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Smart Share Global Ltd

Smart Share Global LtdEM财报

Nasdaq · computing

Smart Technologies is a Canadian company headquartered in Calgary, Alberta, Canada and wholly owned by Foxconn. Founded in 1987, SMART is best known as the developer of interactive whiteboards branded as the "Smart Board" widely used in education and business.

What changed in Smart Share Global Ltd's 20-F — 2022 vs 2023

Top changes in Smart Share Global Ltd's 2023 20-F

807 paragraphs added · 826 removed · 678 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

286 edited+40 added−55 removed642 unchanged
To the extent cash in the business is in the PRC or a PRC entity, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of Smart Share Global Limited, its subsidiaries or the VIE by the PRC government to transfer cash.
To the extent cash in the business is in the PRC or a PRC entity, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of Smart Share Global Limited, its subsidiaries or the VIE by the PRC government to transfer cash.
Risk Factors—Risks Relating to Doing Business in China—Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
Risk Factors—Risks Relating to Doing Business in China—Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the Chinese economy may materially and adversely affect our business, results of operations and financial condition.
Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and financial condition.
In addition, there is no assurance the PRC government will not intervene in or impose restrictions on the ability of Smart Share Global Limited, its subsidiaries, and the VIE to transfer cash.
In addition, there is no assurance the PRC government will not intervene in or impose restrictions on the ability of Smart Share Global Limited, its subsidiaries, and the VIE to transfer cash.
To the extent cash in the business is in the PRC or a PRC entity, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of Smart Share Global Limited, its subsidiaries, or the VIE by the PRC government to transfer cash.
To the extent cash in the business is in the PRC or a PRC entity, the funds may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on the ability of Smart Share Global Limited, its subsidiaries, or the VIE by the PRC government to transfer cash.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
In May 2022, the SEC conclusively listed our company as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
In May 2022, the SEC conclusively listed our company as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
Pursuant to the Announcement relating to the Notice on Filing Management Arrangements for Overseas Securities Offering and Listing by Domestic Companies issued on February 17, 2023 by the CSRC, domestic companies that had been listed overseas prior to March 31, 2023 are categorized as “existing enterprises” and are not required to file with the CSRC with respect to their previous listings immediately.
Pursuant to the Announcement relating to the Notice on Filing Management Arrangements for Overseas Securities Offering and Listing by Domestic Companies issued on February 17, 2023 by the CSRC, domestic companies that had been listed overseas prior to March 31, 2023 are categorized as “existing enterprises” and are not required to file with the CSRC with respect to their previous listings immediately.
The SAFE promulgated the Notice on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or SAFE Circular 19, effective June 2015, in replacement of a former regulation.
SAFE promulgated the Notice on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or SAFE Circular 19, effective June 2015, in replacement of a former regulation.
On October 23, 2019, the SAFE promulgated the Notice of the State Administration of Foreign Exchange on Further Promoting the Convenience of Cross-border Trade and Investment, or the SAFE Circular 28, which, among other things, allows all foreign-invested companies to use Renminbi converted from foreign currency-denominated capital for equity investments in China, as long as the equity investment is genuine, does not violate applicable laws, and complies with the negative list on foreign investment.
On October 23, 2019, SAFE promulgated the Notice of the State Administration of Foreign Exchange on Further Promoting the Convenience of Cross-border Trade and Investment, or SAFE Circular 28, which, among other things, allows all foreign-invested companies to use Renminbi converted from foreign currency-denominated capital for equity investments in China, as long as the equity investment is genuine, does not violate applicable laws, and complies with the negative list on foreign investment.
According to the Notice on Further Simplifying and Improving the Foreign Exchange Management Policies for Direct Investment released on February 13, 2015 by the SAFE, qualified local banks will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under SAFE Circular 37 from June 1, 2015.
According to the Notice on Further Simplifying and Improving the Foreign Exchange Management Policies for Direct Investment released on February 13, 2015 by SAFE, qualified local banks will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under SAFE Circular 37 from June 1, 2015.
These include the Rules on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006, which was amended in 2009, and the Rules of the Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the Security Review Rules, promulgated in 2011.
These include the Rules on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006, which was amended in 2009, and the Rules of the Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, promulgated in 2011.
The SAT Circular 7 extends its tax jurisdiction to not only indirect transfers but also transactions involving transfer of other taxable assets, through the offshore transfer of a foreign intermediate holding company.
SAT Circular 7 extends its tax jurisdiction to not only indirect transfers but also transactions involving transfer of other taxable assets, through the offshore transfer of a foreign intermediate holding company.
In addition, the SAT Circular 7 provides certain criteria on how to assess reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market.
In addition, SAT Circular 7 provides certain criteria on how to assess reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market.
The SAT Circular 7 also brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay for the transfer) of the taxable assets.
SAT Circular 7 also brings challenges to both the foreign transferor and transferee (or other person who is obligated to pay for the transfer) of the taxable assets.
Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC.
Furthermore, according to Article 177 of the PRC Securities Law, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC.
These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, in the assessment of the emerging growth company’s internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies.
These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies.
If the PRC government finds that our contractual arrangements do not comply with its restrictions on foreign investment in value-added telecommunication services, or if the PRC government otherwise finds that we, the VIE or any of our PRC subsidiaries are in violation of PRC laws or regulations or lack the necessary permits or licenses to operate our business, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations or failures, including, without limitation: ● revoking the business licenses and/or operating licenses of such entities; ● discontinuing or placing restrictions or onerous conditions on our operations through any transactions between our PRC subsidiary and the VIE; ● imposing fines, confiscating the income from our PRC subsidiary or the VIE, or imposing other requirements with which we or the VIE may not be able to comply; ● placing restrictions on our right to collect revenues; ● shutting down our servers or blocking our mini programs; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIE and deregistering the equity pledges of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over the VIE; or ● restricting or prohibiting our use of the proceeds of any of our offshore financings to finance our business and operations in China.
If the PRC government finds that our contractual arrangements do not comply with its restrictions on foreign investment in value-added telecommunication services, or if the PRC government otherwise finds that we, the VIE or any of our PRC subsidiaries are in violation of PRC laws or regulations or lack the necessary permits or licenses to operate our business, the PRC regulatory authorities would have broad discretion in dealing with such violations or failures, including, without limitation: ● revoking the business licenses and/or operating licenses of such entities; ● discontinuing or placing restrictions or onerous conditions on our operations through any transactions between our PRC subsidiary and the VIE; ● imposing fines, confiscating the income from our PRC subsidiary or the VIE, or imposing other requirements with which we or the VIE may not be able to comply; ● placing restrictions on our right to collect revenues; ● shutting down our servers or blocking our mini programs; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIE and deregistering the equity pledges of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over the VIE; or ● restricting or prohibiting our use of the proceeds of any of our offshore financings to finance our business and operations in China.
If we fail to obtain the relevant approval or complete the filing procedures for any future offshore offering or listing, we may face sanctions by the CSRC or other PRC regulatory authorities, which may include fines and penalties on our operations in China, limitations on our operating privileges in China, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in China, restrictions on or delays to our future financing transactions offshore, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs.
If we fail to obtain the approval or complete the filing procedures for any future offshore offering or listing, we may face sanctions by the CSRC or other PRC regulatory authorities, which may include fines and penalties on our operations in China, limitations on our operating privileges in China, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in China, restrictions on or delays to our future financing transactions offshore, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs.
Furthermore, certain PRC regulatory authorities issued Opinions on Strictly Cracking Down on Illegal Securities Activities, which were available to the public on July 6, 2021, and further emphasized strengthening cross-border regulatory collaboration, improving relevant laws and regulations on data security, cross-border data transmission, and confidential information management, and providing that efforts will be made to revise the regulations on strengthening confidentiality and file management relating to the offering and listing of securities overseas, implementing the responsibility on information security of overseas listed companies, and strengthening the standardized management of cross-border information provision mechanisms and procedures.
Furthermore, certain PRC regulatory authorities issued Opinions on Strictly Cracking Down on Illegal Securities Activities, which were available to the public on July 6, 2021, and further emphasized strengthening cross-border regulatory collaboration, improving laws and regulations on data security, cross-border data transmission, and confidential information management, and providing that efforts will be made to revise the regulations on strengthening confidentiality and file management relating to the offering and listing of securities overseas, implementing the responsibility on information security of overseas listed companies, and strengthening the standardized management of cross-border information provision mechanisms and procedures.
Given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by relevant government authorities, we may be required to obtain additional licenses, permits, filings or approvals for the functions and services of our platform in the future. 7 Table of Contents On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines, or the Trial Measures, which came into effect on March 31, 2023.
Given the uncertainties of interpretation and implementation of the laws and regulations and the enforcement practice by the government authorities, we may be required to obtain additional licenses, permits, filings or approvals for the functions and services of our platform in the future. 7 Table of Contents On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines, which came into effect on March 31, 2023.
If we fail to obtain the relevant approval or complete the filings and other relevant regulatory procedures, we may face sanctions by the CSRC or other PRC regulatory agencies, which may include fines and penalties on our operations in China, limitations on our operating privileges in China, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in China, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs.
If we fail to obtain the approval or complete the filings and other regulatory procedures, we may face sanctions by the CSRC or other PRC regulatory agencies, which may include fines and penalties on our operations in China, limitations on our operating privileges in China, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in China, or other actions that could have a material and adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs.
If a designated legal representative obtains control of the chops in an effort to obtain control over any of our PRC subsidiaries, we or our PRC subsidiaries would need to pass a new shareholder or board resolution to designate a new legal representative and we would need to take legal action to seek the return of the chops, apply for new chops with the relevant authorities, or otherwise seek legal redress for the violation of the representative’s fiduciary duties to us, which could involve significant time and resources and divert management attention away from our regular business.
If a designated legal representative obtains control of the chops in an effort to obtain control over any of our PRC subsidiaries, we or our PRC subsidiaries would need to pass a new shareholder or board resolution to designate a new legal representative and we would need to take legal action to seek the return of the chops, apply for new chops with the authorities, or otherwise seek legal redress for the violation of the representative’s fiduciary duties to us, which could involve significant time and resources and divert management attention away from our regular business.
Under the Enterprise Income Tax Law of the PRC, or the EIT Law, and related regulations, dividends, interests, rent or royalties payable by a foreign-invested enterprise, such as our PRC subsidiaries, to any of its foreign non-resident enterprise investors, and proceeds from any such foreign enterprise investor’s disposition of assets (after deducting the net value of such assets) are subject to a 10% withholding tax, unless the foreign enterprise investor’s jurisdiction of incorporation has a tax treaty with China that provides for a reduced rate of withholding tax.
Under the Enterprise Income Tax Law of the PRC and related regulations, dividends, interests, rent or royalties payable by a foreign-invested enterprise, such as our PRC subsidiaries, to any of its foreign non-resident enterprise investors, and proceeds from any such foreign enterprise investor’s disposition of assets (after deducting the net value of such assets) are subject to a 10% withholding tax, unless the foreign enterprise investor’s jurisdiction of incorporation has a tax treaty with China that provides for a reduced rate of withholding tax.
Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.” 8 Table of Contents Cash Flows through Our Organization We have established relevant controls and procedures for cash flows within our organization.
Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.” 8 Table of Contents Cash Flows through Our Organization We have established controls and procedures for cash flows within our organization.
As a result, we and non-­resident enterprises in such transactions may become at risk of being subject to filing obligations or being taxed under the SAT Circular 7 and SAT Circular 37, and may be required to expend valuable resources to comply with them or to establish that we and our non-resident enterprises should not be taxed under these regulations, which may have a material adverse effect on our financial condition and results of operations.
As a result, we and non-resident enterprises in such transactions may become at risk of being subject to filing obligations or being taxed under SAT Circular 7 and SAT Circular 37, and may be required to expend valuable resources to comply with them or to establish that we and our non-resident enterprises should not be taxed under these regulations, which may have a material adverse effect on our financial condition and results of operations.
Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue an opinion that is adverse or a report that is qualified if it is not satisfied with our internal control over financial reporting or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us.
Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue an opinion that is adverse or a report that is qualified if it is not satisfied with our internal control over financial reporting or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the requirements differently from us.
These provisions could have the effect of depriving our shareholders of the opportunity to sell their shares at a premium over the prevailing market price by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transactions. 65 Table of Contents Our memorandum and articles of association and the deposit agreement provide that the United States District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in New York County, New York) is the exclusive judicial forum within the U.S. for the resolution of any complaint asserting a cause of action arising out of or relating in any way to the federal securities laws of the United States, and any suit, action or proceeding arising out of or relating in any way to the ADSs or the deposit agreement, which could limit the ability of holders of our ordinary shares, the ADSs or other securities to obtain a favorable judicial forum for disputes with us, our directors and officers, the depositary and potentially others.
These provisions could have the effect of depriving our shareholders of the opportunity to sell their shares at a premium over the prevailing market price by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transactions. 64 Table of Contents Our memorandum and articles of association and the deposit agreement provide that the United States District Court for the Southern District of New York (or, if the United States District Court for the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts in New York County, New York) is the exclusive judicial forum within the U.S. for the resolution of any complaint asserting a cause of action arising out of or relating in any way to the federal securities laws of the United States, and any suit, action or proceeding arising out of or relating in any way to the ADSs or the deposit agreement, which could limit the ability of holders of our ordinary shares, the ADSs or other securities to obtain a favorable judicial forum for disputes with us, our directors and officers, the depositary and potentially others.
For instance, the relevant PRC governments promulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities, among which, it is mentioned that the administration and supervision of Chinese concept stocks will be strengthened, and the special provisions of the State Council on overseas issuance and listing of shares by those companies limited by shares will be revised, clarifying the responsibilities of domestic industry competent authorities and regulatory authorities.
For instance, the PRC governments promulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities, among which, it is mentioned that the administration and supervision of Chinese concept stocks will be strengthened, and the special provisions of the State Council on overseas issuance and listing of shares by those companies limited by shares will be revised, clarifying the responsibilities of domestic industry competent authorities and regulatory authorities.
If we are classified as a PFIC for any taxable year during which a U.S. Holder (as defined in “Item 10. Additional Information—E. Taxation—United States Federal Income Tax Considerations”) holds our ADSs or ordinary shares, such U.S. Holder will generally be subject to reporting requirements and certain adverse U.S. federal income tax consequences could apply to such U.S. Holder.
If we are classified as a PFIC for any taxable year during which a U.S. Holder (as defined in “Item 10. Additional Information—E. Taxation—United States Federal Income Tax Considerations”) holds our ADSs or ordinary shares, such U.S. Holder will generally be subject to burdensome reporting requirements, and certain adverse U.S. federal income tax consequences could apply to such U.S. Holder.
In December 2021, the CAC, together with other authorities, jointly promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022 and replaces its predecessor regulation. Pursuant to the Cybersecurity Review Measures, critical information infrastructure operators that procure internet products and services must be subject to the cybersecurity review if their activities affect or may affect national security.
In December 2021, the CAC, together with other authorities, jointly promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022 and replaces its predecessor regulation. Pursuant to the Cybersecurity Review Measures, critical information infrastructure operators that procure internet products and services must be subject to a cybersecurity review if their activities affect or may affect national security.
We have used our best efforts to notify PRC residents or entities who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being PRC residents or entities to timely complete the foreign exchange registrations and the relevant changes and annual filings of its existing rights under offshore direct investment.
We have used our best efforts to notify PRC residents or entities who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being PRC residents or entities to timely complete the foreign exchange registrations and the changes and annual filings of its existing rights under offshore direct investment.
While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality. Such a situation could be costly and time-consuming, and could distract our management from growing our business.
While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality. Such a situation could be costly and time-consuming, and could distract our management from growing our business.
In accordance with the Draft Regulations, data processors shall apply for a cybersecurity review for certain activities, including, among other things, (i) the listing abroad of data processors that process the personal information of more than one million users and (ii) any data processing activity that affects or may affect national security.
In accordance with such draft regulations, data processors shall apply for a cybersecurity review for certain activities, including, among other things, (i) the listing abroad of data processors that process personal information of more than one million users and (ii) any data processing activity that affects or may affect national security.
There are also other conditions for enjoying the reduced withholding tax rate according to other relevant tax rules and regulations. See “Item 10. Additional Information—E. Taxation.” In the future we intend to reinvest all earnings, if any, generated from our PRC subsidiaries for the operation and expansion of our business in China.
There are also other conditions for enjoying the reduced withholding tax rate according to other tax rules and regulations. See “Item 10. Additional Information—E. Taxation.” In the future we intend to reinvest all earnings, if any, generated from our PRC subsidiaries for the operation and expansion of our business in China.
If the government authorities find that we fail to complete branch company registrations for any of our rented offices or we fail to change the registrations to reflect the change of location in a timely manner or otherwise violate relevant regulations on branch companies, we may be subject to fines, confiscation of income, or being ordered to cease business activities.
If the government authorities find that we fail to complete branch company registrations for any of our rented offices or we fail to change the registrations to reflect the change of location in a timely manner or otherwise violate the regulations on branch companies, we may be subject to fines, confiscation of income, or being ordered to cease business activities.
While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert Renminbi into foreign currency.
While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by PRC foreign exchange regulations that restrict our ability to convert Renminbi into foreign currency.
If we are determined by local authorities to fail to make adequate contributions to any employee benefits as required by relevant PRC regulations, we may face late fees or fines in relation to the underpaid employee benefits. In addition, our provision for these liabilities may not be adequate, particularly in light of the recent tightening regulations.
If we are determined by local authorities to fail to make adequate contributions to any employee benefits as required by PRC regulations, we may face late fees or fines in relation to the underpaid employee benefits. In addition, our provision for these liabilities may not be adequate, particularly in light of the recent tightening regulations.
Risk Factors—Risks Relating to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our securities offering to make loans or additional capital contributions to our PRC subsidiaries and the VIE, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” A. [Reserved] The following selected consolidated statements of operations data for the years ended December 31, 2020, 2021 and 2022, selected consolidated balance sheet data as of December 31, 2021 and 2022, and selected consolidated statements of cash flow data for the years ended December 31, 2020, 2021 and 2022 have been derived from our audited consolidated financial statements included elsewhere in this annual report.
Risk Factors—Risks Relating to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our securities offering to make loans or additional capital contributions to our PRC subsidiaries and the VIE, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” A. [Reserved] The following selected consolidated statements of operations data for the years ended December 31, 2021, 2022 and 2023, selected consolidated balance sheet data as of December 31, 2022 and 2023, and selected consolidated statements of cash flow data for the years ended December 31, 2021, 2022 and 2023 have been derived from our audited consolidated financial statements included elsewhere in this annual report.
It is also likely that the construction of such leased properties was not in line with zoning laws or local construction planning and such properties may be ordered by relevant government authorities to be demolished. In addition, our use of certain leased properties does not comply with the approved use stipulated in the title certificates of such properties.
It is also likely that the construction of such leased properties was not in line with zoning laws or local construction planning and such properties may be ordered by government authorities to be demolished. In addition, our use of certain leased properties does not comply with the approved use stipulated in the title certificates of such properties.
Any lack of requisite approvals, licenses or permits applicable to our business may have a material and adverse impact on our business, financial condition and results of operations. In accordance with the relevant laws and regulations in jurisdictions in which we operate, we are required to maintain various approvals, licenses, permits and filings to operate our business.
Any lack of requisite approvals, licenses or permits applicable to our business may have a material and adverse impact on our business, financial condition and results of operations. In accordance with the laws and regulations in jurisdictions in which we operate, we are required to maintain various approvals, licenses, permits and filings to operate our business.
Where a non-resident enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non­-resident enterprise being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets may report to the relevant tax authority such indirect transfer.
Where a non-resident enterprise conducts an “indirect transfer” by transferring the taxable assets indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise being the transferor, or the transferee, or the PRC entity which directly owned the taxable assets may report to the tax authority such indirect transfer.
We cannot guarantee that we will be able to maintain the growth rate that we have maintained to date. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—Our limited operating history makes it difficult to evaluate our future prospects.
We cannot guarantee that we will be able to maintain the growth rate that we have maintained to date. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—Our relatively limited operating history makes it difficult to evaluate our future prospects.
The PRC government and public advocacy groups have been increasingly focused on environment, social and governance (“ESG”) issues in recent years, making our business more sensitive to ESG issues and changes in governmental policies and laws and regulations associated with environmental protection and other ESG-related matters.
The PRC government and public advocacy groups have been increasingly focused on environment, social and governance (ESG) issues in recent years, making our business more sensitive to ESG issues and changes in governmental policies and laws and regulations associated with environmental protection and other ESG-related matters.
These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies.
These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies.
If we or the VIE is found to be in violation of any existing or future PRC laws or regulations, or fails to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures.
If we or the VIE is found to be in violation of any existing or future PRC laws or regulations, or fails to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures.
In addition, under the PRC laws and regulations, all lease agreements are required to be registered with the local land and real estate administration bureau. The lease agreements for some of our leased properties in China have not been filed for registration with the relevant PRC government authorities.
In addition, under the PRC laws and regulations, all lease agreements are required to be registered with the local land and real estate administration bureau. The lease agreements for some of our leased properties in China have not been filed for registration with the PRC government authorities.
