns against mobile apps collecting and using personal information in violation of applicable laws and regulations, which prohibits business operators from collecting personal information irrelevant to their services, or forcing users to give authorization in a disguised manner.
The Negative List (2021 version) stipulates that the ultimate foreign equity ownership in a value-added telecommunications services provider shall not exceed 50%, except for e-commerce business, domestic multi-party communications services business, store-and-forward business and call center business, which may be 100% owned by foreign investors.
The Negative List (2024 version) stipulates that the ultimate foreign equity ownership in a value-added telecommunications services provider shall not exceed 50%, except for e-commerce business, domestic multi-party communications services business, store-and-forward business and call center business, which may be 100% owned by foreign investors.
As a result, we and our non-resident investors in such transactions may become at risk of being taxed under SAT Bulletin 7, and we may be required to expend valuable resources to comply with SAT Bulletin 7 or to establish that we should not be taxed under the general anti-avoidance rule of the EIT Law, which may have a material adverse effect on our financial condition and results of operations. 86 Table of Contents Dividend Withholding Tax Pursuant to the EIT Law and its implementation rules, if a non-resident enterprise has not set up an organization or establishment in the PRC, or has set up an organization or establishment but the income derived has no actual connection with such organization or establishment, it will be subject to a withholding tax on its PRC-sourced income at a rate of 10%.
As a result, we and our non-resident investors in such transactions may become at risk of being taxed under SAT Bulletin 7, and we may be required to expend valuable resources to comply with SAT Bulletin 7 or to establish that we should not be taxed under the general anti-avoidance rule of the EIT Law, which may have a material adverse effect on our financial condition and results of operations. 80 Dividend Withholding Tax Pursuant to the EIT Law and its implementation rules, if a non-resident enterprise has not set up an organization or establishment in the PRC, or has set up an organization or establishment but the income derived has no actual connection with such organization or establishment, it will be subject to a withholding tax on its PRC-sourced income at a rate of 10%.
We and the VIEs seek to protect our and the VIEs’ intellectual properties through a combination of trademark and copyright protection laws in China and other jurisdictions, as well as through confidentiality agreements and other measures. As of the date of this annual report, we, together with the VIEs, hold 168 registered trademarks in China, including the “TuanChe” trademarks.
We and the VIEs seek to protect our and the VIEs’ intellectual properties through a combination of trademark and copyright protection laws in China and other jurisdictions, as well as through confidentiality agreements and other measures. As of the date of this annual report, we, together with the VIEs, hold 164 registered trademarks in China, including the “TuanChe” trademarks.
Our and the VIEs’ own online channels consist of the tuanche.com website, our and the VIEs’ mobile apps, our and the VIEs’ official WeChat account and WeChat mini-program. As of December 31, 2023, we have created customized city homepages for over 331 cities around China, each targeting local consumers.
Our and the VIEs’ own online channels consist of the tuanche.com website, our and the VIEs’ mobile apps, our and the VIEs’ official WeChat account and WeChat mini-program. As of December 31, 2024, we have created customized city homepages for over 331 cities around China, each targeting local consumers.
Under these regulations, the Renminbi is freely convertible for current account items, including the trade and service-related foreign exchange transactions and other current exchange transactions, but not for capital account items, such as direct investments, loans, repatriation of investments and investments in securities, unless the prior approval of the SAFE, is obtained and prior registration with SAFE is made. 87 Table of Contents In August 2008, the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the Relevant Operating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreign-invested Enterprises (“SAFE Circular 142”), was promulgated by the General Affairs Department of SAFE, which regulates the conversion by foreign-invested enterprises of foreign currency capital into Renminbi by restricting how the converted Renminbi may be used.
Under these regulations, the Renminbi is freely convertible for current account items, including the trade and service-related foreign exchange transactions and other current exchange transactions, but not for capital account items, such as direct investments, loans, repatriation of investments and investments in securities, unless the prior approval of the SAFE, is obtained and prior registration with SAFE is made. 81 In August 2008, the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the Relevant Operating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreign-invested Enterprises (“SAFE Circular 142”), was promulgated by the General Affairs Department of SAFE, which regulates the conversion by foreign-invested enterprises of foreign currency capital into Renminbi by restricting how the converted Renminbi may be used.
Neither we nor the VIEs are not currently subject to any threatened or ongoing legal proceedings that, in the opinion of our and the VIEs’ management, may have a material adverse effect on our and the VIEs’ business, results of operations or financial condition. 74 Table of Contents Regulation Regulations Relating to Value-added Telecommunications Service The Telecommunications Regulations of PRC promulgated in September 2000 and amended in July 2014 and February 2016, respectively, by the State Council and its related implementation rules, including the Catalog of Classification of Telecommunications Business issued by the MIIT, categorize various types of telecommunications and telecommunications-related activities into basic or value-added telecommunications services.
Neither we nor the VIEs are not currently subject to any threatened or ongoing legal proceedings that, in the opinion of our and the VIEs’ management, may have a material adverse effect on our and the VIEs’ business, results of operations or financial condition. 68 Regulation Regulations Relating to Value-added Telecommunications Service The Telecommunications Regulations of PRC promulgated in September 2000 and amended in July 2014 and February 2016, respectively, by the State Council and its related implementation rules, including the Catalog of Classification of Telecommunications Business issued by the MIIT, categorize various types of telecommunications and telecommunications-related activities into basic or value-added telecommunications services.
In response to the significant impact of the COVID-19 pandemic, we and the VIEs implemented measures to adjust the pace of our and the VIEs’ business expansion and conserve resources, such as furlough arrangements and scaling back our recruitment budget and employee size, in 2021, 2022 and 2023.
In response to the significant impact of the COVID-19 pandemic, we and the VIEs implemented measures to adjust the pace of our and the VIEs’ business expansion and conserve resources, such as furlough arrangements and scaling back our recruitment budget and employee size, in 2022, 2023 and 2024.
If a license holder fails to comply with these requirements in the MIIT Notice and cure any non-compliance, the Ministry of Information Industry or its local counterparts have the discretion to take measures against such license holder, including revoking its value-added telecommunications service license. 76 Table of Contents Furthermore, the Foreign Investment Catalog (as amended) classifies industries listed therein into two parts: encouraged category, and the category subject to the special management measures for the entry of foreign investment (the “Negative List”), which are further divided into the restricted category and prohibited category.
If a license holder fails to comply with these requirements in the MIIT Notice and cure any non-compliance, the Ministry of Information Industry or its local counterparts have the discretion to take measures against such license holder, including revoking its value-added telecommunications service license. 70 Furthermore, the Foreign Investment Catalog (as amended) classifies industries listed therein into two parts: encouraged category, and the category subject to the special management measures for the entry of foreign investment (the “Negative List”), which are further divided into the restricted category and prohibited category.
From January 1, 2016 to December 31, 2023, over 3.2 million consumers have entered their information on our and the VIEs’ online platform. In 2021, 2022 and 2023, the average monthly unique visits to our online platform was 3.1 million, 1.5 million and 1.2 million, respectively.
From January 1, 2016 to December 31, 2023, over 3.2 million consumers have entered their information on our and the VIEs’ online platform. In 2022, 2023 and 2024, the average monthly unique visits to our online platform was 1.5 million, 1.2 million and 1.2 million, respectively.
Pursuant to the Interim Measures for the Finance Leasing Companies, the finance leasing business refers to transaction activities whereby a lessor, in accordance with the selection of lessee on seller and leased property, purchases the leased property from the seller and provides the leased property for the lessee to use, for which the lessor pays the rent, and local financial regulatory authorities at the provincial level shall be specifically responsible for the supervision and administration of finance leasing companies within their respective jurisdictions. 82 Table of Contents Regulations Relating to Financing Guarantee In August 2017, the State Council promulgated the Regulations on the Supervision and Administration of Financing Guarantee Companies (the “Financing Guarantee Regulations”), which became effective on October 1, 2017.
Pursuant to the Interim Measures for the Finance Leasing Companies, the finance leasing business refers to transaction activities whereby a lessor, in accordance with the selection of lessee on seller and leased property, purchases the leased property from the seller and provides the leased property for the lessee to use, for which the lessor pays the rent, and local financial regulatory authorities at the provincial level shall be specifically responsible for the supervision and administration of finance leasing companies within their respective jurisdictions. 76 Regulations Relating to Financing Guarantee In August 2017, the State Council promulgated the Regulations on the Supervision and Administration of Financing Guarantee Companies (the “Financing Guarantee Regulations”), which became effective on October 1, 2017.
Facilities Our and the VIEs’ corporate headquarters are located in Beijing, China, where we, together with the VIEs, lease office space with an area of approximately 4,012.0 square meters as of December 31, 2023.
Facilities Our and the VIEs’ corporate headquarters are located in Beijing, China, where we, together with the VIEs, lease office space with an area of approximately 4,012.0 square meters as of December 31, 2024.
The Negative List (2021 version) expands the scope of permitted industries by foreign investment by reducing the number of industries that fall within the Negative List where restrictions on the shareholding percentage or requirements on the composition of board or senior management still exists.
The Negative List (2024 version) expands the scope of permitted industries by foreign investment by reducing the number of industries that fall within the Negative List where restrictions on the shareholding percentage or requirements on the composition of board or senior management still exists.
Effective on January 26, 2024, we changed the ratio of the ADSs to Class A ordinary shares from the then ADS ratio of one ADS to sixteen (16) Class A ordinary shares to a new ADS ratio of one ADS representing two hundred and forty (240) Class A ordinary shares.
Effective on January 26, 2024, we changed the ratio of the ADSs to Class A ordinary shares from the then ADS ratio of one ADS to sixteen (16) Class A ordinary shares to a new ADS ratio of one ADS representing two hundred and forty (240) Class A ordinary shares. ● October 2024 Transaction.
According to the EIT Law and its implementation rules, the income tax rate of an enterprise that has been determined to be a high and new technology enterprise may be reduced to 15%. 84 Table of Contents In addition, according to the EIT Law, enterprises registered in countries or regions outside the PRC but have their “de facto management bodies” located within China may be considered as PRC resident enterprises and are therefore subject to PRC enterprise income tax at the rate of 25% on their worldwide income.
According to the EIT Law and its implementation rules, the income tax rate of an enterprise that has been determined to be a high and new technology enterprise may be reduced to 15%. 78 In addition, according to the EIT Law, enterprises registered in countries or regions outside the PRC but have their “de facto management bodies” located within China may be considered as PRC resident enterprises and are therefore subject to PRC enterprise income tax at the rate of 25% on their worldwide income.
However, remedial registration applications made by PRC residents that previously failed to comply with the SAFE Circular 37 continue to fall under the jurisdiction of the relevant local branch of SAFE . 89 Table of Contents Share Option Rules Pursuant to SAFE Circular 37, PRC residents who participate in share incentive plans in overseas non-publicly-listed companies may submit applications to SAFE or its local branches for the foreign exchange registration with respect to offshore special purpose companies.
However, remedial registration applications made by PRC residents that previously failed to comply with the SAFE Circular 37 continue to fall under the jurisdiction of the relevant local branch of SAFE. 83 Share Option Rules Pursuant to SAFE Circular 37, PRC residents who participate in share incentive plans in overseas non-publicly-listed companies may submit applications to SAFE or its local branches for the foreign exchange registration with respect to offshore special purpose companies.
In addition, in the event that any of them obtains any equity interest in the VIEs held by her respective spouse for any reason, such spouse agrees to be bound by similar obligations and agreed to enter into similar contractual arrangements. 95 Table of Contents In the opinion of Shihui Partners, our PRC legal counsel, the contractual arrangements among WFOEs, the VIEs and their respective shareholders are valid, binding and enforceable under applicable PRC law currently in effect.
In addition, in the event that any of them obtains any equity interest in the VIEs held by her respective spouse for any reason, such spouse agrees to be bound by similar obligations and agreed to enter into similar contractual arrangements. 89 In the opinion of Shihui Partners, our PRC legal counsel, the contractual arrangements among WFOEs, the VIEs and their respective shareholders are valid, binding and enforceable under applicable PRC law currently in effect.
If the trade fair is over, the customer may also demand compensation from the undertaker of such trade fair, in which case the undertaker has the right to recover the compensation from the infringing sellers or service providers afterwards. 81 Table of Contents The Implementation Measures of the PBOC for Protecting Rights and Interests of Financial Consumers (the “Measures for Financial Consumer Protection”), is promulgated by the PBOC in September 2020 and came into force in November 2020.
If the trade fair is over, the customer may also demand compensation from the undertaker of such trade fair, in which case the undertaker has the right to recover the compensation from the infringing sellers or service providers afterwards. 75 The Implementation Measures of the PBOC for Protecting Rights and Interests of Financial Consumers (the “Measures for Financial Consumer Protection”), is promulgated by the PBOC in September 2020 and came into force in November 2020.
Besides, the foreign investors of such company shall not be involved in the company’s operation and management, and their shareholding percentage shall be subject, mutatis mutandis, to the relevant regulations on the domestic securities investments by foreign investors. 90 Table of Contents In February 2023, approved by the State Council, CSRC released new regulations for the filing-based administration of overseas securities offering and listing by domestic companies.
Besides, the foreign investors of such company shall not be involved in the company’s operation and management, and their shareholding percentage shall be subject, mutatis mutandis, to the relevant regulations on the domestic securities investments by foreign investors. 84 In February 2023, approved by the State Council, CSRC released new regulations for the filing-based administration of overseas securities offering and listing by domestic companies.
Any violation of the above provisions may result in, among others, correction order, fines or liability for damage. 77 Table of Contents Regulations Relating to Automobile Sales The sales of new automobiles within the territory of PRC are principally governed by the Administrative Measures for the Automobile Sales (the “Automobile Sales Measures”), promulgated by the MOFCOM in April 2017, which became effective in July 2017.
Any violation of the above provisions may result in, among others, correction order, fines or liability for damage. 71 Regulations Relating to Automobile Sales The sales of new automobiles within the territory of PRC are principally governed by the Administrative Measures for the Automobile Sales (the “Automobile Sales Measures”), promulgated by the MOFCOM in April 2017, which became effective in July 2017.
Below is a summary of the currently effective contractual arrangements by and among our WFOEs, the VIEs and their respective shareholders. 94 Table of Contents Exclusive Business Cooperation Agreement Pursuant to the exclusive business cooperation agreement between each of the VIEs and the applicable WFOE, the respective WFOE has the exclusive right to provide or designate any third party to provide, among other things, comprehensive business support, technical support and consulting services to the VIEs.
Below is a summary of the currently effective contractual arrangements by and among our WFOEs, the VIEs and their respective shareholders. 88 Exclusive Business Cooperation Agreement Pursuant to the exclusive business cooperation agreement between each of the VIEs and the applicable WFOE, the respective WFOE has the exclusive right to provide or designate any third party to provide, among other things, comprehensive business support, technical support and consulting services to the VIEs.
In June 2018, the convertible notes were converted into an aggregate of 3,965,043, 1,201,528 and 2,403,057 Series C-4 preferred shares, respectively, all at a conversion price of US$0.8322734 per share. 64 Table of Contents ● Series D-1 financing .
In June 2018, the convertible notes were converted into an aggregate of 3,965,043, 1,201,528 and 2,403,057 Series C-4 preferred shares, respectively, all at a conversion price of US$0.8322734 per share. 58 ● Series D-1 financing .
For instance, under the Internet Security Law, network operators of key information infrastructure generally shall, during their operations in the PRC, store the personal information and important data collected and produced within the territory of the PRC. 79 Table of Contents In June 2021, the Standing Committee of the NPC promulgated the PRC Data Security Law, which took effect in September 2021.
For instance, under the Internet Security Law, network operators of key information infrastructure generally shall, during their operations in the PRC, store the personal information and important data collected and produced within the territory of the PRC. 73 In June 2021, the Standing Committee of the NPC promulgated the PRC Data Security Law, which took effect in September 2021.
Furthermore, advertisers, advertising agencies and advertising distributors may be subject to civil liability if they infringe on the legal rights and interests of third parties. 78 Table of Contents Regulations Relating to Internet Information Security and Privacy Protection Internet information in China is regulated from a national security standpoint.
Furthermore, advertisers, advertising agencies and advertising distributors may be subject to civil liability if they infringe on the legal rights and interests of third parties. 72 Regulations Relating to Internet Information Security and Privacy Protection Internet information in China is regulated from a national security standpoint.
We and the VIEs primarily provide a series of integrated services, such as event planning and executing, marketing training and onsite coaching, to support our and the VIEs’ industry customers’ special promotion events. In 2021, 2022 and 2023, we facilitated 158, 90 and 750 special promotion events through our services, respectively.
We and the VIEs primarily provide a series of integrated services, such as event planning and executing, marketing training and onsite coaching, to support our and the VIEs’ industry customers’ special promotion events. In 2022, 2023 and 2024, we facilitated 90, 750 and 18 special promotion events through our services, respectively.
