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Token Cat Ltd

Token Cat LtdTC财报

Nasdaq · 工业 · 其他商业服务

What changed in Token Cat Ltd's 20-F — 2022 vs 2023

Top changes in Token Cat Ltd's 2023 20-F

504 paragraphs added · 534 removed · 427 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

180 edited+50 added−61 removed607 unchanged
If our and the VIEs industry customers fail to pay us and the VIEs within the pre-agreed payment periods, or if we and the VIEs are unable to collect the proceeds from secondary dealers before or shortly after we and the VIEs pay automakers or franchised dealerships, we and the VIEs may have outlay capital, which might impose a strain on our and the VIEs’ working capital.
If our and the VIEs’ industry customers fail to pay us and the VIEs within the pre-agreed payment periods, or if we and the VIEs are unable to collect the proceeds from secondary dealers before or shortly after we and the VIEs pay automakers or franchised dealerships, we and the VIEs may have outlay capital, which might impose a strain on our and the VIEs’ working capital.
Based on cash flow projections from operating and financing activities and our current balance of cash and cash equivalents, our management believes that our current cash and cash equivalents and anticipated cash flow from operations upon successful execution of our business plans will be sufficient to meet our anticipated cash needs from operations and other commitments for at least the next 12 months from the date of this annual report.
Based on cash flow projections from operating and financing activities and our current balance of cash and cash equivalents, our management believes that our current cash and cash equivalents and anticipated cash flow from operations upon successful execution of our business plans and financing plans will be sufficient to meet our anticipated cash needs from operations and other commitments for at least the next 12 months from the date of this annual report.
The Special Administrative Measures (Negative Lest) for Foreign Investment Access (2021 Version) (the “Negative List (2021 version)”) stipulates that any domestic enterprise in China engaging in prohibited business under the Negative List shall be subject to review by and shall obtain the consent of the relevant competent PRC authorities for overseas listing, and the foreign investors shall not participate in the operation and management of such enterprise, and the shareholding percentage of the foreign investors in such enterprise shall be subject, mutatis mutandis , to the relevant administrative provisions of the PRC domestic securities investment by foreign investors.
The Special Administrative Measures (Negative List) for Foreign Investment Access (2021 Version) (the “Negative List (2021 version)”) stipulates that any domestic enterprise in China engaging in prohibited business under the Negative List shall be subject to review by and shall obtain the consent of the relevant competent PRC authorities for overseas listing, and the foreign investors shall not participate in the operation and management of such enterprise, and the shareholding percentage of the foreign investors in such enterprise shall be subject, mutatis mutandis, to the relevant administrative provisions of the PRC domestic securities investment by foreign investors.
For example, two weeks prior to an auto show in April 2018 in Beijing National Stadium, the local public security authority abruptly demanded that the VIEs suspend the auto show for one morning, even though the VIEs had already obtained the required approvals. Under such circumstances, we and the VIEs usually negotiate with industry customers to reschedule the auto show.
For example, two weeks prior to an auto show in April 2018 in Beijing National Stadium, the local public security authority demanded that the VIEs suspend the auto show for one morning, even though the VIEs had already obtained the required approvals. Under such circumstances, we and the VIEs usually negotiate with industry customers to reschedule the auto show.
In addition, under PRC law, rulings by arbitrators are final, parties cannot appeal the arbitration results in courts, and if the losing parties fail to carry out the arbitration awards within a prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition proceedings, which would require additional expenses and delay.
In addition, under PRC law, rulings by arbitrators are final, parties cannot appeal the arbitration results in courts, and if the losing parties fail to carry out the arbitration awards within a prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition proceedings, which would require additional expenses and time.
As a result, our and the VIEs’ business and financial condition may be adversely affected. In addition, we cannot assure you that the PRC regulatory authorities will not impose more stringent restrictions on the convertibility of Renminbi in the future, especially with respect to foreign exchange transactions.
As a result, our and the VIEs’ business and financial condition may be adversely affected. In addition, we cannot assure you that the PRC regulatory authorities will not impose more restrictions on the convertibility of Renminbi in the future, especially with respect to foreign exchange transactions.
Under the deposit agreement for the ADSs, if you do not vote, the depositary will give us a discretionary proxy to vote our underlying Class A ordinary shares represented by your ADSs at shareholders’ meetings if: ● we have timely provided the depositary with notice of meeting and related voting materials ; ● we have instructed the depositary that we wish to receive a proxy to vote uninstructed shares; ● we have informed the depositary that we reasonably do not know any substantial opposition as to a matter to be voted on at the meeting; or ● we have informed the depositary that such matter to be voted on at the meeting is not materially adverse to the interest of shareholders. 62 Table of Contents The effect of this discretionary proxy is that if you do not vote at shareholders’ meetings, you cannot prevent our underlying Class A ordinary shares represented by your ADSs from being voted, except that we fail to meet the conditions described above.
Under the deposit agreement for the ADSs, if you do not vote, the depositary will give us a discretionary proxy to vote our underlying Class A ordinary shares represented by your ADSs at shareholders’ meetings if: ● we have timely provided the depositary with notice of meeting and related voting materials ; ● we have instructed the depositary that we wish to receive a proxy to vote uninstructed shares; ● we have informed the depositary that we reasonably do not know any substantial opposition as to a matter to be voted on at the meeting; or ● we have informed the depositary that such matter to be voted on at the meeting is not materially adverse to the interest of shareholders. 61 Table of Contents The effect of this discretionary proxy is that if you do not vote at shareholders’ meetings, you cannot prevent our underlying Class A ordinary shares represented by your ADSs from being voted, except that we fail to meet the conditions described above.
However, there is no assurance that the plans will be successfully implemented. Failure to successfully implement the plan will have a material adverse effect on our and the VIEs’ business, results of operations and financial position, and may materially and adversely affect our ability to continue as a going concern.
However, there is no assurance that the plans will be successfully implemented. Failure to successfully implement the plans will have a material adverse effect on our and the VIEs’ business, results of operations and financial position, and may materially and adversely affect our ability to continue as a going concern.
The applicable foreign exchange circulars and rules may significantly limit our ability to convert, transfer and use the net proceeds from our overseas offerings or any offering of additional equity securities in China, which may adversely affect our and the VIEs’ business, financial condition and results of operations.
The applicable foreign exchange circulars and rules may limit our ability to convert, transfer and use the net proceeds from our overseas offerings or any offering of additional equity securities in China, which may adversely affect our and the VIEs’ business, financial condition and results of operations.
However, we and the VIEs’ may have disagreements or disputes with such third-party business partners, or our and the VIEs’ interests may not be aligned with theirs, which could cause disruptions to or terminations of such business collaboration and adversely affect our and the VIEs’ reputation, results of operations, and financial condition.
However, we and the VIEs may have disagreements or disputes with such third-party business partners, or our and the VIEs’ interests may not be aligned with theirs, which could cause disruptions to or terminations of such business collaboration and adversely affect our and the VIEs’ reputation, results of operations, and financial condition.
To the extent any fluctuations in the Chinese economy significantly affect the demand from automakers or auto dealers for our and the VIEs’ services or change the spending habits of automobile consumers, our and the VIEs’ business, results of operations, and financial condition may be materially and adversely affected.