Any of the abovementioned factors may materially and adversely harm our business, brand image, financial condition, results of operations or reputation. 34 Table of Contents If our location partners and network partners fail to successfully operate our power bank cabinets, our business and results of operations would be adversely affected.
Any of the abovementioned factors may materially and adversely harm our business, brand image, financial condition, results of operations or reputation. 34 Table of Contents If our location partners fail to successfully operate our power bank cabinets, our business and results of operations would be adversely affected.
Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends or otherwise fund and conduct our business. 55 Table of Contents In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless reduced under treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are tax resident.
Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends or otherwise fund and conduct our business. 54 Table of Contents In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless reduced under treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are tax resident.
The selected consolidated statements of operations data and cash flow data for the years ended December 31, 2019 and the selected consolidated balance sheet data as of December 31, 2019 and 2020 have been derived from our audited consolidated financial statements, which are not included in this annual report.
The selected consolidated statements of operations data and cash flow data for the years ended December 31, 2019 and 2020 and the selected consolidated balance sheet data as of December 31, 2019, 2020 and 2021 have been derived from our audited consolidated financial statements, which are not included in this annual report.
Many of the popular types of POIs where we operate, such as restaurants, entertainment venues, shopping malls, transportation hubs and public spaces, increasingly offer public or complimentary mobile device charging products or services, such as power sockets, charging ports and wireless chargers.
Many of the popular types of POIs where we operate, such as restaurants, entertainment venues, shopping malls, transportation hubs, hotels and public spaces, increasingly offer public or complimentary mobile device charging products or services, such as power sockets, charging ports and wireless chargers.
The Data Security Law, among other things, provides for security review procedure for data-related activities that may affect national security. In July 2021, the state council promulgated the Regulations on Protection of Critical Information Infrastructure, which became effective on September 1, 2021.
The Data Security Law, among other things, provides for a security review procedure for data-related activities that may affect national security. In July 2021, the state council promulgated the Regulations on Protection of Critical Information Infrastructure, which became effective on September 1, 2021.
We may be required to make further adjustments to our business practices to comply with the personal information protection laws and regulations. 32 Table of Contents ● In June 2022, the CAC amended the Administrative Provisions on Information Services of Mobile Internet Application Programs, which came into effect on August 1, 2022, which further emphasizes that mobile internet app providers shall not compel users to agree to processing of their personal information out of any reason, and are prohibited from banning users from their basic functional services due to the users’ refusal of providing non-essential personal information.
We may be required to make further adjustments to our business practices to comply with the personal information protection laws and regulations. 32 Table of Contents ● In June 2022, the CAC amended the Administrative Provisions on Information Services of Mobile Internet Application Programs, which came into effect on August 1, 2022, which further emphasize that mobile internet app providers shall not compel users to agree to processing of their personal information out of any reason, and are prohibited from banning users from their basic functional services due to the users’ refusal of providing non-essential personal information.
Risk Factors—Risks Relating to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating some of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.” on page 46. ● We rely on contractual arrangements with the VIE and its respective shareholders for our operations in China, which may not be as effective in providing operational control as direct ownership.
Risk Factors—Risks Relating to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating some of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.” on page 45 . ● We rely on contractual arrangements with the VIE and its respective shareholders for our operations in China, which may not be as effective in providing operational control as direct ownership.
If we do not adapt to or comply with the evolving expectations and standards on ESG matters from investors and the PRC government or are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, we may suffer from reputational damage and the business, financial condition, and the price of our ADSs could be materially and adversely effected. 39 Table of Contents Our success depends on the continuing and collaborative efforts of our management team and other key personnel.
If we do not adapt to or comply with the evolving expectations and standards on ESG matters from investors and the PRC government or are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, we may suffer from reputational damage and the business, financial condition, and the price of our ADSs could be materially and adversely effected. 38 Table of Contents Our success depends on the continuing and collaborative efforts of our management team and other key personnel.
Substantial uncertainties exist in the Foreign Investment Law and the Implementation Regulations with respect to its implementation and interpretation and it is also possible that variable interest entities will be deemed as foreign invested enterprises and be subject to restrictions in the future.
Substantial uncertainties exist in the Foreign Investment Law and its implementing regulations with respect to its implementation and interpretation and it is also possible that variable interest entities will be deemed as foreign invested enterprises and be subject to restrictions in the future.
Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated after-tax profits upon satisfaction of relevant statutory conditions and procedures, if any, determined in accordance with Chinese accounting standards and regulations.
Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated after-tax profits upon satisfaction of statutory conditions and procedures, if any, determined in accordance with Chinese accounting standards and regulations.
Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition and prospects. 53 Table of Contents The filing with the China Securities Regulatory Commission is required and approval of other PRC governmental authorities may be required in connection with our offshore offerings under PRC law, and we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.
Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition and prospects. 52 Table of Contents The filing with the China Securities Regulatory Commission is required and approval of other PRC governmental authorities may be required in connection with our offshore offerings under PRC law, and we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.
As of March 31, 2023, our PRC subsidiaries and the VIE have obtained the requisite licenses and permits from the PRC government authorities that are necessary for our business operations in China, namely, (i) business license, (ii) the value-added telecommunication business license, (iii) the Hi-Tech Enterprise Certificate, (iv) the Filing Certificate for Classified Protection of Information System Security, (v) the Radio Transmission Equipment Type Approval Certificate, (vi) the Food Operation License, (vii) the Liquor Retail License and (viii) the Liquor Wholesale License, and have not been denied such licenses and permits.
As of March 31, 2024, our PRC subsidiaries and the VIE have obtained the requisite licenses and permits from the PRC government authorities that are necessary for our business operations in China, namely, (i) business license, (ii) the value-added telecommunication business license, (iii) the Hi-Tech Enterprise Certificate, (iv) the Filing Certificate for Classified Protection of Information System Security, (v) the Radio Transmission Equipment Type Approval Certificate, (vi) the Food Operation License, (vii) the Liquor Retail License and (viii) the Liquor Wholesale License, and have not been denied such licenses and permits.
If we cannot resolve any conflict of interest or dispute between us and the shareholders of the VIE, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings. 49 Table of Contents The shareholders of the VIE may be involved in personal disputes with third parties or other incidents that may have an adverse effect on their respective equity interests in the VIE and the validity or enforceability of our contractual arrangements with the VIE and its shareholders.
If we cannot resolve any conflict of interest or dispute between us and the shareholders of the VIE, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings. 48 Table of Contents The shareholders of the VIE may be involved in personal disputes with third parties or other incidents that may have an adverse effect on their respective equity interests in the VIE and the validity or enforceability of our contractual arrangements with the VIE and its shareholders.
In the event that we become subject to claims caused by actions taken by our location partners, network partners or other business partners, we may seek compensation from or take other actions against the relevant location partners, network partners or other business partners. However, such compensation may be limited.
In the event that we become subject to claims caused by actions taken by our location partners, network partners or other business partners, we may seek compensation from or take other actions against the location partners, network partners or other business partners. However, such compensation may be limited.
Ownership certificates or other similar proof of certain leased properties have not been provided to us by the relevant lessors. Therefore, we cannot assure you that such lessors are entitled to lease the relevant real properties to us.
Ownership certificates or other similar proof of certain leased properties have not been provided to us by the lessors. Therefore, we cannot assure you that such lessors are entitled to lease the real properties to us.
Risk Factors—Risks Relating to Doing Business in China—The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections.” on page 53. ● Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
Risk Factors—Risks Relating to Doing Business in China—The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections.” on page 52 . ● Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
For details of the amount paid by our subsidiaries to the variable interest entities, see “intercompany receipts from service charge” as in the selected condensed consolidated cash flows information under “Item 3.
For details of the amount paid by our subsidiaries to the variable interest entities, see “intercompany receipts from service charge” in the selected condensed consolidated cash flows information under “Item 3.
Any failure to obtain the requisite licenses and approvals from governmental authorities, misuse or improper placement of our products by our location partners or network partners might cause consumer complaints and negative publicities.
Any failure to obtain the requisite licenses and approvals from governmental authorities, misuse or improper placement of our products by our location partners, and misuse of our services by our network partners might cause consumer complaints and negative publicities.
Assuming that we are the owner of the VIE for U.S. federal income tax purposes, and based on the nature and composition of our assets (in particular, the retention of substantial amounts of cash and investments), and the market price of our ADSs and ordinary shares, we believe that we were a PFIC for the taxable year ended December 31, 2022, and we will likely be a PFIC for the current taxable year unless the market price of our ADSs increases and/or we invest a substantial amount of the cash and other passive assets we hold in assets that produce or are held for the production of income.
Assuming that we are the owner of the VIE for U.S. federal income tax purposes, and based on the nature and composition of our assets (in particular, the retention of substantial amounts of cash and investments), and the market price of our ADSs and ordinary shares, we believe that we were a PFIC for the taxable year ended December 31, 2023, and we will likely be a PFIC for the current taxable year unless the market price of our ADSs increases and/or we invest a substantial amount of the cash and other passive assets we hold in assets that produce or are held for the production of income.
No assurance can be given that our acquisitions, joint ventures and other strategic investments will be successful and will not materially and adversely affect our business, financial condition or results of operations. 40 Table of Contents We may become a target for public scrutiny, including complaints to regulatory agencies, negative media coverage, and public dissemination of malicious reports or accusations about our business, all of which could severely damage our reputation and materially and adversely affect our business and prospects.
No assurance can be given that our acquisitions, joint ventures and other strategic investments will be successful and will not materially and adversely affect our business, financial condition or results of operations. 39 Table of Contents We may become a target for public scrutiny, including complaints to regulatory agencies, negative media coverage, and public dissemination of malicious reports or accusations about our business, all of which could severely damage our reputation and materially and adversely affect our business and prospects.
These risks are discussed more fully below. Risks Relating to Our Business and Industry Risks and uncertainties relating to our business include, but are not limited to, the following: ● Our limited operating history makes it difficult to evaluate our future prospects.
These risks are discussed more fully below. Risks Relating to Our Business and Industry Risks and uncertainties relating to our business include, but are not limited to, the following: ● Our relatively limited operating history makes it difficult to evaluate our future prospects.
If these or other disputes between the shareholders of the VIE and third parties were to impair our control over the VIE, our ability to consolidate the financial results of the VIE would be affected, which would in turn result in a material adverse effect on our business, operations and financial condition. 48 Table of Contents All the agreements under our contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in China.
If these or other disputes between the shareholders of the VIE and third parties were to impair our control over the VIE, our ability to consolidate the financial results of the VIE would be affected, which would in turn result in a material adverse effect on our business, operations and financial condition. 47 Table of Contents All the agreements under our contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in China.
Risk Factors—Risks Relating to Our Business and Industry—Technological advancements that would lessen consumers’ need for mobile device charging may decrease consumer demand for mobile device charging services or put price pressure on such services, which may materially and adversely affect our results of operations, financial condition and business prospects.” on page 22. ● We operate in a highly competitive industry, and our competitors may compete more effectively than we can.
Risk Factors—Risks Relating to Our Business and Industry—Technological advancements that would lessen consumers’ need for mobile device charging may decrease consumer demand for mobile device charging services or put price pressure on such services, which may materially and adversely affect our results of operations, financial condition and business prospects.” on page 23 . ● We operate in a highly competitive industry, and our competitors may compete more effectively than we can.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” on page 53. ● The filing with the China Securities Regulatory Commission is required and approval of other PRC governmental authorities may be required in connection with our offshore offerings under PRC law, and we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.” on page 52 . ● The filing with the China Securities Regulatory Commission is required and approval of other PRC governmental authorities may be required in connection with our offshore offerings under PRC law, and we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.
In addition, the affected entity may not be able to recover corporate assets that are sold or transferred out of our control in the event of such a misappropriation if a transferee relies on the apparent authority of the representative and acts in good faith. 61 Table of Contents Risks Relating to Our ADSs The trading price of the ADSs is likely to be volatile, which could result in substantial losses to investors.
In addition, the affected entity may not be able to recover corporate assets that are sold or transferred out of our control in the event of such a misappropriation if a transferee relies on the apparent authority of the representative and acts in good faith. 60 Table of Contents Risks Relating to Our ADSs The trading price of the ADSs is likely to be volatile, which could result in substantial losses to investors.
If we fail to fully comply with applicable privacy, data security and personal information protection laws, regulations, policies or other requirements, we may be subject to civil or administrative liabilities or challenged for a potential infringement which may subject us to significant legal, financial and operational consequences. 38 Table of Contents We have adopted security policies and measures, including encryption technology, to protect our proprietary data and consumer information.
If we fail to fully comply with applicable privacy, data security and personal information protection laws, regulations, policies or other requirements, we may be subject to civil or administrative liabilities or challenged for a potential infringement which may subject us to significant legal, financial and operational consequences. 37 Table of Contents We have adopted security policies and measures, including encryption technology, to protect our proprietary data and consumer information.
Risk Factors—Risks Relating to Our Business and Industry—We operate in a highly competitive industry, and our competitors may compete more effectively than we can, which could adversely affect our results of operations and financial condition.” on page 23. ● We have incurred net loss in the past, and we may not be able to achieve or maintain profitability in the future.
Risk Factors—Risks Relating to Our Business and Industry—We operate in a highly competitive industry, and our competitors may compete more effectively than we can, which could adversely affect our results of operations and financial condition.” on page 22 . ● We have incurred net loss in the past, and we may not be able to achieve or maintain profitability in the future.
Risk Factors—Risks Relating to Doing Business in China—The filing with the China Securities Regulatory Commission is required and approval of other PRC governmental authorities may be required in connection with our offshore offerings under PRC law, and we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” on page 54.
Risk Factors—Risks Relating to Doing Business in China—The filing with the China Securities Regulatory Commission is required and approval of other PRC governmental authorities may be required in connection with our offshore offerings under PRC law, and we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” on page 53 .
Key Information—D. Risk Factors—Risks Relating to Doing Business in China—The PRC government’s oversight over our business operation could result in a material adverse change in our operations and the value of our ADSs.” on page 52. ● The PCAOB had historically been unable to inspect our auditor in relation to their audit work. See “Item 3. Key Information—D.
See “Item 3. Key Information—D. Risk Factors—Risks Relating to Doing Business in China—The PRC government’s oversight over our business operation could result in a material adverse change in our operations and the value of our ADSs.” on page 51 . ● The PCAOB had historically been unable to inspect our auditor in relation to their audit work. See “Item 3.
As a result, our business operations and our ability to distribute profits to you could be materially and adversely affected. 58 Table of Contents China’s M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of PRC companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
As a result, our business operations and our ability to distribute profits to you could be materially and adversely affected. 57 Table of Contents China’s M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of PRC companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
Volatility or a lack of positive performance in our ADS price may also adversely affect our ability to retain key employees, most of whom have been granted equity incentives. 62 Table of Contents In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities.
Volatility or a lack of positive performance in our ADS price may also adversely affect our ability to retain key employees, most of whom have been granted equity incentives. 61 Table of Contents In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities.
Although failure to do so does not in itself invalidate the leases, we may be subject to fines if we fail to rectify such non-compliance within the prescribed time frame after receiving notice from the relevant PRC government authorities. The penalty ranges from RMB1,000 to RMB10,000 for each unregistered lease, at the discretion of the relevant authority.
Although failure to do so does not in itself invalidate the leases, we may be subject to fines if we fail to rectify such non-compliance within the prescribed time frame after receiving notice from the PRC government authorities. The penalty ranges from RMB1,000 to RMB10,000 for each unregistered lease, at the discretion of the authorities.
In order to attract and retain qualified employees, provide incentives to our directors and employees, and promote the success of our business, we adopted a share incentive plan in January 2021, or the 2021 Share Incentive Plan, which amended and restated any share incentive plan we, our predecessor or any of our subsidiaries adopted previously, if any, in its/their entirety and all awards granted and outstanding thereunder survived the termination of previous share incentive plan(s).
In order to attract and retain qualified employees, provide incentives to our directors and employees, and promote the success of our business, we adopted a share incentive plan in January 2021, which we refer to as the 2021 Share Incentive Plan, which amended and restated any share incentive plan we, our predecessor or any of our subsidiaries adopted previously, if any, in its/their entirety and all awards granted and outstanding thereunder survived the termination of previous share incentive plan(s).

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Our mobile device charging service is priced primarily based on thirty-minute and one-hour intervals. A deposit and payment are processed through users’ digital wallets, provided by WeChat Pay and Alipay. The deposit is waived for users who have qualified credit scores at their digital wallet service providers, as assessed by these providers.
Our mobile device charging service is priced primarily based on thirty-minute and one-hour intervals. A deposit and payment are processed through users’ digital wallets, primarily provided by WeChat Pay and Alipay. The deposit is waived for users who have qualified credit scores at their digital wallet service providers, as assessed by these providers.
Furthermore, according to the Interpretations on Several Issues Concerning the Application of Law in the Handling of Criminal Cases Involving Infringement of Citizens’ Personal Information, or the Interpretations, issued by the Supreme People’s Court and the Supreme People’s Procuratorate on May 8, 2017 and took effect on June 1, 2017, personal information means various information recorded electronically or through other manners, which may be used to identify individuals or activities of individuals, including but not limited to the name, identification number, contact information, address, user account number and passcode, property ownership and whereabouts.
Furthermore, according to the Interpretations on Several Issues Concerning the Application of Law in the Handling of Criminal Cases Involving Infringement of Citizens’ Personal Information, issued by the Supreme People’s Court and the Supreme People’s Procuratorate on May 8, 2017 and took effect on June 1, 2017, personal information means various information recorded electronically or through other manners, which may be used to identify individuals or activities of individuals, including but not limited to the name, identification number, contact information, address, user account number and passcode, property ownership and whereabouts.
The organizations and individuals within the territory of China shall carry out the countermeasures taken by the relevant departments of the State Council.
The organizations and individuals within the territory of China shall carry out the countermeasures taken by relevant departments of the State Council.
Any organization or individual violating the requirements set in the Anti-Foreign Sanctions Law will be punished by the relevant departments of the State Council in accordance with the law, and such organization or individual will be restricted or prohibited from engaging in the relevant activities.
Any organization or individual violating the requirements set in the Anti-Foreign Sanctions Law will be punished by relevant departments of the State Council in accordance with the law, and such organization or individual will be restricted or prohibited from engaging in the activities.
The SAFE Circular 16 unifies the discretional foreign exchange settlement for all the domestic institutions.
SAFE Circular 16 unifies the discretional foreign exchange settlement for all the domestic institutions.
On October 23, 2019, the SAFE promulgated the Notice of the State Administration of Foreign Exchange on Further Promoting the Convenience of Cross-border Trade and Investment, or the SAFE Circular 28.
On October 23, 2019, SAFE promulgated the Notice of the State Administration of Foreign Exchange on Further Promoting the Convenience of Cross-border Trade and Investment, or SAFE Circular 28.
The SAFE Circular 8 provides that under the condition that the use of funds is genuine and compliant with current administrative provisions on use of income relating to capital account, enterprises are allowed to use income under capital account such as capital funds, foreign debts and overseas listings for domestic payment, without submission to the bank prior to each transaction of materials evidencing the veracity of such payment.
SAFE Circular 8 provides that under the condition that the use of funds is genuine and compliant with current administrative provisions on use of income relating to capital account, enterprises are allowed to use income under capital account such as capital funds, foreign debts and overseas listings for domestic payment, without submission to the bank prior to each transaction of materials evidencing the veracity of such payment.
SAFE promulgated Notice on Issues Relating to Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or the SAFE Circular 37, on July 4, 2014, that requires PRC residents or entities to register with SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.
SAFE promulgated Notice on Issues Relating to Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or SAFE Circular 37, on July 4, 2014, that requires PRC residents or entities to register with SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.
SAFE further promulgated the Notice of the State Administration of Foreign Exchange on Further Simplifying and Improving the Foreign Exchange Management Policies for Direct Investment on February 13, 2015 and amended on December 30, 2019 by the SAFE, or the SAFE Circular 13, which allows PRC residents or entities to register with qualified banks in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.
SAFE further promulgated the Notice of the State Administration of Foreign Exchange on Further Simplifying and Improving the Foreign Exchange Management Policies for Direct Investment on February 13, 2015 and amended on December 30, 2019 by SAFE, or SAFE Circular 13, which allows PRC residents or entities to register with qualified banks in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.
On January 26, 2017, SAFE issued the Notice on Improving the Check of Authenticity and Compliance to Further Promote Foreign Exchange Control, or the SAFE Circular 3, which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (i) 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 (ii) domestic entities shall hold income to account for previous years’ losses before remitting the profits.
On January 26, 2017, SAFE issued the Notice on Improving the Check of Authenticity and Compliance to Further Promote Foreign Exchange Control, or SAFE Circular 3, which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (i) 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 (ii) domestic entities shall hold income to account for previous years’ losses before remitting the profits.
The SAT Circular 7 repeals certain provisions in the Notice of the State Administration of Taxation on Strengthening the Administration of Enterprise Income Tax on Income from Equity Transfer by Non-Resident Enterprises, or the SAT Circular 698, issued by SAT on December 10, 2009 and the Announcement on Several Issues Relating to the Administration of Income Tax on Non-resident Enterprises issued by SAT on March 28, 2011, and clarifies certain provisions in the SAT Circular 698.