We believe we and the VIEs’ are differentiated from our and the VIEs’ competitors mainly for two reasons: (1) our and the VIEs’ events are more sales-oriented instead of information-oriented; and (2) our and the VIEs’ business model integrates our and the VIEs’ online platform with offline events. Employees As of December 31, 2023, we had 324 full-time employees.
We believe we and the VIEs’ are differentiated from our and the VIEs’ competitors mainly for two reasons: (1) our and the VIEs’ events are more sales-oriented instead of information-oriented; and (2) our and the VIEs’ business model integrates our and the VIEs’ online platform with offline events. Employees As of December 31, 2024, we had 116 full-time employees.
On January 21, 2022, we announced our preliminary plan to enter the electric vehicle manufacturing business. 65 Table of Contents Our principal executive offices are located at 9F, Ruihai Building, No. 21 Yangfangdian Road, Haidian District, Beijing 100038, People’s Republic of China.
On January 21, 2022, we announced our preliminary plan to enter the electric vehicle manufacturing business. 59 Our principal executive offices are located at 9F, Ruihai Building, No. 21 Yangfangdian Road, Haidian District, Beijing 100038, People’s Republic of China.
According to the Regulations on Management of Housing Fund, an enterprise that fails to make housing fund contributions may be ordered to rectify the noncompliance and pay the required contributions within a stipulated deadline; otherwise, an application may be made to a local court for compulsory enforcement. 92 Table of Contents C.
According to the Regulations on Management of Housing Fund, an enterprise that fails to make housing fund contributions may be ordered to rectify the noncompliance and pay the required contributions within a stipulated deadline; otherwise, an application may be made to a local court for compulsory enforcement. 86 C.
We and the VIEs collaborate with and facilitate a commercial bank in expanding its cooperation with our and the VIEs’ industry customers to grow its auto loan business. We and the VIEs charge the bank service fees for approved loan applications. We and the VIEs ceased to operate the referral services in 2022.
We and the VIEs collaborate with and facilitate a commercial bank in expanding its cooperation with our and the VIEs’ industry customers to grow its auto loan business. We and the VIEs charge the bank service fees for approved loan applications. We and the VIEs ceased to operate the referral services in 2022. 60 Social CRM cloud services.
The map below shows the cities where we organized at least one auto show as of December 31, 2023.
The map below shows the cities where we organized at least one auto show as of December 31, 2024.
We believe that our and the VIEs’ existing facilities are generally adequate to meet our and the VIEs’ current needs, but we and the VIEs expect to seek additional space as needed to accommodate future growth. ​ 73 Table of Contents Our and the VIEs’ servers are primarily hosted at internet data centers owned by major domestic internet data center providers.
We believe that our and the VIEs’ existing facilities are generally adequate to meet our and the VIEs’ current needs, but we and the VIEs expect to seek additional space as needed to accommodate future growth. 67 Our and the VIEs’ servers are primarily hosted at internet data centers owned by major domestic internet data center providers.
As of the same date, we, together with the VIEs, have 113 registered domain names, including our main website domain names, tuanche.com, as well as 28 artwork copyright and 119 software copyrights in China.
As of the same date, we, together with the VIEs, have 110 registered domain names, including our main website domain names, tuanche.com, as well as 26 artwork copyright and 119 software copyrights in China.
In particular: ● Incorporation of the listing entity . In September 2012, we incorporated TuanChe Limited as a holding company and proposed listing entity in the Cayman Islands. ● Incorporation of Hong Kong and PRC subsidiaries . In October 2012, we established a wholly-owned subsidiary in Hong Kong, TuanChe Information Limited.
In September 2012, we incorporated Token Cat Limited (formerly known as TuanChe Limited) as a holding company and proposed listing entity in the Cayman Islands. ● Incorporation of Hong Kong and PRC subsidiaries . In October 2012, we established a wholly-owned subsidiary in Hong Kong, TuanChe Information Limited.
Operating Results—Year Ended December 31, 2023 Compared to Year Ended December 31, 2022.” 67 Table of Contents Our and the VIEs’ Business Model We, together with the VIEs, are the first company in China to provide a scalable omni-channel automotive marketplace approach to automobile marketing and distribution, according to the iResearch report.
Operating Results-Year Ended December 31, 2024 Compared to Year Ended December 31, 2023.” 61 Our and the VIEs’ Business Model We, together with the VIEs, are the first company in China to provide a scalable omni-channel automotive marketplace approach to automobile marketing and distribution, according to the iResearch report.
In December 2021, the NDRC and MOFCOM jointly issued the Negative List (2021 Version), which became effective on January 1, 2022. Pursuant to the Negative List (2021 Version), if a domestic company engaging in the prohibited business stipulated in the Negative List (2021 Version) seeks an overseas offering and listing, it shall obtain approval from the competent governmental authorities.
In September 2024, the NDRC and MOFCOM jointly issued the Negative List (2024 Version), which became effective on November 1, 2024. Pursuant to the Negative List (2024 Version), if a domestic company engaging in the prohibited business stipulated in the Negative List (2024 Version) seeks an overseas offering and listing, it shall obtain approval from the competent governmental authorities.
Our and the VIEs’ organization of auto shows involves four phases: (1) annual planning, (2) event request initiation, (3) event planning, and (4) event execution. 69 Table of Contents Annual planning .
Our and the VIEs’ organization of auto shows involves four phases: (1) annual planning, (2) event request initiation, (3) event planning, and (4) event execution. 63 Annual planning .
In 2023, our and the VIEs’ top 20 industry customers collectively contributed to approximately 43.7% of our total net revenues with the largest customer accounting for approximately 16.1%. Our and the VIEs’ Services Offline Marketing Solutions Auto shows We, together with the VIEs, organize auto shows to create a many-to-many consumption environment for prospective local consumers.
In 2024, our and the VIEs’ top 20 industry customers collectively contributed to approximately 44.3% of our total net revenues with the largest customer accounting for approximately 7.9%. Our and the VIEs’ Services Offline Marketing Solutions Auto shows We, together with the VIEs, organize auto shows to create a many-to-many consumption environment for prospective local consumers.
Since our incorporation of TuanChe Limited in 2012, we have raised approximately US$146.8 million in equity financing from our dedicated group of investors: ● Series A financing .
Since our incorporation of Token Cat Limited (formerly known as TuanChe Limited) in 2012, we have raised approximately US$146.8 million in equity financing from our dedicated group of investors: ● Series A financing .
We and the VIEs facilitated 750 special promotion events through our and the VIEs’ services in 2023. Historically, we generated net revenues primarily through the offline events.
We and the VIEs facilitated 18 special promotion events through our and the VIEs’ services in 2024. Historically, we generated net revenues primarily through the offline events.
In 2021, our top 20 industry customers collectively contributed to approximately 11.3% of our total net revenues with the largest customer accounting for approximately 2.7%. In 2022, our and the VIEs’ top 20 industry customers collectively contributed to approximately 55.3% of our total net revenues with the largest customer accounting for approximately 24.1%.
In 2022, our top 20 industry customers collectively contributed to approximately 55.3% of our total net revenues with the largest customer accounting for approximately 24.1%. In 2023, our and the VIEs’ top 20 industry customers collectively contributed to approximately 43.7% of our total net revenues with the largest customer accounting for approximately 16.1%.
We and the VIEs also work with local public safety officials and hire security personnel through third-party security service providers to ensure we and the VIEs comply with relevant regulations on public gatherings and prevent any public security related issues. 70 Table of Contents In 2021, 2022 and 2023, we hosted 450, 150 and 299 auto shows across 142, 76 and 81 cities in China, respectively.
We and the VIEs also work with local public safety officials and hire security personnel through third-party security service providers to ensure we and the VIEs comply with relevant regulations on public gatherings and prevent any public security related issues. 64 In 2022, 2023 and 2024, we hosted 150, 299 and 63 auto shows across 76, 81 and 47 cities in China, respectively.
(“Chema Beijing”) PRC 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Direct or ​ ​ ​ ​ Indirect ​ ​ ​ ​ ​ Economic ​ Major VIEs ​ Place of Incorporation ​ Ownership ​ TuanChe Internet Information Service (Beijing) Co., Ltd. (“TuanChe Internet”) PRC 100 % Shenzhen Drive New Media Co., Ltd.
(“Chema Beijing”) PRC 100% New Tuanche New York Inc. (“New Tuanche”) New York 100% Percentage of Direct or Indirect Economic Major VIEs Place of Incorporation Ownership TuanChe Internet Information Service (Beijing) Co., Ltd. (“TuanChe Internet”) PRC 100% Shenzhen Drive New Media Co., Ltd. (“Drive New Media”) PRC 100% Beijing Internet Drive Technology Co., Ltd.
In 2021, 2022 and 2023, we, together with the VIEs, attracted approximately 3.0 million, 4.0 million and 3.1 million consumers to sign up for our and the VIEs offline events through our and the VIEs’ online channels, respectively. 68 Table of Contents Offline .
In 2022, 2023 and 2024, we, together with the VIEs, attracted approximately 4.0 million, 3.1 million and 2.1 million consumers to sign up for our and the VIEs offline events through our and the VIEs’ online channels, respectively. 62 Offline .
(“TuanChe Automobile”) PRC 100 % Aikesipo Exhibition Display (Tianjin) Co., Ltd. PRC 100 % ​ Our Contractual Arrangements PRC laws and regulations place certain restrictions on foreign investment in value-added telecommunications service businesses. We conduct operations in the PRC principally through our PRC subsidiaries, the VIEs, and their subsidiaries.
PRC 100% Our Contractual Arrangements PRC laws and regulations place certain restrictions on foreign investment in value-added telecommunications service businesses. We conduct operations in the PRC principally through our PRC subsidiaries, the VIEs, and their subsidiaries.
Key Information – Risks Related to our Corporate Structure – Uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.” On December 26, 2019, the State Council issued the Implementation Regulation on the Foreign Investment Law, which came into effect on 1 January 2020, The Implementation Regulation on the Foreign Investment Law further clarified relevant provisions of the Foreign Investment Law.
Key Information - Risks Related to our Corporate Structure - The interpretation and implementation of the PRC Foreign Investment Law are still evolving and we may not be able to precisely predict how it may impact the viability of our current corporate structure, corporate governance and business operations.” On December 26, 2019, the State Council issued the Implementation Regulation on the Foreign Investment Law, which came into effect on 1 January 2020, The Implementation Regulation on the Foreign Investment Law further clarified relevant provisions of the Foreign Investment Law.
In 2021, 2022 and 2023, we and the VIEs organized 450, 150 and 299 auto shows, respectively. The total number of automobiles sales transactions we and the VIEs facilitated through the auto shows was 104,689, 22,176 and 61,020 in 2021, 2022 and 2023, respectively.
In 2022, 2023 and 2024, we and the VIEs organized 150, 299 and 63 auto shows, respectively. The total number of automobiles sales transactions we and the VIEs facilitated through the auto shows was 22,176, 61,020 and10,460 in 2022, 2023 and 2024, respectively.
Pursuant to the Foreign Investment Information Measures, from January 1, 2020 on, the foreign investors carrying out investment activities directly or indirectly in China and the relevant foreign-invested enterprises shall, through the Enterprise Registration System and the National Enterprise Credit Information Publicity System operated by the SAMR, disclose their investment information to the competent authorities by submitting various reports, including the reports related to their establishments, modifications and cancellations, and their annual reports. 75 Table of Contents In December 2020, the NDRC and the MOFCOM promulgated Measures for Security Review of Foreign Investment, which became effective on January 18, 2021.
Pursuant to the Foreign Investment Information Measures, from January 1, 2020 on, the foreign investors carrying out investment activities directly or indirectly in China and the relevant foreign-invested enterprises shall, through the Enterprise Registration System and the National Enterprise Credit Information Publicity System operated by the SAMR, disclose their investment information to the competent authorities by submitting various reports, including the reports related to their establishments, modifications and cancellations, and their annual reports.
The increase in our adjusted net loss from 2022 to 2023 was primarily due to (1) the cessation of our and the VIEs’ referral services since April 2022 and (2) the increase in information acquisition cost in connection with the online marketing services. See “Item 5. Operating and Financial Review and Prospects—A.
Operating Results-Non-GAAP Financial Measures.” The increase in our adjusted net loss from 2022 to 2023 was primarily due to (1) the cessation of our and the VIEs’ referral services since April 2022 and (2) the increase in information acquisition cost in connection with the online marketing services.
The Foreign Investment Security Review Mechanism (the “Security Review mechanism”), in charge of organization, coordination and guidance of foreign investment security review is thereunder established. A working mechanism office shall be established under the NDRC and led by the NDRC and the Ministry of Commerce to undertake routine work on the security review of foreign investment.
A working mechanism office shall be established under the NDRC and led by the NDRC and the Ministry of Commerce to undertake routine work on the security review of foreign investment.
The most recent updated version of Negative List (the “Negative List (2021 version)”), was promulgated by MOFCOM and the NDRC in December 2021 and became effective in January 2022.
The most recent updated version of Negative List (the “Negative List (2024 version)”), was promulgated by MOFCOM and the NDRC in September 2024 and became effective in November 2024.
(“Hainashuke”) (formerly known as Tansuojixian Technology (Beijing) Co., Ltd) PRC 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Direct ​ ​ ​ ​ or Indirect ​ ​ ​ ​ ​ Economic ​ Major subsidiaries of VIEs Place of Incorporation Ownership ​ TuanChe (Beijing) Automobile Sales & Service Co., Ltd.
(“Internet Drive Technology”) PRC 100% Hainashuke (Beijing) Technology Co., Ltd. (“Hainashuke”) (formerly known as Tansuojixian Technology (Beijing) Co., Ltd) PRC 100% Percentage of Direct or Indirect Economic Major subsidiaries of VIEs Place of Incorporation Ownership TuanChe (Beijing) Automobile Sales & Service Co., Ltd. (“TuanChe Automobile”) PRC 100% Aikesipo Exhibition Display (Tianjin) Co., Ltd.
The total GMV of all automobile sales transactions we and the VIEs facilitated was approximately RMB3.4 billion and RMB9.7 billion (US$1.4 billion) in 2022 and 2023, respectively.
The total GMV of all automobile sales transactions we and the VIEs facilitated was approximately RMB9.7 billion and RMB1.7 billion (US$0.2 billion) in 2023 and 2024, respectively.
We generated net revenue from referral services, online marketing services and others, which amounted to RMB110.7 million, RMB127.6 million and RMB47.9 million (US$6.7 million) in 2021, 2022 and 2023, respectively, representing 31.0%, 69.7% and 29.5% of our net revenues for the same periods, respectively.
We generated net revenue from referral services, online marketing services and others, which amounted to RMB127.6 million, RMB47.9 million and RMB28.4 million (US$3.9 million) in 2022, 2023 and 2024, respectively, representing 69.7%, 29.5% and 57.8% of our net revenues for the same periods, respectively. In 2022, we and the VIEs ceased to operate the referral services for a commercial bank.
ITEM 4. INFORMATION ON THE COMPANY A. History and development of the company We are an exempted company with limited liability incorporated in the Cayman Islands. We commenced our automobile group-purchase facilitation business in 2010.
ITEM 4. INFORMATION ON THE COMPANY A. History and development of the company We are an exempted company with limited liability incorporated in the Cayman Islands. We commenced our automobile group-purchase facilitation business in 2010. We began our auto show business in the fourth quarter of 2016, and we expanded our auto shows to tier-3 and below cities in 2017.
For example, it provides that the existing foreign-invested enterprises established before the effectiveness of the Foreign Investment Law may change their organizational forms, organizational structures, etc. and go through the change of registration procedures in accordance with the Foreign Investment Law and other relevant laws and regulations at any time prior to January 1, 2025, after which the local branches of State Administration for Market Regulations (the “SAMR”), shall stop processing additional registration applications from the said enterprises, and disclose relevant information of such enterprises.
For example, it provides that the existing foreign-invested enterprises established before the effectiveness of the Foreign Investment Law may change their organizational forms, organizational structures, etc. and go through the change of registration procedures in accordance with the Foreign Investment Law and other relevant laws and regulations prior to January 1, 2025, after which the local branches of State Administration for Market Regulations (the “SAMR”), shall stop processing additional registration applications from the said enterprises, and disclose relevant information of such enterprises. 69 In December 2019, the MOFCOM and the SAMR jointly issued the Measures for Reporting of Foreign Investment Information (the “Foreign Investment Information Measures”), which came into effect on January 1, 2020, and the Interim Administrative Measures for the Record-filing of the Establishment and Modification of Foreign-invested Enterprises were suspended on the same date.