To the extent any fluctuations in the Chinese and global economy significantly affect the demand from automakers or auto dealers for our and the VIEs’ services or change the spending habits of automobile consumers, our and the VIEs’ business, results of operations, and financial condition may be materially and adversely affected.
In addition, volatility in the NEV industry may materially and adversely affect our business, prospects, operating results and financial condition. The sales volume of NEVs in China may not grow at the rate that we expect, or at all.
In addition, potential volatility in the NEV industry may materially and adversely affect our business, prospects, operating results and financial condition. The sales volume of NEVs in China may not grow at the rate that we expect, or at all.
Furthermore, such collaborations are subject to numerous risks, which may include the following: ● such collaboration may fail to integrate into our current product and service offerings; ● collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration project; ● collaborators may not pursue the research, development and commercialization of our NEVs or may elect not to continue or renew our collaboration due to availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; ● collaborators could independently develop, or develop with third parties, NEVs that compete directly or indirectly with our NEV products or product candidates; ● disputes may arise between us and collaborators that cause delays in or termination of the research, development or commercialization of our NEVs, or that result in costly litigation or arbitration that diverts management’s attention and resources; and/or ● collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further research, development or commercialization initiatives.
Furthermore, such collaborations are subject to numerous risks, which may include the following: ● such collaboration may fail to integrate into our current product and service offerings; ● collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration project; ● collaborators may not pursue the research, development and commercialization of our NEVs or may elect not to continue or renew our collaboration due to availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; ● collaborators could independently develop, or develop with third parties, NEVs that compete directly or indirectly with our NEV products or product candidates; 14 Table of Contents ● disputes may arise between us and collaborators that cause delays in or termination of the research, development or commercialization of our NEVs, or that result in costly litigation or arbitration that diverts management’s attention and resources; and/or ● collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further research, development or commercialization initiatives.
As a result, you may not be afforded the same protections or information, which would be made available to you, were you investing in a U.S. domestic issuer. 61 Table of Contents As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq corporate governance listing standards.
As a result, you may not be afforded the same protections or information, which would be made available to you, were you investing in a U.S. domestic issuer. 60 Table of Contents As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with Nasdaq corporate governance listing standards.
It is advisable that you consult legal counsel regarding the jury waiver provision before entering into the deposit agreement. 63 Table of Contents If you or any other holders or beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under federal securities laws, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and/or the depositary.
It is advisable that you consult legal counsel regarding the jury waiver provision before entering into the deposit agreement. 62 Table of Contents If you or any other holders or beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under federal securities laws, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and/or the depositary.
In 2017, we and the VIEs expanded auto shows to tier-3 and below cities. We and the VEs began the operation of virtual dealership business in the second quarter of 2018, and we and the VIEs ceased operation of, and did not generate any revenue from, virtual dealership business in 2021.
In 2017, we and the VIEs expanded auto shows to tier-3 and below cities. We and the VIEs began the operation of virtual dealership business in the second quarter of 2018, and we and the VIEs ceased operation of, and did not generate any revenue from, virtual dealership business in 2021.
The foregoing cash flows include all distributions and transfers between our Cayman Islands holding company, our subsidiaries and the VIEs as of the date of this annual report. 7 Table of Contents Our Operations in China and Permissions Required from the PRC Authorities for Our Operations We and the VIEs have obtained all licenses, permits or approvals from the PRC regulatory authorities for our and the VIEs’ business operations of offline marketing services and online marketing services, except that we and/or the VIEs may need to obtain certain permits each time before we and/or the VIEs hold an offline event.
The foregoing cash flows include all distributions and transfers between our Cayman Islands holding company, our subsidiaries and the VIEs as of the date of this annual report. 8 Table of Contents Our Operations in China and Permissions Required from the PRC Authorities for Our Operations We and the VIEs have obtained all licenses, permits or approvals from the PRC regulatory authorities for our and the VIEs’ business operations of offline marketing services and online marketing services, except that we and/or the VIEs may need to obtain certain permits each time before we and/or the VIEs hold an offline event.
For a description of these contractual arrangements, see “Item 4. Information on the Company—C. Organizational Structure.” The revenue contribution of the VIEs accounted for a significant portion of our net revenues in 2020, 2021 and 2022. However, these contractual arrangements may not be as effective as direct equity ownership in providing us with significant influence over the VIEs.
For a description of these contractual arrangements, see “Item 4. Information on the Company—C. Organizational Structure.” The revenue contribution of the VIEs accounted for a significant portion of our net revenues in 2021, 2022 and 2023. However, these contractual arrangements may not be as effective as direct equity ownership in providing us with significant influence over the VIEs.
Certain PRC regulations, including the M&A Rules and national security regulations, may require a complicated review and approval process which could make it more difficult for us to pursue growth through acquisitions in China. The M&A Rules established additional procedures and requirements that could make merger and acquisition activities in China by foreign investors more time-consuming and complex.
Certain PRC regulations, including the M&A Rules and national security regulations, may require a comprehensive review and approval process which could make it more difficult for us to pursue growth through acquisitions in China. The M&A Rules established additional procedures and requirements that could make merger and acquisition activities in China by foreign investors more time-consuming and complex.
We cannot assure that we will remain fully compliant with all new regulatory requirements of these opinions or any future implementation rules on a timely basis, or at all. On February 17, 2023, the CSRC promulgated the Overseas Listing Trial Measures and five relevant guidelines, which will take effect on March 31, 2023.
We cannot assure that we will remain fully compliant with all new regulatory requirements of these opinions or any future implementation rules on a timely basis, or at all. On February 17, 2023, the CSRC promulgated the Overseas Listing Trial Measures and five relevant guidelines, which took effect on March 31, 2023.
As of the date of this annual report, we and the VIEs have obtained requisite licenses in full compliance with applicable laws and regulations for offline events held, and we and the VIEs have not received any inquiry or investigation from any PRC government authority regarding non-compliance of the offline events. See ““—D.
As of the date of this annual report, we and the VIEs have obtained requisite licenses in full compliance with applicable laws and regulations for offline events held, and we and the VIEs have not received any inquiry or investigation from any PRC government authority regarding non-compliance of the offline events. See “—D.
The annual car license plate quota in 2023 has been further reduced to 100,000, down from 150,000 in 2017. Some other cities in China, including Tianjin, Hangzhou, and Shenzhen, have also implemented certain interim provisions to control the quantity of small cars in the cities.
The annual car license plate quota in 2024 has been further reduced to 100,000, down from 150,000 in 2017. Some other cities in China, including Tianjin, Hangzhou, and Shenzhen, have also implemented certain interim provisions to control the quantity of small cars in the cities.
Assuming that we are the owner of the VIEs for United States federal income tax purposes, and based upon our historical and current income and assets, we do not believe that we were classified as a PFIC for the fiscal year ended December 31, 2022, and we do not expect to be classified as a PFIC for the current fiscal year.
Assuming that we are the owner of the VIEs for United States federal income tax purposes, and based upon our historical and current income and assets, we do not believe that we were classified as a PFIC for the fiscal year ended December 31, 2023, and we do not expect to be classified as a PFIC for the current fiscal year.
The PRC government may exert, at any time, substantial intervention and influence over the manner of our operations, and the rules and regulations to which we are subject, including the ways they are enforced, may change rapidly and with little advance notice to us or our shareholders.