SAT Circular 7 repeals certain provisions in the Notice of the State Administration of Taxation on Strengthening the Administration of Enterprise Income Tax on Income from Equity Transfer by Non-Resident Enterprises, or SAT Circular 698, issued by the State Administration of Taxation on December 10, 2009 and the Announcement on Several Issues Relating to the Administration of Income Tax on Non-resident Enterprises issued by the State Administration of Taxation on March 28, 2011, and clarifies certain provisions in SAT Circular 698.
The SAT Circular 7 provides comprehensive guidelines relating to, and heightening the Chinese tax authorities’ scrutiny on, indirect transfers by a non-resident enterprise of assets (including assets of organizations and premises in the PRC, immovable property in the PRC, equity investments in PRC resident enterprises) or the PRC Taxable Assets.
SAT Circular 7 provides comprehensive guidelines relating to, and heightening the Chinese tax authorities’ scrutiny on, indirect transfers by a non-resident enterprise of assets (including assets of organizations and premises in the PRC, immovable property in the PRC, equity investments in PRC resident enterprises) or the PRC Taxable Assets.
For instance, when a non-resident enterprise transfers equity interests in an overseas holding company that directly or indirectly holds certain PRC Taxable Assets and if the transfer is believed by the Chinese tax authorities to have no reasonable commercial purpose other than to evade enterprise income tax, the SAT Circular 7 allows Chinese tax authorities to reclassify the indirect transfer of PRC Taxable Assets into a direct transfer and therefore impose a 10% rate of PRC enterprise income tax on the non-resident enterprise.
For instance, when a non-resident enterprise transfers equity interests in an overseas holding company that directly or indirectly holds certain PRC Taxable Assets and if the transfer is believed by the Chinese tax authorities to have no reasonable commercial purpose other than to evade enterprise income tax, SAT Circular 7 allows Chinese tax authorities to reclassify the indirect transfer of PRC Taxable Assets into a direct transfer and therefore impose a 10% rate of PRC enterprise income tax on the non-resident enterprise.
Organizational Structure The following diagram illustrates our corporate structure, including our principal subsidiaries and consolidated variable interest entity as of the date of this annual report.
Organizational Structure The following diagram illustrates our corporate structure, including our principal subsidiaries and the consolidated variable interest entity as of the date of this annual report.
In addition, pursuant to the Trial Measures, no overseas offering and listing shall be made under any of the following circumstances: (i) where such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (ii) where the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) where the domestic company intending to make the securities offering and listing, or its controlling shareholders and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iv) where the domestic company intending to make the securities offering and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according to law, and no conclusion has yet been made thereof; (v) where there are material ownership disputes over equity held by the domestic company’s controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller.
In addition, pursuant to the trial measures, no overseas offering and listing shall be made under any of the following circumstances: (i) where such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and state rules; (ii) where the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) where the domestic company intending to make the securities offering and listing, or its controlling shareholders and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iv) where the domestic company intending to make the securities offering and listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according to law, and no conclusion has yet been made thereof; (v) where there are material ownership disputes over equity held by the domestic company’s controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller.
Under the Regulations on the Protection of the Right to Network Dissemination of Information that took effect on July 1, 2006 and was amended on January 30, 2013, it is further provided that an internet information service provider may be held liable under various situations, including that if it knows or should reasonably have known a copyright infringement through the internet and the service provider fails to take measures to remove, block or disconnect links to the relevant content, or, although not aware of the infringement, the internet information service provider fails to take such measures upon receipt of the copyright holder’s notice of such infringement.
Under the Regulations on the Protection of the Right to Network Dissemination of Information that took effect on July 1, 2006 and was amended on January 30, 2013, it is further provided that an internet information service provider may be held liable under various situations, including that if it knows or should reasonably have known a copyright infringement through the internet and the service provider fails to take measures to remove, block or disconnect links to the content, or, although not aware of the infringement, the internet information service provider fails to take such measures upon receipt of the copyright holder’s notice of such infringement.
The shareholders or beneficial owners who are PRC entities are required to be in compliance with the related overseas investment regulations. If they fail to complete the filings or registrations required by overseas direct investment regulations, the relevant authority may order them to suspend or cease the implementation of such investment and make corrections within a specified time.
The shareholders or beneficial owners who are PRC entities are required to be in compliance with the related overseas investment regulations. If they fail to complete the filings or registrations required by overseas direct investment regulations, the authority may order them to suspend or cease the implementation of such investment and make corrections within a specified time.
If we or the VIE is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures. See “Item 3. Key Information—D.
If we or the VIE is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures. See “Item 3. Key Information—D.
How to use our products Users start using our products by either spotting our cabinets at one of our POIs, or easily finding our cabinet locations through our mini programs, which can be accessed through WeChat, Alipay and other third-party partners. Users scan the QR codes on the cabinets to release our power banks.
How to use our products Users start using our products either by spotting our cabinets at one of our POIs, or by finding our cabinet locations through our mini programs, which can be accessed through WeChat, Alipay and other third-party partners. Users scan the QR codes on the cabinets to release our power banks.
In the third quarter of 2021, we launched a new power bank optimization program. This new program dynamically calculates the suitable amount of power banks in each cabinet based on the local and historical trends. These power bank numbers are then delivered to our business development personnel to adjust the number of power bank in a certain cabinet accordingly.
In the third quarter of 2021, we launched a power bank optimization program. This program dynamically calculates the suitable amount of power banks in each cabinet based on the local and historical trends. These power bank numbers are then delivered to our business development personnel to adjust the number of power bank in a certain cabinet accordingly.
Data-driven tools . Our business development personnel are equipped with a suite of proprietary real-time data analytics and decision-making tools empowered by our strong technology infrastructure, such as our location partner database, POI data analytics tools, and real-time power bank availability updates. These tools are consolidated into our proprietary business development personnel-facing app.
Our business development personnel are equipped with a suite of proprietary real-time data analytics and decision-making tools empowered by our strong technology infrastructure, such as our location partner database, POI data analytics tools, and real-time power bank availability updates. These tools are consolidated into our proprietary business development personnel-facing app.
Any advertiser in violation of such requirements on advertisement content will be ordered to cease publishing such advertisements and imposed a fine, the business license of such advertiser may be revoked, and the relevant authorities may revoke the approval document for advertisement examination and refuse to accept applications submitted by such advertiser for one year.
Any advertiser in violation of such requirements on advertisement content will be ordered to cease publishing such advertisements and imposed a fine, the business license of such advertiser may be revoked, and the authorities may revoke the approval document for advertisement examination and refuse to accept applications submitted by such advertiser for one year.
The Discretional Foreign Exchange Settlement refers to the foreign exchange capital in the capital account which has been confirmed by the relevant policies subject to the discretional foreign exchange settlement (including foreign exchange capital, foreign loans and funds remitted from the proceeds from the overseas listing) can be settled at the banks based on the actual operational needs of the domestic institutions.
The Discretional Foreign Exchange Settlement refers to the foreign exchange capital in the capital account which has been confirmed by the policies subject to the discretional foreign exchange settlement (including foreign exchange capital, foreign loans and funds remitted from the proceeds from the overseas listing) can be settled at the banks based on the actual operational needs of the domestic institutions.
Third Parties must obtain consent or a proper license from the patent owner to use the patent. Otherwise, the unauthorized use constitutes an infringement on the patent rights. Domain Names On August 24, 2017, the MIIT promulgated the Administrative Measures for Internet Domain Names, or the Domain Name Measures, which became effective on November 1, 2017.
Third Parties must obtain consent or a proper license from the patent owner to use the patent. Otherwise, the unauthorized use constitutes an infringement on the patent rights. Domain Names On August 24, 2017, the MIIT promulgated the Administrative Measures for Internet Domain Names, which became effective on November 1, 2017.
If a foreign-invested enterprise investing in the PRC has finished submitting its reports for its establishment, modifications and cancellation and its annual reports, the relevant information will be shared by the competent market regulation department to the competent commercial department, and does not require such foreign-invested enterprise to submit the reports separately.
If a foreign-invested enterprise investing in the PRC has finished submitting its reports for its establishment, modifications and cancellation and its annual reports, the information will be shared by the competent market regulation department to the competent commercial department, and does not require such foreign-invested enterprise to submit the reports separately.
According to such measures, landlords and tenants are required to enter into lease contracts which should generally contain specified provisions, and lease contracts should be registered with the relevant construction or property authorities at municipal or county level within 30 days after its conclusion.
According to such measures, landlords and tenants are required to enter into lease contracts which should generally contain specified provisions, and lease contracts should be registered with the construction or property authorities at municipal or county level within 30 days after its conclusion.
After the release of the Cyber Security Law, on May 2, 2017, the CAC issued the Measures for Security Reviews of Network Products and Services (Trial), which was later replaced by the Cybersecurity Review Measures, or the Review Measures, which became effective on June 1, 2020 and was amended on November 16, 2021.
After the release of the Cyber Security Law, on May 2, 2017, the CAC issued the Measures for Security Reviews of Network Products and Services (Trial), which was later replaced by the Cybersecurity Review Measures, which became effective on June 1, 2020 and was amended on November 16, 2021.
Our accessibility provides users with the peace of mind of not having to worry about their mobile devices running out of battery power. ● Visible . Our unique placement strategy, as well as our highly distinguishable brand, appearance and name, make our products highly visible and easy to find.
Our accessibility provides users with the peace of mind of not having to worry about their mobile devices running out of battery power. ● Visible. Our unique placement strategy, as well as our highly distinguishable brand and name, make our products highly visible and easy to find.
If the lease contract is extended or terminated or if there is any change to the registered items, the landlord and the tenant are required to effect alteration registration, extension of registration or deregistration with the relevant construction or property authorities within 30 days after the occurrence of such extension, termination or alteration.
If the lease contract is extended or terminated or if there is any change to the registered items, the landlord and the tenant are required to effect alteration registration, extension of registration or deregistration with the construction or property authorities within 30 days after the occurrence of such extension, termination or alteration.
The Announcement of the State Administration of Taxation on Issues concerning “Beneficial Owners” in Tax Treaties, promulgated by the SAT on February 3, 2018 and took effect on April 1 2018, further clarifies the analysis standard when determining one’s qualification for beneficial owner status.
The Announcement of the State Administration of Taxation on Issues concerning “Beneficial Owners” in Tax Treaties, promulgated by the State Administration of Taxation on February 3, 2018 and took effect on April 1 2018, further clarifies the analysis standard when determining one’s qualification for beneficial owner status.
However, the non-financial enterprise shall report its international income and expenditure regularly. 96 Table of Contents Regulations Relating to Offshore Special Purpose Vehicles Held by PRC Residents SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents on May 10, 2013, which was amended on October 10, 2018 and on December 30, 2019, which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.
However, the non-financial enterprise shall report its international income and expenditure regularly. 95 Table of Contents Regulations Relating to Offshore Special Purpose Vehicles Held by PRC Residents SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents on May 10, 2013, which was amended on October 10, 2018 and on December 30, 2019, which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.
Furthermore, the Personal Information Protection Law also provides for the rights of individuals whose personal information is processed, and takes special care of the personal information of children under 14 and sensitive personal information. In November 2021, the CAC released the Regulations on the Network Data Security (Draft for Comments), or the Draft Regulations.
Furthermore, the Personal Information Protection Law also provides for the rights of individuals whose personal information is processed, and takes special care of the personal information of children under 14 and sensitive personal information. In November 2021, the CAC released the Regulations on the Network Data Security (Draft for Comments).
In addition, the MITT promulgated the Measures for Data Security Management in the Industrial and Information Technology Sector (Trial), or the Measures for Data Security Management on December 8, 2022, which became effective on January 1, 2023, and it requires that industrial and telecoms data processors shall collect data under the principles of legitimacy and rightfulness, and shall not steal or illegally collect data. 92 Table of Contents Regulations Relating to Payment Services According to Measures for the Administration of Payment Services of Non-Financial Institutions which were promulgated by the People’s Bank of China, or the PBOC, on June 14, 2010 and amended on April 29, 2020 by Measures for the Administration of Payment Services of Non-Financial Institutions , and Detailed Implementing Rules for the Measures for the Administration of Payment Services of Non-Financial Institution which were promulgated by the PBOC on December 1, 2010 and were amended on June 2, 2020, November 12, 2020 and July 20, 2021 respectively, the payment services provided by non-financial institutions refer to some or all of the following monetary capital transfer services provided by the non-financial institutions as intermediary agencies between payers and payees: (i) payment through the internet; (ii) issuance and acceptance of prepaid cards; (iii) bankcard acquiring; and (iv) other payment services as determined by the PBOC.
In addition, the MITT promulgated the Measures for Data Security Management in the Industrial and Information Technology Sector (Trial) on December 8, 2022, which became effective on January 1, 2023, and it requires that industrial and telecoms data processors shall collect data under the principles of legitimacy and rightfulness, and shall not steal or illegally collect data. 91 Table of Contents Regulations Relating to Payment Services According to Measures for the Administration of Payment Services of Non-Financial Institutions which were promulgated by the People’s Bank of China on June 14, 2010 and amended on April 29, 2020 by Measures for the Administration of Payment Services of Non-Financial Institutions, and Detailed Implementing Rules for the Measures for the Administration of Payment Services of Non-Financial Institution which were promulgated by the People’s Bank of China on December 1, 2010 and were amended on June 2, 2020, November 12, 2020 and July 20, 2021 respectively, the payment services provided by non-financial institutions refer to some or all of the following monetary capital transfer services provided by the non-financial institutions as intermediary agencies between payers and payees: (i) payment through the internet; (ii) issuance and acceptance of prepaid cards; (iii) bankcard acquiring; and (iv) other payment services as determined by the People’s Bank of China.
In addition, the State Administration of Taxation, or the SAT, has issued certain circulars concerning employee stock options and restricted shares. Under these circulars, employees working in the PRC who exercise stock options or are granted restricted shares will be subject to PRC individual income tax.
In addition, the State Administration of Taxation has issued certain circulars concerning employee stock options and restricted shares. Under these circulars, employees working in the PRC who exercise stock options or are granted restricted shares will be subject to PRC individual income tax.
The PRC subsidiaries of an overseas listed company are required to file documents relating to employee stock options and restricted shares with relevant tax authorities and to withhold individual income taxes of employees who exercise their stock option or purchase restricted shares.
The PRC subsidiaries of an overseas listed company are required to file documents relating to employee stock options and restricted shares with the tax authorities and to withhold individual income taxes of employees who exercise their stock option or purchase restricted shares.
Where an undertaking has voluntarily reported the relevant activities of entering into a monopolistic agreement to the anti-monopoly enforcement agency and provided important evidence, the anti-monopoly enforcement agency may, at its discretion, reduce or waive the punishment for such an undertaking.
Where an undertaking has voluntarily reported the activities of entering into a monopolistic agreement to the anti-monopoly enforcement agency and provided important evidence, the anti-monopoly enforcement agency may, at its discretion, reduce or waive the punishment for such an undertaking.
Regulations Relating to Stock Incentive Plans According to the Notice of the State Administration of Foreign Exchange on Issues Relating to the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Listed Company, or the Share Option Rules, which was issued on February 15, 2012 and other regulations, directors, supervisors, senior management and other employees participating in any share incentive plan of an overseas publicly-listed company who are PRC citizens or non-PRC citizens residing in China for a continuous period of not less than one year, subject to certain exceptions, are required to register with the SAFE.
Regulations Relating to Stock Incentive Plans According to the Notice of the State Administration of Foreign Exchange on Issues Relating to the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Listed Company, which was issued on February 15, 2012, and other regulations, directors, supervisors, senior management and other employees participating in any share incentive plan of an overseas publicly-listed company who are PRC citizens or non-PRC citizens residing in China for a continuous period of not less than one year, subject to certain exceptions, are required to register with SAFE.
On January 9, 2021, the MOFCOM promulgated the Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures, which requires where a citizen, legal person or other organization of China is prohibited or restricted by foreign legislation and other measures from engaging in normal economic, trade and related activities with a third State (or region) or its citizens, legal persons or other organizations, he/it shall truthfully report such matters to the competent department of commerce of the State Council within 30 days.
On January 9, 2021, the Ministry of Commerce promulgated the Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures, which requires where a citizen, legal person or other organization of China is prohibited or restricted by foreign legislation and other measures from engaging in normal economic, trade and related activities with a third State (or region) or its citizens, legal persons or other organizations, he/it shall truthfully report such matters to the competent department of commerce of the State Council within 30 days.
On May 28, 2020, the National People’s Congress promulgated the Civil Code of the People’s Republic of China, or the PRC Civil Code, which took effect on January 1, 2021 and replaces the Tort Law of the People’s Republic of China, the Contract Law of the People’s Republic of China, and several other basic civil laws in the PRC.
On May 28, 2020, the National People’s Congress promulgated the Civil Code of the People’s Republic of China, which took effect on January 1, 2021 and replaces the Tort Law of the People’s Republic of China, the Contract Law of the People’s Republic of China, and several other basic civil laws in the PRC.
The Draft Regulations provide that data processors refer to individuals or organizations that, during their data processing activities such as data collection, storage, utilization, transmission, publication and deletion, have autonomy over the purpose and the manner of data processing.
These draft regulations provide that data processors refer to individuals or organizations that, during their data processing activities such as data collection, storage, utilization, transmission, publication and deletion, have autonomy over the purpose and the manner of data processing.
Additionally, for any act endangering the sovereignty, security and development interests of China, the relevant laws, administrative regulations and departmental rules may prescribe other necessary countermeasures in addition to the provisions of Anti-Foreign Sanctions Law.
Additionally, for any act endangering the sovereignty, security and development interests of China, the laws, administrative regulations and departmental rules may prescribe other necessary countermeasures in addition to the provisions of Anti-Foreign Sanctions Law.
All such participants need to authorize a qualified PRC agent, such as a PRC subsidiary of the overseas publicly-listed company to register with the SAFE and handle foreign exchange matters such as opening accounts, and transfer and settlement of the relevant proceeds.
All such participants need to authorize a qualified PRC agent, such as a PRC subsidiary of the overseas publicly-listed company to register with SAFE and handle foreign exchange matters such as opening accounts, and transfer and settlement of the proceeds.
If CSRC approval is required, it is uncertain whether it would be possible for us to obtain the approval and any failure to obtain or delay in obtaining CSRC approval for our overseas offering would subject us to sanctions imposed by the CSRC and other PRC regulatory agencies. 101 Table of Contents The M&A Rules, and other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex.
If CSRC approval is required, it is uncertain whether it would be possible for us to obtain the approval and any failure to obtain or delay in obtaining CSRC approval for our overseas offering would subject us to sanctions imposed by the CSRC and other PRC regulatory agencies. 99 Table of Contents The M&A Rules, and other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex.
On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly promulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law, or the Opinions.
On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly promulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law.
If they fail to make withholding or withhold the full amount of tax payable, the transferor of equity shall declare and pay tax to the relevant tax authorities within seven days from the occurrence of tax payment obligation.
If they fail to make withholding or withhold the full amount of tax payable, the transferor of equity shall declare and pay tax to the tax authorities within seven days from the occurrence of tax payment obligation.
Pursuant to the Trial Measures and five supporting guidelines, a domestic company that seeks to offer and list securities in overseas markets shall perform the filing procedure with the CSRC as per the relevant requirements of such Measures, submit relevant materials that contain a filing report and a legal opinion, and provide truthful, accurate and complete information on the shareholders, etc., and where a domestic company seeks to indirectly offer and list securities in overseas markets, the issuer shall designate a major domestic operating entity, which shall, as the domestic responsible entity, file with the CSRC.
Pursuant to these trial measures and the five supporting guidelines, a domestic company that seeks to offer and list securities in overseas markets shall perform the filing procedure with the CSRC as per the requirements of such Measures, submit materials that contain a filing report and a legal opinion, and provide truthful, accurate and complete information on the shareholders, etc., and where a domestic company seeks to indirectly offer and list securities in overseas markets, the issuer shall designate a major domestic operating entity, which shall, as the domestic responsible entity, file with the CSRC.
According to the Foreign Investment Law, foreign investment means any foreign investor’s direct or indirect investment in China, including (i) establishing FIEs in China either individually or jointly with other investors; (ii) obtaining stock shares, stock equity, property shares, other similar interests in Chinese domestic enterprises; (iii) investing in new projects in China either individually or jointly with other investors; and (iv) making investment through other means provided by laws, administrative regulations, or State Council provisions.
According to the Foreign Investment Law, foreign investment means any foreign investor’s direct or indirect investment in China, including (i) establishing foreign invested enterprises in China either individually or jointly with other investors; (ii) obtaining stock shares, stock equity, property shares, other similar interests in Chinese domestic enterprises; (iii) investing in new projects in China either individually or jointly with other investors; and (iv) making investment through other means provided by laws, administrative regulations, or State Council provisions.
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.
However, remedial registration applications made by PRC residents that previously failed to comply with SAFE Circular 37 continue to fall under the jurisdiction of the local branch of SAFE.
The SAT Circular 7 lists several factors to be taken into consideration by tax authorities in determining if an indirect transfer has a reasonable commercial purpose.
SAT Circular 7 lists several factors to be taken into consideration by tax authorities in determining if an indirect transfer has a reasonable commercial purpose.