Zhen Ye, hold a 15.2170%, 0.9972%, 13.2840%, 0.0973%, and 0.5836%, equity interest in TuanChe Internet, respectively. ​ 93 Table of Contents The following table sets out the details of our subsidiaries, the VIEs and the subsidiaries held by the VIEs that are significant to us. ​ ​ ​ ​ ​ ​ Subsidiaries Place of Incorporation Ownership Interest TuanChe Information Limited (“TuanChe Information”) ​ Hong Kong ​ 100 % TuanYuan Internet Technology (Beijing) Co., Ltd.
Zhen Ye, hold a 15.2170%, 0.9972%, 13.2840%, 0.0973%, and 0.5836%, equity interest in TuanChe Internet, respectively. 87 The following table sets out the details of our subsidiaries, the VIEs and the subsidiaries held by the VIEs that are significant to us.
(“TuanYuan”) PRC 100 % Longye International Limited Cayman Islands 100 % Long Ye Information Technology Limited Hong Kong 100 % Beijing Sangu Maolu Information Technology Co., Ltd. (“Sangu Maolu”) PRC 100 % Chema Technology (Beijing) Co., Ltd.
Subsidiaries Place of Incorporation Ownership Interest TuanChe Information Limited (“TuanChe Information”) Hong Kong 100% TuanYuan Internet Technology (Beijing) Co., Ltd. (“TuanYuan”) PRC 100% Longye International Limited Cayman Islands 100% Long Ye Information Technology Limited Hong Kong 100% Beijing Sangu Maolu Information Technology Co., Ltd. (“Sangu Maolu”) PRC 100% Chema Technology (Beijing) Co., Ltd.
As of December 31, 2023, we and the VIEs had served over 3,440 industry customers in China, covering over 110 domestic and international automobile brands. We and the VIEs facilitated the sale of 82,364 automobiles for our and the VIEs’ industry customers in 2023, with a GMV of approximately RMB13.5 billion (US$1.9 billion).
As of December 31, 2024, we and the VIEs had served over 3,701 industry customers in China, covering over 110 domestic and international automobile brands. We and the VIEs facilitated the sale of 10,460 automobiles for our and the VIEs’ industry customers in 2024, with a GMV of approximately RMB1.7 billion (US0.2 billion).
In order to support domestic companies overseas securities offering and listing pursuant to laws and regulations, as a supplement to the Trial Measures, the CSRC, Ministry of Finance of PRC, National Administration of State Secrets Protection and National Archives Administration of China, have jointly revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing (Announcement No.29 [2009] of the CSRC, hereinafter referred to as the “Provisions”).
Persons-in-charge and other persons that are directly liable shall be each imposed a fine of between RMB500,000 and RMB5,000,000. 85 In order to support domestic companies overseas securities offering and listing pursuant to laws and regulations, as a supplement to the Trial Measures, the CSRC, Ministry of Finance of PRC, National Administration of State Secrets Protection and National Archives Administration of China, have jointly revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing (, hereinafter referred to as the “revised Provisions”).
The revised Provisions will come into effect on March 31, 2023 with the Trial Measures.
The revised Provisions became effective on March 31, 2023 with the Trial Measures.
The following table sets forth the number of our full-time employees by functions as of the dates indicated. ​ ​ ​ ​ As of December 31, 2023 Functional Area ​ Number of employees Sales and marketing 252 General and administrative 44 Research and development 28 Total 324 ​ Our and the VIEs’ success depends on our and the VIEs’ ability to attract, retain and motivate qualified employees.
As of December 31, 2024 Functional Area Number of employees Sales and marketing 70 General and administrative 37 Research and development 9 Total 116 Our and the VIEs’ success depends on our and the VIEs’ ability to attract, retain and motivate qualified employees.
With our and the VIEs’ data analytics capabilities, these data enhance our and the VIEs’ understanding of the automobile demand in various localities and continuously improve the effectiveness of our and the VIEs’ event planning. 66 Table of Contents We, together with the VIEs, complement our and the VIEs’ service offerings by collaborating with service and product providers in China’s automotive industry, such as aftermarket service providers, financial institutions, and insurance companies.
We, together with the VIEs, complement our and the VIEs’ service offerings by collaborating with service and product providers in China’s automotive industry, such as aftermarket service providers, financial institutions, and insurance companies.
Together, these channels promote our and the VIEs’ offline events and serve as a consumer acquisition tool for the offline events.
The online platform consists of our and the VIEs’ website, tuanche.com , official WeChat account, WeChat mini-program and mobile applications. Together, these channels promote our and the VIEs’ offline events and serve as a consumer acquisition tool for the offline events.
From the year in which the entity is determined as a “PRC resident enterprise”, any dividend, profit and other equity investment gain shall be taxed in accordance with the EIT Law and its implementing rules.
From the year in which the entity is determined as a “PRC resident enterprise”, any dividend, profit and other equity investment gain shall be taxed in accordance with the EIT Law and its implementing rules. 79 If we or any of our subsidiaries outside of China were to be considered a PRC “resident enterprise” under the EIT Law, we will be subject to PRC enterprise income tax on our worldwide income at a uniform tax rate of 25.0%.
In addition, the domestic company, securities companies and securities service providers shall first obtain approval from the CSRC or other competent Chinese authorities before cooperating with the inspection and investigation by the overseas securities regulator or competent overseas authority, or providing documents and materials requested in such inspection and investigation. 91 Table of Contents Regulations Relating to Employment Pursuant to the Labor Law of PRC, promulgated by the Standing Committee of NPC in July 1994 and amended in December 2018 (the “Labor Law”), and the Labor Contract Law of PRC, promulgated by Standing Committee of the NPC in June 2007 and amended in December 2012 (the “Labor Contract Law”), employers must execute written employment contracts with full-time employees.
Regulations Relating to Employment Pursuant to the Labor Law of PRC, promulgated by the Standing Committee of NPC in July 1994 and amended in December 2018 (the “Labor Law”), and the Labor Contract Law of PRC, promulgated by Standing Committee of the NPC in June 2007 and amended in December 2012 (the “Labor Contract Law”), employers must execute written employment contracts with full-time employees.
PRC laws and regulations place certain restrictions on foreign investment in value-added telecommunications service businesses. We conduct our operations in the PRC through our subsidiaries and the VIEs and their subsidiaries. We exert significant influence over the VIEs through a series of contractual arrangements among our WFOEs, the VIEs and their respective shareholders.
We exert significant influence over the VIEs through a series of contractual arrangements among our WFOEs, the VIEs and their respective shareholders.
Sales and Marketing We believe our and the VIEs’ brand name is well-recognized across China’s automotive industry, thanks to the dedicated services of our and the VIEs’ sales and marketing team. Our and the VIEs’ nationwide in-house sales team is mainly responsible for attracting automakers and auto dealers to attend our and the VIEs’ offline events.
When the client posts an ad, the platform charges the account. Sales and Marketing We believe our and the VIEs’ brand name is well-recognized across China’s automotive industry, thanks to the dedicated services of our and the VIEs’ sales and marketing team.
The table below sets forth a breakdown of the number of cities where we and the VIEs have organized auto shows by city tiers in the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2021 2022 2023 Tier-1 cities 4 — 1 Tier-2 cities 36 15 21 Tier-3 and below cities 102 61 59 Total 142 76 81 ​ The table below sets forth a breakdown of the number of cities where we and the VIEs have established operations by city tiers in the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2021 2022 2023 Tier-1 cities 4 2 1 Tier-2 cities 30 22 19 Tier-3 and below cities 85 59 59 Total 119 83 79 ​ 71 Table of Contents Special promotion event services We, together with the VIEs, began to provide special promotion event services to our and the VIEs’ industry customers in January 2019 to better support our industry customers in organizing their special promotion events.
The table below sets forth a breakdown of the number of cities where we and the VIEs have organized auto shows by city tiers in the periods indicated: Year ended December 31, 2022 2023 2024 Tier-1 cities - 1 1 Tier-2 cities 15 21 13 Tier-3 and below cities 61 59 33 Total 76 81 47 The table below sets forth a breakdown of the number of cities where we and the VIEs have established operations by city tiers in the periods indicated: Year ended December 31, 2022 2023 2024 Tier-1 cities 2 1 1 Tier-2 cities 22 19 13 Tier-3 and below cities 59 59 33 Total 83 79 47 65 The auto show business has been fully transformed into an agency model in July 2024.
Our adjusted EBITDA was RMB(82.9) million, RMB(73.4) million and RMB(92.5) million (US$13.0 million) in 2021, 2022 and 2023, respectively. We recorded adjusted net loss of RMB90.0 million, RMB77.8 million and RMB92.6 million (US$13.0 million) in 2021, 2022 and 2023, respectively. For a detailed description of our non-GAAP measures, see “Item 5. Operating and Financial Review and Prospects—A.
Our net loss was RMB166.5 million, RMB83.0 million and RMB188.0 million (US$25.8 million) in 2022, 2023 and 2024, respectively. Our adjusted EBITDA was RMB(73.4) million, RMB(92.5) million and RMB(51.9) million (US$7.1 million) in 2022, 2023 and 2024, respectively. We recorded adjusted net loss of RMB77.8 million, RMB92.6 million and RMB52.9 million (US$7.3 million) in 2022, 2023 and 2024, respectively.
We began our auto show business in the fourth quarter of 2016, and we expanded our auto shows to tier-3 and below cities in 2017. 63 Table of Contents We conduct our business through our subsidiaries and the VIEs in China. Over the past few years, we underwent a series of restructurings.
We conduct our business through our subsidiaries and the VIEs in China. Over the past few years, we underwent a series of restructurings. In particular: ● Incorporation of the listing entity .
As of the date of this annual report, our core social CRM service, Cheshangtong social CRM cloud system, has served more than 17,080 customers. Aftermarket promotion services Starting from August 2021, we provide aftermarket promotion service to support auto dealers’ aftermarket promotion events during a period.
As of the date of this annual report, our core social CRM service, Cheshangtong social CRM cloud system, has served more than 20,000 customers.
As of December 31, 2023, we have established relationships with over 3,440 industry customers across China. Our and the VIEs’ head sales office in Beijing is in charge of sales management, operational management and strategic decision-making.
Our and the VIEs’ nationwide in-house sales team is mainly responsible for attracting automakers and auto dealers to attend our and the VIEs’ offline events. As of December 31, 2024, we have established relationships with over 3,701 industry customers across China.
Operating Results—Key Components of Results of Operations—Net Revenues.” Our net revenues were RMB357.6 million, RMB183.2 million and RMB162.4 million (US$22.9 million) in 2021, 2022 and 2023, respectively. Our net loss was RMB101.9 million, RMB166.5 million and RMB83.0 million (US$11.7 million) in 2021, 2022 and 2023, respectively.
In 2024, t he auto show business has been fully transformed into an agency model. For a detailed breakdown of our net revenues, see “Item 5. Operating and Financial Review and Prospects-A. Operating Results-Key Components of Results of Operations-Net Revenues.” Our net revenues were RMB183.2 million, RMB162.4 million and RMB49.2 million (US$6.7 million) in 2022, 2023, and 2024 respectively.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Investing Activities Net cash used in and generated from investing activities was nil in 2023. Net cash used in investing activities was RMB0.2 million in 2022, representing purchase of property, equipment and software.
Net cash used in and generated from investing activities was nil in 2023. Net cash used in investing activities was RMB0.2 million in 2022, representing purchase of property, equipment and software.
In 2022 and 2023, we facilitated 90 and 750 special promotion events for our industry customers, respectively. ● Net revenues from referral service for a commercial bank decreased by 94.2% from RMB44.2 million in 2022 to RMB2.6 million (US$0.4 million) in 2023, primarily because we ceased operation of the referral services since April 1, 2022. ● Net revenues from our online marketing services decreased by 53.9% from approximately RMB50.8 million in 2022 to RMB23.4 million (US$3.3 million) in 2023, primarily due to the decrease in live streaming events held by us and the VIEs as we and the VIEs re-negotiated with key customers about the future cooperation plan, and during such re-negotiation process, our and the VIEs’ live streaming events witnessed a decrease in business volume. ● Net revenues from other services decreased by 33.0% from approximately RMB32.7 million in 2022 to RMB21.9 million (US$3.1 million) in 2023, primarily due to the cessation of the aftermarket promotion service in 2023.
In 2022 and 2023, we facilitated 90 and 750 special promotion events for our industry customers, respectively. ● Net revenues from referral service for a commercial bank decreased by 94.2% from RMB44.2 million in 2022 to RMB2.6 million in 2023, primarily because we ceased operation of the referral services since April 1, 2022. ● Net revenues from our online marketing services decreased by 53.9% from approximately RMB50.8 million in 2022 to RMB23.4 million in 2023, primarily due to the decrease in live streaming events held by us and the VIEs as we and the VIEs re-negotiated with key customers about the future cooperation plan, and during such re-negotiation process, our and the VIEs’ live streaming events witnessed a decrease in business volume. ● Net revenues from other services decreased by 33.0% from approximately RMB32.7 million in 2022 to RMB21.9 million in 2023, primarily due to the cessation of the aftermarket promotion service in 2023.
Risk Factors—Risks Related to Our Business and Industry—The consolidated financial statements included herein contain disclosures that express substantial doubt about 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.
Risk Factors—Risks Related to Our Business and Industry—The consolidated financial statements included herein contain disclosures that express substantial doubt about our ability to continue as a going concern.” 100 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.
Key Information—Risk Factors—Risks Related to Our Business and Industry—Our business operations have been and may continue to be materially and adversely affected by the COVID-19 pandemic.” In addition to general economic conditions and industry factors, we believe the following company-specific factors have had, and will continue to have, a significant impact on our results of operations.
Key Information—Risk Factors—Risks Related to Our Business and Industry—Our business operations have been and may continue to be materially and adversely affected by the COVID-19 pandemic.” 90 In addition to general economic conditions and industry factors, we believe the following company-specific factors have had, and will continue to have, a significant impact on our results of operations.
In 2023, the difference between our cash used in operating activities and our net loss of RMB83.0 million (US$11.7 million) resulted primarily from (1) a decrease in prepayment and other current assets of RMB26.8 million (US$3.8 million), (2) a decrease in accounts and notes receivable of RMB20.4 million (US$2.9 million), (3) share-based compensation of RMB9.5 million (US$1.3 million), (4) allowance of doubtful accounts of RMB4.8 million (US$0.7 million), and (5) impairment on long-lived asset of RMB1.5 million (US$0.2 million), partially offset by (1) changes in fair value of warrant liability of RMB20.7 million (US$2.9 million), (2) a decrease in salary and welfare benefits payable of RMB15.9 million(US$2.2 million), (3) other income on reverse of unpaid tax of RMB8.8 million (US$1.2 million), (4) a decrease in other taxes payable of RMB3.7 million (US$0.5 million), (5) a decrease in accounts payable of RMB3.3 million (US$0.5 million) and (6) a decrease in other current liabilities of RMB3.0 million (US$0.4 million).
In 2023, the difference between our cash used in operating activities and our net loss of RMB83.0 million resulted primarily from (1) a decrease in prepayment and other current assets of RMB26.8 million, (2) a decrease in accounts and notes receivable of RMB20.4 million, (3) share-based compensation of RMB9.5 million, (4) allowance of doubtful accounts of RMB4.8 million, and (5) impairment of long-lived asset of RMB1.5 million, partially offset by (1) changes in fair value of warrant liability of RMB20.7 million, (2) a decrease in salary and welfare benefits payable of RMB15.9 million, (3) other income on reverse of unpaid tax of RMB8.8 million, (4) a decrease in other taxes payable of RMB3.7 million, (5) a decrease in accounts payable of RMB3.3 million and (6) a decrease in other current liabilities of RMB3.0 million.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the 2023 that are reasonably likely to have a material adverse effect on our net revenue, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the 2024 that are reasonably likely to have a material adverse effect on our net revenue, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.
Cost of Revenues Our cost of revenues decreased by 2.3% from RMB70.5 million in 2022 to RMB68.9 million (US$9.7 million), primarily due to the following reasons. ● Our other direct costs decreased by 37.7% from RMB54.5 million in 2022 to RMB33.9 million (US$4.8 million) in 2023, primarily due to a decrease in information acquisition costs in connection with our and the VIEs’ online marketing services. ● Our venue set-up costs increased significantly from RMB6.5 million in 2022 to RMB14.4 million (US$2.0 million) in 2023, generally in line with the increases in net revenues from auto show services and special promotion event services. ● Our venue rental costs increased significantly from RMB9.5 million in 2022 to RMB20.6 million (US$2.9 million) in 2023, primarily due to an increase in the number of auto shows we organized and set up from 150 in 2022 to 299 in 2023.