The PRC government may exert, at any time, subject to necessary procedures, substantial intervention and influence over the manner of our operations, and the rules and regulations to which we are subject, including the ways they are enforced, may change rapidly and with little advance notice to us or our shareholders.
If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the Measures for Cybersecurity Review and the annual data security review under the Administrative Measures for Internet Data Security (Draft for Comments), are required for our listing status or future offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected.
If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the Measures for Cybersecurity Review and the annual data security review under the Administrative Measures for Internet Data Security (Draft for Comments), are required for our listing status or future offshore offerings, we could not predict whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected.
Our net revenues then decreased by 48.8% from RMB357.6 million in 2021 to RMB183.2 million (US$26.6 million) in 2022, primarily due to a reduced number of offline activities as a result of tightened government restrictions in response to regional COVID-19 outbreak.
Our net revenues then decreased by 48.8% from RMB357.6 million in 2021 to RMB183.2 million in 2022, primarily due to a reduced number of offline activities as a result of tightened government restrictions in response to regional COVID-19 outbreak.
Wei Wen beneficially owns 71.4% of the aggregate voting power of our company as of the date of this annual report. See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” As a result of the dual-class share structure and the concentration of ownership, Mr.
Mr. Wei Wen beneficially owns 69.4% of the aggregate voting power of our company as of the date of this annual report. See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” As a result of the dual-class share structure and the concentration of ownership, Mr.
This ability is subject to risks, including: ● lack of necessary funding; ● delays or disruptions in our supply chain and production, including in our procurement of raw materials and components such as chips and battery cells; ● delays in the research and development of technologies necessary for our vehicles; 12 Table of Contents ● deficiencies in quality control; ● compliance with environmental and workplace safety related laws and regulations; ● cost overruns; and ● loss of skilled and talented employees.
This ability is subject to risks, including: ● lack of necessary funding; ● delays or disruptions in our supply chain and production, including in our procurement of raw materials and components such as chips and battery cells; ● delays in the research and development of technologies necessary for our vehicles; ● deficiencies in quality control; ● compliance with environmental and workplace safety related laws and regulations; ● cost overruns; and ● loss of skilled and talented employees.
Our independent registered public accounting firm included an explanatory paragraph expressing substantial doubt relating to our ability to continue as a going concern in its report on our consolidated financial statements for the year ended December 31, 2022.
Our independent registered public accounting firm included an explanatory paragraph expressing substantial doubt relating to our ability to continue as a going concern in its report on our consolidated financial statements for the year ended December 31, 2023.
Accordingly, government actions in the future, including any decision to intervene or influence the operations of our subsidiaries in China or the VIEs at any time, or to exert control over an offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our subsidiaries in China or the VIEs, may limit or completely hinder our ability to offer or continue to offer securities to investors, and/or may cause the value of such securities to significantly decline or be worthless.
Accordingly, government actions in the future may intervene or influence the operations of our subsidiaries in China or the VIEs at any time, or exert control over an offering of securities conducted overseas and/or foreign investment in China-based issuers, which may cause us to make material changes to the operations of our subsidiaries in China or the VIEs, may limit or completely hinder our ability to offer or continue to offer securities to investors, and/or may cause the value of such securities to significantly decline or be worthless.
In response to the significant impact of the COVID-19 pandemic, we and the VIEs implemented measures to adjust the pace of business expansion and conserve resources, such as furlough arrangements and scaling back recruitment budget and employee size in 2020, 2021 and 2022.
In response to the significant impact of the COVID-19 pandemic, we and the VIEs implemented measures to adjust the pace of business expansion and conserve resources, such as furlough arrangements and scaling back recruitment budget and employee size in 2021, 2022 and 2023.
In any such event, these regulatory agencies may impose fines and penalties on our operations in China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from offshore fund-raising activities into the PRC or take other actions that could materially adversely affect our business, financial condition, results of operations, reputation and prospects, as well as the trading price of the ADSs.
In any such event, these regulatory agencies may impose fines and penalties on our operations in China, delay or restrict the repatriation of the proceeds from offshore fund-raising activities into the PRC or take other actions that could materially adversely affect our business, financial condition, results of operations, reputation and prospects, as well as the trading price of the ADSs.
As such, our subsidiaries in China and the VIEs may be subject to various government actions and regulatory interference in the provinces in which they operate. They could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions.
As such, our subsidiaries in China and the VIEs may be subject to various government actions and regulatory requirements in the provinces in which they operate. They could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions.
As a result, we do not expect to be identified as a “commission-identified issuer” under the HFCA Act for the fiscal year ended December 31, 2022 after we file our annual report on Form 20-F for the fiscal year of 2022.
As a result, we do not expect to be identified as a “commission-identified issuer” under the HFCA Act for the fiscal year ended December 31, 2023 after we file our annual report on Form 20-F for the fiscal year of 2023.
If we, our PRC subsidiaries and the VIEs fail to complete the filing with the CSRC in a timely manner, or at all, for any future offering or any other capital raising activities, which are subject to the filings under the Overseas Listing Trial Measures, due to our contractual arrangements, our ability to raise or utilize funds could be materially and adversely affected.
If we, our PRC subsidiaries and the VIEs fail to complete the filing with the CSRC in a timely manner, or at all, for any future offering or any other capital raising activities, which are subject to the filings under the Overseas Listing Trial Measures, our ability to raise or utilize funds could be materially and adversely affected.
We were not able to sustain this level of growth in 2020 due to the impact of COVID-19 that led to cancellation of most of our and the VIEs’ auto shows and offline events. Our revenue increased to RMB357.6 million (US$56.1 million) in 2021, primarily due to our continuous and expanded collaboration with a commercial bank for our referral services.
We were not able to sustain this level of growth in 2020 due to the impact of COVID-19 that led to cancellation of most of our and the VIEs’ auto shows and offline events. Our revenue increased to RMB357.6 million in 2021, primarily due to our continuous and expanded collaboration with a commercial bank for our referral services.
Wei Wen withdrew the non-binding going-private proposal, in order to open up more opportunities for our company. 56 Table of Contents We cannot assure you that Mr. Wei Wen or other members of our senior management team will not in the future propose similar going-private transactions and seek to acquire all of the outstanding ordinary shares of our company.
Wei Wen withdrew the non-binding going-private proposal, in order to open up more opportunities for our company. We cannot assure you that Mr. Wei Wen or other members of our senior management team will not in the future propose similar going-private transactions and seek to acquire all of the outstanding ordinary shares of our company.
The liquidity risks could materially and adversely affect our business, results of our and the VIEs’ operations, and financial condition. 13 Table of Contents We have entered into collaboration, and may establish or seek collaborations, strategic alliances or equity investment in connection with our expansion into the NEV industry in the future, and we may not timely realize the benefits of such arrangements.
The liquidity risks could materially and adversely affect our business, results of our and the VIEs’ operations, and financial condition. We have entered into collaboration, and may establish or seek collaborations, strategic alliances or equity investment in connection with our expansion into the NEV industry in the future, and we may not timely realize the benefits of such arrangements.
In 2020, 2021 and 2022, our PRC subsidiaries received cash of nil, RMB2.0 million and nil, respectively, from the VIEs for services rendered to the VIEs and their subsidiaries. In 2020, 2021 and 2022, our PRC subsidiaries paid cash of nil, RMB0.6 million and nil, respectively, to the VIEs for services provided by the VIEs and their subsidiaries.