The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on www.sec.gov. We maintain our website at https://ir.enmonster.com. B. Business Overview We are a consumer tech company providing mobile device charging service through an extensive online and offline network.
The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on www.sec.gov. We maintain our website at https://ir.enmonster.com. B. Business Overview We are a consumer tech company providing mobile device charging services through an extensive online and offline network.
Processors processing personal information exceeding the threshold to be set by the relevant authorities and critical information infrastructure operators are required to store, within the PRC territory, the personal information collected and produced within the PRC.
Processors processing personal information exceeding the threshold to be set by the authorities and critical information infrastructure operators are required to store, within the PRC territory, the personal information collected and produced within the PRC.
In addition, according to the Notice on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors issued by the General Office of the State Council on February 3, 2011 and became effective on March 3, 2011, the Rules on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by the MOFCOM on August 25, 2011 and became effective on September 1, 2011, mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by the MOFCOM, and the regulations prohibit any activities attempting to bypass such security review, including by structuring the transaction through a proxy or contractual control arrangement.
In addition, according to the Notice on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors issued by the General Office of the State Council on February 3, 2011 and became effective on March 3, 2011, the Rules on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by the Ministry of Commerce on August 25, 2011 and became effective on September 1, 2011, mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by the Ministry of Commerce, and the regulations prohibit any activities attempting to bypass such security review, including by structuring the transaction through a proxy or contractual control arrangement.
Notably, their understanding of the regional competitive environment in conjunction with their ability to deploy either the direct or network partner model could enable us to more flexibly increase our market presence. This program continues to be widely popular amongst our direct model business development personnel and a driver for our network coverage expansion.
Notably, their understanding of the regional competitive environment in conjunction with their ability to deploy either the direct model or the network partner model could enable us to more flexibly increase our market presence. This program continues to be widely popular among our direct model business development personnel and a driver for our network coverage expansion.
The FITE Regulation stipulates that a foreign-invested telecommunications enterprise in the PRC, or the FITE, must be established as a sino-foreign equity joint venture for operations in the PRC.
The FITE Regulation stipulates that a foreign-invested telecommunications enterprise in the PRC must be established as a sino-foreign equity joint venture for operations in the PRC.
Furthermore, after a domestic company has offered and listed securities in an overseas markets, it is required to file a report with the CSRC after the occurrence and public disclosure of certain material corporate events, including but not limited to, change of control and voluntary or mandatory delisting. 102 Table of Contents C.
Furthermore, after a domestic company has offered and listed securities in an overseas markets, it is required to file a report with the CSRC after the occurrence and public disclosure of certain material corporate events, including but not limited to, change of control and voluntary or mandatory delisting. 100 Table of Contents C.
Any operator who violates the Anti-Unfair Competition Law by engaging in the foregoing unfair competition activities shall be ordered to cease such illegal activities, eliminate the influence of such activities or compensate for the damages caused to any party. The competent supervision and inspection authorities may also confiscate the illegal gains or impose fines on such operators.
Any operator who violates the Law against Unfair Competition by engaging in the foregoing unfair competition activities shall be ordered to cease such illegal activities, eliminate the influence of such activities or compensate for the damages caused to any party. The competent supervision and inspection authorities may also confiscate the illegal gains or impose fines on such operators.
On April 10, 2020, the SAFE issued the Notice of the SAFE on Optimizing Foreign Exchange Administration to Support the Development of Foreign-related Business, or the SAFE Circular 8.
On April 10, 2020, SAFE issued the Notice of the State Administration of Foreign Exchange on Optimizing Foreign Exchange Administration to Support the Development of Foreign-related Business, or SAFE Circular 8.
Pervasive smartphone usage, dependence on mobile apps and the adoption of 5G telecommunications technology also fuel a booming demand for charging services. The growing supply of and demand for shared power banks has drived up usage among existing users and attract new users through growing accessibility, convenience, consumer habits and awareness.
Pervasive smartphone usage, dependence on mobile apps and the adoption of 5G telecommunications technology also fuel a booming demand for charging services. The growing supply of and demand for shared power banks has driven up usage among existing users and attract new users through growing accessibility, convenience, consumer habits and awareness.
Trademarks and domain names that are used in the provision of value-added telecommunications services must be owned by the license holder or its shareholders. The MII Notice also requires that each value-added telecommunications services license holder have appropriate facilities for its approved business operations and to maintain such facilities in the business regions covered by its license.
Trademarks and domain names that are used in the provision of value-added telecommunications services must be owned by the license holder or its shareholders. This notice also requires that each value-added telecommunications services license holder have appropriate facilities for its approved business operations and to maintain such facilities in the business regions covered by its license.
Our power banks are easily portable, with a size of just 145.8*68.8*14.7mm (approximately 5.7*2.7*0.6 inches) and weight of approximately 168g (6 oz), barely larger than a common mobile phone. Quality and capacity . Our power banks have a battery capacity of 3.7V/5000mAh.
Our power banks are easily portable, with a size of just 145.8*68.8*14.7mm (approximately 5.7*2.7*0.6 inches) and weight of approximately 160g (5.6 oz), barely larger than a common mobile phone. Quality and capacity. Our power banks have a battery capacity of 3.7V/5000mAh.
We have also sponsored a host of commercial events, such as the China International Import Expo (CIIE), to further establish our brand recognitions among potential location partners. Campaigns We from time to time initiate campaigns to attract more users to proactively seek out our power banks.
We have also sponsored a host of commercial events, such as the China International Import Expo (CIIE), to further establish our brand recognitions among potential location partners. Campaigns We from time to time initiate campaigns to attract more users to actively seek out our power banks.
PRC government authorities have enacted laws and regulations with respect to internet information security and protection of personal information from any abuse or unauthorized disclosure, including the Decision of the Standing Committee of the National People’s Congress on Internet Security Protection enacted and amended by the SCNPC on December 28, 2000 and August 27, 2009, respectively, the Provisions on the Technical Measures for Internet Security Protection issued by the MPS on December 13, 2005 and took effect on March 1, 2006, the Decision of the Standing Committee of the National People’s Congress on Strengthening Network Information Protection promulgated by the SCNPC on December 28, 2012, the Several Provisions on Regulating the Market Order of Internet Information Services promulgated by the MIIT on December 29, 2011, and the Provisions on Protection of Personal Information of Telecommunication and Internet Users released by the MIIT on July 16, 2013.
PRC government authorities have enacted laws and regulations with respect to internet information security and protection of personal information from any abuse or unauthorized disclosure, including the Decision of the Standing Committee of the National People’s Congress on Internet Security Protection enacted and amended by the Standing Committee of the National People’s Congress on December 28, 2000 and August 27, 2009, respectively, the Provisions on the Technical Measures for Internet Security Protection issued by the Ministry of Public Security on December 13, 2005 and took effect on March 1, 2006, the Decision of the Standing Committee of the National People’s Congress on Strengthening Network Information Protection promulgated by the Standing Committee of the National People’s Congress on December 28, 2012, the Several Provisions on Regulating the Market Order of Internet Information Services promulgated by the MIIT on December 29, 2011, and the Provisions on Protection of Personal Information of Telecommunication and Internet Users released by the MIIT on July 16, 2013.
Telecommunications Regulations The Telecommunications Regulations of the People’s Republic of China, or the Telecom Regulations, promulgated on September 25, 2000 and amended on July 29, 2014 and February 6, 2016, respectively, are the primary PRC laws governing telecommunications services and set out the general framework for the provision of telecommunications services by PRC companies.
Telecommunications Regulations The Telecommunications Regulations of the People’s Republic of China promulgated on September 25, 2000 and amended on July 29, 2014 and February 6, 2016, respectively, are the primary PRC laws governing telecommunications services and set out the general framework for the provision of telecommunications services by PRC companies.
In the opinion of Commerce & Finance Law Offices, our PRC legal counsel: ● The ownership structures of the VIE and Zhixiang WFOE in China are not in violation of mandatory provisions of applicable PRC laws and regulations currently in effect; and 105 Table of Contents ● The agreements under the contractual arrangements among Zhixiang WFOE, the VIE and its shareholders governed by PRC law are valid and binding upon each party to such agreements and enforceable against each party thereto in accordance with their terms and applicable PRC laws and regulations currently in effect.
In the opinion of Commerce & Finance Law Offices, our PRC legal counsel: ● The ownership structures of the VIE and Zhixiang WFOE in China are not in violation of mandatory provisions of applicable PRC laws and regulations currently in effect; and ● The agreements under the contractual arrangements among Zhixiang WFOE, the VIE and its shareholders governed by PRC law are valid and binding upon each party to such agreements and enforceable against each party thereto in accordance with their terms and applicable PRC laws and regulations currently in effect.
The Patent Law and Implementation Rules of the Patent Law provide for three types of patents, namely “inventions”, “utility models” and “designs.” Invention patents are valid for twenty years, while utility model patents and design patents are valid for ten years, and fifteen years, in each case from the date of application.
The Patent Law and Implementation Rules of the Patent Law provide for three types of patents, namely “inventions,” “utility models” and “designs.” Invention patents are valid for twenty years, while utility model patents and design patents are valid for ten years, and fifteen years, in each case from the date of application.
For example, the M&A Rules require that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that impact or may impact national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand.
For example, the M&A Rules require that the Ministry of Commerce be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that impact or may impact national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand.
The Implementing Rules of the Enterprise Income Law of the People’s Republic of China, or the Implementing Rules of the EIT Law defines a de facto management body as a managing body that in practice exercises “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise.
The Implementing Rules of the Enterprise Income Law of the People’s Republic of China, or the Implementing Rules of the Enterprise Income Tax Law defines a de facto management body as a managing body that in practice exercises “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise.
The Review Measures establish the basic framework and principle for national security reviews of network products and services. On July 7, 2022, the CAC promulgated the Measures for the Security Assessment of Cross-border Data Transfer, or the Security Assessment Measures, which took effect on September 1, 2022.
The Cybersecurity Review Measures establish the basic framework and principle for national security reviews of network products and services. On July 7, 2022, the CAC promulgated the Measures for the Security Assessment of Cross-border Data Transfer, which took effect on September 1, 2022.
Pursuant to the Social Insurance Law of the People’s Republic of China, which was promulgated by the SCNPC on October 28, 2010, effective on July 1, 2011 and last amended on December 29, 2018, the Interim Regulations on the Collection of Social Insurance Fees, issued by the State Council on January 22, 1999 and last amended on March 24, 2019, and the Regulations on the Administration of Housing Provident Funds, issued by the State Council on April 3, 1999 and last amended on March 24, 2019, enterprises in China are required to participate in certain employee benefit plans, including social insurance funds and housing provident funds, and contribute to the funds in amounts equal to certain percentages of salaries, including bonuses and allowances, of the employees as specified by the local government from time to time at locations where they operate their businesses or where they are located.
Pursuant to the Social Insurance Law of the People’s Republic of China, which was promulgated by the Standing Committee of the National People’s Congress on October 28, 2010, effective on July 1, 2011 and last amended on December 29, 2018, the Interim Regulations on the Collection of Social Insurance Fees, issued by the State Council on January 22, 1999 and last amended on March 24, 2019, and the Regulations on the Administration of Housing Provident Funds, issued by the State Council on April 3, 1999 and last amended on March 24, 2019, enterprises in China are required to participate in certain employee benefit plans, including social insurance funds and housing provident funds, and contribute to the funds in amounts equal to certain percentages of salaries, including bonuses and allowances, of the employees as specified by the local government from time to time at locations where they operate their businesses or where they are located.
The Domain Name Measures regulate the registration of domain names, such as China’s national top-level domain name “.CN.” The China Internet Network Information Center, or the CNNIC, issued the Administrative Regulations for Country Code Top-Level Domain Name Registration and Country Code Top-Level Dispute Resolutions Rules on June 18, 2019, pursuant to which the CNNIC can authorize a domain name dispute resolution institution to decide domain name related disputes.
These measures regulate the registration of domain names, such as China’s national top-level domain name “.CN.” The China Internet Network Information Center, issued the Administrative Regulations for Country Code Top-Level Domain Name Registration and Country Code Top-Level Dispute Resolutions Rules on June 18, 2019, pursuant to which the China Internet Network Information Center can authorize a domain name dispute resolution institution to decide domain name related disputes.
Shanghai Zhixiang further undertakes that, without Zhixiang WFOE’s prior written consent, it will not, among other things, sell, transfer, pledge, or permit others to use or otherwise dispose of such assets. The exclusive asset subscription agreement has a term of 10 years and can be extended at Zhixiang WFOE’s option. Exclusive Call Option Agreement.
Shanghai Zhixiang further undertakes that, without Zhixiang WFOE’s prior written consent, it will not, among other things, sell, transfer, pledge, or permit others to use or otherwise dispose of such assets. The exclusive asset subscription agreement has a term of 10 years and can be extended at Zhixiang WFOE’s option. 102 Table of Contents Exclusive Call Option Agreement.
Patent According to the Patent Law of the People’s Republic of China, or the Patent Law, promulgated by the SCNPC on March 12, 1984 and amended on September 4, 1992, August 25, 2000, December 27, 2008, and October 17, 2020, the latest amendment took effect on June 1, 2021, respectively, and the Implementation Rules of the Patent Law of the People’s Republic of China, or the Implementation Rules of the Patent Law, promulgated by the State Council on June 15, 2001 and revised on December 28, 2002 and January 9, 2010, respectively, the patent administrative department under the State Council is responsible for the administration of patent-related work nationwide and the patent administration departments of provincial or autonomous regions or municipal governments are responsible for administering patents within their respective administrative areas.
Patent According to the Patent Law of the People’s Republic of China, promulgated by the Standing Committee of the National People’s Congress on March 12, 1984 and amended on September 4, 1992, August 25, 2000, December 27, 2008, and October 17, 2020, the latest amendment took effect on June 1, 2021, respectively, and the Implementation Rules of the Patent Law of the People’s Republic of China, promulgated by the State Council on June 15, 2001 and revised on December 28, 2002 and January 9, 2010, respectively, the patent administrative department under the State Council is responsible for the administration of patent-related work nationwide and the patent administration departments of provincial or autonomous regions or municipal governments are responsible for administering patents within their respective administrative areas.
Under the FITE Regulation and in accordance with WTO-related agreements, the foreign party investing in a FITE engaging in value-added telecommunications services may hold up to 50% of the ultimate equity interests of the FITE.
Under the FITE Regulation and in accordance with WTO-related agreements, the foreign party investing in a foreign-invested telecommunications enterprise engaging in value-added telecommunications services may hold up to 50% of the ultimate equity interests of the foreign-invested telecommunications enterprise.
The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will be taken to deal with the risks and incidents of China-based overseas listed companies, and cybersecurity and data privacy protection requirements, etc.
These opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of a regulatory systems will be taken to deal with the risks and incidents of China-based overseas listed companies, and cybersecurity and data privacy protection requirements, etc.
Regulations Relating to Value-added Telecommunications Services Foreign Investment in Value-Added Telecommunications Foreign direct investment in telecommunications companies in China is regulated by the Administrative Provisions on Foreign-Invested Telecommunications Enterprises, or the FITE Regulation, which was issued by the State Council on December 11, 2001 and amended on September 10, 2008 and February 6, 2016, respectively.
Regulations Relating to Value-added Telecommunications Services Foreign Investment in Value-Added Telecommunications Foreign direct investment in telecommunications companies in China is regulated by the Administrative Provisions on Foreign-Invested Telecommunications Enterprises, or the FITE Regulation, which was issued by the State Council on December 11, 2001 and amended on September 10, 2008, February 6, 2016 and March 29, 2022, respectively.
In addition, the Draft Regulations requires that data processors that process “important data” or are listed overseas must conduct an annual data security assessment by itself or commission a data security service provider to do so, and submit the assessment report of the preceding year to the municipal cybersecurity department by the end of January each year.
In addition, these draft regulations require that data processors that process “important data” or are listed overseas must conduct an annual data security assessment by itself or commission a data security service provider to do so, and submit the assessment report of the preceding year to the municipal cybersecurity department by the end of January each year.
The Share Option Rules further require an offshore agent to be designated to handle matters in connection with the exercise of share options and sales of proceeds for the participants of the share incentive plans. Failure to complete the said SAFE registrations may subject the participating directors, supervisors, senior management and other employees to fines and legal sanctions.
The notice further require an offshore agent to be designated to handle matters in connection with the exercise of share options and sales of proceeds for the participants of the share incentive plans. Failure to complete the said SAFE registrations may subject the participating directors, supervisors, senior management and other employees to fines and legal sanctions.
On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “Trial Measures”) and five supporting guidelines, which came into effect on March 31, 2023.
On February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines, which came into effect on March 31, 2023.
The examination results are recorded on a set of product sample documents, which are further reviewed and approved before they are handed over to our assembly partners. For our existing product lines, we also have a quality assurance team that establishes, communicates and monitors quality standards by product category.
The examination results are recorded on a set of product sample documents, which are further reviewed and approved before they are handed over to our assembly partners. 80 Table of Contents For our existing product lines, we also have a quality assurance team that establishes, communicates and monitors quality standards by product category.
The value-added telecommunications services license holder shall perfect relevant measures for safeguarding the network and information, establish relevant administrative system for information safety, set up the procedures for handling emergencies of network and information safety and implement the liabilities of information safety.
The value-added telecommunications services license holder shall perfect the measures for safeguarding the network and information, establish an administrative system for information safety, set up the procedures for handling emergencies of network and information safety and implement the liabilities of information safety.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Dividends paid by our wholly foreign-owned subsidiaries in mainland China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation on Income.
Dividends paid by our wholly foreign-owned subsidiaries in mainland China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the Hong Kong entity satisfies all the requirements under the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation on Income.
We generate substantially all of our revenues from our mobile device charging services. We offer users mobile device charging service generally at a rate of between RMB1 to RMB2 per thirty-minute. Users usually pay a refundable deposit of RMB99 upon receiving our power banks, and pay usage fees when they return the power banks.
We generate substantially all of our revenues from our mobile device charging services. We offer users mobile device charging service generally at a rate of between RMB1 to RMB2 per thirty-minute interval. Users usually pay a refundable deposit of RMB99 upon receiving our power banks, and pay usage fees when they return the power banks.
The incentive fees we pay to location partners consist of entry fees and commissions based on certain percentages of the revenues generated by the power banks placed at their locations. We intend to collaborate with top-tier brands which may require higher entry fees.
The incentive fees we pay to location partners consist of entry fees and commissions based on certain percentages of the revenues generated by the power banks placed at their locations. We intend to collaborate with more top-tier brands which may require higher entry fees.
A Hong Kong entity is required to file application package with the relevant tax authority, and settle the overdue taxes if the preferential 5% tax rate is denied based on the subsequent review of the application package by the relevant tax authority. See “Item 3. Key Information—D.
A Hong Kong entity is required to file application package with the tax authority, and settle the overdue taxes if the preferential 5% tax rate is denied based on the subsequent review of the application package by the tax authority. See “Item 3. Key Information—D.
E. Critical Accounting Estimates We prepare our consolidated financial statements and related notes in accordance with GAAP. In doing so, we have to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities.
Critical Accounting Estimates We prepare our consolidated financial statements and related notes in accordance with GAAP. In doing so, we have to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities.
Risk Factors—Risks Relating to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated, both in absolute amount and as a percentage of our net revenues for the periods presented.
Risk Factors—Risks Relating to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” 110 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated, both in absolute amount and as a percentage of our net revenues for the periods presented.
There is an anti-fragmentation measure where each group will have to nominate only one company in the group to benefit from the progressive rates. No provision for Hong Kong S.A.R. profits tax has been made in the financial statements as the subsidiary in Hong Kong S.A.R. have no assessable profits for the years ended December 31, 2020, 2021 and 2022.
There is an anti-fragmentation measure where each group will have to nominate only one company in the group to benefit from the progressive rates. No provision for Hong Kong S.A.R. profits tax has been made in the financial statements as the subsidiary in Hong Kong S.A.R. have no assessable profits for the years ended December 31, 2021, 2022 and 2023.
Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. C. Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Our Technologies,” and “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” D.
Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds. C. Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Our Technologies.” D.
Meanwhile, in 2022, Shanghai Zhixiang also applied for its qualification as High and New Technology Enterprise (“HNTE”) and is entitled to a preferential income tax rate of 15% from 2022 to 2024 as long as it maintained its qualification for HNTE that is subject to verification by competent authorities and renewals every three years.
Meanwhile, in 2022, Shanghai Zhixiang also applied for its qualification as High and New Technology Enterprise and is entitled to a preferential income tax rate of 15% from 2022 to 2024 as long as it maintained its qualification for High and New Technology Enterprise that is subject to verification by competent authorities and renewals every three years.
We may decide to enhance our liquidity position or increase our cash reserve for future investments through additional capital and finance funding. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations.
We may decide to enhance our liquidity position or increase our cash reserve in the future through additional capital and finance funding. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations.
We refer to accounting estimates of this type as critical accounting estimates, which we discuss further below. Fair value of restricted shares, restricted share units (“RSUs”) and share options We grant restricted shares to our co-founders and RSUs of Smart Share Brothers Holding Limited and Smart Share CGY Holding Limited to our employees and external consultants.