Cost of Revenues ● Our cost of revenues decreased by 2.3% from RMB70.5 million in 2022 to RMB68.9 million, primarily due to the following reasons. ● Our other direct costs decreased by 37.7% from RMB54.5 million in 2022 to RMB33.9 million in 2023, primarily due to a decrease in information acquisition costs in connection with our and the VIEs’ online marketing services. ● Our venue set-up costs increased significantly from RMB6.5 million in 2022 to RMB14.4 million in 2023, generally in line with the increases in net revenues from auto show services and special promotion event services. ● Our venue rental costs increased significantly from RMB9.5 million in 2022 to RMB20.6 million in 2023, primarily due to an increase in the number of auto shows we organized and set up from 150 in 2022 to 299 in 2023.
We performed qualitative analysis regarding the existence of impairment indicators pursuant to ASC 360-10-35-21 and concluded that there are indicators that the asset group might be impaired mainly due to recurring net losses and operating cash out-flows for the years ended December 31, 2023.
We performed qualitative analysis regarding the existence of impairment indicators pursuant to ASC 360-10-35-21 and concluded that there are indicators that the asset group might be impaired mainly due to recurring net losses and operating cash out-flows for the years ended December 31, 2024.
Operating Loss As a result of the foregoing, our operating loss remained relatively stable at RMB119.3 million in 2022 and RMB121.0 million (US$17.0 million) in 2023. Other income/(expenses) primarily include government grants and VAT refunds, change in fair value of warrant liability.
Operating Loss As a result of the foregoing, our operating loss remained relatively stable at RMB119.3 million in 2022 and RMB121.0 million in 2023. Other income/(expenses) primarily include government grants and VAT refunds, change in fair value of warrant liability.
For the marketing information services, we and the VIEs generate consumers’ demand information through online channels and provide to the industry customers upon consumers’ consent. We identified only one performance obligation to provide information regarding consumer demand for industry customers. The marketing information service fee is charged based on the quantity of consumers’ demand information delivered.
Other revenue For the marketing information services, we and the VIEs generate consumers’ demand information through online channels and provide to the industry customers upon consumers’ consent. We identified only one performance obligation to provide information regarding consumer demand for industry customers. The marketing information service fee is charged based on the quantity of consumers’ demand information delivered.
For example, we and the VIEs implemented measures to adjust the pace of business expansion and conserve resources, such as furlough arrangements and scaling back our recruitment budget and employee size, in 2021, 2022 and 2023. For more details, see “Item 3.
For example, we and the VIEs implemented measures to adjust the pace of business expansion and conserve resources, such as furlough arrangements and scaling back our recruitment budget and employee size, in 2022, 2023 and 2024. For more details, see “Item 3.
Research and Development Expenses Our research and development expenses decreased by 43.1% from RMB19.8 million in 2022 to RMB11.3 million (US$1.6 million) in 2023, primarily due to the decrease in the staff compensation expenses, as a result of the reduction in headcount and improved workforce structure.
Research and Development Expenses Our research and development expenses decreased by 43.1% from RMB19.8 million in 2022 to RMB11.3 million in 2023, primarily due to the decrease in the staff compensation expenses, as a result of the reduction in headcount and improved workforce structure.
Impairment of long-lived assets Impairment of long-lived assets decreased from RMB19.7 million in 2022 to RMB1.5 million (US$0.2 million) in 2023, primarily due to (1) a decrease in impairment loss of RMB1.1 million in relation to property, equipment and software, (2) a decrease in impairment loss of RMB1.5 million in relation to right-of-use assets, and (3) a decrease in impairment loss of RMB15.6 million in relation to intangible assets.
Impairment of long-lived assets Impairment of long-lived assets decreased from RMB19.7 million in 2022 to RMB1.5 million in 2023, primarily due to (1) a decrease in impairment loss of RMB1.1 million in relation to property, equipment and software, (2) a decrease in impairment loss of RMB1.5 million in relation to right-of-use assets, and (3) a decrease in impairment loss of RMB15.6 million in relation to intangible assets.
In 2022 and 2023, we organized 150 and 299 auto shows in 76 and 81 cities, offering a total of 2,868 and 7,144 booths, respectively. ● Net revenues from special promotion event services increased by 96.8% from RMB1.6 million in 2022 to RMB3.2 million (US$0.4 million) in 2023, primarily due to the increase in the number of special promotion events as a result of the relief of pandemic restrictions.
In 2022 and 2023, we organized 150 and 299 auto shows in 76 and 81 cities, offering a total of 2,868 and 7,144 booths, respectively. ● Net revenues from special promotion event services increased by 96.8% from RMB1.6 million in 2022 to RMB3.2 million in 2023, primarily due to the increase in the number of special promotion events as a result of the relief of pandemic restrictions.
However, according to SAT Circular 81 and SAT Circular 35, if the relevant tax authorities consider the transactions or arrangements we have are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future.
However, according to SAT Circular 81 and SAT Circular 35, if the relevant tax authorities consider the transactions or arrangements, we have been for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders.” 105 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders.” 96 Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated.
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 less than its carrying amount as of December 31, 2022 and 2023.
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 less than its carrying amount as of December 31, 2023 and 2024.
On January 13, 2020, we completed the acquisition of Longye, a Software-as-a-Service company that mainly provides subscription and support services to industry customers, including auto dealers, automakers and automotive service provider, with access to cloud services, software licenses and related support and updates during the term of the arrangement.
Social CRM cloud services revenue On January 13, 2020, we completed the acquisition of Longye, a Software-as-a-Service company that mainly provides subscription and support services to industry customers, including auto dealers, automakers and automotive service provider, with access to cloud services, software licenses and related support and updates during the term of the arrangement.
Indebtedness For details of our outstanding borrowings as of December 31, 2022 and 2023, see Notes 13 and 15 to the consolidated financial statements included in this annual report.
Indebtedness For details of our outstanding borrowings as of December 31, 2023 and 2024, see Notes 13 and 15 to the consolidated financial statements included in this annual report.
Payments of dividends by the subsidiary to the Company are not subject to withholding tax in Hong Kong. 104 Table of Contents PRC Our subsidiaries and the VIEs are incorporated under PRC law and, as such, are subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws.
Payments of dividends by the subsidiary to the Company are not subject to withholding tax in Hong Kong. PRC Our subsidiaries and the VIEs are incorporated under PRC law and, as such, are subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws.
Based on cash flow projections from operating and financing activities, our current balance of cash and cash equivalents, and the impact of the COVID-19 pandemic on our operations, our management believes that our current cash and cash equivalents, time deposits and anticipated cash flow from operations upon successful execution of our business plans and financing 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 annual report.
Based on cash flow projections from operating and financing activities, our current balance of cash and cash equivalents, our management believes that our current cash and cash equivalents, time deposits and anticipated cash flow from operations upon successful execution of our business plans and financing 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 annual report.
Our advertising and promotion expenses increased by 71.1% from RMB57.6 million in 2022 to RMB98.5 million (US$13.9 million) in 2023, primarily due to increased volume of offline events. The number of organized auto shows increased from 150 in 2022 to 299 in 2023.
Our advertising and promotion expenses increased by 71.1% from RMB57.6 million in 2022 to RMB98.5 million in 2023, primarily due to increased volume of offline events. The number of organized auto shows increased from 150 in 2022 to 299 in 2023.
In 2018, our subsidiary, TuanYuan, and the VIE, TuanChe Internet, were accredited as HNTEs, and their HNTE qualifications were renewed in 2021 for three years, which entitled them to the preferential enterprise income tax rate of 15% from 2021 to 2023, if TuanYuan and TuanChe Internet successfully meet the criteria of HNTE each year.
In 2018, our subsidiary, TuanYuan, and the VIE, TuanChe Internet, were accredited as HNTEs, and their HNTE qualifications were renewed in 2024 for three years, which entitled them to the preferential enterprise income tax rate of 15% from 2024 to 2026, if TuanYuan and TuanChe Internet successfully meet the criteria of HNTE each year.
Our sales staff compensation expenses decreased by 26.3% from RMB59.7 million in 2022 to RMB44.0 million (US$6.2 million) in 2023, primarily due to the reduction in headcount and improved workforce structure.
Our sales staff compensation expenses decreased by 26.3% from RMB59.7 million in 2022 to RMB44.0 million in 2023, primarily due to the reduction in headcount and improved workforce structure.
In 2021, 2022 and 2023, we facilitated 158, 90 and 750 special promotion events through our and the VIEs’ services, respectively. We typically generate net revenues by charging industry customers fixed service fees per event.
In 2022, 2023 and 2024, we facilitated 90, 750 and 18 special promotion events through our and the VIEs’ services, respectively. We typically generate net revenues by charging industry customers fixed service fees per event.
We recorded impairment of long-lived assets of nil, RMB19.7 million and RMB1.5 million (US$0.2 million) in 2021, 2022 and 2023, respectively, accounting for nil, 10.8% and 0.9% of our net revenues in the same periods, respectively. Taxation Cayman Islands We are incorporated in the Cayman Islands.
We recorded impairment of long-lived assets of RMB19.7 million, RMB1.5 million and RMB4.0 million (US$0.6 million) in 2022, 2023 and 2024, respectively, accounting for 10.8%, 0.9% and 8.2% of our net revenues in the same periods, respectively. Taxation Cayman Islands We are incorporated in the Cayman Islands.
We define adjusted EBITDA as net loss excluding depreciation and amortization, interest income/expenses, net, change of guarantee liability, share-based compensation expenses, impairment of long-term investment, long-lived assets and goodwill and change in fair value of warrant liability.
We define adjusted EBITDA as net loss excluding depreciation and amortization, interest income/expenses, net, share-based compensation expenses, long-lived assets and goodwill and change in fair value of warrant liability. We define adjusted net loss as net loss excluding share-based compensation expenses, long-lived assets and goodwill and change in fair value of warrant liability.
We recorded research and development expenses of RMB35.7 million, RMB19.8 million and RMB11.3 million (US$1.6 million) in 2021, 2022 and 2023, respectively, accounting for 9.9%, 10.8% and 6.9% of our net revenues in the same periods, respectively. Impairment of long-lived assets Impairment of long-lived assets was in relation to property, equipment and software, intangible assets and right-of-use assets.
We recorded research and development expenses of RMB19.8 million, RMB11.3 million and RMB11.9 million (US$1.6 million) in 2022, 2023 and 2024, respectively, accounting for 10.8%, 6.9% and 24.2% of our net revenues in the same periods, respectively. Impairment of long-lived assets Impairment of long-lived assets was in relation to property, equipment and software, intangible assets and right-of-use assets.
Capital Expenditures We incurred capital expenditures of RMB1.0 million, RMB0.2 million and nil in 2021, 2022 and 2023, respectively, primarily in connection with the purchase of property, equipment and software and our and the VIEs’ office refurbishment. We intend to fund our future capital expenditures with our existing cash balance, proceeds from debt or equity financing and other financing alternatives.
Capital Expenditures We incurred capital expenditures of RMB0.2 million, nil and RMB19 thousand in 2022, 2023 and 2024, respectively, primarily in connection with the purchase of property, equipment and software and our and the VIEs’ office refurbishment. We intend to fund our future capital expenditures with our existing cash balance, proceeds from debt or equity financing and other financing alternatives.
We provide a scalable omni-channel automotive marketplace approach to automobile marketing and distribution. We offer marketing solutions by integrating our online platform and offline sales events. In 2021, 2022 and 2023, we hosted 450, 150 and 299 auto shows across 142, 76 and 81 cities in China, respectively.
We provide a scalable omni-channel automotive marketplace approach to automobile marketing and distribution. We offer marketing solutions by integrating our online platform and offline sales events. In 2022, 2023 and 2024, we hosted 150, 299 and 63 auto shows across 76, 81 and 47 cities in China, respectively.
In 2022, the difference between our cash used in operating activities and our net loss of RMB166.5 million resulted primarily from (1) provisions for goodwill impairment of RMB69.9 million, (2) provisions for long-lived asset impairment of RMB19.7 million, (3) share-based compensation of RMB10.3 million, (4) allowance of doubtful accounts of RMB8.1 million, and (5) a decrease in prepayment and other current assets of RMB5.2 million, partially offset by (1) a decrease in accounts payable of RMB15.9 million, (2) a decrease in advance from customers of RMB11.7 million, (3) income on changes in fair value of RMB11.2 million, (4) a decrease in other current liabilities of RMB8.0 million and (5) a decrease in salary and welfare benefits payable of RMB6.9 million.
In 2022, the difference between our cash used in operating activities and our net loss of RMB166.5 million resulted primarily from (1) provisions for goodwill impairment of RMB69.9 million, (2) provisions for long-lived asset impairment of RMB19.7 million, (3) share-based compensation of RMB10.3 million, (4) allowance of doubtful accounts of RMB8.1 million, and (5) a decrease in prepayment and other current assets of RMB5.2 million, partially offset by (1) a decrease in accounts payable of RMB15.9 million, (2) a decrease in advance from customers of RMB11.7 million, (3) income on changes in fair value of RMB11.2 million, (4) a decrease in other current liabilities of RMB8.0 million and (5) a decrease in salary and welfare benefits payable of RMB6.9 million. 101 Investing Activities Net cash used in investing activities was RMB19 thousand (US$3 thousand) in 2024, representing purchase of property, equipment and software.
In exchange, we and the VIEs pay these service providers service fees, which we recognize as venue set-up costs after the relevant services are rendered. Our venue set-up costs were RMB24.1 million, RMB6.5 million and RMB14.4 million (US$2.0 million) in 2021, 2022 and 2023, respectively.
In exchange, we and the VIEs pay these service providers service fees, which we recognize as venue set-up costs after the relevant services are rendered. Our venue set-up costs were RMB6.5 million, RMB14.4 million and RMB1.7 million (US$0.2 million) in 2022, 2023 and 2024, respectively.
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.
New York Commencing from the year of assessment 2024, the New York’s statutory income tax rate is 8%. 95 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.
We identified only one performance obligation to provide referral services to Baidu. We charged Baidu a fixed rate commission fee based on the membership fee amount for the services rendered. Revenues are recognized at point-in-time when the industry customers successfully register as a membership of Baidu’s auto content distribution platform.
We charged Baidu a fixed rate commission fee based on the membership fee amount for the services rendered. Revenues are recognized at point-in-time when the industry customers successfully register as a membership of Baidu’s auto content distribution platform.
C. Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Technology” and “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” 113 Table of Contents D.
Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Technology” and “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” D.
We and the VIEs host many of offline events outdoors throughout the year. Severe weather conditions may force us and the VIEs to cancel pre-scheduled outdoor events and lower the level of industry customer attendance at the affected events, negatively impacting our net revenues.
Severe weather conditions may force us and the VIEs to cancel pre-scheduled outdoor events and lower the level of industry customer attendance at the affected events, negatively impacting our net revenues.
Information acquisition costs primarily related to costs incurred for acquiring vehicle sales leads. In 2021, 2022 and 2023, our other costs were RMB27.9 million, RMB54.5 million and RMB33.9 million (US$4.8 million), respectively.
Information acquisition costs primarily related to costs incurred for acquiring vehicle sales leads. In 2022, 2023 and 2024, our other costs were RMB54.5 million, RMB33.9 million and RMB11.4 million (US$1.6 million), respectively.
Our venue rental costs were RMB33.3 million, RMB9.5 million and RMB20.6 million (US$2.9 million) in 2021, 2022 and 2023, respectively. 102 Table of Contents Other direct costs Other direct costs primarily include costs related to the planning and organization of our and the VIEs’ offline and online events, such as security costs, direct labor costs and information acquisition costs.
Our venue rental costs were RMB9.5 million, RMB20.6 million and RMB2.5 million (US$0.3 million) in 2022, 2023 and 2024, respectively. Other direct costs Other direct costs primarily include costs related to the planning and organization of our and the VIEs’ offline and online events, such as security costs, direct labor costs and information acquisition costs.
Auto shows We typically generate net revenues from industry customers that pay for booth spaces in our and the VIEs’ auto shows. In 2021, 2022 and 2023, net revenues generated from our auto shows were RMB242.9 million, RMB54.0 million and RMB111.3 million (US$15.7 million), respectively, representing 67.9%, 29.5% and 68.6% of our net revenues for the same periods, respectively.
Auto shows We typically generate net revenues from industry customers that pay for booth spaces in our and the VIEs’ auto shows. In 2022, 2023 and 2024, net revenues generated from our auto shows were RMB54.0 million, RMB111.3 million and RMB20.5 million (US$2.8 million), respectively, representing 29.5%, 68.6% and 41.8% of our net revenues for the same periods, respectively.
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 we had originally estimated.
If we reorganize our reporting structure in a manner that changes the composition of our reporting units, goodwill is reassigned based on the relative fair value of each of the affected reporting units. 105 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 we had originally estimated.
In 2021, 2022 and 2023, net revenues from special promotion events were RMB4.0 million, RMB1.6 million and RMB3.2 million (US$0.4 million), representing 1.1%, 0.9% and 1.9% of our net revenues, respectively.