In 2021, 2022 and 2023, our PRC subsidiaries received cash of RMB2.0 million, nil and nil, respectively, from the VIEs for services rendered to the VIEs and their subsidiaries. In 2021, 2022 and 2023, our PRC subsidiaries paid cash of RMB0.6 million, nil and nil, respectively, to the VIEs for services provided by the VIEs and their subsidiaries.
The Overseas Listing Trial Measures will comprehensively improve and reform the existing regulatory regime for overseas offering and listing of securities of PRC domestic companies and will regulate both direct and indirect overseas offering and listing of securities of PRC domestic companies by adopting a filing-based regulatory regime.
The Overseas Listing Trial Measures will comprehensively improve and reform the previous regulatory regime for overseas offering and listing of securities of PRC domestic companies and will regulate both direct and indirect overseas offering and listing of securities of PRC domestic companies by adopting a filing-based regulatory regime.
A. [Reserved] B. Capitalization and Indebtedness Not applicable. 8 Table of Contents C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors An investment in the ADSs involves risks.
A. [Reserved] B. Capitalization and Indebtedness Not applicable. 9 Table of Contents C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors An investment in the ADSs involves risks.
Any resulting liability or expenses, or changes required of our and the VIEs’ websites to reduce the risk of future liability, may have a material adverse effect on our and the VIEs’ business, financial condition, and results of operations. 25 Table of Contents We and the VIEs may be subject to liability for placing advertisements with inappropriate or misleading content.
Any resulting liability or expenses, or changes required of our and the VIEs’ websites to reduce the risk of future liability, may have a material adverse effect on our and the VIEs’ business, financial condition, and results of operations. We and the VIEs may be subject to liability for placing advertisements with inappropriate or misleading content.
For more information, see “Item 10. Additional Information—E. Taxation—United States Federal Income Taxation.” 59 Table of Contents Our memorandum and articles of association contains anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A ordinary shares and ADSs.
For more information, see “Item 10. Additional Information—E. Taxation—United States Federal Income Taxation.” Our memorandum and articles of association contains anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A ordinary shares and ADSs.
As of the date of this annual report, except as disclosed above, we and the VIEs have obtained requisite licenses in full compliance with applicable laws and regulations for offline events held, and we and the VIEs have not received any inquiry or investigation from any PRC government authority regarding non-compliance of the offline events.
As of the date of this annual report, we and the VIEs have obtained requisite licenses in full compliance with applicable laws and regulations for offline events held, and we and the VIEs have not received any inquiry or investigation from any PRC government authority regarding non-compliance of the offline events.
See “—Our and the VIEs’ business operations have been and may continue to be materially and adversely affected by the COVID-19 pandemic.” In addition, the economic downturn may reduce the number of automakers and auto dealers in China resulting in the decrease of the demand for our and the VIEs’ services.
See “—Our and the VIEs’ business operations have been and may continue to be materially and adversely affected by the COVID-19 pandemic.” 21 Table of Contents In addition, the economic downturn may reduce the number of automakers and auto dealers in China resulting in the decrease of the demand for our and the VIEs’ services.
A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere. 60 Table of Contents In addition, we conduct substantially all of our business operations in emerging markets, including China, and substantially all of our directors and senior management are based in China. The SEC, U.S.
A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere. In addition, we conduct substantially all of our business operations in emerging markets, including China, and substantially all of our directors and senior management are based in China. The SEC, U.S.
As of the date of this annual report, TuanChe Internet Information Service (Beijing) Co., Ltd. has obtained certain value-added telecommunications service license for the operation of internet content service from the Beijing Administration of Telecommunications which will remain valid until September 2023, Shenzhen Drive New Media Co., Ltd. has obtained certain value-added telecommunications service license for the operation of internet content service from the Guangdong Administration of Telecommunications which will remain valid until June 2024, and TuanChe (Beijing) Automobile Sales & Service Co., Ltd., a subsidiary of TuanChe Internet, has obtained certain value-added telecommunications service license for the operation of internet content service from the Beijing Administration of Telecommunications which will remain valid until January 2026.
As of the date of this annual report, TuanChe Internet Information Service (Beijing) Co., Ltd. has obtained certain value-added telecommunications service license for the operation of internet content service from the Beijing Administration of Telecommunications which will remain valid until September 2028, Shenzhen Drive New Media Co., Ltd. has obtained certain value-added telecommunications service license for the operation of internet content service from the Guangdong Administration of Telecommunications which will remain valid until June 2029, and TuanChe (Beijing) Automobile Sales & Service Co., Ltd., a subsidiary of TuanChe Internet, has obtained certain value-added telecommunications service license for the operation of internet content service from the Beijing Administration of Telecommunications which will remain valid until January 2026.
As of the date of this annual report, we and the VIEs have registered certain regional offices, including those in Shenzhen, Chongqing, Tianjin, Hangzhou, Xi’an, Harbin, Hefei and Shijiazhuang, as our and the VIEs’ branches, and we and the VIEs’ have not yet received any inquiry or investigation from any PRC government authority regarding the absence of any registration.
As of the date of this annual report, we and the VIEs have registered certain regional offices, including those in Shenzhen, Chongqing, Tianjin, Hangzhou, Xi’an, Harbin, Hefei, Nanjing, Wuha, Chengdu, Zhengzhou and Shijiazhuang, as our and the VIEs’ branches, and we and the VIEs’ have not yet received any inquiry or investigation from any PRC government authority regarding the absence of any registration.
If the CSRC or any other PRC regulatory body subsequently determines that we need to file with the CSRC or obtain the CSRC’s approval to maintain our listing status on U.S. exchanges or if the CSRC or any other PRC government authorities promulgates any interpretation or implements rules that would require us to file with or obtain approvals of the CSRC or other governmental bodies for any such listing status, we may face adverse actions that could have a material and adverse effect on our business, reputation, financial condition, results of operations, prospects, as well as the trading price of the ADSs.
If the CSRC or any other PRC regulatory body in the future determines that we need to file with the CSRC or obtain the CSRC’s approval to maintain our listing status on U.S. exchanges or if the CSRC or any other PRC government authorities promulgates any interpretation or implements rules that would require us to file with or obtain approvals of the CSRC or other governmental bodies for any such listing status, and if we fail to comply with such requirements, we may face adverse actions that could have a material and adverse effect on our business, reputation, financial condition, results of operations, prospects, as well as the trading price of the ADSs.
Any such restrictions may materially affect such entities’ ability to make dividends or make payments, in service fees or otherwise, to us, which may materially and adversely affect our and the VIEs’ business, financial condition and results of operations. ​ 45 Table of Contents Fluctuations in the value of the Renminbi may have a material adverse effect on your investment.
Any such restrictions may materially affect such entities’ ability to make dividends or make payments, in service fees or otherwise, to us, which may materially and adversely affect our and the VIEs’ business, financial condition and results of operations. ​ 45 Table of Contents Fluctuations in exchange rates may have a material adverse effect on your investment.