We refer to accounting estimates of this type as critical accounting estimates, which we discuss further below. Fair value of restricted shares, restricted share units, or RSUs, and share options We grant restricted shares to our co-founders and RSUs of Smart Share Brothers Holding Limited and Smart Share CGY Holding Limited to our employees and external consultants.
As of December 31, 2022, our power banks were available in approximately 997,000 POIs, compared with over 845,000 POIs as of December 31, 2021, representing a growth rate of approximately 18.0%. As of December 31, 2021 and 2022, our available-for-use power banks were 5.7 million and 6.7 million, respectively, representing a growth rate of 17.9%.
Our power banks were available in over 845,000 POIs as of December 31, 2021 and approximately 997,000 POIs as of December 31, 2022, representing a growth rate of approximately 18.0%. As of December 31, 2021 and 2022, our available-for-use power banks were 5.7 million and 6.7 million, respectively, representing a growth rate of 17.9%.
Operating Results Overview We are a consumer tech company providing mobile device charging service through an extensive online and offline network. We provide service through our power banks, placed in points of interests, or POIs, operated by our location partners, such as entertainment venues, restaurants, shopping centers, hotels, transportation hubs and public spaces.
Operating Results Overview We are a consumer tech company providing mobile device charging services through an extensive online and offline network. We provide service through our power banks, placed in points of interests, or POIs, and operated by our location partners, such as entertainment venues, restaurants, shopping centers, hotels and transportation hubs.
This decrease was primarily due to the decrease in incentive fees paid to location partners and network partners from the decrease in mobile device charging business revenues, which decreased by 2.1% from RMB2,112.8 million in 2021 to RMB2,069.1 million (US$300.0 million) in 2022, and the decrease in personnel related expenses. Our incentive fees include both commissions and entry fees.
This decrease was primarily due to the decrease in incentive fees paid to location partners and network partners from the decrease in mobile device charging business revenues, which decreased by 2.1% from RMB2,112.8 million in 2021 to RMB2,069.1 million in 2022, and the decrease in personnel related expenses. Our incentive fees include both commissions and entry fees.
The incentive fee rates in 2021 and 2022 were 61.1% and 75.1%, respectively. Among the total incentive fees, our commissions to location partners and network partners increased by 12% from RMB1,653.0 million in 2021 to RMB1,851.3 million (US$268.4 million) in 2022 with the commission rates being 47.8% and 67.2% in 2021 and 2022, respectively.
The incentive fee rates in 2021 and 2022 were 61.1% and 75.1%, respectively. Among the total incentive fees, our commissions to location partners and network partners increased by 12% from RMB1,653.0 million in 2021 to RMB1,851.3 million in 2022 with the commission rates being 47.8% and 67.2% in 2021 and 2022, respectively.
Our entry fees to location partners decreased by 52.6% from RMB459.7 million in 2021 to RMB217.8 million (US$31.6 million) in 2022 and the entry fee rates decreased from 13.3% in 2021 to 7.9% in 2022.
Our entry fees to location partners decreased by 52.6% from RMB459.7 million in 2021 to RMB217.8 million in 2022 and the entry fee rates decreased from 13.3% in 2021 to 7.9% in 2022.
The difference was primarily the result of: (i) adjustments for non-cash items that primarily include depreciation and amortization expense of RMB396.9 million as well as amortization of entry fees and prepayments to location partners of RMB626.1 million; and (ii) change in assets and liabilities mainly resulted from an increase in prepayments and other current and non-current assets of RMB828.4 million, partially offset by an increase in accounts and notes payable of RMB45.4 million.
The difference was primarily the result of: (a) adjustments for non-cash items that primarily include depreciation and amortization expense of RMB396.9 million as well as amortization of entry fees and prepayments to location partners of RMB626.1 million; and (b) change in assets and liabilities mainly resulted from an increase in prepayments and other current and non-current assets of RMB828.4 million, partially offset by an increase in accounts and notes payable of RMB45.4 million.
We determine the fair value of restricted shares to our co-founders and RSUs of Smart Share Brothers Holding Limited and Smart Share CGY Holding Limited to our employees and external consultants based on the fair value of our ordinary shares on the date of grant. 120 Table of Contents The binomial option-pricing model is used to measure the value of share options.
We determine the fair value of restricted shares to our co-founders and RSUs of Smart Share Brothers Holding Limited and Smart Share CGY Holding Limited to our employees and external consultants based on the fair value of our ordinary shares on the date of grant. The binomial option-pricing model is used to measure the value of share options.
The deposit is waived for users who have qualified credit scores at their digital wallet service providers, as assessed by these providers. We retain the deposit if the power banks are not returned after a certain period of time. We have two operating models for our mobile device charging services, direct operation and network partners.
The deposit is waived for users who have qualified credit scores at their digital wallet service providers, as assessed by these providers. We retain the deposit if the power banks are not returned after a certain period of time. We have two operating models for our mobile device charging services, direct model and network partner model.
See “Forward-Looking Information.” In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties. 106 Table of Contents A.
See “Forward-Looking Information.” In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties. A.
In the years of 2020, 2021 and 2022, our capital expenditures primarily incurred for purchasing raw materials and components from suppliers for the manufacturing of our power banks and cabinets, purchasing computer and electronic equipment and other production tools and software. We funded our capital expenditures primarily with net cash flows generated from operating activities.
In the years of 2021, 2022 and 2023, our capital expenditures primarily incurred for purchasing raw materials and components from suppliers for the manufacturing of our power banks and cabinets, purchasing computer, electronic equipment, equipment for photovoltaic power stations and other production tools and software. We funded our capital expenditures primarily with net cash flows generated from operating activities.
Risk Factors—Risks Relating to Doing Business in China—We may not be able to obtain certain benefits under relevant tax treaty on dividends paid by our PRC subsidiaries to us through our Hong Kong subsidiaries.” 112 Table of Contents If our holding company in the Cayman Islands were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
Risk Factors—Risks Relating to Doing Business in China—We may not be able to obtain certain benefits under the tax treaties on dividends paid by our PRC subsidiaries to us through our Hong Kong subsidiaries.” If our holding company in the Cayman Islands were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%.
We regularly evaluate the effective interest rate against the actual lease repayments and prospectively adjust the effective interest rate as necessary. For the periods presented, there was no material change in the effective interest rate. For the years ended December 31, 2020, 2021 and 2022, the weighted average effective interest rate was 23%, 24% and 21%, respectively.
We regularly evaluate the effective interest rate against the actual lease repayments and prospectively adjust the effective interest rate as necessary. For the periods presented, there was no material change in the effective interest rate. For the years ended December 31, 2021, 2022 and 2023, the weighted average effective interest rate was 24%, 21% and 9%, respectively.
Incentive fee rate in a given period is defined as the result of dividing the incentive fees to location partners and network partners in the period by the revenues generated through the mobile device charging service in the same period.
Incentive fee rate in a given period is defined as the result of dividing the incentive fees to location partners and, under the former network partner model, to network partners, in the period by the revenues generated through the mobile device charging service in the same period.
Such increase was offset by the negative impact of the emergence of new variants of COVID-19 and regional breakouts in China in 2022. Cost of revenues Our cost of revenues remained relatively stable at RMB556.9 million (US$80.7 million) in 2022, compared to RMB557.2 million in 2021.
Such increase was offset by the negative impact of the emergence of new variants of COVID-19 and regional breakouts in China in 2022. Cost of revenues Our cost of revenues remained relatively stable at RMB557.2 million in 2021 and RMB556.9 million in 2022.
We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. As of December 31, 2022, 97.8% of our cash, cash equivalents and restricted cash were denominated in Renminbi. As of December 31, 2022, an insignificant portion of cash and cash equivalents were held by the VIE.
We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. As of December 31, 2023, 99.5% of our cash, cash equivalents and restricted cash were denominated in Renminbi. As of December 31, 2023, an insignificant portion of cash and cash equivalents were held by the VIE.
Recent Accounting Pronouncements A list of recently issued accounting pronouncements that are relevant to us is included in note 2 “Summary of Principal Accounting Policies — (af) Recent Accounting Pronouncements” of our consolidated financial statements included elsewhere in this annual report. 121 Table of Contents
Recent Accounting Pronouncements A list of recently issued accounting pronouncements that are relevant to us is included in note 2 “Summary of Principal Accounting Policies — (ah) Recent Accounting Pronouncements” of our consolidated financial statements included elsewhere in this annual report.
The incentive fees we pay to network partners include commissions based on certain percentages of the revenues generated by the power banks which are managed by them. We use incentive fee rate as a metric to track our mobile device charging service.
The incentive fees we paid to network partners under the former network partner model include commissions based on certain percentages of the revenues generated by the power banks which are managed by them. We use incentive fee rate as a metric to track our mobile device charging service.
Under the direct operation model, we pay location partners commission fees based on percentages of the revenues generated by the cabinets placed at their POIs. For certain location partners, we also pay entry fees, based on our projected revenues of the POIs, in order to secure our collaboration with them.
Commission fees are calculated based on percentages of the revenues generated by the cabinets placed at their POIs. For certain location partners, we also pay entry fees, based on our projected revenues of the POIs, in order to secure our collaboration with them.
Incentive fees to location partners, including entry fees and commissions, as percentages of revenues generated by our devices placed at their venues generally range between 50% and 70% during periods without significant COVID-19 outbreaks. Under the network partner model, we pay network partners monthly commissions based on percentages of the revenues generated by the cabinets that they place.
Incentive fees to location partners as percentages of revenues generated by our devices placed at their venues generally range between 50% and 70% during periods without significant COVID-19 outbreaks. Under the network partner model, we historically pay network partners incentive fees based on a percentage of the revenues generated by cabinets that they placed.
The difference was primarily the result of: (i) adjustments for non-cash items that primarily include depreciation and amortization expense of RMB421.3 million (US$61.1 million) amortization and impairment of prepayments to location partners and amortization of entry fees of RMB571.6 million (US$82.9 million); and (ii) change in assets and liabilities mainly resulted from an increase in tax payables, other non-current liabilities as well as accounts payable and notes payable of RMB514.7 million (US$74.6 million), partially offset by an increase in other non-current assets of RMB127.2 million (US$18.4 million).
The difference was primarily the result of: (i) adjustments for non-cash items that primarily include depreciation and amortization expense of RMB421.3 million amortization and impairment of prepayments to location partners and amortization of entry fees of RMB571.6 million; and 115 Table of Contents (ii) change in assets and liabilities mainly resulted from an increase in tax payables, other non-current liabilities as well as accounts payable and notes payable of RMB514.7 million, partially offset by an increase in other non-current assets of RMB127.2 million.
Our mobile device charging service and other services are subject to value added tax, or VAT, at the rate of 6%, and our power bank sales are subject to VAT at the rate of 13%, for general VAT payer entities in accordance with PRC tax rules.
For us, a general value added tax payer entity, our mobile device charging service and our cabinet and power bank sales are subject to value added tax, or VAT, at the rate of 13%. Other revenues are subject to VAT at the rate of 6%, in accordance with PRC tax rules.
As of December 31, 2020, 2021 and 2022, our available-for-use power banks were 5.4 million, 5.7 million and 6.7 million, respectively, representing a growth rate of 6.1% from 2020 to 2021 and 17.9% from 2021 to 2022.
As of December 31, 2021, 2022 and 2023, our available-for-use power banks were 5.7 million, 6.7 million and 9.2 million, respectively, representing a growth rate of 17.9% from 2021 to 2022 and 36.6% from 2022 to 2023.
Our results of operations, financial condition, and the period-to-period comparability of our financial results have been, and are expected to continue to be, more specifically affected by the below factors: 107 Table of Contents Our ability to expand our POI coverage and increase the number of available-for-use power banks POIs.
Our results of operations, financial condition, and the period-to-period comparability of our financial results have been, and we expect them to continue to be, more specifically affected by the below factors: Our ability to expand our POI coverage and increase the number of available-for-use power banks POIs.
Investing activities Net cash used in investing activities in 2022 was RMB1,024.0 million (US$148.5 million), consisting of RMB7,689.4 million (US$1,114.9 million) used to purchase of short-term investments and RMB439.6 million (US$63.7 million) used to purchase of property, equipment and software from third parties, partially offset by RMB7,104.6 million (US$1,030.1 million) from proceeds from maturities of short-term investments.
Net cash used in investing activities in 2022 was RMB1,024.0 million, consisting of RMB7,689.4 million used to purchase of short-term investments and RMB439.6 million used to purchase of property, equipment and software from third parties, partially offset by RMB7,104.6 million from proceeds from maturities of short-term investments.
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 year ended December 31, 2022, that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
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 period since January 1, 2024, that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions. 117 Table of Contents E.
As of December 31, 2020, 2021 and 2022, our services were available in approximately 1,500, 1,700 and 1,800 out of the 2,843 counties and county-level districts in China.
As of December 31, 2021, 2022 and 2023, our services were available in approximately 1,700, 1,800 and 2,000 out of the approximate 2,850 counties and county-level districts in China.
Risk Factors—Risks Relating to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our securities offering to make loans or additional capital contributions to our PRC subsidiaries and the VIE, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” 117 Table of Contents Operating activities Net cash generated from operating activities in 2022 was RMB708.1 million (US$102.7 million), as compared to net loss of RMB711.2 million (US$103.1 million) in the same period.
Risk Factors—Risks Relating to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our securities offering to make loans or additional capital contributions to our PRC subsidiaries and the VIE, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” Operating activities Net cash generated from operating activities in 2023 was RMB416.5 million (US$58.7 million), as compared to net income of RMB87.7 million (US$12.4 million) in the same period.
We primarily derive our revenues from our mobile device charging service. Other sources of revenues mainly include sales of power banks, advertising services that we provide to our customers by displaying customers’ images and brand on our power banks or our mini programs as well as sales of merchandises.
Other sources of revenues mainly include new initiatives and advertising services that we provide to our customers by displaying customers’ images and brand on our power banks or our mini programs as well as sales of merchandises.
Research and development expenses Our research and development expenses decreased by 3.4% from RMB93.9 million in 2021 to RMB90.7 million (US$13.1 million) in 2022. This decrease was primarily due to the decrease in system and personnel related expenses.
Research and development expenses Our research and development expenses decreased by 3.4% from RMB93.9 million in 2021 to RMB90.7 million in 2022. This decrease was primarily due to the decrease in system and personnel related expenses. Sales and marketing expenses Our sales and marketing expenses decreased by 8.1% from RMB2,951.0 million in 2021 to RMB2,712.3 million in 2022.
Internal rate of return associated with the finance lease Under the network partner model, we sell the cabinets to majority of network partners, but retain all the output derived from the cabinets, whose only potential use is to store, charge, and process our proprietary power banks, for an indefinite period.
The amortization of these costs is included in expenses over the estimated life of the internal-use software. 118 Table of Contents Internal rate of return associated with the finance lease Under the former network partner model, we sell the cabinets to majority of network partners, but retain all the output derived from the cabinets, whose only potential use is to store, charge, and process our proprietary power banks, for an indefinite period.
The mobile device charging service only pertains to public areas for business or leisure. The more people stay at home or offices, the less likely they will need our services. Our industry is generally affected by the popularity and the prevalence of smart mobile devices. The development of battery technologies also influences our industry.
The more people stay at home or offices, the less likely they will need our services. Our industry is generally affected by the popularity and the prevalence of smart mobile devices. The development of battery technologies also influences our industry.
China Generally, our PRC subsidiaries and VIE are subject to the PRC Enterprise Income Tax Law at the statutory income tax rate of 25%. In accordance with the Enterprise Income Tax Law (“EIT Law”), Foreign Investment Enterprises (“FIEs”) and domestic companies are subject to Enterprise Income Tax (“EIT”) at a uniform rate of 25%.
Mainland China Generally, our PRC subsidiaries and the VIE are subject to the PRC Enterprise Income Tax Law at the statutory income tax rate of 25%. 109 Table of Contents In accordance with the Enterprise Income Tax Law, foreign invested enterprises and domestic companies are subject to enterprise income tax at a uniform rate of 25%.
As of December 31, 2020, 2021 and 2022, our power banks were available in over 664,000 POIs, over 845,000 POIs and approximately 997,000 POIs, respectively representing a growth rate of approximately 27.2% from 2020 to 2021 and approximately 18.0% from 2021 to 2022.
As of December 31, 2021, 2022 and 2023, our power banks were available in over 845,000 POIs, approximately 997,000 POIs and approximately 1,233,900 POIs, respectively, representing a growth rate of approximately 18.0% from 2021 to 2022 and approximately 23.8% from 2022 to 2023.
Judgment is required in determining when we enter the application development stage. We have determined that the application development stage for our software products is reached after the project research, plan and design are completed. The amortization of these costs is included in expenses over the estimated life of the internal-use software.
Judgment is required in determining when we enter the application development stage. We have determined that the application development stage for our software products is reached after the project research, plan and design are completed.
The following table sets forth the components of our incentive fees paid to location partners and network partners by amounts and percentages of our total incentive fees paid to location partners and network partners for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Incentive fees paid to location partners and network partners ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Entry fees ​ 380,257 ​ 24.1 ​ 459,737 ​ 21.8 ​ 217,819 ​ 31,581 ​ 10.5 Commissions ​ 1,196,308 ​ 75.9 ​ 1,653,037 ​ 78.2 ​ 1,851,283 ​ 268,411 ​ 89.5 Total ​ 1,576,565 ​ 100.0 ​ 2,112,774 ​ 100.0 ​ 2,069,102 ​ 299,992 ​ 100.0 ​ We believe that our network effect and leading position in the number of POIs covered contributes to our ability to effectively negotiate with location partners and network partners, and our ability to control raw material and manufacturing costs enhances our ability to offer attractive incentive fee rates.
The following table sets forth the components of our incentive fees paid to location partners and, under the former network partner model, to network partners by amounts and percentages of our total incentive fees paid to location partners and network partners for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Incentive fees paid to location partners and network partners ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Entry fees ​ 459,737 ​ 21.8 ​ 217,819 ​ 10.5 ​ 64,863 ​ 9,136 ​ 6.6 Commissions ​ 1,653,037 ​ 78.2 ​ 1,851,283 ​ 89.5 ​ 916,426 ​ 129,076 ​ 93.4 Total ​ 2,112,774 ​ 100.0 ​ 2,069,102 ​ 100.0 ​ 981,289 ​ 138,212 ​ 100.0 ​ We believe that our network effect and leading position in the number of POIs covered contributes to our ability to effectively negotiate with location partners, and our ability to control raw material and manufacturing costs enhances our ability to offer attractive incentive fee rates.
Material Cash Requirements We made capital expenditures of RMB394.6 million in 2020, RMB472.4 million in 2021 and RMB442.9 million (US$64.2 million) in 2022, respectively.
Material Cash Requirements We made capital expenditures of RMB472.4 million in 2021, RMB442.9 million in 2022 and RMB182.0 million (US$25.6 million) in 2023, respectively.
The decrease from 2021 to 2022 was primarily attributable to the decrease in the adoption of fixed entry fees for new signings.
The decrease from 2021 to 2022 and the further decrease from 2022 to 2023 was primarily attributable to the decreased use of fixed entry fees for new signings.
In 2020, 2021 and 2022, the depreciation costs of our cabinets and power banks as percentages of revenues generated from the mobile device charging service and power bank sales for the respective periods were 10.0%, 8.8% and 12.3%, respectively.
In 2021, 2022 and 2023, the depreciation costs of our cabinets and power banks as percentages of revenues generated from the mobile device charging service for the respective periods were 9.1%, 12.6% and 12.5%, respectively.
The following table sets forth the components of our cost of revenues by amounts and percentages of our total revenues for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Cost of revenues Depreciation 279,682 10.0 313,196 8.7 346,319 50,212 12.2 Cost of power banks sold (1) 94,319 3.4 108,280 3.0 83,251 12,070 2.9 Others 56,772 2.0 135,701 3.8 127,353 18,464 4.5 Total 430,773 15.4 557,177 15.5 556,923 80,746 19.6 Note: (1) Including cost of power banks sold and written-off of power banks kept by users who forfeit their deposits.
The following table sets forth the components of our cost of revenues by amounts and percentages of our total revenues for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Cost of revenues Depreciation 313,196 8.7 346,319 12.2 196,266 27,643 6.6 Cost of cabinets and power banks sold (1) 108,280 3.0 83,251 2.9 843,203 118,763 28.5 Others 135,701 3.8 127,353 4.5 169,995 23,943 5.8 Total 557,177 15.5 556,923 19.6 1,209,464 170,349 40.9 Note: (1) Including cost of power banks sold and written-off of power banks kept by users who forfeit their deposits.
Sales and marketing expenses Our sales and marketing expenses primarily include incentive fees paid to location partners and network partners, compensation for business development personnel, and other expenses related to sales and marketing functions.
Sales and marketing expenses Our sales and marketing expenses comprise a significant portion of our operating expenses, consisting primarily of incentive fees paid to location partners, compensation for business development personnel and other expenses related to sales and marketing functions.
The increase from 2021 to 2022 was primarily due to the decrease in revenue as a result of COVID-19 outbreaks and the increase in the number of cabinets and power banks within the mobile device charging service network. 109 Table of Contents Impact of COVID-19 On Our Operations The outbreak of COVID-19 has severely impacted China and the rest of the world.