In 2022, 2023 and 2024, net revenues from special promotion events were RMB1.6 million, RMB3.2 million and RMB0.2 million (US$31 thousand), representing 0.9%, 1.9% and 0.5% of our net revenues, respectively.
As of December 31, 2023, future minimum payments under non-cancelable operating lease agreements were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment due by period ​ ​ Total Less than 1 year 1-3 years More than 3 years ​ ​ (RMB in thousands) Office spaces and venues for auto shows(1) 11,381 4,735 6,646 — (1) Represents minimum payments under non-cancelable operating lease agreements related to our office spaces and venues for auto shows.
As of December 31, 2024, future minimum payments under non-cancelable operating lease agreements were as follows: Payment due by period Total Less than 1 year 1-3 years More than 3 years (RMB in thousands) Office spaces and venues for auto shows(1) 7,076 3,649 3,427 — (1) Represents minimum payments under non-cancelable operating lease agreements related to our office spaces and venues for auto shows. 102 C.
Our auto shows offered a total of 12,372, 2,868 and 7,144 booth spaces in 2021, 2022 and 2023, respectively. The total number of automobile sales transactions we facilitated with our auto shows was 22,176 and 61,020 in 2022 and 2023, respectively, with a total GMV of approximately RMB3.4 billion and RMB9.7 billion (US$1.4 billion) in the same year, respectively.
Our auto shows offered a total of 2,868, 7,144 and 1,084 booth spaces in 2022, 2023 and 2024, respectively. The total number of automobile sales transactions we facilitated with our auto shows was 61,020 and 10,460 in 2023 and 2024, respectively, with a total GMV of approximately RMB9.7 billion and RMB1.7 billion (US$0.2 billion) in the same year, respectively.
Historically, we generated our net revenues primarily through our offline events. Our net revenues were RMB357.6 million, RMB183.2 million and RMB162.4 million (US$22.9 million) in 2021, 2022 and 2023, respectively. Our net loss was RMB101.9 million, RMB166.5 million and RMB83.0 million (US$11.7 million) in 2021, 2022 and 2023, respectively.
Historically, we generated our net revenues primarily through our offline events. Our net revenues were RMB183.2 million, RMB162.4 million and RMB49.2 million (US$6.7 million) in 2022, 2023 and 2024, respectively. Our net loss was RMB166.5 million, RMB83.0 million and RMB188.0 million (US$25.8 million) in 2022, 2023 and 2024, respectively.
We have identified one performance obligation, as the individual service promised in service contracts are not distinct individually. As we have control of the special promotion event services and discretion in establishing the price of services fees to industry customers, we are considered to be a principal in accordance with ASC 606.
As we have control of the special promotion event services and discretion in establishing the price of services fees to industry customers, we are considered to be a principal in accordance with ASC 606.
As of December 31, 2022 and 2023, we had RMB24,376 million and RMB4.0 million (US$0.6 million) of warrant liability. We recognized nil, RMB11.2 million and RMB20.7 million (US$2.9 million) in gain in fair value of warrant liability in 2021, 2022 and 2023, respectively.
As of December 31, 2023 and 2024, we had RMB4.0 million and RMB68.6 million (US$9.4 million) of warrant liability. We recognized RMB11.2 million, RMB20.7 million and RMB57.1 million (US$7.8 million) in gain in fair value of warrant liability in 2022, 2023 and 2024, respectively. 106
Our adjusted EBITDA was RMB(82.9) million, RMB(73.4) million and RMB(92.5) million (US$(13.0) million) in 2021, 2022 and 2023, respectively. We recorded adjusted net loss of RMB90.0 million, RMB77.8 million and RMB92.6 million (US$13.0 million) in 2021, 2022 and 2023, respectively.
Our adjusted EBITDA was RMB(73.4) million, RMB(92.5) million and RMB(51.9) million (US$(7.1) million) in 2022, 2023 and 2024, respectively. We recorded adjusted net loss of RMB77.8 million, RMB92.6 million and RMB52.9 million (US$7.3 million) in 2022, 2023 and 2024, respectively.
Gross Profit As a result of the foregoing, our gross profit was RMB272.3 million, RMB112.7 million and RMB93.4 million (US$13.2 million) in 2021, 2022 and 2023, respectively, and our gross profit margin was 76.1%, 61.5% and 57.5% in 2021, 2022 and 2023, respectively.
Gross Profit As a result of the foregoing, our gross profit was RMB112.7 million, RMB93.4 million and RMB33.6 million (US$4.6 million) in 2022, 2023 and 2024, respectively, and our gross profit margin was 61.51%, 57.5% and 68.3% in 2022, 2023 and 2024, respectively.
We generated net revenues from other services of approximately RMB29.2 million, RMB32.7 million and RMB21.9 million (US$3.1 million) in 2021, 2022 and 2023, representing 8.1%, 17.8% and 13.5% of our net revenues for the same periods, respectively. Cost of Revenues Our cost of revenues consists of (1) venue set-up costs, (2) venue rental costs, and (3) other direct costs.
We generated net revenues from other services of approximately RMB11.2 million, RMB4.1 million and RMB3.5 million (US$0.5 million) in 2022, 2023 and 2024, representing 6.1%, 2.6% and 7.0% of our net revenues for the same periods, respectively. 93 Cost of Revenues Our cost of revenues consists of (1) venue set-up costs, (2) venue rental costs, and (3) other direct costs.
General and administrative expenses Our general and administrative expenses decreased by 31.0% from RMB64.7 million in 2022 to RMB44.7 million (US$6.3 million) in 2023, primarily due to (1) a decrease in the administrative staff compensation expenses, as a result of the reduction in headcount and improved workforce structure, (2) a decrease in allowance for doubtful accounts, as a result of strengthened collection efforts of accounts receivable and (3) a decrease in professional service expenses in connection with the November 2022 Offering.
Our selling and marketing expenses as a percentage of total net revenues increased from 69.7% in 2022 to 94.4% in 2023, because the increase of our selling and marketing expenses outpaced the increase in our net revenues, primarily due to an increase in promotion expenses as a result of the increase in the number of offline events held by us and the VIEs. 99 General and administrative expenses Our general and administrative expenses decreased by 31.0% from RMB64.7 million in 2022 to RMB44.7 million in 2023, primarily due to (1) a decrease in the administrative staff compensation expenses, as a result of the reduction in headcount and improved workforce structure, (2) a decrease in allowance for doubtful accounts, as a result of strengthened collection efforts of accounts receivable and (3) a decrease in professional service expenses in connection with the November 2022 Offering.
Our goodwill as of December 31, 2022 and 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.
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.
Our 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.
Our 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 consolidated financial statements do not include any adjustments that might result from the outcome of uncertainties described above.
Gross Profit As a result of the foregoing, our gross profit decreased by 17.1% from RMB112.7 million in 2022 to RMB93.4 million (US$13.2 million) in 2023. 107 Table of Contents Operating Expenses Selling and marketing expenses Our selling and marketing expenses increased by 23.0% from RMB127.7 million in 2022 to RMB157.0 million (US$22.1 million) in 2023, primarily due to an increase in promotion expenses, as a result of increased volume of offline events.
Operating Expenses Selling and marketing expenses Our selling and marketing expenses increased by 23.0% from RMB127.7 million in 2022 to RMB157.0 million in 2023, primarily due to an increase in promotion expenses, as a result of increased volume of offline events.
Gross Profit As a result of the foregoing, our gross profit decreased by 58.6% from RMB272.3 million in 2021 to RMB112.7 million in 2022.
Gross Profit As a result of the foregoing, our gross profit decreased by 17.1% from RMB112.7 million in 2022 to RMB93.4 million in 2023.
In 2021, 2022 and 2023, net revenues generated from referral service for the commercial bank were RMB67.0 million, RMB44.2 million and RMB2.6 million (US$0.4 million), respectively, representing 18.8%, 24.1% and 1.6% of our net revenues for the same periods, respectively.
In 2022, 2023 and 2024, net revenues generated from referral service for the commercial bank were RMB44.2 million, RMB2.6 million and nil, respectively, representing 24.1%, 1.6% and nil of our net revenues for the same periods, respectively. We had ceased operation of the referral services since April 1, 2022.
The following table sets forth the components of operating expenses, in absolute amounts and as a percentage of net revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues 357,552 100.0 183,188 100.0 162,367 22,868 100.0 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling and marketing expenses 274,670 76.8 127,696 69.7 157,004 22,114 96.7 General and administrative expenses 72,788 20.4 64,708 35.3 44,666 6,291 27.5 Research and development expenses 35,651 9.9 19,799 10.8 11,267 1,587 6.9 Impairment of long-lived assets ​ — ​ — ​ 19,743 ​ 10.8 ​ 1,515 ​ 213 ​ 0.9 Total operating expenses 383,109 107.1 231,946 126.6 214,452 30,205 132.0 ​ Selling and marketing expenses Our selling and marketing expenses consist primarily of (1) advertising and promotion expenses, which entail expenditures related to online and offline promotion of our and the VIEs’ business, (2) sales staff compensation, (3) others, including transportation expenses incurred by our and the VIEs’ sales staff, field sales office rental expenses and call center expenses.
For the year ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (in thousands, except for percentages) Net revenues 183,188 100.0 162,367 100.0 49,176 6,737 100.0 Operating expenses: Selling and marketing expenses 127,696 69.7 157,004 96.7 54,481 7,464 110.8 General and administrative expenses 64,708 35.3 44,666 27.5 53,101 7,275 108.0 Research and development expenses 19,799 10.8 11,267 6.9 11,890 1,629 24.2 Impairment of long-lived assets 19,743 10.8 1,515 0.9 4,048 555 8.2 Total operating expenses 231,946 126.6 214,452 132.0 123,520 16,923 251.2 94 Selling and marketing expenses Our selling and marketing expenses consist primarily of (1) advertising and promotion expenses, which entail expenditures related to online and offline promotion of our and the VIEs’ business, (2) sales staff compensation, (3) others, including transportation expenses incurred by our and the VIEs’ sales staff, field sales office rental expenses and call center expenses.
Revenue is recorded net of Value Added Tax (“VAT”), and related surcharges collected from customers, which are subsequently remitted to government authorities. 114 Table of Contents Offline marketing services revenue Auto show revenue Our and the VIEs’ online website and offline infrastructure allow us and the VIEs to organize auto shows, which aim at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers.
Offline marketing services revenue Auto show revenue Our and the VIEs’ online website and offline infrastructure allow us and the VIEs to organize auto shows, which aim at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers.
The following table sets forth the components of cost of revenues, both in absolute amount and as a percentage of net revenues for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues 357,552 100.0 183,188 100.0 162,367 22,868 100.0 Cost of revenues: Venue set-up costs 24,119 6.7 6,505 3.6 14,391 2,027 8.9 Venue rental costs 33,304 9.4 9,522 5.2 20,605 2,902 12.7 Other direct costs 27,867 7.8 54,510 29.7 33,946 4,781 20.9 Total cost of revenues 85,290 23.9 70,537 38.5 68,942 9,710 42.5 ​ Venue set-up costs We and the VIEs engage third-party service providers to assemble exhibition booths and coordinate maintenance issues with participating industry customers.
For the year ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (in thousands, except for percentages) Net revenues 183,188 100.0 162,367 100.0 49,176 6,737 100.0 Cost of revenues: Venue set-up costs 6,505 3.6 14,391 8.9 1,723 236 3.5 Venue rental costs 9,522 5.2 20,605 12.7 2,477 339 5.0 Other direct costs 54,510 29.7 33,946 20.9 11,396 1,562 23.2 Total cost of revenues 70,537 38.5 68,942 42.5 15,596 2,137 31.7 Venue set-up costs We and the VIEs engage third-party service providers to assemble exhibition booths and coordinate maintenance issues with participating industry customers.
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.
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. The auto show business has been fully transformed into an agency model in July 2024. The Group’s agency service is developed from the original auto show service.
The following table sets forth the components of our selling and marketing expenses, in absolute amounts and as a percentage of net revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues 357,552 100.0 183,188 100.0 162,367 22,868 100.0 Selling and marketing expenses: Advertising and promotion expense 140,088 39.2 57,562 31.4 98,490 13,872 60.7 Sales staff compensation 110,680 31.0 59,667 32.6 43,964 6,192 27.1 Others 23,902 6.6 10,467 5.7 14,550 2,050 8.9 Total selling and marketing expenses 274,670 76.8 127,696 69.7 157,004 22,114 96.7 ​ 103 Table of Contents General and administrative expenses General and administrative expenses consist primarily of (1) administrative staff compensation, (2) professional service expenses, (3) office expenses, and (4) others, including allowance of doubtful accounts and insurance expenses.
For the year ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (in thousands, except for percentages) Net revenues 183,188 100.0 162,367 100.0 49,176 6,737 100.0 Selling and marketing expenses: Advertising and promotion expense 57,562 31.4 98,490 60.7 16,792 2,300 34.1 Sales staff compensation 59,667 32.6 43,964 27.1 30,006 4,111 61.0 Others 10,467 5.7 14,550 8.9 7,683 1,053 15.7 Total selling and marketing expenses 127,696 69.7 157,004 96.7 54,481 7,464 110.8 General and administrative expenses General and administrative expenses consist primarily of (1) administrative staff compensation, (2) professional service expenses, (3) office expenses, and (4) others, including allowance of doubtful accounts and insurance expenses.
Allowance for credit loss The carrying value of accounts receivable is reduced by an allowance that reflects our best estimate of the amounts that will not be collected.
The Group is considered to be an agent in accordance with ASC 606 and revenue is recognized over the period of the contract. 104 Allowance for credit loss The carrying value of accounts receivable is reduced by an allowance that reflects our best estimate of the amounts that will not be collected.
Net cash generated from financing activities was RMB7.0 million in 2021, primarily due to cash of RMB10.0 million received from short-term borrowings, partially offset by cash repayments of short-term borrowings of RMB3.0 million.
Net cash generated from financing activities was RMB14.0 million in 2023, primarily due to proceeds from borrowings of RMB20.4 million, partially offset by cash repayments of borrowings of RMB6.4 million.
In 2021, the difference between our cash used in operating activities and our net loss of RMB101.9 million resulted primarily from (1) allowance of doubtful accounts of RMB17.8 million, (2) share-based compensation of RMB9.8 million, (3) an increase in accounts payable of RMB7.8 million, (4) a decrease in accounts receivable of RMB6.5 million and (5) amortization of intangible assets of RMB4.1 million, partially offset by (1) a decrease in other current liabilities of RMB17.3 million, (2) a decrease in salary and welfare benefits payable of RMB13.0 million, (3) a decrease in advance from customers of RMB6.1 million and (4) an increase in prepayment and other current assets of RMB4.2 million.
In 2024, the difference between our cash used in operating activities and our net loss of RMB188.0 million (US$25.8 million) resulted primarily from (1) changes in fair value of warrant liability of RMB57.1 million (US$7.8 million), (2) provisions for goodwill impairment of RMB45.6 million (US$6.2 million), (3) share-based compensation of RMB28.4 million (US$1.3 million), (4) a decrease in accounts and notes receivable of RMB13.1 million (US$1.8 million), (5) an increase in other current liabilities of RMB9.3 million (US$1.3 million), (6) allowance of doubtful accounts of RMB6.9 million (US$0.9 million), (7) an increase in in advance from customers of RMB4.7 million (US$0.6 million), (8)provisions for long-lived asset impairment of RMB4.0 million (US$0.6 million) and (9) an increase in accounts payable of RMB3.5 million (US$0.5 million), partially offset by (1) a decrease in salary and welfare benefits payable of RMB11.5 million(US$1.6 million), (2) an increase in prepayment and other current assets of RMB2.4 million (US$0.3 million), (3) a decrease in other taxes payable of RMB2.3 million (US$0.3 million), and (4) other income on reverse of unpaid tax of RMB2.1 million (US$0.3 million).
Special promotion event service revenue We and the VIEs provide integrated services to support industry customers’ special promotion events during a specific period, which include event planning and execution, marketing training and onsite coaching. We and the VIEs charge a fixed service fee per special promotion event.
The Group is considered to be an agent in accordance with ASC 606 and revenue is recognized over the period of the contract. 103 Special promotion event service revenue We and the VIEs provide integrated services to support industry customers’ special promotion events during a specific period, which include event planning and execution, marketing training and onsite coaching.
We generated net revenues from online marketing services of approximately RMB14.5 million, RMB50.8 million and RMB23.4 million (US$3.3 million) in 2021, 2022 and 2023, representing 4.1%, 27.7% and 14.4% of our net revenues for the same periods, respectively.
We and the VIEs charge a fixed admission fee per event from industry customers for our live streaming promotion events services. We generated net revenues from online marketing services of approximately RMB50.8 million, RMB23.4 million and RMB8.2 million (US$1.1 million) in 2022, 2023 and 2024, representing 27.7%, 14.4% and 16.7% of our net revenues for the same periods, respectively.