For example, TuanChe Internet has obtained certain value-added telecommunications service license for the operation of internet content service from the Beijing Administration of Telecommunications which will remain valid until September 2023, Drive New Media has obtained certain value-added telecommunications service license for the operation of internet content service from the Guangdong Administration of Telecommunications which will remain valid until June 2024, and TuanChe (Beijing) Automobile Sales & Service Co., Ltd., a subsidiary of TuanChe Internet, has obtained certain value-added telecommunications service license for the operation of internet content service from the Beijing Administration of Telecommunications which will remain valid until January 2026.
For example, TuanChe Internet has obtained certain value-added telecommunications service license for the operation of internet content service from the Beijing Administration of Telecommunications which will remain valid until September 2028, Drive New Media has obtained certain value-added telecommunications service license for the operation of internet content service from the Guangdong Administration of Telecommunications which will remain valid until June 2029, and TuanChe (Beijing) Automobile Sales & Service Co., Ltd., a subsidiary of TuanChe Internet, has obtained certain value-added telecommunications service license for the operation of internet content service from the Beijing Administration of Telecommunications which will remain valid until January 2026.
On February 24, 2023, the CSRC published the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises (the “Provisions on Confidentiality and Archives Administration”), which will come into effect on March 31, 2023.
On February 24, 2023, the CSRC published the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises (the “Provisions on Confidentiality and Archives Administration”), which came into effect on March 31, 2023.
Risk Factors—Risks Related to Our Business and Industry—Our and the VIEs’ failure to obtain necessary permits for offline events may subject us and the VIEs to penalties and adversely affect our business, results of operations, and financial condition.” However, the licensing requirements in China are constantly evolving, and we may be subject to more stringent regulatory requirements due to changes in the political or economic policies in the relevant jurisdictions.
Risk Factors—Risks Related to Our Business and Industry—Our and the VIEs’ failure to obtain necessary permits for offline events may subject us and the VIEs to penalties and adversely affect our business, results of operations, and financial condition.” However, the licensing requirements in China are constantly evolving, and we may be subject to more stringent regulatory requirements due to changes in the relevant jurisdictions in the future.
Certain existing shareholders have substantial influence over our company and their interests may not be aligned with the interests of our other shareholders. As of the date of this annual report, our directors, officers and principal shareholders collectively own an aggregate of 73.3% of the total voting power of our outstanding ordinary shares.
Certain existing shareholders have substantial influence over our company and their interests may not be aligned with the interests of our other shareholders. As of the date of this annual report, our directors, officers and principal shareholders collectively own an aggregate of 69.4% of the total voting power of our outstanding ordinary shares.
Risks Related to Our Business and Industry We rely on China’s automotive industry for our net revenues and future growth, the prospects of which are subject to many uncertainties, including government regulations and policies. We rely on China’s automotive industry for our net revenues and future growth.
Risks Related to Our Business and Industry We rely on China’s automotive industry for our net revenues and future growth, the prospects of which are subject to many factors, including the relevant government regulations and policies. We rely on China’s automotive industry for our net revenues and future growth.
On February 17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies (the “Overseas Listing Trial Measures”) and five relevant guidelines, which will become effective on March 31, 2023.
On February 17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies (the “Overseas Listing Trial Measures”) and five relevant guidelines, which became effective on March 31, 2023.
If we and the VIEs lose the services of any of our and the VIEs’ key executive officers, senior management, or other key employees, or are unable to retain, recruit and hire sufficiently qualified staff, our and the VIEs’ ability to effectively manage and execute our and the VIEs’ operations and meet our and the VIEs’ strategic objectives could be harmed.
Therefore, if we and the VIEs lose the services of any of our and the VIEs’ key executive officers, senior management, or other key employees, or are unable to retain, recruit and hire experienced staff, our and the VIEs’ ability to effectively manage and execute our and the VIEs’ operations and meet our and the VIEs’ strategic objectives could be harmed.
In October 2019, the SAFE promulgated the Circular Regarding Further Promotion of the Facilitation of Cross-Border Trade and Investment (“SAFE Circular 28”), pursuant to which all foreign-invested enterprises can make equity investments in the PRC with their capital funds in accordance with the law.
In October 2019, the SAFE promulgated the Circular Regarding Further Promotion of the Facilitation of Cross-Border Trade and Investment (“SAFE Circular 28”), which was further amended in December 2023, pursuant to which all foreign-invested enterprises can make equity investments in the PRC with their capital funds in accordance with the law.
We face a number of risks and challenges in China’s NEV industry, including but not limited to our ability to develop and produce safe, reliable and high quality NEVs, advance our technologies, expand our sales and service network, market and promote our products and services, improve our operational efficiency and attract, retain and motivate our employees, in particular, our R&D personnel.
We face a number of risks and challenges for our NEV business in China, including but not limited to our ability to develop and produce safe, reliable and high quality NEVs, advance our technologies, expand our sales and service network, market and promote our products and services, improve our operational efficiency and attract, retain and motivate our employees, in particular, our R&D personnel.
Although we and the VIEs have endeavored and will continue to endeavor to obtain all necessary permits according to our and the VIEs’ estimate of the condition of each specific event, we cannot assure you that we and the VIEs have been or will continue to be in full compliance with the licensing requirements for all the offline events we and the VIEs have held or will hold because the regulatory practices with respect to an offline event vary among different regions and the local authorities retain broad discretion in enforcing the licensing requirements.
Although we and the VIEs have endeavored and will continue to endeavor to obtain all necessary permits according to our and the VIEs’ estimate of the condition of each specific event, we cannot assure you that we and the VIEs have been or will continue to be in full compliance with the licensing requirements for all the offline events we and the VIEs have held or will hold because the regulatory practices with respect to an offline event vary among different regions and the local authorities consider multiple factors in enforcing the licensing requirements.
Failure to comply with these requirements could subject us and the VIEs to fines and penalties. 50 Table of Contents We face regulatory uncertainties in China that could restrict our ability to grant share incentive awards to our employees or consultants who are PRC citizens.
Failure to comply with these requirements could subject us and the VIEs to fines and penalties. We face regulatory uncertainties in China that could restrict our ability to grant share incentive awards to our employees or consultants who are PRC citizens.
These risks are discussed more fully below and include, but are not limited to, risks related to: Risks Related to Our Business and Industry ● our reliance on China’s automotive industry for our net revenues and future growth; ● material and adverse impact from the COVID-19 pandemic on our business operations; ● our dependence on collaboration with our industry customers; ● our ability to attract and retain automobile consumers; ● our limited track record in operating in the NEV industry; ● intense competition in China’s NEV market; ● our ability to successfully expand into the NEV industry; Risks Related to Our Corporate Structure ● the agreements that establish the structure for operating some of our operations in China to be found not compliant with PRC regulations relating to the relevant industries; ● uncertainties with respect to the interpretation and implementation of the PRC Foreign Investment Law; ● our ability to receive dividends and other distributions on equity paid by our subsidiaries in China and Hong Kong; ● the risk of losing the ability to use and enjoy assets held by our VIEs and their subsidiaries that are important to our business if our VIEs and their subsidiaries declare bankruptcy or become subject to a dissolution or liquidation proceeding; Risks Related to Doing Business in China ● impact from PRC economic, political and social conditions, as well as changes in any government policies, laws and regulations; 9 Table of Contents ● uncertainties with respect to the PRC legal system; ● the influence of the PRC government on our operations; ● the approval from government authorities for our future offshore offering under PRC law; ● us being classified as a PRC resident enterprise for PRC enterprise income tax purposes; Risks Related to Our Securities, including the ADSs ● We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements; ● The trading price of the ADSs is likely to be volatile, which could result in substantial losses to investors; ● Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial; ● Substantial future sales or perceived potential sales of the ADSs in the public market could cause the price of the ADSs to decline; ● If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the ADSs and trading volume could decline; ● Uncertainty involving certain proposed transactions that we have announced from time to time may adversely affect our business and the market price of the ADSs.