The increase from 2021 to 2022 was primarily due to the decrease in revenue as a result of COVID-19 outbreaks and the increase in the number of cabinets and power banks within the mobile device charging service network.
The increase in commissions to location partners and network partners was mainly due to the general increase in our POIs and the launch of our network partner campaign which is tailored to help us better attract high-quality network partners across China to help us further increase our POI coverage.
The increase in our incentive fees from 2021 to 2022 is primarily due to the general increase in our POIs and the launch of our network partner campaign, which is tailored to help us better attract high-quality network partners across China.
The decrease in entry fee and entry fee rates were mainly due to the increase in the usage of variable commissions in place of fixed entry fees for new signings, which we have actively promoted in order to better mitigate the impact of regional COVID-19 outbreaks.
The decrease in entry fee and entry fee rates were mainly due to the increase in the usage of variable commissions in place of fixed entry fees for new signings, which we have actively promoted in order to better mitigate the impact of regional COVID-19 outbreaks. 113 Table of Contents General and administrative expenses Our general and administrative expenses decreased by 5.5% from RMB119.0 million in 2021 to RMB112.4 million in 2022.
We define the number of POIs as the total number of unique locations whose proprietors have entered into contracts with us or our network partners. Available-for-use power banks. We define available-for-use power banks as of a certain date as the number of power banks in circulation for that day.
We define the number of POIs as the total number of unique locations whose proprietors, i.e., location partners, have entered into contracts with us or our network partners as of a given day with at least one cabinet assigned to the location. Available-for-use power banks.
Our subsidiaries and VIE in the PRC are subject to a uniform income tax rate of 25% for all periods presented. Shanghai Zhixiang was entitled to be “Software Enterprise.” According to the EIT Law and relevant regulations, from 2019, Shanghai Zhixiang could enjoy a tax holiday of two-year EIT exemption and subsequently three-year 12.5% preferential tax rate.
Shanghai Zhixiang was entitled to be “Software Enterprise.” According to the Enterprise Income Tax Law and its implementing regulations, from 2019, Shanghai Zhixiang could enjoy a tax holiday of two-year enterprise income tax exemption and subsequently three-year 12.5% preferential tax rate.
A power bank is in circulation for a day if it has been stored in a POI’s cabinet or in the possession of a user during the course of utilizing our mobile device charging service for that day.
We define available-for-use power banks as of a given date as the number of power banks in circulation for that day. A power bank is deemed in circulation for a day if it is stored in a POI’s cabinet or in a user’s possession during the course of utilizing our mobile device charging service for that day.
Our material cash requirements as of December 31, 2022, and any subsequent interim period primarily include our operating lease obligations, purchase obligations and financing payable. Our operating lease obligations primarily consist of minimum payments under non-cancelable operating leases related to offices and warehouses. Our purchase obligations primarily include our commitment to purchase power banks and cabinets.
Our operating lease obligations primarily consist of minimum payments under non-cancelable operating leases related to offices and warehouses. Our purchase obligations primarily include our commitment to purchase power banks and cabinets.
We intend to fund our future capital expenditures with our existing cash balance, short-term investments and anticipated cash flows from operations. We will continue to make well-planned capital expenditures to meet the expected growth of our business.
We intend to fund our future capital expenditures with our existing cash balance, short-term investments and anticipated cash flows from operations.
The following table sets forth the components of our sales and marketing expenses by amounts and percentages of our total sales and marketing expenses for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Sales and marketing expenses Incentive fees to location partners and network partners 1,576,565 74.3 2,112,774 71.6 2,069,102 299,992 76.3 Compensation for business development personnel 396,777 18.7 604,822 20.5 503,572 73,011 18.6 Others 147,664 7.0 233,376 7.9 139,656 20,248 5.1 Total 2,121,006 100.0 2,950,972 100.0 2,712,330 393,251 100.0 ​ 111 Table of Contents General and administrative expenses Our general and administrative expenses primarily include compensation for corporate employees and other expenses related to the general corporate functions.
We have ceased to pay incentive fees to our network partners under the new arrangement. 108 Table of Contents The following table sets forth the components of our sales and marketing expenses by amounts and percentages of our total sales and marketing expenses for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Sales and marketing expenses Incentive fees to location partners and network partners 2,112,774 71.6 2,069,102 76.3 981,289 138,212 65.1 Compensation for business development personnel 604,822 20.5 503,572 18.6 408,739 57,570 27.1 Others 233,376 7.9 139,656 5.1 117,404 16,535 7.8 Total 2,950,972 100.0 2,712,330 100.0 1,507,432 212,317 100.0 ​ General and administrative expenses Our general and administrative expenses primarily include compensation for corporate employees and other expenses related to the general corporate functions.
We intend to fund our existing and future material cash requirements primarily with anticipated cash flows from operations, our existing cash balance and other financing alternatives.
We intend to fund our existing and future material cash requirements primarily with anticipated cash flows from operations, our existing cash balance and other financing alternatives. We will continue to make cash commitments, including capital expenditures, to support the growth of our business.
Net cash generated from operating activities in 2020 was RMB536.1 million, as compared to net income of RMB75.4 million in the same period.
Net cash generated from operating activities in 2022 was RMB708.1 million, as compared to net loss of RMB711.2 million in the same period.
The following table sets forth our contractual obligations as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Within one One to three Three to five More than five ​ Total year years years years ​ ​ (RMB in thousands) Operating lease obligations 13,983 13,660 323 — — Purchase of equipment 109,638 109,638 — — — Financing payable 116,774 84,418 31,914 442 — ​ Other than as shown above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2022.
The following table sets forth our contractual obligations as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Within one One to three Three to five More than five ​ Total year years years years ​ ​ (RMB in thousands) Operating lease obligations 31,105 21,049 3,996 888 5,172 Purchase of equipment and inventory 246,273 246,273 — — — ​ Other than as shown above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2023.
Our entry fee rates, calculated by dividing the entry fees paid to location partners in a given period by revenues from mobile device charging service in the same period, decreased from 14.0% in 2020 to 13.3% in 2021 to 7.9% in 2022.
The entry fee rates for our direct model, calculated by dividing the entry fees paid to location partners in a given period by revenues from mobile device charging service revenue for the direct model operation, decreased from 18.7% in 2021 to 13.7% in 2022 and further to 6.1% in 2023.
The number of POIs and available-for-use power banks are two important measures of our expansion and geographic coverage and in turn, our ability to attract more users and location partners and create a network effect. We believe our uniquely designed business development personnel system and network partner model are effective in helping us expand our coverage.
The number of POIs and available-for-use power banks are two important measures of our expansion and geographic coverage and, in turn, our ability to attract more users and location partners.
As of December 31, 2020, 2021 and 2022, our restricted cash was RMB51.0 million, RMB19.7 million and RMB14.6 million (US$2.1 million), respectively. Our restricted cash mainly consists of deposits held in designated bank accounts for issuance of bank acceptance notes and letter of guarantee, and required by our business partners.
As of December 31, 2021, 2022 and 2023, our restricted cash and long-term restricted cash was RMB39.7 million, RMB35.6 million and RMB193.2 million (US$27.2 million), respectively. Our restricted cash mainly consists of deposits held in designated bank accounts for issuance of bank acceptance notes, letter of guarantee and those with legal restrictions.
This decrease was primarily due to the impact of COVID-19 in 2022, which resulted in a significant decline in general offline foot traffic in China due to COVID-19 restrictions and infections in certain regions of mainland China.
Revenues generated from our mobile device charging service decreased by 20.3% from RMB3,455.8 million in 2021 to RMB2,754.1 million in 2022. This decrease was primarily due to the impact of COVID-19 in 2022, which resulted in a significant decline in general offline foot traffic in China due to COVID-19 restrictions and infections in certain regions of mainland China.
Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any off-balance sheet derivative instruments. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
Among the total incentive fees, our commission rates, calculated by dividing the commissions paid to location partners and network partners in a given period by revenues from mobile device charging service in the same period, to location partners and network partners were relatively stable at 44.1% and 47.8% in 2020 and 2021, respectively, and increased to 67.2% in 2022.
As a contributor to the overall incentive fee rate, our overall commission rate, calculated by dividing the commissions paid to location partners and, under the former network partner model, to network partners, in a given period by revenues from mobile device charging service in the same period, to location partners and network partners increased from 47.8% in 2021 to 67.2% in 2022, and decreased to 58.1% in 2023.
This decrease was primarily driven by the decrease in revenues from our mobile device charging business. Revenues generated from our mobile device charging service decreased by 20.3% from RMB3,455.8 million in 2021 to RMB2,754.1 million (US$399.3 million) in 2022.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenues Our revenues decreased by 20.8% from RMB3,585.4 million in 2021 to RMB2,838.2 million in 2022. This decrease was primarily driven by the decrease in revenues from our mobile device charging business.
Because we own the power banks under both direct operation and network partner models, and manage the operations under the same set of frameworks, technology infrastructure and other tools, cost of revenues for the two models have insignificant differences. Major Factors Affecting Our Results of Operations Our industry and our operations are significantly influenced by the general economic conditions.
Historically, because we owned the power banks and managed the operations under the same set of frameworks, technology infrastructure and other tools under both the direct model and network partner model, cost of revenues for the two models have insignificant differences.
This decrease was primarily due to the decrease in VAT refund received from local governments. 114 Table of Contents Income/(Loss) from operations As a result of the foregoing, we earned loss from operations of RMB109.0 million in 2021, and loss from operations of RMB621.2 million (US$90.1 million) in 2022.
Income/(Loss) from operations As a result of the foregoing, we earned loss from operations of RMB109.0 million in 2021, and loss from operations of RMB621.2 million in 2022.
Liquidity and Capital Resources Cash Flows and Working Capital The following table sets forth a summary of our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB RMB RMB US$ ​ ​ (in thousands) Net cash generated from operating activities ​ 536,118 ​ 226,778 ​ 708,142 ​ 102,670 Net cash used in investing activities (261,487) (1,714,287) (1,023,997) (148,465) Net cash generated from/(used in) financing activities 654,571 1,563,397 (78,454) (11,374) Effect of exchange rate changes on cash and cash equivalents and restricted cash (6,234) (42,794) 42,095 6,103 Net increase/(decrease) in cash, cash equivalents and restricted cash 922,968 33,094 (352,214) (51,066) Cash, cash equivalents and restricted cash at the beginning of the year 380,533 1,303,501 1,336,595 193,788 Cash, cash equivalents and restricted cash at the end of the year 1,303,501 1,336,595 984,381 142,722 ​ We have financed our operating and investing activities mainly through cash generated from operating activities during the fiscal year ended December 31, 2022.
Liquidity and Capital Resources Cash Flows and Working Capital The following table sets forth a summary of our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB RMB RMB US$ ​ ​ (in thousands) Net cash generated from operating activities ​ 226,778 ​ 708,142 ​ 416,499 ​ 58,663 Net cash used in investing activities (1,714,287) (1,023,997) (598,535) (84,302) Net cash generated from/(used in) financing activities 1,563,397 (78,454) (27,956) (3,938) Effect of exchange rate changes on cash and cash equivalents and restricted cash (42,794) 42,095 7,501 1,057 Net increase/(decrease) in cash, cash equivalents and restricted cash 33,094 (352,214) (202,491) (28,520) Cash, cash equivalents and restricted cash at the beginning of the year 1,303,501 1,336,595 984,381 138,647 Cash, cash equivalents and restricted cash at the end of the year 1,336,595 984,381 781,890 110,127 ​ We have financed our operating and investing activities mainly through cash generated from operating activities, financing activities and our initial public offering in 2021. 114 Table of Contents As of December 31, 2021, 2022 and 2023, our cash and cash equivalents were RMB1,296.9 million, RMB948.8 million and RMB588.6 million (US$82.9 million), respectively.
The operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Revenues Mobile device charging business ​ 2,711,541 96.5 3,455,797 96.4 2,754,143 399,313 97.0 Power bank sales ​ 77,598 2.8 102,857 2.9 59,476 8,623 2.1 Others ​ 20,220 0.7 26,737 0.7 24,571 3,562 0.9 Total revenues ​ 2,809,359 100.0 3,585,391 100.0 2,838,190 411,498 100.0 Cost of revenues (1) (430,773) (15.4) (557,177) (15.5) (556,923) (80,746) (19.6) Research and development expenses (1) (70,938) (2.5) (93,882) (2.6) (90,656) (13,144) (3.2) Sales and marketing expenses (1) (2,121,006) (75.5) (2,950,972) (82.3) (2,712,330) (393,251) (95.6) General and administrative expenses (1) (79,600) (2.8) (118,973) (3.3) (112,403) (16,297) (4.0) Other operating income 24,790 0.9 26,614 0.7 12,876 1,867 0.5 Income/(loss) from operations 131,832 4.7 (108,999) (3.0) (621,245) (90,073) (21.9) Interest and investment income 10,271 0.4 30,560 0.9 52,389 7,596 1.8 Interest expense to third parties (39,596) (1.4) (38,051) (1.1) (31,282) (4,535) (1.1) Interest expense to a related party (1,032) (0.0) — — — — — Foreign exchange (losses)/gains, net (485) (0.0) (7,935) (0.2) 3,787 549 0.1 Other (expenses)/income, net 443 0.0 (190) (0.0) (413) (60) (0.0) Change in fair value of warrant liabilities (7,442) (0.3) — — — — — Income/(loss) before income tax expense 93,991 3.4 (124,615) (3.4) (596,764) (86,523) (21.0) Income tax expense (18,564) (0.7) — — (114,476) (16,597) (4.0) Net income/(loss) 75,427 2.7 (124,615) (3.4) (711,240) (103,120) (25.1) Note: (1) Share-based compensation expenses were allocated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB RMB RMB US$ ​ ​ (in thousands) Share-based compensation expenses: General and administrative expenses 24,015 23,688 21,383 3,100 Research and development expenses 1,378 1,462 1,679 244 Sales and marketing expenses 4,144 5,252 4,983 722 Cost of revenues 218 271 200 29 Total 29,755 30,673 28,245 4,095 ​ ​ 113 Table of Contents Year Ended December 31, 2022, Compared to Year Ended December 31, 2021 Revenues Our revenues decreased by 20.8% from RMB3,585.4 million in 2021 to RMB2,838.2 million (US$411.5 million) in 2022.
The operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Revenues Mobile device charging service ​ 3,455,797 96.4 2,754,143 97.0 1,577,379 222,169 53.3 Mobile device charging solution ​ — ​ — ​ — ​ — ​ 173,152 ​ 24,388 ​ 5.9 Power bank and cabinet sales ​ 102,857 ​ 2.9 ​ 59,476 ​ 2.1 ​ 1,118,684 ​ 157,563 ​ 37.8 Mobile device charging ​ 3,558,654 99.3 2,813,619 99.1 2,869,215 404,120 97.0 Others ​ 26,737 0.7 24,571 0.9 89,432 12,596 3.0 Total revenues ​ 3,585,391 100.0 2,838,190 100.0 2,958,647 416,716 100.0 Cost of revenues (1) (557,177) (15.5) (556,923) (19.6) (1,209,464) (170,349) (40.9) Research and development expenses (1) (93,882) (2.6) (90,656) (3.2) (91,461) (12,882) (3.1) Sales and marketing expenses (1) (2,950,972) (82.3) (2,712,330) (95.6) (1,507,432) (212,317) (51.0) General and administrative expenses (1) (118,973) (3.3) (112,403) (4.0) (125,528) (17,680) (4.2) Other operating income/(loss) 26,614 0.7 12,876 0.5 (25,827) (3,638) (0.9) Loss from operations (108,999) (3.0) (621,245) (21.9) (1,065) (150) (0.0) Interest and investment income 30,560 0.9 52,389 1.8 117,247 16,514 4.0 Interest expense to third parties (38,051) (1.1) (31,282) (1.1) (4,228) (596) (0.1) Foreign exchange (losses)/gains, net (7,935) (0.2) 3,787 0.1 (3,255) (458) (0.1) Other (expenses)/income, net (190) (0.0) (413) (0.0) 63 9 0.0 (Loss)/income before income tax expense ​ (124,615) (3.4) (596,764) (21.0) 108,762 15,319 3.7 Income tax expense — — (114,476) (4.0) (21,021) (2,961) (0.7) Net (loss)/income ​ (124,615) (3.4) (711,240) (25.1) 87,741 12,358 3.0 Note: (1) Share-based compensation expenses were allocated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB RMB RMB US$ ​ ​ (in thousands) Share-based compensation expenses: General and administrative expenses 23,688 21,383 15,757 2,219 Research and development expenses 1,462 1,679 1,141 161 Sales and marketing expenses 5,252 4,983 3,328 469 Cost of revenues 271 200 113 16 Total 30,673 28,245 20,339 2,865 ​ ​ 111 Table of Contents Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues Our revenues increased by 4.2% from RMB2,838.2 million in 2022 to RMB2,958.6 million (US$416.7 million) in 2023.
Incentive fee rates are impacted by industry competition, as we need to offer competitive packages to our location partners and network partners to ensure effective expansion and retention. Our incentive fee rates in 2020, 2021 and 2022 were 58.1%, 61.1% and 75.1%, respectively.
Incentive fee rates are impacted by industry competition, as we need to offer competitive packages to our location partners and network partners to ensure effective expansion and retention. Starting in the second quarter of 2023, under the new contractual arrangement of our network partner model, we ceased to provide incentive fees to our network partners.
General and administrative expenses Our general and administrative expenses decreased by 5.5% from RMB119.0 million in 2021 to RMB112.4 million (US$16.3 million) in 2022. This decrease was primarily due to the decrease in personnel related expenses, which was partially offset by the increase in professional service expenses.
This decrease was primarily due to the decrease in personnel related expenses, which was partially offset by the increase in professional service expenses. Other operating income Other operating income decreased by 51.6% from RMB26.6 million in 2021 to RMB12.9 million in 2022. This decrease was primarily due to the decrease in VAT refund received from local governments.
Net income/(loss) As a result of the foregoing, we generated net loss of RMB124.6 million in 2021 and loss of RMB711.2 million (US$103.1 million) in 2022. Year Ended December 31, 2021, Compared to Year Ended December 31, 2020 Revenues Our revenues increased by 27.6% from RMB2,809.4 million in 2020 to RMB3,585.4 million in 2021.
Net income/(loss) As a result of the foregoing, we generated net loss of RMB124.6 million in 2021 and net loss of RMB711.2 million in 2022. B.
The difference was primarily the result of: (i) adjustments for noncash items that primarily include depreciation and amortization expense of RMB343.4 million as well as amortization of entry fees of RMB239.4 million; and (ii) change in assets and liabilities mainly resulted from an increase in prepayments and other current assets of RMB257.1 million, partially offset by an increase in accounts and notes payable of RMB118.0 million.
The difference was primarily the result of: (i) adjustments for non-cash items that primarily include depreciation and amortization expense of RMB257.6 million (US$36.3 million), and amortization and impairment of prepayments to location partners of RMB110.0 million (US$15.5 million) and (ii) change in assets and liabilities mainly resulted from an increase in accounts and notes receivable and prepayments and other current assets of RMB472.6 million (US$66.6 million), a decrease in inventory of RMB306.8 million (US$43.2 million) and a decrease in financial payables of RMB94.3 million (US$13.3 million), partially offset by an increase in salary and welfare payable and tax payable of RMB114.8 million (US$16.2 million).
Under direct operation, we manage the placement of power banks and cabinets ourselves. Under the network partner model, network partners manage the placement of power banks and cabinets. We also generate revenues from power bank sales, if users decided to purchase the power banks from us.
Under the direct model, we manage the placement of power banks and cabinets ourselves by collecting payments from users directly and settling with location partners periodically. Under the network partner model, network partners manage the placement of power banks and cabinets. Historically, we had the ownership rights to the cabinets and power banks under the network partner model.
Net cash used in investing activities in 2020 was RMB261.5 million, consisting of RMB283.1 million used to purchase of property, equipment and software from a related party and RMB133.8 million used to purchase of property, equipment and software from third parties, and RMB304.8 million used to purchase of short-term investments, partially offset by RMB460.2 million proceeds from maturities of short-term investments. 118 Table of Contents Financing activities Net cash used in financing activities in 2022 was RMB78.5 million (US$11.4 million), consisting primarily of RMB60.5 million (US$8.8 million) of repayment to financing from network partners, and RMB19.7 million (US$2.9 million) of repurchasing of Class A ordinary shares.
Net cash used in financing activities in 2022 was RMB78.5 million, consisting primarily of RMB60.5 million of repayment to financing from network partners, and RMB19.7 million of repurchasing of Class A ordinary shares.

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

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Mr. Benny Yucong Xu has served as our independent director since March 2021. Mr. Xu has spent over two decades at Unilever and rose through the ranks.
Benny Yucong Xu has served as our independent director since March 2021. Mr. Xu has spent over two decades at Unilever and rose through the ranks.
Ronald Cao is the director of Sky9 Capital Fund III GP Ltd. Sky9 Capital MVP Fund, L.P. is controlled by Sky9 Capital MVP Fund GP Ltd., its general partner. Mr. Ronald Cao is the director of Sky9 Capital MVP Fund GP Ltd.