Net Loss As a result of the foregoing, we had net loss of RMB166.5 million and RMB80.4 million (US$11.3 million) in 2022 and 2023, respectively. 108 Table of Contents Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Net Revenues Our net revenues decreased by 48.8% from RMB357.6 million in 2021 to RMB183.2 million in 2022, primarily representing the decreases in net revenues from offline marketing services and referral service for a commercial bank. ● Net revenues from auto show services decreased by 77.8% from RMB242.9 million in 2021 to RMB54.0 million in 2022, primarily due to a reduced number of auto shows held by us and the VIEs as a result of tightened government restrictions in response to regional COVID-19 outbreaks.
Net Loss As a result of the foregoing, we had net loss of RMB80.4 million and RMB188.0 million (US$25.8 million) in 2023 and 2024, respectively. 98 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Net Revenues ● Our net revenues decreased by 9.3% from RMB183.2 million in 2022 to RMB162.4 million in 2023, primarily representing the decreases in net revenues from referral service for a commercial bank and online marketing services, partially offset by the increase in net revenues from auto show services. ● Net revenues from auto show services increased significantly from RMB54.0 million in 2022 to RMB111.3 million in 2023, primarily due to the increase in the number of offline activities as a result of the relief of pandemic restrictions.
Liquidity and Capital Resources Liquidity and Capital Resources Our principal sources of liquidity have been cash generated from operations, proceeds from our initial public offering, the November 2022 Offering and loans from banks. As of December 31, 2022 and 2023, we had RMB69.9 million and RMB9.6 million (US$1.3 million), respectively, in cash and cash equivalents.
Net Loss As a result of the foregoing, we had net loss of RMB166.5 million and RMB80.4 million in 2022 and 2023, respectively. B. Liquidity and Capital Resources Liquidity and Capital Resources Our principal sources of liquidity have been cash generated from operations, proceeds from our initial public offering, the November 2022 Offering, October 2024 Offering and loans from banks.
General and administrative expenses, as a percentage of total net revenues, increased from 20.4% in 2021 to 35.3% in 2022, primarily due to the decrease in our net revenues.
General and administrative expenses, as a percentage of total net revenues, increased from 27.5% in 2023 to 108.0% in 2024, primarily due to the increase in general and administrative expenses and the decrease in net revenues.
As of December 31, 2022 and 2023, we held a cash balance of RMB61.1 million and RMB3.0 million (US$0.4 million) denominated in U.S. dollars, respectively. As of the same dates, we held a cash balance of RMB8.8 million and RMB6.6 million (US$0.9 million) denominated in RMB, respectively, representing 12.6% and 68.5% of our total cash and cash equivalents, respectively.
As of the same dates, we held a cash balance of RMB6.6 million and RMB1.7 million (US$0.2 million) denominated in RMB, respectively, representing 68.5% and 27.0% of our total cash and cash equivalents, respectively. We did not have time deposits as of December 31, 2023 and 2024, respectively.
Specifically, the impairment loss of RMB1.1 million, RMB3.0 million and RMB15.6 million in 2022 was recognized in relation to property, equipment and software, right-of-use assets and intangible assets, respectively, and the impairment loss of RMB1.5 million (US$0.2 million) in 2023 related to right-of-use assets. Future cash flow assumptions.
We recognized RMB19.7 million, RMB1.5 million and RMB4.0 million (US$0.6 million) in impairment loss related to long-lived assets in 2022, 2023 and 2024, respectively. Specifically, the impairment loss of RMB1.5 million in 2023 related to right-of-use assets, and the impairment loss of RMB4.0 million (US$0.6 million) in 2024 related to right-of-use assets and other non-current assets. Future cash flow assumptions.
The following table sets forth the components of general and administrative expenses, in absolute amounts and as a percentage of net revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues 357,552 100.0 183,188 100.0 162,367 22,868 100.0 General and administrative expenses: ​ ​ ​ ​ ​ ​ ​ Administrative staff compensation 22,520 6.3 17,741 9.7 16,688 2,350 10.3 Professional service expenses 11,172 3.1 24,111 13.2 16,517 2,326 10.2 Office expenses 12,765 3.6 9,500 5.2 4,279 603 2.6 Others 26,331 7.4 13,356 7.2 7,182 1,012 4.4 Total general and administrative expenses 72,788 20.4 64,708 35.3 44,666 6,291 27.5 ​ Research and development expenses Research and development expenses consist primarily of compensation for research and development personnel.
For the year ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (in thousands, except for percentages) Net revenues 183,188 100.0 162,367 100.0 49,176 6,737 100.0 General and administrative expenses: Administrative staff compensation 17,741 9.7 16,688 10.3 14,237 1,950 29.0 Professional service expenses 24,111 13.2 16,517 10.2 18,700 2,562 38.0 Office expenses 9,500 5.2 4,279 2.6 1,186 162 2.4 Others 13,356 7.2 7,182 4.4 18,978 2,601 38.6 Total general and administrative expenses 64,708 35.3 44,666 27.5 53,101 7,275 108.0 Research and development expenses Research and development expenses consist primarily of compensation for research and development personnel.
We had ceased operation of the referral services since April 1, 2022. 101 Table of Contents Online marketing services We and the VIEs commenced live streaming promotion events services in the first quarter of 2020. For the live streaming promotion events services, we and the VIEs hold promotional events on the live streaming platform of Zhejiang Tmall Technology Co., Ltd.
Online marketing services We and the VIEs commenced live streaming promotion events services in the first quarter of 2020. For the live streaming promotion events services, we and the VIEs hold promotional events on the live streaming platform of Zhejiang Tmall Technology Co., Ltd. (“Tmall”) to facilitate transactions between consumers and our and the VIEs’ industry customers.
We also historically generated net revenues from referral services for a commercial bank. In 2021, 2022 and 2023, our net revenues were RMB357.6 million, RMB183.2 million and RMB162.4 million (US$22.9 million), respectively.
We also historically generated net revenues from referral services for a commercial bank. In 2022, 2023 and 2024, our net revenues were RMB183.2 million, RMB162.4 million and RMB49.2 million (US$6.7 million), respectively. The following table sets forth the breakdown of our total net revenues, both in absolute amounts and as a percentage of total net revenues, for the years indicated.
Cash used in operating activities was RMB92.3 million in 2021.
Cash used in operating activities was RMB74.9 million in 2023.
We primarily consider the following factors when evaluating impairment: ● significant underperformance relative to projected operating results; ● significant changes in the overall business strategy; ● significant adverse changes in legal or business environment; and ● significant competition, unfavorable industry trends, or economic outlook. ​ 117 Table of Contents When these events occur, we evaluate 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.
When these events occur, we evaluate 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.
Specific Factors Affecting Our Results of Operations While our business is influenced by general factors affecting China’s automotive industry, we believe our results of operations are more directly affected by company specific factors, including the following: Scale of Our and the VIEs’ Business The scale of our and the VIEs’ business, including the number of offline events we and the VIEs organize, the number of cities in which we and the VIEs operate, the number of automobile sales transactions we and the VIEs facilitate, and the number of industry customers we and the VIEs serve, has a significant impact on our results of operations.
Specific Factors Affecting Our Results of Operations While our business is influenced by general factors affecting China’s automotive industry, we believe our results of operations are more directly affected by company specific factors, including the following: Operational Efficiency Our and the VIEs’ ability to maintain and enhance operational efficiency for our and the VIEs’ offline events directly impacts our results of operations.
The following table sets forth the breakdown of our total net revenues, both in absolute amounts and as a percentage of total net revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % ​ RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues: Offline marketing services Auto show 242,860 67.9 53,962 29.5 111,349 15,683 68.6 Special promotion events 3,994 1.1 1,609 0.9 3,166 446 1.9 Referral service for commercial bank ​ 67,010 ​ 18.8 ​ 44,202 ​ 24.1 ​ 2,572 ​ 362 ​ 1.6 Online marketing services 14,489 4.1 50,757 27.7 23,411 3,297 14.4 Other services ​ 29,199 ​ 8.1 ​ 32,658 ​ 17.8 ​ 21,869 ​ 3,080 ​ 13.5 Total net revenues 357,552 100.0 183,188 100.0 162,367 22,868 100.0 ​ Offline marketing services revenue Our offline marketing services revenue primarily consists of revenues from auto shows and special promotion events.
For the year ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (in thousands, except for percentages) Net revenues: Offline marketing services Auto show 53,962 29.5 111,349 68.6 20,545 2,815 41.8 Special promotion events 1,609 0.9 3,166 1.9 224 31 0.5 Referral service for commercial bank 44,202 24.1 2,572 1.6 — — — Online marketing services 50,757 27.7 23,411 14.4 8,222 1,126 16.7 Social CRM cloud services 11,760 6.4 8,282 5.1 9,026 1,237 18.4 Referral service for distribution platform 9,684 5.3 9,457 5.8 7,667 1,050 15.6 Other services 11,214 6.1 4,130 2.6 3,492 478 7.0 Total net revenues 183,188 100.0 162,367 100.0 49,176 6,737 100.0 92 Offline marketing services revenue Our offline marketing services revenue primarily consists of revenues from auto shows and special promotion events.
Our selling and marketing expenses as a percentage of total net revenues increased from 69.7% in 2022 to 94.4% in 2023, because the increase of our selling and marketing expenses outpaced the increase in our net revenues, primarily due to an increase in promotion expenses as a result of the increase in the number of offline events held by us and the VIEs.
Our selling and marketing expenses as a percentage of total net revenues increased from 94.4% in 2023 to 110.8% in 2024, because the decrease in our net revenues outpaced the decrease of our selling and marketing expenses.
We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. 99 Table of Contents The following tables set forth a reconciliation of our adjusted EBITDA and adjusted net loss to net loss for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 2022 2023 ​ ​ RMB ​ RMB ​ RMB US$ ​ ​ (in thousands) Net loss (101,945) (166,490) (82,971) (11,687) Add: Depreciation and amortization 7,668 4,237 — — Subtract: ​ ​ ​ ​ Interest income/(expenses), net 625 (174) (143) (20) EBITDA (94,902) (162,079) (82,828) (11,667) Add: Share-based compensation expenses 9,796 10,282 9,546 1,345 Change of guarantee liability 1,542 — — — Impairment of long-term investment 700 — — — Change in fair value of warrant liability ​ — ​ (11,219) ​ (20,732) ​ (2,920) Impairment of long-lived assets — 19,743 1,515 213 Impairment of goodwill ​ — ​ 69,853 ​ — ​ — Adjusted EBITDA (82,864) (73,420) (92,499) (13,029) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 2022 2023 ​ ​ RMB ​ RMB ​ RMB US$ Net loss (101,945) (166,490) (82,971) (11,687) Add: ​ ​ ​ ​ ​ ​ ​ ​ Share-based compensation expenses 9,796 10,282 9,546 1,345 Change of guarantee liability ​ 1,542 ​ — ​ — ​ — Impairment of long-term investment 700 — — — Change in fair value of warrant liability ​ — ​ (11,219) ​ (20,732) ​ (2,920) Impairment of long-lived assets ​ — ​ 19,743 ​ 1,515 ​ 213 Impairment of goodwill ​ — ​ 69,853 ​ — ​ — Adjusted net loss (89,907) (77,831) (92,642) (13,049) ​ 100 Table of Contents Key Components of Results of Operations Net Revenues We generate net revenues primarily from offline marketing service, referral services for commercial bank, online marketing services and other services.
For the year ended December 31, 2022 2023 2024 RMB RMB RMB US$ (in thousands) Net loss (166,490 ) (82,971 ) (187,991 ) (25,756 ) Add: Depreciation and amortization 4,237 — — — Subtract: Interest income/(expenses), net (174 ) (143 ) (999 ) (137 ) EBITDA (162,079 ) (82,828 ) (186,992 ) (25,619 ) Add: Share-based compensation expenses 10,282 9,546 28,394 3,890 Change in fair value of warrant liability (11,219 ) (20,732 ) 57,066 7,818 Impairment of long-lived assets 19,743 1,515 4,048 555 Impairment of goodwill 69,853 — 45,561 6,242 Adjusted EBITDA (73,420 ) (92,499 ) (51,923 ) (7,114 ) For the year ended December 31, 2022 2023 2024 RMB RMB RMB US$ Net loss (166,490 ) (82,971 ) (187,991 ) (25,756 ) Add: Share-based compensation expenses 10,282 9,546 28,394 3,890 Change in fair value of warrant liability (11,219 ) (20,732 ) 57,066 7,818 Impairment of long-lived assets 19,743 1,515 4,048 555 Impairment of goodwill 69,853 — 45,561 6,242 Adjusted net loss (77,831 ) (92,642 ) (52,922 ) (7,251 ) Key Components of Results of Operations Net Revenues We generate net revenues primarily from offline marketing service, referral services for commercial bank, online marketing services and other services.
General and administrative expenses Our general and administrative expenses decreased by 11.1% from RMB72.8 million in 2021 to RMB64.7 million in 2022, primarily due to (1) a decrease in the administrative staff compensation expenses, as a result of adjustment of our and the VIEs’ workforce structure and (2) a decrease in allowance for doubtful accounts, as a result of strengthened collection efforts of accounts receivable, partially offset by an increase in professional service expenses in connection with the November 2022 Offering.
General and administrative expenses Our general and administrative expenses increased by 18.9% from RMB44.7 million in 2023 to RMB53.1 million (US$7.3 million) in 2024, primarily due to (1) an increase in the administrative staff compensation expenses, as a result of the increase in share-based compensation expenses, (2) an increase in allowance for doubtful accounts, and (3) an increase in professional service expenses in connection with the October 2024 Offering.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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We may grant awards to our employees, directors and consultants of our company, and other individuals, as determined by the plan administrator. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries. Vesting schedule .
We may grant awards to our employees, directors and consultants of our company, and other individuals, as determined by the plan administrator. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries. Vesting schedule .
In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Restricted shares . Restricted shares are subject to such restrictions on transferability and other restrictions as the committee may impose. Exercise of options . The committee determines the exercise price of each option, which is set forth in the Award Agreement.
In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Restricted shares . Restricted shares are subject to such restrictions on transferability and other restrictions as the committee may impose. Exercise of options . The committee determines the exercise price of each option, which is set forth in the Award Agreement.
The calculation of each director or executive’s beneficial ownership does not take into account that person’s restricted shares which were still held by Best Cars Limited and would not be vested within 60 days after March 20, 2024. † For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after March 20, 2024. †† For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
The calculation of each director or executive’s beneficial ownership does not take into account that person’s restricted shares which were still held by Best Cars Limited and would not be vested within 60 days after March 20, 2024. † For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after March 28, 2025. † † For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
Our company may have the right to seek damages if a duty owed by our directors is breached. Terms of Directors and Officers Pursuant to the amended and restated memorandum and articles of association, our officers are elected by and serve at the discretion of the board.
Our company may have the right to seek damages if a duty owed by our directors is breached. 113 Terms of Directors and Officers Pursuant to the amended and restated memorandum and articles of association, our officers are elected by and serve at the discretion of the board.
Key Information—Risk Factors—Risks Related to Our Business and Industry—Our business operations have been and may continue to be materially and adversely affected by the COVID-19 pandemic.” E.
Key Information-Risk Factors-Risks Related to Our Business and Industry-Our business operations have been and may continue to be materially and adversely affected by the COVID-19 pandemic.” 114 E.
The nominating and corporate governance committee will be responsible for, among other things: ● recommending nominees to the board for election or re-election to the board, or for appointment to fill any vacancy on the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, age, skills, experience and availability of service to us; ● selecting and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; 124 Table of Contents ● developing and reviewing the corporate governance principles adopted by the board and advising the board with respect to significant developments in the law and practice of corporate governance and our compliance with such laws and practices; and ● evaluating the performance and effectiveness of the board as a whole.
The nominating and corporate governance committee will be responsible for, among other things: ● recommending nominees to the board for election or re-election to the board, or for appointment to fill any vacancy on the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, age, skills, experience and availability of service to us; ● selecting and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; ● developing and reviewing the corporate governance principles adopted by the board and advising the board with respect to significant developments in the law and practice of corporate governance and our compliance with such laws and practices; and ● evaluating the performance and effectiveness of the board as a whole.
Due to the COVID-19 outbreak, we and the VIEs’ implemented measures to adjust the pace of our business expansion and conserve resources, such as furlough arrangements and scaling back recruitment budget and employee size, in 2021, 2022 and 2023. For more details, see “Item 3.
Due to the COVID-19 outbreak, we and the VIEs’ implemented measures to adjust the pace of our business expansion and conserve resources, such as furlough arrangements and scaling back recruitment budget and employee size, in 2022, 2023 and 2024. For more details, see “Item 3.