These risks are discussed more fully below and include, but are not limited to, risks related to: Risks Related to Our Business and Industry ● our reliance on China’s automotive industry for our net revenues and future growth; ● our dependence on collaboration with our industry customers; ● our ability to attract and retain automobile consumers; ● our limited track record in operating in the NEV industry; ● intense competition in China’s NEV market; ● our ability to successfully expand into the NEV industry; ● our net losses incurred in the past; Risks Related to Our Corporate Structure ● the agreements that establish the structure for operating some of our operations in China to be found not compliant with PRC regulations relating to the relevant industries; ● uncertainties with respect to the interpretation and implementation of the PRC Foreign Investment Law; ● our ability to receive dividends and other distributions on equity paid by our subsidiaries in China and Hong Kong; ● the risk of losing the ability to use and enjoy assets held by our VIEs and their subsidiaries that are important to our business if our VIEs and their subsidiaries declare bankruptcy or become subject to a dissolution or liquidation proceeding; Risks Related to Doing Business in China ● impact from Chinese and global economic, political and social conditions, as well as changes in any government policies, laws and regulations; 10 Table of Contents ● risks arising from the PRC legal system; ● the influence of the PRC government on our operations; ● the approval from government authorities for our future offshore offering under PRC law; ● us being classified as a PRC resident enterprise for PRC enterprise income tax purposes; Risks Related to Our Securities, including the ADSs ● The trading price of the ADSs is likely to be volatile, which could result in substantial losses to investors; ● Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial; ● Substantial future sales or perceived potential sales of the ADSs in the public market could cause the price of the ADSs to decline; ● If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the ADSs and trading volume could decline; ● Uncertainty involving certain proposed transactions that we have announced from time to time may adversely affect our business and the market price of the ADSs.
Such abrupt suspensions, re-scheduling and restrictions might adversely affect the sales volumes of our and the VIEs’ industry customers, which in turn could discourage them from participating in our and the VIEs’ future events and materially and adversely affect our and the VIEs’ business, results of operations, and financial condition.
Such suspensions, re-scheduling and restrictions without advance notice might adversely affect the sales volumes of our and the VIEs’ industry customers, which in turn could discourage them from participating in our and the VIEs’ future events and materially and adversely affect our and the VIEs’ business, results of operations, and financial condition.
Consolidated Statements and Other Financial Information” in this annual report. Our and the VIEs’ ability to achieve profitability and positive cash flow will depend in large part on our and the VIEs’ ability to execute our and the VIEs’ growth strategies and appropriately control our and the VIEs’ costs and expenses.
Consolidated Statements and Other Financial Information” in this annual report. ​ 13 Table of Contents Our and the VIEs’ ability to achieve profitability and positive cash flow will depend in large part on our and the VIEs’ ability to execute our and the VIEs’ growth strategies and appropriately control our and the VIEs’ costs and expenses.
In March 2023, our directors approved the 2023 Share Incentive Plan (the “2023 Plan”), pursuant to which 169,172,564 ordinary shares have been reserved for future issuance to our employees, directors and consultants, representing 43.0% of our total issued and outstanding ordinary shares as of December 31, 2022, and the 2023 Plan will significantly dilute our existing shareholders.
In March 2023, our directors approved the 2023 Share Incentive Plan (the “2023 Plan”), pursuant to which 169,172,564 ordinary shares have been reserved for future issuance to our employees, directors and consultants, representing 43.0% of our total issued and outstanding ordinary shares as of December 31, 2022.
Although we and the VIEs have endeavored and will continue to endeavor to obtain all necessary permits according to our estimate of the condition of each specific event, we cannot assure you that we and the VIEs have been or will continue to be in full compliance with the licensing requirements for all the offline events we and the VIEs have held or will hold because the regulatory practices with respect to an offline event vary among different regions and the local authorities retain broad discretion in enforcing the license requirements.
Although we and the VIEs have endeavored and will continue to endeavor to obtain all necessary permits according to our estimate of the condition of each specific event, we cannot assure you that we and the VIEs have been or will continue to be in full compliance with the licensing requirements for all the offline events we and the VIEs have held or will hold because the regulatory practices with respect to an offline event vary among different regions and the local authorities would consider multiple factors in enforcing the license requirements.
These short attacks have, in the past, led to selling of shares in the market. Public companies that have substantially all of their operations in China have been the subject of short selling.
These short attacks have, in the past, led to selling of shares in the market. 56 Table of Contents Public companies that have substantially all of their operations in China have been the subject of short selling.
The PRC government has implemented a series of capital control measures, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments.
The PRC government has implemented a series of foreign exchange measures, including vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments.
Future implementation of rules and regulations might be inconsistent with current interpretations of the modified Enterprise Income Tax. 28 Table of Contents Seasonality may cause fluctuations in our and the VIEs’ results of operations.
Future implementation of rules and regulations might be different from current interpretations of the modified Enterprise Income Tax. 28 Table of Contents Seasonality may cause fluctuations in our and the VIEs’ results of operations.
The Measures for the Security Assessment of Data Cross-border Transfer was adopted on July 7, 2022 and will take effect on September 1, 2022.
The Measures for the Security Assessment of Data Cross-border Transfer was adopted on July 7, 2022 and took effect on September 1, 2022.
In any of these cases, it will be uncertain whether our contractual arrangements will be deemed to be in violation of the market access requirements for foreign investment under the PRC laws and regulations.
It is uncertain whether our contractual arrangements will be deemed to be in violation of the market access requirements for foreign investment under the PRC laws and regulations.
The trading price of the ADSs is likely to be volatile, which could result in substantial losses to investors. The trading price of the ADSs is likely to be volatile and could fluctuate widely due to factors beyond our control.
Risks Related to Our Securities, including the ADSs The trading price of the ADSs is likely to be volatile, which could result in substantial losses to investors. The trading price of the ADSs is likely to be volatile and could fluctuate widely due to factors beyond our control.
However, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control, including positions taken by authorities of the PRC.
However, whether the PCAOB will continue to conduct inspections and investigations completely to its satisfaction of PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s, control.
Such regulatory developments, as well as other uncertainties, may adversely affect the growth prospects of China’s automotive industry, and in turn reduce consumer demand for automobiles.
Such regulatory developments, as well as other factors, may affect the growth prospects of China’s automotive industry, and in turn adversely influence consumer demand for automobiles.
We and the VIEs organized auto shows in 172, 142 and 76 cities across China in 2020, 2021 and 2022, and we had sales representatives located in 126, 119 and 83 cities as of December 31, 2020, 2021 and 2022, respectively. We and the VIEs plan to expand our and the VIEs’ operations to more cities and counties in China.