Sky9 Capital Fund III, L.P. is controlled by Sky9 Capital Fund III GP Ltd., its general partner. Mr. Ronald Cao is the director of Sky9 Capital Fund III GP Ltd. Sky9 Capital MVP Fund, L.P. is controlled by Sky9 Capital MVP Fund GP Ltd., its general partner. Mr. Ronald Cao is the director of Sky9 Capital MVP Fund GP Ltd.
The maximum aggregate number of ordinary shares that may be issued under 2021 Share Incentive Plan is initially 46,566,250 and will be increased on the first day of each fiscal year during the ten-year term of the plan commencing with the fiscal year beginning January 1, 2021, by an amount equal to 1.0% of the total number of issued and outstanding shares (on an as-converted fully diluted basis) on the last day of the immediately preceding fiscal year.
The maximum aggregate number of shares that may be issued under 2021 Share Incentive Plan is initially 46,566,250 and will be increased on the first day of each fiscal year during the ten-year term of the plan commencing with the fiscal year beginning January 1, 2021, by an amount equal to 1.0% of the total number of issued and outstanding shares (on an as-converted fully diluted basis) on the last day of the immediately preceding fiscal year.
The nominating and corporate governance committee is responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; 126 Table of Contents ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
The nominating and corporate governance committee is responsible for, among other things: ● selecting and recommending to the board nominees for election by the shareholders or appointment by the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; ● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; 123 Table of Contents ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. 130 Table of Contents F.
The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. F.
Eligibility. We may grant awards to our directors, employees and consultants. Vesting Schedule. In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. 124 Table of Contents Exercise of Options. The plan administrator determines the exercise price for each award, which is stated in the relevant award agreement.
Eligibility. We may grant awards to our directors, employees and consultants. Vesting Schedule. In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Exercise of Options. The plan administrator determines the exercise price for each award, which is stated in the relevant award agreement.
(4) Represents 7,306,970 Class B ordinary shares, 800,000 Class A ordinary shares in the form of ADSs and 95,000 Class A ordinary shares issuable upon the exercise of options within 60 days of March 31, 2023, held by Victor Family Limited, a British Virgin Islands company wholly owned by Victor Yaoyu Zhang.
(4) Represents 7,306,970 Class B ordinary shares, 800,000 Class A ordinary shares in the form of ADSs and 190,000 Class A ordinary shares issuable upon the exercise of options within 60 days of March 31, 2024, held by Victor Family Limited, a British Virgin Islands company wholly owned by Victor Yaoyu Zhang.
Zhang served as the head of customer management at Uber Shanghai from March 2016 to December 2016. Mr. Zhang also served as a brand assistant manager at Johnson & Johnson (China) Co., Ltd. from September 2014 to March 2016. Mr. Zhang received his bachelor’s degree in public administration from Shanghai Jiao Tong University in 2014. Mr.
Zhang served as the head of customer management at Uber Shanghai from March 2016 to December 2016. Mr. Zhang also served as a brand assistant manager at Johnson & Johnson (China) Co., Ltd. from September 2014 to March 2016. Mr. Zhang received his bachelor’s degree in public administration from Shanghai Jiao Tong University in 2014. 120 Table of Contents B.
(9) 35,877,631 — 6.9 % 3.0 % Beautyworks Investment Limited (10) 34,158,716 — 6.6 % 2.9 % Super June Limited (2) 3,212,500 27,397,000 5.9 % 23.4 % Sky9 Capital entities (11) 27,099,870 — 5.2 % 2.3 % Notes: * Aggregate number of shares account for less than 1% of our total ordinary shares on an as-converted basis outstanding as of the date of this annual report. ** Except as indicated otherwise below, the business address of our directors and executive officers is 6th Floor, 799 Tianshan W Road, Changning District, Shanghai 200335, People’s Republic of China. † For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
(9) 35,877,631 — 6.9 % 3.0 % Beautyworks Investment Limited (10) 34,020,246 — 6.6 % 2.9 % Super June Limited (2) 3,425,000 27,397,000 6.0 % 23.5 % Sky9 Capital entities (11) 27,099,870 — 5.2 % 2.3 % Notes: * Aggregate number of shares account for less than 1% of our total ordinary shares on an as-converted basis outstanding as of the date of this annual report. 126 Table of Contents ** Except as indicated otherwise below, the business address of our directors and executive officers is 6th Floor, 799 Tianshan W Road, Changning District, Shanghai 200335, People’s Republic of China. † For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
(1) Represents 39,270,000 Class B ordinary shares, 4,280,073 Class A ordinary shares in the form of ADSs, and 212,500 Class A ordinary shares issuable upon the exercise of options within 60 days of March 31, 2023, held by Smart Share Holdings Limited, a British Virgin Islands company wholly owned by Mars Guangyuan Cai.
(1) Represents 39,270,000 Class B ordinary shares, 4,280,073 Class A ordinary shares in the form of ADSs, and 425,000 Class A ordinary shares issuable upon the exercise of options within 60 days of March 31, 2024, held by Smart Share Holdings Limited, a British Virgin Islands company wholly owned by Mars Guangyuan Cai.
Board Diversity Matrix ​ ​ ​ Board Diversity Matrix (As of March 31, 2023) Country of Principal Executive Offices PRC Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 8 ​ W2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Did Not ​ ​ ​ ​ ​ ​ Non- ​ Disclose ​ Female Male Binary Gender Part I: Gender Identity Directors 2 6 — — Part II: Demographic Background ​ ​ ​ ​ ​ ​ ​ ​ Underrepresented Individual in Home Country Jurisdiction ​ ​ — ​ ​ LGBTQ+ ​ ​ — ​ ​ Did Not Disclose Demographic Background ​ ​ 8 ​ ​ ​ D.
Board Diversity Matrix ​ ​ ​ Board Diversity Matrix (As of March 31, 2024) Country of Principal Executive Offices PRC Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 7 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Did Not ​ ​ ​ ​ ​ ​ ​ ​ Disclose ​ Female Male Non-Binary Gender Part I: Gender Identity Directors 2 5 — — Part II: Demographic Background ​ ​ ​ ​ ​ ​ ​ ​ Underrepresented Individual in Home Country Jurisdiction ​ ​ — ​ ​ ​ ​ LGBTQ+ ​ ​ — ​ ​ ​ ​ Did Not Disclose Demographic Background ​ ​ 7 ​ ​ ​ ​ ​ D.
Gan worked in several positions at Alibaba Group (NYSE: BABA), including as vice president of sales, senior director of sales operation team, internet operation director and marketing director, focusing on sales and marketing. Mr. Gan received his bachelor’s degree in food engineering from Zhejiang Gongshang University in 1995 and his EMBA degree from China Europe International Business School in 2011.
(NYSE: BABA), including as vice president of sales, senior director of sales operation team, internet operation director and marketing director, focusing on sales and marketing. Mr. Gan received his bachelor’s degree in food engineering from Zhejiang Gongshang University in 1995 and his EMBA degree from China Europe International Business School in 2011. Mr.
We may also terminate an executive officer’s employment without cause upon three-month advance written notice. In such case of termination by us, we will provide severance payments to the executive officer as may be agreed between the executive officer and us.
We may also terminate an executive officer’s employment without cause upon three-month advance written notice. In such case of termination by us, we will provide severance payments to the executive officer as may be agreed between the executive officer and us. The executive officer may resign at any time with a three-month advance written notice.
The following table summarizes, as of March 31, 2023, the number of outstanding restricted share units and options granted to our directors and executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted Share ​ Exercise Price ​ ​ Name Units Share Options (US$/Share) Date of Grant Date of Expiration Mars Guangyuan Cai — ​ * 0.01 August 23, 2021 January 15, 2031 Peifeng Xu — ​ * ​ 0.01 August 23, 2021 January 15, 2031 Maria Yi Xin * ​ — ​ ​ June 2, 2020 Termination of Service ​ — ​ * ​ 0.01 August 23, 2021 ​ January 15,2031 Victor Yaoyu Zhang — ​ * ​ 0.01 August 23, 2021 January 15, 2031 Xiaowei Li * ​ — ​ ​ June 1, 2020 Termination of Service ​ — ​ * ​ 0.01 August 23, 2021 ​ January 15, 2031 All directors and executive officers as a group 2,470,487 ​ 2,680,000 ​ ​ Note: * Less than 1% of our total ordinary shares on an as-converted basis outstanding as of the date of this annual report.
The following table summarizes, as of March 31, 2024, the number of outstanding restricted share units and options granted to our directors and executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted Share ​ Exercise Price ​ ​ Name Units Share Options (US$/Share) Date of Grant Date of Expiration Mars Guangyuan Cai — ​ * ​ 0.01 August 23, 2021 ​ August 23, 2031 Peifeng Xu — ​ * ​ 0.01 August 23, 2021 ​ August 23, 2031 Maria Yi Xin 846,599 ​ — ​ ​ June 2, 2020 Termination of Service ​ — ​ * ​ 0.01 August 23, 2021 ​ August 23, 2031 Victor Yaoyu Zhang — ​ * ​ 0.01 August 23, 2021 ​ August 23, 2031 All directors and executive officers as a group 846,599 ​ 2,380,000 ​ ​ Note: * Less than 1% of our total ordinary shares on an as-converted basis outstanding as of the date of this annual report.
The business address of each of HHLR and HIM is Office #122, Windward 3 Building, Regatta Office Park, West Bay Road, Grand Cayman, Cayman Islands, KY1-9006. The above information is based on the Schedule 13G filed by HHLR Advisors Ltd., among others, on September 27, 2021.
The business address of each of HHLR and HIM is Office #122, Windward 3 Building, Regatta Office Park, West Bay Road, Grand Cayman, Cayman Islands, KY1-9006. The above information is based on the Schedule 13G/A filed by HHLR Advisors Ltd., among others, on February 14, 2024.
Compensation Committee. Our compensation committee consists of Benny Yucong Xu, Onward Choi and Jiawei Gan. Benny Yucong Xu is the chairperson of our compensation committee. We have determined that Onward Choi, Jiawei Gan and Benny Yucong Xu satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market.
Compensation Committee. Our compensation committee consists of Benny Yucong Xu, Conor Chia-hung Yang and Jiawei Gan. Benny Yucong Xu is the chairperson of our compensation committee. We have determined that Conor Chia-hung Yang, Jiawei Gan and Benny Yucong Xu satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market.
We have determined that Onward Choi, Jiawei Gan and Benny Yucong Xu satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market and Rule 10A-3 under the Exchange Act.
We have determined that Conor Chia-hung Yang, Jiawei Gan and Benny Yucong Xu satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market and Rule 10A-3 under the Exchange Act.
Options that are vested and exercisable will terminate if they are not exercised prior to the time as the plan administrator determines at the time of grant. However, the maximum exercisable term is ten years from the date of effectiveness of the 2021 Share Incentive Plan. Transfer Restrictions.
Options that are vested and exercisable will terminate if they are not exercised prior to the time as the plan administrator determines at the time of grant. However, the maximum exercisable term is ten years from the date of grant, subject to certain exceptions. Transfer Restrictions.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2023, by: ● each of our directors and executive officers; and 128 Table of Contents ● each person known to us to own beneficially more than 5% of our total outstanding shares.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our shares as of March 31, 2024, by: ● each of our directors and executive officers; and ● each person known to us to own beneficially 5% or more of our total outstanding shares.
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Jiawei Gan, Onward Choi and Benny Yucong Xu. Jiawei Gan is the chairperson of our nominating and corporate governance committee. Onward Choi, Jiawei Gan and Benny Yucong Xu satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market.
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Jiawei Gan, Conor Chia-hung Yang and Benny Yucong Xu. Jiawei Gan is the chairperson of our nominating and corporate governance committee. Conor Chia-hung Yang, Jiawei Gan and Benny Yucong Xu satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market.
(“YHG”) and the sole management company of HHLR Fund, L.P. (“HHLR Fund”). HHLR is hereby deemed to be the beneficial owner of, and to control the voting and investment power of, the Class A ordinary shares held by YHG and HHLR Fund. HIM acts as the sole management company of Hillhouse Fund III, L.P. (“Fund III”).
HHLR acts as the sole management company of HHLR Fund, L.P., or HHLR Fund. HHLR is hereby deemed to be the beneficial owner of, and to control the voting and investment power of, the Class A ordinary shares held by HHLR Fund. HIM acts as the sole management company of Hillhouse Fund III, L.P., or Fund III.
To our knowledge, as of March 31, 2023, an aggregate of 136,198,658 of our issued and outstanding Class A ordinary shares are held by one record holder in the United States, which is Bank of New York Mellon, the depositary of our ADS program.
To our knowledge, as of March 31, 2024, an aggregate of 132,939,888 of our issued and outstanding Class A ordinary shares are held by one record holder in the United States, which is Bank of New York Mellon, the depositary of our ADS program.
The executive officer may resign at any time with a three-month advance written notice. 123 Table of Contents Each executive officer has agreed to hold, both during and after the termination or expiry of his or her employment agreement, in strict confidence and not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to applicable law, any of our confidential information or trade secrets, any confidential information or trade secrets of our customers or prospective customers, or the confidential or proprietary information of any third party received by us and for which we have confidential obligations.
Each executive officer has agreed to hold, both during and after the termination or expiry of his or her employment agreement, in strict confidence and not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to applicable law, any of our confidential information or trade secrets, any confidential information or trade secrets of our customers or prospective customers, or the confidential or proprietary information of any third party received by us and for which we have confidential obligations.
We have determined that Onward Choi qualifies as an “audit committee financial expert.” The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
We have determined that Conor Chia-hung Yang qualifies as an “audit committee financial expert.” The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
Fund III owns HH RSV-XXII Holdings Limited (“HH RSV,” and together with YHG and HHLR Fund, the “Hillhouse Entities”). HIM is hereby deemed to be the beneficial owner of, and to control the voting and investment power of, the Class A ordinary shares held by HH RSV.
Fund III owns HH RSV-XXII Holdings Limited, or HH RSV (HH RSV together with HHLR Fund, the Hillhouse Entities). HIM is hereby deemed to be the beneficial owner of, and to control the voting and investment power of, the Class A ordinary shares held by HH RSV.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and approving the transfer of shares in our company, including the registration of such shares in our register of members.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our register of members. 124 Table of Contents Terms of Directors and Executive Officers Our directors may be appointed by an ordinary resolution of our shareholders.
In addition, a director will cease to be a director if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his or her creditors; (ii) dies or is found to be or becomes of unsound mind; (iii) resigns his or her office by notice in writing to our company, or (iv) is removed from office pursuant to any other provision of our articles of association. ​ 127 Table of Contents Our officers are appointed by and serve at the discretion of the board of directors, and may be removed by our board of directors.
In addition, a director will cease to be a director if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his or her creditors; (ii) dies or is found to be or becomes of unsound mind; (iii) resigns his or her office by notice in writing to our company, or (iv) is removed from office pursuant to any other provision of our articles of association.
The following is a breakdown of our employees as of December 31, 2022, by function: ​ ​ ​ ​ Function Number Business development personnel 2,875 Research & development and supply chain management 203 Other sales and marketing personnel and general & administrative 578 Total 3,656 ​ As of December 31, 2022, all of our employees were based in mainland China.
The following is a breakdown of our employees as of December 31, 2023, by function: ​ ​ ​ ​ Function Number Business development personnel 2,420 Research & development and supply chain management 206 Other sales and marketing personnel and general & administrative 572 Total 3,198 ​ As of December 31, 2023, all of our employees were based in mainland China.
These shares and associated votes, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of Ordinary ​ ​ ​ ​ ​ ​ ​ Shares ​ ​ ​ ​ ​ Class A Ordinary ​ Class B Ordinary ​ Beneficially ​ % of Voting ​ ​ Shares Shares Owned Power † ​ Directors and Executive Officers**: ​ Mars Guangyuan Cai (1) 4,492,573 39,270,000 8.4 % 33.5 % Peifeng Xu (2) 3,212,500 27,397,000 5.9 % 23.4 % Maria Yi Xin * — * * ​ Xiao Xiao — — — — ​ Feng Zhang — — — — ​ Onward Choi — — — — ​ Jiawei Gan (3) 9,001,545 — 1.7 % * ​ Benny Yucong Xu — — — — ​ Victor Yaoyu Zhang (4) 895,000 7,306,970 1.6 % 6.2 % Xiaowei Li * — * * ​ All Directors and Executive Officers as a Group 23,633,700 73,973,970 18.8 % 64.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Shareholders: ​ ​ ​ ​ ​ Taobao China Holding Limited (5) 76,386,109 — 14.7 % 6.4 % Hillhouse entities (6) 62,627,893 — 12.1 % 5.3 % Xiaomi entities (7) 46,977,051 — 9.0 % 4.0 % Smart Share Holdings Limited (1) 4,492,573 39,270,000 8.4 % 33.5 % Shunwei entities (8) 41,989,086 — 8.1 % 3.5 % China Ventures Fund I Pte.
These shares and associated votes, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of Ordinary ​ ​ ​ ​ ​ ​ ​ Shares ​ ​ ​ ​ ​ Class A Ordinary ​ Class B Ordinary ​ Beneficially ​ % of Voting ​ ​ Shares Shares Owned Power† ​ Directors and Executive Officers**: ​ Mars Guangyuan Cai (1) 4,705,073 39,270,000 8.5 % 33.6 % Peifeng Xu (2) 3,425,000 27,397,000 6.0 % 23.5 % Maria Yi Xin * — * * ​ Chen Shen ​ — ​ — ​ — ​ — ​ Conor Chia-hung Yang ​ — ​ — ​ — ​ — ​ Jiawei Gan (3) 9,001,545 — 1.7 % * ​ Benny Yucong Xu — — — — ​ Victor Yaoyu Zhang (4) 990,000 7,306,970 1.6 % 6.3 % All Directors and Executive Officers as a Group 20,811,406 73,973,970 18.3 % 64.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal Shareholders: ​ ​ ​ ​ ​ Taobao China Holding Limited (5) 76,386,109 — 14.8 % 6.5 % Hillhouse entities (6) 62,367,293 — 12.1 % 5.3 % Xiaomi entities (7) 46,977,051 — 9.1 % 4.0 % Smart Share Holdings Limited (1) 4,705,073 39,270,000 8.5 % 33.6 % Shunwei entities (8) 41,989,086 — 8.1 % 3.6 % China Ventures Fund I Pte.
The above information is based on the Schedule 13G filed by Shunwei Angels III Limited, among others, on February 14, 2022. (9) Represents 35,877,631 Class A ordinary shares held by China Ventures Fund I Pte. Ltd., a private company limited by shares in Singapore. China Ventures Fund I Pte.
The above information is based on the Schedule 13G filed by Shunwei Angels III Limited, among others, on February 14, 2022. (9) Represents 35,877,631 Class A ordinary shares held by China Ventures Fund I Pte. Ltd., which is wholly owned by China Ventures Fund I, Limited Partnership, which is, in turn, controlled by SV GP I Ltd.
Peifeng Xu is our co-founder and partner, and has been serving as our director and chief operating officer since June 2017. Prior to joining us, Mr. Xu served as general manager of third-party delivery business and regional manager of groupon business at Meituan from February 2011 to April 2017. Mr. Xu studied telecommunications engineering at Nantong University. Ms.
Xu served as general manager of third-party delivery business and regional manager of groupon business at Meituan from February 2011 to April 2017. Mr. Xu studied telecommunications engineering at Nantong University. 119 Table of Contents Ms. Maria Yi Xin is our partner, and has been serving as our chief financial officer since June 2020 and our director since December 2020.
Each committee’s members and functions are described below. 125 Table of Contents Audit Committee. Our audit committee consists of Onward Choi, Jiawei Gan and Benny Yucong Xu. Onward Choi is the chairperson of our audit committee.
Each committee’s members and functions are described below. Audit Committee. Our audit committee consists of Conor Chia-hung Yang, Jiawei Gan and Benny Yucong Xu. Conor Chia-hung Yang is the chairperson of our audit committee.
The calculations in the table below are based on 519,638,121 ordinary shares outstanding as of March 31, 2023, comprising of (i) 445,664,151 Class A ordinary shares (excluding 7,234,026 Class A ordinary shares in the form of ADSs held as treasury shares and reserved for future issuance upon the exercising or vesting of awards granted under our company’s share incentive plans) and (ii) 73,973,970 Class B ordinary shares.
The calculations in the table below are based on 516,379,351 shares outstanding as of March 31, 2024, comprising of (i) 442,405,381 Class A ordinary shares (excluding 10,492,796 Class A ordinary shares in the form of ADSs held as treasury shares and reserved for future issuance upon the exercising or vesting of awards granted under our company’s share incentive plans) and (ii) 73,973,970 Class B ordinary shares.
(2) Represents 27,397,000 Class B ordinary shares, 3,000,000 Class A ordinary shares in the form of ADSs, and 212,500 Class A ordinary shares issuable upon the exercise of options within 60 days of March 31, 2023, held by Super June Limited, a British Virgin Islands company wholly owned by Peifeng Xu. 129 Table of Contents (3) Represents 7,414,766 Class A ordinary shares and 1,586,779 Class A ordinary shares, in the form of ADSs, held by LIGAN Legend Limited, a British Virgin Islands company wholly owned by Jiawei Gan.