To the extent permitted under the 2018 Plan and applicable law and regulations, the trustee shall follow the instruction of the Board or a committee of the Board consisting one or more members of the Board in respect of the exercise of voting rights (if any) and powers in relation to the Class A ordinary shares held by Best Cars Limited until they have been transferred outside of the trust and/or the nominee to the personal accounts of the relevant grant recipient. ​ 122 Table of Contents C.
To the extent permitted under the 2018 Plan and applicable law and regulations, the trustee shall follow the instruction of the Board or a committee of the Board consisting one or more members of the Board in respect of the exercise of voting rights (if any) and powers in relation to the Class A ordinary shares held by Best Cars Limited until they have been transferred outside of the trust and/or the nominee to the personal accounts of the relevant grant recipient. 111 C.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. For information regarding our stock options, see “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Critical Accounting Policies—Share-based Compensation.” F. Disclosure of a Registrant’s Action to Recover Errorneously Awarded Compensation Not applicable. 128 Table of Contents
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. For information regarding our stock options, see “Item 5. Operating and Financial Review and Prospects-A. Operating Results-Critical Accounting Policies-Share-based Compensation.” F. Disclosure of a Registrant’s Action to Recover Errorneously Awarded Compensation Not applicable. 116
The audit committee will be responsible for, among other things: ● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; 123 Table of Contents ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; ● reviewing and reassessing annually the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ● reporting regularly to the board.
The audit committee will be responsible for, among other things: ● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; 112 ● reviewing and reassessing annually the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ● reporting regularly to the board.
Wei Wen that have vested as of March 20, 2024, (ii) 2,188,160 Class A ordinary shares held in the form of ADSs by WW Long Limited, and (iii) 55,260,580 Class B ordinary shares directly held by WW Long Limited, a company organized and existing under the laws of the British Virgin Islands and wholly owned by Mr. Wei Wen.
Wei Wen that have vested as of March 20, 2024, (ii) 2,188,160 Class A ordinary shares represented by ADSs by WW Long Limited, (iii) 220 Class A ordinary shares held by WW Long Limited, and (iv) 55,260,580 Class B ordinary shares directly held by WW Long Limited, a company organized and existing under the laws of the British Virgin Islands and wholly owned by Mr.
Mr. Wen oversees our overall strategies and business operations. Prior to founding TuanChe, Mr. Wen had over ten years of entrepreneurial experience in the information technology and automotive industries.
Mr. Wen oversees our overall strategies and business operations. Prior to founding Token Cat, Mr. Wen had over ten years of entrepreneurial experience in the information technology and automotive industries.
Through the equity incentive trust, our Class A ordinary shares underlying equity awards granted pursuant to our 2018 Plan may be provided to certain of recipients of such equity awards. As of March 20, 2024, Best Cars Limited held 6,663,321 Class A ordinary shares pursuant to our 2018 Plan.
Through the equity incentive trust, our Class A ordinary shares underlying equity awards granted pursuant to our 2018 Plan may be provided to certain of recipients of such equity awards. As of March 28, 2025, Best Cars Limited held 6,663,321 Class A ordinary shares pursuant to our 2018 Plan.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of March 20, 2024 by: ● each of our directors and executive officers; and ● each person known to us to beneficially own 5.0% or more of our ordinary shares.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of March 28, 2025 by: ● each of our directors and executive officers; and ● each person known to us to beneficially own 5.0% or more of our ordinary shares.
The registered office of WW Long Limited is Start Chambers, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands. 127 Table of Contents (2) Represents (i) 2,810,672 Class A shares in the form of ADS, representing the number of restricted shares granted to Mr.
Wei Wen. The registered office of WW Long Limited is Start Chambers, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands. (2) Represents (i) 2,810,672 Class A shares in the form of ADS, representing the number of restricted shares granted to Mr.
Compensation Compensation of Directors and Executive Officers In 2023, the aggregate cash compensation to directors and executive officers was approximately RMB2.4 million (US$0.3 million). This amount consisted only of cash and did not include any share-based compensation or benefits in kind.
Compensation Compensation of Directors and Executive Officers In 2024, the aggregate cash compensation to directors and executive officers was approximately RMB2.9 million (US$0.4 million). This amount consisted only of cash and did not include any share-based compensation or benefits in kind.
Each executive officer has also agreed to assign to us all his or her all inventions, improvements, designs, original works of authorship, formulas, processes, compositions of matter, computer software programs, databases, mask works and trade secrets. 125 Table of Contents D. Employees As of December 31, 2021, 2022 and 2023, we had 621, 431 and 324 full-time employees.
Each executive officer has also agreed to assign to us all his or her all inventions, improvements, designs, original works of authorship, formulas, processes, compositions of matter, computer software programs, databases, mask works and trade secrets. D. Employees As of December 31, 2022, 2023 and 2024, we had 431, 324 and 116 full-time employees.
The committee also determines the exercise time and conditions for each option, provided that the maximum exercisable term is 10 years absent amendment or modification. 120 Table of Contents Transfer restrictions .
The committee also determines the exercise time and conditions for each option, provided that the maximum exercisable term is 10 years absent amendment or modification. 108 Transfer restrictions .
Prior to joining TuanChe, Mr. Yuan co-founded XiongmaoCar and served as a Vice President of Bitauto Holdings Limited (NYSE: BITA). Before launching his career in the automotive industry, Mr. Yuan also held product R&D positions in several Chinese internet companies, including Dangdang.com. 119 Table of Contents B.
Yuan co-founded XiongmaoCar and served as a Vice President of Bitauto Holdings Limited (NYSE: BITA). Before launching his career in the automotive industry, Mr. Yuan also held product R&D positions in several Chinese internet companies, including Dangdang.com. 107 B.
As of the date of this annual report, there were 17,600,000 restricted shares issued and 240,000 restricted shares outstanding under the 2023 Plan. The following paragraphs describe the principal terms of the 2023 Plan: Types of awards . The 2023 Plan permits the awards of options, restricted shares or restricted share units. Plan administration .
As of the date of this annual report, there were 0 restricted shares issued and 0 restricted shares outstanding under the 2024 Plan. The following paragraphs describe the principal terms of the 2024 Plan: Types of awards . The 2024 Plan permits the awards of options, restricted shares or restricted share units. Plan administration .
Each of the members of the audit committee satisfies the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules and meet the independence standards under Rule 10A-3 under the Exchange Act. We have determined that Ms.
Wentao Deng and is chaired by Mr. Jintao Lin. Each of the members of the audit committee satisfies the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules and meet the independence standards under Rule 10A-3 under the Exchange Act. We have determined that Ms.
Sun held multiple positions including regional manager, channel manager, general manager of communication division and deputy general manager, in Changzhou Huaxin Electric Appliance Research Institute, Yiyang Group, Changzhou Boyun Communication Technology Co., Ltd., and Beijing Guoyuan Innovative Technology Co., Ltd., respectively. Mr.
Jianchen Sun is our co-founder and president. Prior to joining us, Mr. Sun held multiple positions including regional manager, channel manager, general manager of communication division and deputy general manager, in Changzhou Huaxin Electric Appliance Research Institute, Yiyang Group, Changzhou Boyun Communication Technology Co., Ltd., and Beijing Guoyuan Innovative Technology Co., Ltd., respectively. Mr.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A Directors and Senior Management The following table sets forth information regarding our directors and senior management as of the date of this annual report: ​ ​ ​ ​ ​ Directors and Executive Officers Age Position/Title Wei Wen 48 Chairman and Chief Executive Officer Simon Li 40 Chief Financial Officer Jianchen Sun 46 Director and President Wendy Hayes 54 Independent Director Zijing Zhou 42 Independent Director Tong Zhang 49 Independent Director Hui Yuan 47 Chief Operating Officer ​ Wei Wen is our co-founder and has been serving as the chairman of our board of directors and our chief executive officer since our inception, and has served as our acting chief financial officer since February 2023.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A Directors and Senior Management The following table sets forth information regarding our directors and senior management as of the date of this annual report: Directors and Executive Officers Age Position/Title Wei Wen 49 Chief Executive Officer and Chairman Guangsheng Liu 41 Co-Chief Executive Officer and Director Simon Li 40 Chief Financial Officer Jianchen Sun 47 President Jintao Lin 37 Independent Director Wentao Deng 37 Independent Director Yicheng Yang 32 Independent Director Hui Yuan 48 Chief Operating Officer Wei Wen is our co-founder and has been serving as the chairman of our board of directors and our chief executive officer since our inception, and has served as our acting chief financial officer since February 2023.
Compensation Committee . Our compensation committee consists of Mr. Wei Wen, Ms. Wendy Hayes and Mr. Zijing Zhou, and is chaired by Mr. Wei Wen. Ms. Wendy Hayes and Mr. Zijing Zhou satisfy the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules.
Compensation Committee . Our compensation committee consists of Mr. Wei Wen, Mr. Jintao Lin and Mr. Wentao Deng, and is chaired by Mr. Wei Wen. Mr. Wentao Deng and Mr. Jintao Lin satisfy the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules.
The following table sets forth the numbers of our and the VIEs’ full-time employees by functions as of the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ As of the December 31, ​ ​ 2021 2022 2023 Sales and marketing 488 329 252 General and administrative 73 58 44 Research and development 60 44 28 Total 621 431 324 ​ As required by PRC laws and regulations, we participate in various employee social security plans for our and the VIEs’ employees that are administered by local PRC governments, including housing, pension, medical insurance and unemployment insurance.
As of the December 31, 2022 2023 2024 Sales and marketing 329 252 70 General and administrative 58 44 37 Research and development 44 28 9 Total 431 324 116 As required by PRC laws and regulations, we participate in various employee social security plans for our and the VIEs’ employees that are administered by local PRC governments, including housing, pension, medical insurance and unemployment insurance.
Nominating and Corporate Governance Committee . Our nominating and corporate governance committee consists of Mr. Wei Wen, Mr. Zijing Zhou and Mr. Tong Zhang, and is chaired by Mr. Wei Wen. Mr. Tong Zhang and Mr. Zijing Zhou satisfy the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules.
Nominating and Corporate Governance Committee . Our nominating and corporate governance committee consists of Mr. Yicheng Yang and Mr. Wentao Deng, and is chaired by Mr. Wentao Deng. Mr. Wentao Deng and Mr. Yicheng Yang satisfy the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules.
The calculations in the table below are based on the fact that there were 428,336,063 ordinary shares outstanding as March 20, 2024, including (1) Class A ordinary shares, including the 6,663,321 Class A ordinary shares held by Best Cars Limited, the nominee of our equity incentive trust that, although legally issued and outstanding, are not deemed as outstanding from an accounting perspective and (2) 55,260,580 Class B ordinary shares. ​ 126 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on the fact that there were 705,829,791 ordinary shares outstanding as March 28, 2025, including (1) Class A ordinary shares, including the 6,663,321 Class A ordinary shares held by Best Cars Limited, the nominee of our equity incentive trust that, although legally issued and outstanding, are not deemed as outstanding from an accounting perspective and (2) 55,260,580 Class B ordinary shares.
As of March 20, 2024, a total of 230,846,688 Class A ordinary shares are held by four record holders in the United States, including The Bank of New York Mellon, the depositary of the ADS program, representing 53.9% of our total outstanding shares. None of our outstanding Class B ordinary shares are held by record holders in the United States.
As of March 28, 2025, a total of 625,379,977 Class A ordinary shares are held by four record holders in the United States, including The Bank of New York Mellon, the depositary of the ADS program, representing 78.1% of our total outstanding shares. None of our outstanding Class B ordinary shares are held by record holders in the United States.
Each holder of Class A ordinary shares is entitled to one vote per share and each holder of our Class B is entitled to 15 votes per share on all matters submitted to them for vote. Our Class B ordinary shares are convertible at any time by the holder thereof into Class A ordinary shares on a one-for-one basis.
Each holder of Class A ordinary shares is entitled to one vote per share and each holder of our Class B is entitled to 100 votes per share on all matters submitted to them for vote.
(7) 38,155,408 — 9.0 % 3.2 % * Less than 1% of our total outstanding shares as of March 20, 2024. ** The business address of our directors and executive officers is 9F, Ruihai Building, No. 21 Yangfangdian Road, Haidian District, Beijing 100038, People’s Republic of China .
(4) 37,978,409 - 4.99 % * * Less than 1% of our total outstanding shares as of March 28, 2025. ** The business address of our directors and executive officers is 9F, Ruihai Building, No. 21 Yangfangdian Road, Haidian District, Beijing 100038, People’s Republic of China.
(1) Represents (i) 2,498,784 Class A ordinary shares held in the name of Mr. Wei Wen by Best Cars Limited, representing the number of restricted shares granted to Mr.
Our Class B ordinary shares are convertible at any time by the holder thereof into Class A ordinary shares on a one-for-one basis. 115 (1) Represents (i) 2,498,784 Class A ordinary shares held in the name of Mr. Wei Wen by Best Cars Limited, representing the number of restricted shares granted to Mr.
Zhang received his bachelor’s and master’s degrees in economics and management from Beijing Administration College in 2002 and 2004, respectively. Hui Yuan has been serving as our chief operating officer since May 2019. Mr. Yuan has over 20 years of experience in China’s automotive industry with expertise in the management of product development, operations, sales, and marketing.
He attended Singapore Management University and received his master’s degree of science in international trading. Hui Yuan has been serving as our chief operating officer since May 2019. Mr. Yuan has over 20 years of experience in China’s automotive industry with expertise in the management of product development, operations, sales, and marketing. Prior to joining Token Cat, Mr.
As of December 31, 2023, there were 6,327,321 ordinary shares available for grants and 3,640,000 restricted shares outstanding under the 2018 Plan. The following paragraphs describe the principal terms of the 2018 Plan: Types of awards . The 2018 Plan permits the awards of options, restricted shares or restricted share units. Plan administration .
As of the date of this annual report, all ordinary shares have been granted and there are 4,305,000 restricted shares outstanding under the 2018 Plan. The following paragraphs describe the principal terms of the 2018 Plan: Types of awards . The 2018 Plan permits the awards of options, restricted shares or restricted share units. Plan administration .
Before he started his own companies, Mr. Wen was a channel manager of Mitsubishi Electric Shanghai. Mr. Wen received a bachelor’s degree in industrial foreign trade from Beijing Jiaotong University. 118 Table of Contents Simon Li has extensive experience in investment and corporate finance. Prior to joining the Company, Mr.
Before he started his own companies, Mr. Wen was a channel manager of Mitsubishi Electric Shanghai. Mr. Wen received a bachelor’s degree in industrial foreign trade from Beijing Jiaotong University. Guangsheng Liu has served as a Senior Partner of Jingdong Medicine since December 2015.
The committee, with the prior approval of the board, may terminate, amend or modify the 2023 Plan, subject to some limitations. 121 Table of Contents The following table sets forth information on restricted shares that we have awarded or have agreed to award as of March 20, 2024 pursuant to the 2018 Plan and 2023 Plan. ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ Restricted ​ ​ ​ Shares Awarded(1) Grant Date Directors and Executive Officers ​ ​ ​ ​ ​ ​ ​ ​ June 15, 2018 Wei Wen ​ * July 1, 2018 Simon Li * June 15, 2023 ​ ​ ​ ​ June 15, 2018 Jianchen Sun * July 1, 2018 ​ ​ ​ ​ July 1, 2019 Hui Yuan 5,000,000 July 1, 2020 Zijing Zhou * June 15, 2018 ​ ​ ​ ​ November 20, 2018 ​ ​ ​ ​ November 20, 2019 ​ ​ ​ ​ November 20, 2020 ​ ​ ​ ​ November 20, 2021 Wendy Hayes * November 20, 2022 Tong Zhang ​ — ​ — Total 14,547,904 * Less than 1% of our total outstanding shares on an as-converted basis.
The committee, with the prior approval of the board, may terminate, amend or modify the 2024 Plan, subject to some limitations. 110 The following table sets forth information on restricted shares that we have awarded or have agreed to award as of March 28, 2025 pursuant to the 2018 Plan, 2023 Plan and 2024 Plan.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary shares Beneficially Owned Voting Power Beneficially Owned ​ Class A Ordinary Shares Class B Ordinary Shares % † % †† Directors and Executive Officers** ​ ​ ​ ​ ​ ​ ​ ​ Wei Wen (1) ​ 4,686,944 ​ 55,260,580 ​ 14.0 % 69.4 % Jianchen Sun (2) 14,130,672 — 3.3 % 1.2 % Wendy Hayes * — * * ​ Zijing Zhou * — * * ​ Hui Yuan * — * * ​ Tong Zhang — — — — ​ Simon Li ​ * ​ — ​ — ​ — ​ Directors and executive officers as a group 25,846,064 55,260,580 18.9 % 71.1 % Principal Shareholders ​ WW Long Limited (3) 2,188,160 55,260,580 13.4 % 69.1 % Highland Funds (4) 30,550,709 — 7.1 % 2.5 % BAI GmbH (5) 28,715,429 — 6.7 % 2.4 % Beijing Z-Park Fund Investment Center (Limited Partner) (6) 30,482,380 — 7.1 % 2.5 % Sabby Volatility Warrant Master Fund, Ltd.