We and the VIEs organized auto shows in 142, 76 and 81 cities across China in 2021, 2022 and 2023, and we had sales representatives located in 119, 83 and 79 cities as of December 31, 2021, 2022 and 2023, respectively. We and the VIEs plan to expand our and the VIEs’ operations to more cities and counties in China.
However, Shihui Partners has also advised us that there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations, and there can be no assurance that the PRC government will ultimately take a view that is consistent with the opinion of our PRC counsel.
However there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations, and there can be no assurance that the PRC government will ultimately take a view that is consistent with the opinion of our PRC counsel.
The PRC government may, at its discretion, impose restrictions on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to pay dividends in foreign currencies to our shareholders.
The PRC government may impose requirements on access to foreign currencies for current account transactions and if this occurs in the future, we may not be able to pay dividends in foreign currencies to our shareholders.
These uncertainties may affect our decisions on the policies and actions to be taken to comply with PRC laws and regulations, and may affect our and the VIEs’ ability to enforce our and their contractual or tort rights, respectively.
These evolvements and uncertainties may also affect our decisions on the policies and actions to be taken to comply with PRC laws and regulations, and may affect our and the VIEs’ ability to enforce our and their contractual rights, property (including intellectual property) or tort rights, respectively.
Historically we and the VIEs relied upon certain online advertising service providers to advertise our and the VIEs’ service offerings. Our and the VIEs’ two largest online advertising service providers accounted for approximately 47.4%, 62.2% and 38.9% of our total online advertising expenses in 2020, 2021 and 2022, respectively.
Historically we and the VIEs relied upon certain online advertising service providers to advertise our and the VIEs’ service offerings. Our and the VIEs’ two largest online advertising service providers accounted for approximately 62.2%, 38.9% and 52.1% of our total online advertising expenses in 2021, 2022 and 2023, respectively.
If a significant number of our and the VIEs’ industry customers terminate or do not renew their agreements with us or the VIEs and we and the VIEs are not able to replace these business partners on commercially reasonable terms in a timely manner, or at all, our and the VIEs business, results of operations and financial condition would be materially and adversely affected. 11 Table of Contents If we and the VIEs fail to attract and retain automobile consumers, our and the VIEs’ business and results of operations may be materially and adversely affected.
If a significant number of our and the VIEs’ industry customers terminate or do not renew their agreements with us or the VIEs and we and the VIEs are not able to replace these business partners on commercially reasonable terms in a timely manner, or at all, our and the VIEs business, results of operations and financial condition would be materially and adversely affected.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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As a result of these contractual arrangements, we are the primary beneficiary of the VIEs and their respective subsidiaries, and, therefore, have consolidated the financial results of the VIEs in our consolidated financial statements, provided that we meet the conditions for consolidation under U.S. GAAP.
As a result of these contractual arrangements, we are the primary beneficiary of the VIEs and their respective subsidiaries, and, therefore, have consolidated the financial results of the VIEs in our consolidated financial statements, provided that we meet the conditions for consolidation under U.S. GAAP.
Business Overview We operate the following businesses: ● Offline marketing solutions . We and the VIEs turn individual and isolated automobile purchase transactions into large-scale collective purchase activities through our auto shows. By attracting a large number of consumers, these events serve as integrated marketing solutions to industry customers, which include automakers, franchised dealerships, secondary dealers and automotive service providers.
B. Business Overview We operate the following businesses: Offline marketing solutions . We and the VIEs turn individual and isolated automobile purchase transactions into large-scale collective purchase activities through our auto shows. By attracting a large number of consumers, these events serve as integrated marketing solutions to industry customers, which include automakers, franchised dealerships, secondary dealers and automotive service providers.
In addition, it also lifted the restriction, that foreign exchange capital under the capital accounts and the corresponding Renminbi capital obtained from foreign exchange settlement should not be used for repaying the inter-enterprise borrowings (including advances by the third party) or repaying bank loans in Renminbi that have been sub-lent to the third party. 89 Table of Contents In January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification (“SAFE Circular 3”), which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (1) under the principle of genuine transaction, banks shall check board resolutions regarding profit distribution, the original version of tax filing records and audited financial statements; and (2) domestic entities shall hold income to account for previous years’ losses before remitting profits.
In addition, it also lifted the restriction, that foreign exchange capital under the capital accounts and the corresponding Renminbi capital obtained from foreign exchange settlement should not be used for repaying the inter-enterprise borrowings (including advances by the third party) or repaying bank loans in Renminbi that have been sub-lent to the third party. 88 Table of Contents In January 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification (“SAFE Circular 3”), which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (1) under the principle of genuine transaction, banks shall check board resolutions regarding profit distribution, the original version of tax filing records and audited financial statements; and (2) domestic entities shall hold income to account for previous years’ losses before remitting profits.
In February 2021, the CBIRC promulgated the Circular 24, which sets forth several requirements on the online lending business of the commercial banks, including: (i) the commercial banks shall conduct the risk control measures independently and the core credit assessment and risk control business are prohibited to be outsourced; (ii) except for the commercial banks which have no actual business sites, mainly conduct online business and meet other requirements stipulated by the CBIRC, local commercial banks shall conduct online lending within the jurisdiction where such commercial banks are registered; and (iii) with respect to the online loan business conducted in cooperation with third-party institutions, the capital contribution of cooperative institutions shall not be less than 30% in a single loan. 84 Table of Contents Regulations Relating to Intellectual Property Rights The PRC has adopted comprehensive legislation governing intellectual property rights, including copyrights, patents, trademarks and domain names.
In February 2021, the CBIRC promulgated the Circular 24, which sets forth several requirements on the online lending business of the commercial banks, including: (i) the commercial banks shall conduct the risk control measures independently and the core credit assessment and risk control business are prohibited to be outsourced; (ii) except for the commercial banks which have no actual business sites, mainly conduct online business and meet other requirements stipulated by the CBIRC, local commercial banks shall conduct online lending within the jurisdiction where such commercial banks are registered; and (iii) with respect to the online loan business conducted in cooperation with third-party institutions, the capital contribution of cooperative institutions shall not be less than 30% in a single loan. 83 Table of Contents Regulations Relating to Intellectual Property Rights The PRC has adopted comprehensive legislation governing intellectual property rights, including copyrights, patents, trademarks and domain names.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders.” 86 Table of Contents Income Tax for Share Transfers According to the Public Notice Regarding Certain Enterprise Income Tax Matters on Indirect Transfer of Properties by Non-resident Enterprise (“SAT Bulletin 7”), promulgated by the SAT in February 2015, if a non-resident enterprise transfers the equity interests of a PRC resident enterprise indirectly by transfer of the equity interests of an offshore holding company (other than a purchase and sale of shares issued by a PRC resident enterprise in public securities market) without a reasonable commercial purpose, the PRC tax authorities have the power to reassess the nature of the transaction and the indirect equity transfer will be treated as a direct transfer.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders.” 85 Table of Contents Income Tax for Share Transfers According to the Public Notice Regarding Certain Enterprise Income Tax Matters on Indirect Transfer of Properties by Non-resident Enterprise (“SAT Bulletin 7”), promulgated by the SAT in February 2015, if a non-resident enterprise transfers the equity interests of a PRC resident enterprise indirectly by transfer of the equity interests of an offshore holding company (other than a purchase and sale of shares issued by a PRC resident enterprise in public securities market) without a reasonable commercial purpose, the PRC tax authorities have the power to reassess the nature of the transaction and the indirect equity transfer will be treated as a direct transfer.