(2) Represents 27,397,000 Class B ordinary shares, 3,000,000 Class A ordinary shares in the form of ADSs, and 425,000 Class A ordinary shares issuable upon the exercise of options within 60 days of March 31, 2024, held by Super June Limited, a British Virgin Islands company wholly owned by Peifeng Xu.
As of March 31, 2023, there were options to acquire 4,211,514 Class A ordinary shares and 3,636,780 restricted shares units outstanding under the 2021 Share Incentive Plan. The following paragraphs summarize the principal terms of the 2021 Share Incentive Plan. Type of Awards.
As of March 31, 2024, there were options to acquire 4,620,064 Class A ordinary shares and 1,188,186 restricted shares units outstanding under the 2021 Share Incentive Plan. The following paragraphs summarize the principal terms of the 2021 Share Incentive Plan. 121 Table of Contents Type of Awards.
Xiaowei Li is our co-founder and partner, and has been serving as our chief technology officer since June 2017. Mr. Li also served as our director from January 2021 to March 2021. Prior to joining us, Mr.
Peifeng Xu is our co-founder and partner, and has been serving as our president since September 2023 and as our director since June 2017. Mr. Xu also served as our chief operating officer from June 2017 to September 2023. Prior to joining us, Mr.
As required by laws and regulations in China, we participate in various employee social security plans that are organized by municipal and provincial governments including, among other things, pension, medical insurance, unemployment insurance, maternity insurance, on-the-job injury insurance and housing fund plans through a PRC government-mandated benefit contribution plan.
We have not experienced any material labor disputes or strikes that may have a material and adverse effect on our business, financial condition or results of operations. 125 Table of Contents As required by laws and regulations in China, we participate in various employee social security plans that are organized by municipal and provincial governments including, among other things, pension, medical insurance, unemployment insurance, maternity insurance, on-the-job injury insurance and housing fund plans through a PRC government-mandated benefit contribution plan.
(6) Represents (i) 54,467,893 Class A ordinary shares held by a fund managed by Hillhouse Investment Management, Ltd., or HIM, an exempted Cayman Islands company, and (ii) 8,160,000 Class A ordinary shares held by funds managed by HHLR Advisors, Ltd., or HHLR, an exempted Cayman Islands company. HHLR acts as the sole investment manager of YHG Investment, L.P.
(6) Represents (i) 54,467,893 Class A ordinary shares held by a fund managed by Hillhouse Investment Management, Ltd., or HIM, an exempted Cayman Islands company, and (ii) 7,899,400 Class A ordinary shares, in the form of ADSs, held by a fund managed by HHLR Advisors, Ltd., or HHLR, an exempted Cayman Islands company.
Directors and Senior Management The following table sets forth information regarding our executive officers and directors as of the date of this annual report. ​ Directors and Executive Officers Age Position/Title Mars Guangyuan Cai ​ 40 ​ Chairman of the board of directors and Chief Executive Officer Peifeng Xu ​ 35 ​ Director and Chief Operating Officer Maria Yi Xin ​ 38 ​ Director and Chief Financial Officer Xiao Xiao ​ 38 ​ Director Feng Zhang ​ 53 ​ Director Onward Choi ​ 52 ​ Independent Director Jiawei Gan ​ 53 ​ Independent Director Benny Yucong Xu ​ 45 ​ Independent Director Victor Yaoyu Zhang ​ 30 ​ Chief Marketing Officer Xiaowei Li ​ 41 ​ Chief Technology Officer ​ Mr.
Directors and Senior Management The following table sets forth information regarding our executive officers and directors as of the date of this annual report. ​ Directors and Executive Officers Age Position/Title Mars Guangyuan Cai ​ 41 ​ Chairman of the board of directors and Chief Executive Officer Peifeng Xu ​ 36 ​ Director and President Maria Yi Xin ​ 39 ​ Director and Chief Financial Officer Chen Shen ​ 41 ​ Director Conor Chia-hung Yang ​ 61 ​ Independent Director Jiawei Gan ​ 54 ​ Independent Director Benny Yucong Xu ​ 46 ​ Independent Director Victor Yaoyu Zhang ​ 31 ​ Chief Marketing Officer ​ Mr.
Employees As of December 31, 2022, we had a total of 3,656 employees.
Employees As of December 31, 2021, 2022 and 2023, we had a total of 5,094, 3,656 and 3,198 employees, respectively.
As of the date of this annual report, our employees other than directors and executive officers as a group held 1,166,293 outstanding restricted share units and 1,531,514 outstanding share options. C. Board Practices Our board of directors currently consists of eight directors. A director is not required to hold any shares in our company by way of qualification.
As of March 31, 2024, our employees other than directors and executive officers as a group held 341,587 outstanding restricted share units and 2,240,064 outstanding share options. 122 Table of Contents C. Board Practices Our board of directors currently consists of seven directors. A director is not required to hold any shares in our company by way of qualification.
Mr. Gan has also served as an operating partner of Hillhouse Capital Group since 2018, responsible for providing consulting services to invested companies. From 2011 to 2016, Mr. Gan worked in several positions at Meituan (HKEx: 3690), including as chief operation officer and president of the in-store food voucher business unit. From 2000 to 2011, Mr.
Gan worked in several positions at Meituan (HKEx: 3690), including as chief operation officer and president of the in-store food voucher business unit. From 2000 to 2011, Mr. Gan worked in several positions at Alibaba Group Holding Ltd.
She served as several key investor relations roles in the company such as E-Commerce China Dangdang Inc., a leading business-to-consumer e-commerce company in China and New Oriental Education and Technology Group Inc. (NYSE: EDU ; HKEx: 9901). Ms. Xin received bachelor’s degrees in economics and law from Nankai University in China in 2007. Ms.
Prior to her tenure at Tuniu Corporation, Ms. Xin worked in equity research at China Renaissance (HKEx: 1911), a leading financial institution in China. She served as several key investor relations roles in the company such as E-Commerce China Dangdang Inc., a leading business-to-consumer e-commerce company in China and New Oriental Education and Technology Group Inc.
(11) Represents (i) 18,558,680 Class A ordinary shares held by Sky9 Capital Fund III, L.P., a Cayman Islands limited partnership, and (ii) 8,541,190 Class A ordinary shares held by Sky9 Capital MVP Fund, L.P., a Cayman Islands limited partnership. Sky9 Capital Fund III, L.P. is controlled by Sky9 Capital Fund III GP Ltd., its general partner. Mr.
The above information is based on the Schedule 13G/A filed by Beautyworks Investment Limited, among others, on February 5, 2024. 127 Table of Contents (11) Represents (i) 18,558,680 Class A ordinary shares held by Sky9 Capital Fund III, L.P., a Cayman Islands limited partnership, and (ii) 8,541,190 Class A ordinary shares held by Sky9 Capital MVP Fund, L.P., a Cayman Islands limited partnership.
Xin held various key roles, including chief financial officer and vice president of investor relations, strategic investments and international media, at Tuniu Corporation from December 2013 to May 2020. Prior to her tenure at Tuniu Corporation, Ms. Xin worked in equity research at China Renaissance (HKEx: 1911), a leading financial institution in China.
Ms. Xin has over 10 years of experience in corporate finance and capital markets with US-listed companies. Prior to joining us, Ms. Xin held various key roles, including chief financial officer and vice president of investor relations, strategic investments and international media, at Tuniu Corporation (Nasdaq: TOUR) from December 2013 to May 2020.
Compensation For the years ended December 31, 2022, we paid an aggregate of RMB9.3 million (US$1.4 million) in cash to our executive officers, and RMB1.2 million (US$0.2 million) to our non-executive directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
Compensation For the years ended December 31, 2023, we paid an aggregate of RMB12.0 million (US$1.7 million) in cash to our executive officers, and RMB1.2 million (US$0.2 million) to our non-executive directors and our former non-executive director who served in 2023.
Choi received a Bachelor of Arts degree in accountancy with honors from the Hong Kong Polytechnic University. Mr. Jiawei Gan has served as our independent director since March 2021. Mr. Gan currently serves as an independent director and the chairman of the compensation committee and the nominating and corporate governance committee of 17 Education & Technology Group Inc. (NYSE: YQ).
Gan currently serves as an independent director and the chairman of the compensation committee and the nominating and corporate governance committee of 17 Education & Technology Group Inc. (NYSE: YQ). Mr. Gan has also served as an operating partner of Hillhouse Capital Group since 2018, responsible for providing consulting services to invested companies. From 2011 to 2016, Mr.
Terms of Directors and Executive Officers Our directors may be appointed by an ordinary resolution of our shareholders.
Our officers are appointed by and serve at the discretion of the board of directors, and may be removed by our board of directors.
(10) Represents 34,158,716 Class A ordinary shares, in the form of ADSs, held by Beautyworks Investment Limited, a Cayman Islands limited company. The business address of Beautyworks Investment Limited is Suites 1702-03, 17/F, One Exchange Square, 8 Connaught Place, Central, Hong Kong.
The business address of Beautyworks Investment Limited, Advantech Master Investment Limited, Advantech Capital Partners Ltd. and Advantech Capital L.P. is Suites 1707-08, 17/F, One Exchange Square, 8 Connaught Place, Central, Hong Kong.
Onward Choi has served as our independent director since March 2021. Mr. Choi also serves as an independent director and the chairman of the audit committee of both Tuniu Corporation (Nasdaq: TOUR) and Ucloudlink Group Inc. (Nasdaq: UCL). Mr. Choi was the acting chief financial officer of NetEase, Inc. (Nasdaq: NTES; HKEx: 9999) from July 2007 to June 2017. Mr.
Conor Chia-hung Yang has served as our independent director since June 2023. Mr. Yang has been the chief financial officer of EHang Holdings Limited (Nasdaq: EH) since September 2023. From 2007 to 2023, Mr. Yang served in several chief financial officer positions, including Tuniu Corporation (Nasdaq: TOUR), E-Commerce China Dangdang Inc. and AirMedia Group Inc. Mr.
Removed
Maria Yi Xin is our partner, and has been serving as our chief financial officer since June 2020 and our director since December 2020. Ms. Xin has over 10 years of experience in corporate finance and capital markets with US-listed companies. Prior to joining us, Ms.
Added
(NYSE: EDU ; HKEx: 9901). Ms. Xin received bachelor’s degrees in economics and law from Nankai University in China in 2007. Ms. Chen Shen has been serving as our director since June 2023. Ms. Shen currently serves as a director of strategic investments at Alibaba Group Holding Ltd. (NYSE: BABA) and serves as a director of Best Inc.
Removed
Xiao Xiao has been serving as our director since December 2022. Ms. Xiao currently serves as an investment director at Alibaba Group Holding Ltd. (NYSE: BABA; HKEx: 9988), where she has served since 2020. Prior to that, Ms. Xiao had a career spanning across key roles at a number of companies, including Cathay Capital and Fresh Capital. Ms.
Added
(NYSE: BEST), Sanjiang Shopping Club Co., Ltd. (SSE: 601116), New Hua Du Supercenter Co., Ltd. (SZSE: 002264) and Xiaoju Kuaizhi Inc. (OTCPK: DIDI.Y). Prior to joining Alibaba Group Holding Ltd. in 2018, she served as senior investment officer in International Finance Corporation at World Bank Group from 2017 to 2018.
Removed
Xiao received a bachelor’s degree in engineering from Tsinghua University and an MBA from the Hong Kong University of Science and Technology. Mr. Feng Zhang has been serving as our director since July 2017. Mr. Zhang joined Xiaomi Corporation (HKEx: 1810) since September 2016 and currently serves as the group partner and senior vice president. Mr.
Added
She was an associate from 2010 to 2012 and then vice president of CDH Investments from 2013 to 2016. She also served as an investment analyst and then associate at China International Capital Corporation Limited from 2004 to 2008. Ms. Shen holds a bachelor’s degree from Fudan University and an MBA degree from Columbia University. Mr.
Removed
Zhang has spent over 20 years in the mobile phone and communication industry. He founded Jiangsu Zimi Electronic Technology Co. Ltd. and served as its general manager in 2013, and the company later became one of Xiaomi’s wholly owned subsidiaries in 2021. Prior to that, Mr.
Added
Yang was the chief executive officer of Rock Mobile Corporation from 2004 to 2007, and the chief financial officer of the Asia Pacific region for CellStar Asia Corporation from 1999 to 2004. Prior to that, Mr. Yang was a senior banker at Goldman Sachs (Asia) L.L.C., Lehman Brothers Asia Limited and Morgan Stanley Asia Limited from 1992 to 1999. Mr.
Removed
Zhang served as various roles, including engineer, R&D manager, supply chain director, vice president and general manager, at Inventec group’s Nanjing branch for almost 20 years from 1993 to 2012. Mr. Zhang received a bachelor’s degree in radio electronics from University of Shanghai for Science and Technology in 1991. 122 Table of Contents Mr.
Added
Yang currently also serves as an independent director of I-Mab (Nasdaq: IMAB), iQIYI, Inc. (Nasdaq: IQ), Tongcheng Travel Holdings Limited (HKEx: 0780) and UP Fintech Holding Ltd. (Nasdaq: TIGR). Mr. Yang received his master’s degree in business administration from the University of California, Los Angeles. Mr. Jiawei Gan has served as our independent director since March 2021. Mr.
Removed
Choi also serves as an independent non-executive director and the chairman of the audit committee of Beijing Jingkelong Company Limited (HKEx: 0814) and Tongdao Liepin Group (HKEx: 6100). Mr. Choi is a fellow member of the Association of Chartered Certified Accountants, CPA Australia and the Hong Kong Institute of Certified Public Accountants. Mr.
Added
We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
Removed
Li served as general manager of R&D Center and general manager of Tuniu Communications at Tuniu Corporation (Nasdaq: TOUR) from August 2014 to June 2017. Prior to that, he served as the head of cloud computing development at FUJITSU in Nanjing from January 2013 to August 2014. Mr.
Added
(3) Represents 7,414,766 Class A ordinary shares and 1,586,779 Class A ordinary shares, in the form of ADSs, held by LIGAN Legend Limited, a British Virgin Islands company wholly owned by Jiawei Gan.
Removed
Li also worked as a senior engineer at NDS from March 2010 to August 2010, innovative engineer at Anevia from March 2009 to August 2010, as well as a software development engineer at Orange Lab from October 2007 to March 2009. Mr.
Added
SV GP I Ltd. is wholly owned by THE EDGEOF, PTE. LTD. The ultimate beneficial owners of THE EDGEOF, PTE. LTD. are Mr. Taira Atsushi, Mr. Son Taejang, who owns his equity interests through Belleisle Japan Inc., and Mr. Lee Joonpyo, who owns his equity interests through WAVEMAKER CO., LTD. The business address of China Ventures Fund I Pte.
Removed
Li received his master’s degree in computer systems networking and telecommunications from Université Pierre-et-Marie-Curie in 2007 and his bachelor’s degree in telecommunications engineering from Southeast University in China in 2004. B.
Added
Ltd., is 9 Raffles Place, #27-00, Republic Plaza, Singapore 048619. The above information is based on the Schedule 13G/A filed by China Ventures Fund I, Limited Partnership, among others, on February 8, 2024.
Removed
We have not experienced any material labor disputes or strikes that may have a material and adverse effect on our business, financial condition or results of operations.
Added
(10) Represents 34,020,246 Class A ordinary shares, in the form of ADSs, which Beautyworks Investment Limited, Advantech Master Investment Limited, Advantech Capital Partners Ltd. and Advantech Capital L.P. have the shared power to vote or to direct the disposition of.
Removed
Ltd. is wholly owned by China Ventures Fund I, Limited Partnership, which is, in turn, controlled by SV GP I Ltd. SV GP I Ltd. is wholly owned by SV China Holdco Ltd., which is, in turn, wholly owned by Softbank Ventures Asia Corp.
Removed
Softbank Ventures Asia Corp. is wholly owned by Softbank Korea Corp., which is, in turn, wholly owned by Softbank Group Corp. Mr. Masayoshi Son holds 21.25% equity interest in and is the largest shareholder of Softbank Group Corp.
Removed
The business address of China Ventures Fund I, Limited Partnership, is 19F, B Wing, Kyobo Tower, 465, Gangnam-daero, Seoul, Seocho-gu 06611, South Korea. The above information is based on the Schedule 13G filed by China Ventures Fund I, Limited Partnership on February 15, 2022.
Removed
The above information is based on the Schedule 13G/A filed by Beautyworks Investment Limited, among others, on February 8, 2023. Beautyworks Investment Limited is wholly owned by Advantech Master Investment Limited, which is, in turn, wholly owned by Advantech Capital L.P., and this information is based on the 424B4 prospectus filed by our company on April 2, 2021.

Item 7. Management's Discussion & Analysis

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

8 edited+0 added−2 removed9 unchanged
We will bear all registration expenses in connection with any demand, piggyback or Form F-3 registration, other than the selling expenses or other amounts payable to underwriter(s), brokers or the depositary bank in connection with such offering by the holders. 131 Table of Contents Termination of Registration Rights.
We will bear all registration expenses in connection with any demand, piggyback or Form F-3 registration, other than the selling expenses or other amounts payable to underwriter(s), brokers or the depositary bank in connection with such offering by the holders. Termination of Registration Rights.
We also issued notes payable to ZMI in connection with power bank and cabinet purchases, with a term ranging from three to six months. As of December 31, 2020, 2021 and 2022, the amounts due on these notes were RMB77.9 million, RMB23.3 million and nil, respectively. C. Interests of Experts and Counsel Not applicable.
We also issued notes payable to ZMI in connection with power bank and cabinet purchases, with a term ranging from three to six months. As of December 31, 2021, 2022 and 2023, the amounts due on these notes were RMB23.3 million, nil and nil, respectively. C. Interests of Experts and Counsel Not applicable.
We shall effect the registration of the securities on Form F-3 as soon as practicable, except in certain circumstances. Piggyback Registration Rights.
We shall effect the registration of the securities on Form F-3 as soon as practicable, except in certain circumstances. 128 Table of Contents Piggyback Registration Rights.
As of December 31, 2020 and 2021 and 2022, we had amounts due from one of our suppliers, ZMI (Hong Kong) International Company Limited, or ZMI, totaling RMB23.6 million, RMB20.0 million and RMB0.1 million (US$0.0 million), respectively, in connection with the prepayments we made to ZMI for power bank and cabinet purchases.
Transactions with ZMI (Hong Kong) International Company Limited. As of December 31, 2021, 2022 and 2023, we had amounts due from one of our suppliers, ZMI (Hong Kong) International Company Limited, or ZMI, totaling RMB20.0 million, RMB0.1 million and nil, respectively, in connection with the prepayments we made to ZMI for power bank and cabinet purchases.
The registration rights will terminate with respect to any holder of registrable securities upon the seventh anniversary following the completion of our initial public offering. Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—B. Compensation—Employment Agreements and Indemnification Agreements.” Share Incentive Plan See “Item 6. Directors, Senior Management and Employees—B.
The registration rights will terminate with respect to any holder of registrable securities on April 6, 2028. Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—B. Compensation—Employment Agreements and Indemnification Agreements.” Share Incentive Plan See “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” Transactions with Our Shareholders Transactions with People Better Limited.
Compensation—Share Incentive Plan.” Transactions with Our Shareholders Transactions with People Better Limited. In May 2020, we entered into a capital lease agreement for cabinets with People Better Limited, with a term of one year, a selling price of RMB50.0 million and a total rental payment of RMB51.6 million.
In May 2020, we entered into a capital lease agreement for cabinets with People Better Limited, with a term of one year, a selling price of RMB50.0 million and a total rental payment of RMB51.6 million. We have the option to purchase the cabinets at the nominal price at the end of the lease term.
In November 2020, we repaid the remaining lease payments in advance and received deposit refund of RMB8.6 million. Total interest expense in connection with the lease amounted to RMB1.0 million, which included early repayment penalty. Transactions with ZMI (Hong Kong) International Company Limited.
The RMB50.0 million received from People Better Limited was recognized as a financial liability as the transaction failed to qualify as a sale-and-leaseback transaction. In November 2020, we repaid the remaining lease payments in advance and received deposit refund of RMB8.6 million. Total interest expense in connection with the lease amounted to RMB1.0 million, which included early repayment penalty.
If, at any time following the earlier of (i) six months after the effective date of the registration statement of our initial public offering and (ii) 48 months from the initial closing date of the Series D preferred shares, holders of registrable securities holding 20% or more voting power of the then outstanding registrable securities may request by written notice that we effect a registration of the registrable securities under the Securities Act of such requesting shareholder’s registrable securities.
Set forth below is a description of the registration rights granted under the shareholders agreement. Demand Registration Rights. If holders of registrable securities holding 20% or more voting power of the then outstanding registrable securities may request by written notice that we effect a registration of the registrable securities under the Securities Act of such requesting shareholder’s registrable securities.
Removed
Set forth below is a description of the registration rights granted under the shareholders agreement. Demand Registration Rights.
Removed
We have the option to purchase the cabinets at the nominal price at the end of the lease term. The RMB50.0 million received from People Better Limited was recognized as a financial liability as the transaction failed to qualify as a sale-and-leaseback transaction.

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