Ordinary shares Beneficially Owned Voting Power Beneficially Owned Class A Ordinary Shares Class B Ordinary Shares % † % †† Directors and Executive Officers** Wei Wen (1) 4,687,164 55,260,580 7.88 % 88.75 % Jianchen Sun (2) 14,130,672 - 1.86 % * Hui Yuan * - * * Guangsheng Liu - - - - Simon Li * - * - Jintao Lin - - - - Wentao Deng - - - - Yicheng Yang - - - - Directors and executive officers as a group 18,817,836 55,260,580 9.73 % 88.98 % Principal Shareholders WW Long Limited (3) 2,188,380 55,260,580 7.55 % 88.71 % Sabby Volatility Warrant Master Fund, Ltd.
Each managing member of HMP 9 LLC disclaims beneficial ownership of the shares held by the Highland Funds, except to the extent of each such managing member’s pecuniary interest therein.
Each of Sabby Management, LLC and Hal Mintz disclaims beneficial ownership over the securities listed except to the extent of their pecuniary interest therein.
Removed
Jianchen Sun has been serving as our director since 2010 and is our co-founder and president. Prior to joining us, Mr.
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From December 2013 to December 2015, he served as the Chief Technology Officer of Beijing Dream Castle Information Technology Co., Ltd. Mr. Deng also served as the Chief Technology Officer of Beijing Beisheng Tiandi Petroleum Technology Development Co., Ltd. from July 2008 to December 2013. Mr.
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Sun received a bachelor’s degree in international economics and trade from Renmin University of China and executive MBA from Beijing Jiaotong University. Wendy Hayes has served as our independent director since November 2018. Ms. Hayes has served as an independent director of ShakNinja, Inc (NYSE: SN) since July 2023, Apollomics, Inc.
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Liu attended Inner Mongolia University of Finance and Economics and received his bachelor’s degree in Computer Science and Technology in 2008. Simon Li has extensive experience in investment and corporate finance. Prior to joining the Company, Mr.
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(NASDAQ: APML) since March 2023, SciClone Pharmaceuticals (Holdings) Limited (SEHK: 6600) since March 2021, IHuman Inc. (NYSE: IH) since October 2020 and Burning Rock Biotech Limited (NASDAQ: BNR) since June 2020. Between May 2013 and September 2018, Ms. Hayes served as the inspections leader at the Public Company Accounting Oversight Board in the United States. Prior to that, Ms.
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Sun received a bachelor’s degree in international economics and trade from Renmin University of China. Jintao Lin is currently the chief financial planner of Bluestone Economic Company where he engaged in financial management and planning, optimized the financial structure, and managed to increase to the investment value.
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Hayes was an audit partner at Deloitte (China). Ms. Hayes received her bachelor’s degree in international finance from University of International Business and Economics in 1991, and her executive MBA from Cheung Kong Graduate School of Business in 2012. Ms. Hayes is a certified public accountant in the United States (California) and China.
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From August 2014 to August 2016, he worked as the chief senior economist at Zhongtai International Company, where he formulated corporate strategy, managed team development and coordinated the risk assessment system. Mr. Lin attended South China Normal University from September 2011 to June 2014, and received his bachelor’s degree in finance.
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Zijing Zhou has been serving as our independent director since November 2019. Mr. Zhou founded Aplus Investment Consulting (Beijing) Co., Ltd. (“Ether Capital”), in 2014 and served as the chief executive officer of Ether Capital since 2014. From 2011 to 2014, Mr. Zhou served as a senior financial adviser of China Renaissance Holding Limited (HK:1911). From 2009 to 2011, Mr.
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Wentao Deng has served as the Founder of Shenzhen Yucai Consulting Management Co., Ltd. since June 2016. From October 2015 to May 2016, Mr. Deng served as the Chief Financial Officer of Xiaoke Internet Financial Services Co., Ltd. Mr. Deng attended Jiangnan University and received his bachelor’s degree in Accounting in 2014.
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Zhou served as a senior product manager of Alibaba Group Holding Limited (NYSE: BABA). From 2006 to 2009, Mr. Zhou served as an internet technology developer of Anhui Jinyu Internet Technology Co., Ltd. Mr.
Added
Yicheng Yang was the deputy manager at Dark Pool Asset Management from June 2018 to April 2020, where he maintained equity pledges and supervised assets management.
Removed
Zhou received a bachelor’s degree in physics and a bachelor’s degree in computer science, both from Zhejiang University in 2003, and a master’s degree in computer science from Tsinghua University in 2006.
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From November 2017 to February 2016, he was a director of securities department at Bluestone Securities (New Zealand) Limited, where he managed the sales team, developed and coordinated the complete closed-loop process of compliance, risk control, settlement and customer service. Mr. Yang attended Jiangsu University of Science and Technology and received his bachelor’s degree in mechanical design, manufacturing and automation.
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Tong Zhang has over 10 years of experiences in the fields of vehicle trading, e-commerce and technology research, particularly with respect to vehicle electrification, vehicle intelligence and V2X (vehicle-to-everything) technologies. Since 2015, Mr.
Added
As of the date of this annual report, all restricted shares have been issued and granted, there are 21,600,000 restricted shares outstanding under the 2023 Plan. The following paragraphs describe the principal terms of the 2023 Plan: Types of awards . The 2023 Plan permits the awards of options, restricted shares or restricted share units. Plan administration .
Removed
Zhang has served as vice president of the Automotive Intelligent Industry Research Institute of the Ministry of Industry and Information Technology, where he also serves as the secretary general of the Automotive Intelligent Services Consortium and focuses on the integration of domestic and foreign advanced technologies in the automotive industry, promoting the innovative development and transformation of automotive services.
Added
The committee, with the prior approval of the board, may terminate, amend or modify the 2023 Plan, subject to some limitations. 109 2024 Share Incentive Plan On February 10, 2025, we adopted our 2024 Share Incentive Plan (the “2024 Plan”), to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business.
Removed
Prior to that, Mr. Zhang served as the deputy director of the China Automobile Dealers Association from 2012 to 2015, where he participated in and presided over the drafting and promulgation of the first national standard in the domestic automobile dealing industry for used car inspection. Mr.
Added
We may grant options, restricted shares, restricted share units and other equity-based awards under the 2024 Plan to our employees, directors and consultants. Under the 2024 Plan, a total of 105,874,468 Class A ordinary shares were initially reserved for issuance.
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Board Diversity The following board diversity matrix sets forth the information concerning the gender, demographic background and certain other characteristics of our board of directors as of the date of this annual report, as self-identified by its members, in accordance with Rule 5606 of the Nasdaq Listing Rules. ​ ​ ​ ​ ​ ​ ​ ​ ​ Country of Principal Executive Offices People’s Republic of China Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 5 ​ Female Male Non-Binary Did Not ​ ​ ​ ​ ​ ​ ​ Disclose ​ ​ ​ ​ ​ ​ ​ Gender Part I: Gender Identity Directors 1 4 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction ​ 0 LGBTQ+ ​ 0 Did Not Disclose Demographic Background ​ 0 ​ ​ Committees of the Board of Directors Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, and has adopted a charter for each of the three committees.
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The 2024 Plan shall be administered by the board or a committee of one or more members of the board to whom the board shall delegate the authority to grant or amend awards to participants other than any of the committee members.
Removed
Each committee’s members and functions are described below. Audit Committee . Our audit committee consists of Ms. Wendy Hayes, Mr. Zijing Zhou and Mr. Tong Zhang and is chaired by Ms. Wendy Hayes.
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Any grant or amendment of awards to any committee member shall then require an affirmative vote of a majority of the board members who are not on the committee. Award agreement .
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(4) Represents (i) 19,542,537 Class A ordinary shares directly held by Highland Capital Partners 9 Limited Partnership, a Delaware limited partnership, (ii) 8,417,752 Class A ordinary shares directly held by Highland Capital Partners 9-B Limited Partnership, a Delaware limited partnership, (iii) 1,705,800 Class A ordinary shares directly held by Highland Entrepreneurs’ Fund 9 Limited Partnership, a Delaware limited partnership, and (iv) 884,620 Class A ordinary shares in the form of the ADSs.
Added
Awards granted under the 2024 Plan are evidenced by an award agreement that sets forth terms, conditions and limitations for each award, which may include the term of the award, the provisions applicable in the event of the grantee’s employment or service terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award. Eligibility .
Removed
Highland Capital Partners 9 Limited Partnership, Highland Capital Partners 9-B Limited Partnership, and Highland Entrepreneurs’ Fund 9 Limited Partnership are collectively referred to as the Highland Funds. Highland Management Partners 9 Limited Partnership, a Delaware limited partnership (“HMP 9 LP”), is the general partner of the Highland Funds.
Added
We may grant awards to our employees, directors and consultants of our company, and other individuals, as determined by the plan administrator. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries. Vesting schedule .
Removed
Highland Management Partners 9, LLC, a Delaware limited liability company (“HMP 9 LLC”), is the general partner of HMP 9 LP. Paul A. Maeder, Sean M. Dalton, Robert J. Davis, Daniel J. Nova and Corey M. Mulloy, are the managing members of HMP 9 LLC.
Added
In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Restricted shares . Restricted shares are subject to such restrictions on transferability and other restrictions as the committee may impose. Exercise of options . The committee determines the exercise price of each option, which is set forth in the Award Agreement.
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HMP 9 LLC, as the general partner of HMP 9 LP, which is the general partner of the Highland Funds, may be deemed to have beneficial ownership of the shares held by the Highland Funds.
Added
The committee also determines the exercise time and conditions for each option, provided that the maximum exercisable term is 10 years absent amendment or modification. Transfer restrictions . Awards may not be transferred in any manner by the recipient except under limited circumstances, including by will or the laws of descent and distribution, unless otherwise provided by the plan administrator.
Removed
The managing members have shared power over all investment decisions of HMP 9 LLC and therefore may be deemed to share beneficial ownership of the shares held by the Highland Funds by virtue of their status as controlling persons of HMP 9 LLC.
Added
Number of Restricted Shares Awarded(1) Grant Date Directors and Executive Officers June 15, 2018 Wei Wen * July 1, 2018 Simon Li * June 15, 2023 June 15, 2018 Jianchen Sun * July 1, 2018 July 1, 2019 Hui Yuan * July 1, 2020 * - - Total 13,509,456 * Less than 1% of our total outstanding shares on an as-converted basis.
Removed
Each of HMP 9 LLC and HMP 9 LP disclaims beneficial ownership of the shares held by the Highland Funds, except to the extent of each such entity’s pecuniary interest therein. The principal business address for each of the entities in this paragraph is One Broadway, 16th Floor, Cambridge, MA 02142, U.S.
Added
Committees of the Board of Directors Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, and has adopted a charter for each of the three committees. Each committee’s members and functions are described below. Audit Committee . Our audit committee consists of Mr. Yicheng Yang, Mr. Jintao Lin and Mr.
Removed
(5) Represents 28,715,429 Class A ordinary shares held by BAI GmbH, a company organized and existing under the laws of Germany. BAI GmbH is a wholly-owned subsidiary of subsidiary of Bertelsmann SE & Co. KGaA, a company organized and existing under the laws of Germany. The registered office of BAI GmbH and Bertelsmann SE & Co.
Added
The following table sets forth the numbers of our and the VIEs’ full-time employees by functions as of the dates indicated.
Removed
KGaA is Carl-Bertelsmann-Strasse 270, 33311 Gütersloh, Germany. (6) Represents 30,482,380 Class A ordinary shares held by Beijing Z-Park Fund Investment Center (Limited Partner) (“Z-Park Fund”). The registered office of Z-Park Fund is Room 208, No. 11 Fengzhi East Road, Baiwang Innovation Technology Park, Haidian District, Beijing, PRC.
Added
Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Removed
( 7) Represents 38,155,408 Class A ordinary shares, held by Sabby Volatility Warrant Master Fund, Ltd. (“Sabby Fund”) in the from of ADSs, according to a Schedule 13G filed on January 4, 2023. The registered office of Sabby Fund is c/o Ogier Fiduciary Services (Cayman) Limited, 89 Nexus Way, Camana Bay, Grand Cayman KY1-9008, Cayman Islands.
Added
These shares, however, are not included in the computation of the percentage ownership of any other person.
Removed
The investment manager of Sabby Fund is Sabby Management, LLC, a Delaware limited liability company, the manager of which is Mr. Hal Mintz.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

7 edited+1 added−0 removed2 unchanged
For a description of these contractual arrangements, see “Item 4. Information on the Company—C. Organizational Structure—Our Contractual Arrangements.” Outsourcing Agreement with STDC In 2021, 2022 and 2023, we entered into outsourcing service agreements with Shanghai Three Drivers Culture Media Co., Limited (“STDC”), of which we own 49% equity interest.
For a description of these contractual arrangements, see “Item 4. Information on the Company-C. Organizational Structure-Our Contractual Arrangements.” Outsourcing Agreement with STDC In 2022, 2023 and 2024, we entered into outsourcing service agreements with Shanghai Three Drivers Culture Media Co., Limited (“STDC”), of which we own 49% equity interest.
In 2022 and 2023, we entered into promotion service agreements with STDC, under which the promotion service expenses provided by us for STDC is RMB1.4 million and RMB1.0 million for the years ended December 31, 2022 and 2023. The prepayment balance is RMB248 and RMB1,125 as of December 31, 2022 and 2023, respectively. Transaction with Mr.
In 2023 and 2024, we entered into promotion service agreements with STDC, under which the promotion service expenses provided by us for STDC is RMB1.0 million and nil for the years ended December 31, 2023 and 2024. The prepayment balance is RMB1,125 and nil as of December 31, 2023 and 2024, respectively.
The outsourcing service expenses provided by STDC for us is RMB2.7 million, RMB1.5 million and RMB4.0 million for the years ended December 31, 2021, 2022 and 2023, respectively.
The outsourcing service expenses provided by STDC for us is RMB1.5 million, RMB4.0 million and RMB5.2 million for the years ended December 31, 2022, 2023 and 2024, respectively.
History and Development of the Company.” Employment Agreements See “Item 6. Directors, Senior Management and Employees—C. Board Practices—Employment Agreements.” Share Incentive Plan See “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” 129 Table of Contents C. Interests of Experts and Counsel Not applicable.
Board Practices-Employment Agreements.” Share Incentive Plan See “Item 6. Directors, Senior Management and Employees-B. Compensation-Share Incentive Plan.” 117 C. Interests of Experts and Counsel Not applicable.
Wei Wen In 2022 and 2023, we provided RMB13.6 million and RMB12.6 million, respectively, to Mr. Wei Wen, the chairman of the board, the chief executive officer of our company, who used the fund to assist business development with third parties on behalf of our company, and Mr.
Wei Wen, the chairman of the board, the chief executive officer of our company, who used the fund to assist business development with third parties on behalf of our company, and Mr. Wei Wen repaid RMB12.5 million to us in 2023. In 2024, we received RMB9.1 million from Mr. Wen, which used for operations of the company.
Wei Wen repaid RMB13.7 million to us in 2022 and repaid RMB12.5 million to us in 2023. The other payable due to Mr. Wei Wen is RMB0.1 million and nil as of December 31, 2022 and 2023, respectively. Transaction with Mr. Hui Yuan On November 22, 2023, we received a loan of RMB1.5 million from the spouse of Mr.
The other current liabilities balance due to CEO are nil and RMB9.1 million as of December 31, 2023 and 2024, respectively. Transaction with Mr. Hui Yuan On November 22, 2023, we received a loan of RMB1.5 million from the spouse of Mr. Hui Yuan, the chief operating officer of our company. The loan payable balance due to Mr.
Hui Yuan, the chief operating officer of our company. The loan payable balance due to Mr. Hui Yuan’s spouse is nil and RMB1.5 million as of December 31, 2022 and 2023, respectively. Private Placements See “Item 4. Information on the Company—A. History and Development of the Company.” Shareholders Agreement See “Item 4. Information on the Company—A.
Hui Yuan’s spouse is RMB1.5 million and RMB1.0 million as of December 31, 2023 and 2024, respectively. Private Placements See “Item 4. Information on the Company-A. History and Development of the Company.” Shareholders Agreement See “Item 4. Information on the Company-A. History and Development of the Company.” Employment Agreements See “Item 6. Directors, Senior Management and Employees-C.
Added
The other current liabilities balance is nil and RMB813 as of December 31, 2023 and 2024, respectively. Transaction with Mr. Wei Wen In 2023, we provided RMB12.6 million to Mr.

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