In addition, the Outbound Data Transfer Security Assessment Measures sets forth a 6-month grace period, any entity or data controller may within 6 months upon February 28, 2023, take corrective actions and apply for the CAC security assessment. 81 Table of Contents In January 2019, the Office of the Central Cyberspace Affairs Commission, the MIIT, the Ministry of Public Security, and the SAMR jointly issued an Announcement of Launching Special Crackdown Against Illegal Collection and Use of Personal Information by Apps to carry out special campaigns against mobile apps collecting and using personal information in violation of applicable laws and regulations, which prohibits business operators from collecting personal information irrelevant to their services, or forcing users to give authorization in a disguised manner.
In addition, the Outbound Data Transfer Security Assessment Measures sets forth a 6-month grace period, any entity or data controller may within 6 months upon February 28, 2023, take corrective actions and apply for the CAC security assessment. 80 Table of Contents In January 2019, the Office of the Central Cyberspace Affairs Commission, the MIIT, the Ministry of Public Security, and the SAMR jointly issued an Announcement of Launching Special Crackdown Against Illegal Collection and Use of Personal Information by Apps to carry out special campaigns against mobile apps collecting and using personal information in violation of applicable laws and regulations, which prohibits business operators from collecting personal information irrelevant to their services, or forcing users to give authorization in a disguised manner.
As a result, we and our non-resident investors in such transactions may become at risk of being taxed under SAT Bulletin 7, and we may be required to expend valuable resources to comply with SAT Bulletin 7 or to establish that we should not be taxed under the general anti-avoidance rule of the EIT Law, which may have a material adverse effect on our financial condition and results of operations. 87 Table of Contents Dividend Withholding Tax Pursuant to the EIT Law and its implementation rules, if a non-resident enterprise has not set up an organization or establishment in the PRC, or has set up an organization or establishment but the income derived has no actual connection with such organization or establishment, it will be subject to a withholding tax on its PRC-sourced income at a rate of 10%.
As a result, we and our non-resident investors in such transactions may become at risk of being taxed under SAT Bulletin 7, and we may be required to expend valuable resources to comply with SAT Bulletin 7 or to establish that we should not be taxed under the general anti-avoidance rule of the EIT Law, which may have a material adverse effect on our financial condition and results of operations. 86 Table of Contents Dividend Withholding Tax Pursuant to the EIT Law and its implementation rules, if a non-resident enterprise has not set up an organization or establishment in the PRC, or has set up an organization or establishment but the income derived has no actual connection with such organization or establishment, it will be subject to a withholding tax on its PRC-sourced income at a rate of 10%.
Under these regulations, the Renminbi is freely convertible for current account items, including the trade and service-related foreign exchange transactions and other current exchange transactions, but not for capital account items, such as direct investments, loans, repatriation of investments and investments in securities, unless the prior approval of the SAFE, is obtained and prior registration with SAFE is made. 88 Table of Contents In August 2008, the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the Relevant Operating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreign-invested Enterprises (“SAFE Circular 142”), was promulgated by the General Affairs Department of SAFE, which regulates the conversion by foreign-invested enterprises of foreign currency capital into Renminbi by restricting how the converted Renminbi may be used.
Under these regulations, the Renminbi is freely convertible for current account items, including the trade and service-related foreign exchange transactions and other current exchange transactions, but not for capital account items, such as direct investments, loans, repatriation of investments and investments in securities, unless the prior approval of the SAFE, is obtained and prior registration with SAFE is made. 87 Table of Contents In August 2008, the Notice of the General Affairs Department of the State Administration of Foreign Exchange on the Relevant Operating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreign-invested Enterprises (“SAFE Circular 142”), was promulgated by the General Affairs Department of SAFE, which regulates the conversion by foreign-invested enterprises of foreign currency capital into Renminbi by restricting how the converted Renminbi may be used.
Neither we nor the VIEs are not currently subject to any threatened or ongoing legal proceedings that, in the opinion of our and the VIEs’ management, may have a material adverse effect on our and the VIEs’ business, results of operations or financial condition. 75 Table of Contents Regulation Regulations Relating to Value-added Telecommunications Service The Telecommunications Regulations of PRC promulgated in September 2000 and amended in July 2014 and February 2016, respectively, by the State Council and its related implementation rules, including the Catalog of Classification of Telecommunications Business issued by the MIIT, categorize various types of telecommunications and telecommunications-related activities into basic or value-added telecommunications services.
Neither we nor the VIEs are not currently subject to any threatened or ongoing legal proceedings that, in the opinion of our and the VIEs’ management, may have a material adverse effect on our and the VIEs’ business, results of operations or financial condition. 74 Table of Contents Regulation Regulations Relating to Value-added Telecommunications Service The Telecommunications Regulations of PRC promulgated in September 2000 and amended in July 2014 and February 2016, respectively, by the State Council and its related implementation rules, including the Catalog of Classification of Telecommunications Business issued by the MIIT, categorize various types of telecommunications and telecommunications-related activities into basic or value-added telecommunications services.
If a license holder fails to comply with these requirements in the MIIT Notice and cure any non-compliance, the Ministry of Information Industry or its local counterparts have the discretion to take measures against such license holder, including revoking its value-added telecommunications service license. 77 Table of Contents Furthermore, the Foreign Investment Catalog (as amended) classifies industries listed therein into two parts: encouraged category, and the category subject to the special management measures for the entry of foreign investment (the “Negative List”), which are further divided into the restricted category and prohibited category.
If a license holder fails to comply with these requirements in the MIIT Notice and cure any non-compliance, the Ministry of Information Industry or its local counterparts have the discretion to take measures against such license holder, including revoking its value-added telecommunications service license. 76 Table of Contents Furthermore, the Foreign Investment Catalog (as amended) classifies industries listed therein into two parts: encouraged category, and the category subject to the special management measures for the entry of foreign investment (the “Negative List”), which are further divided into the restricted category and prohibited category.
In addition, the domestic company, securities companies and securities service providers shall first obtain approval from the CSRC or other competent Chinese authorities before cooperating with the inspection and investigation by the overseas securities regulator or competent overseas authority, or providing documents and materials requested in such inspection and investigation. 92 Table of Contents Regulations Relating to Employment Pursuant to the Labor Law of PRC, promulgated by the Standing Committee of NPC in July 1994 and amended in December 2018 (the “Labor Law”), and the Labor Contract Law of PRC, promulgated by Standing Committee of the NPC in June 2007 and amended in December 2012 (the “Labor Contract Law”), employers must execute written employment contracts with full-time employees.
In addition, the domestic company, securities companies and securities service providers shall first obtain approval from the CSRC or other competent Chinese authorities before cooperating with the inspection and investigation by the overseas securities regulator or competent overseas authority, or providing documents and materials requested in such inspection and investigation. 91 Table of Contents Regulations Relating to Employment Pursuant to the Labor Law of PRC, promulgated by the Standing Committee of NPC in July 1994 and amended in December 2018 (the “Labor Law”), and the Labor Contract Law of PRC, promulgated by Standing Committee of the NPC in June 2007 and amended in December 2012 (the “Labor Contract Law”), employers must execute written employment contracts with full-time employees.
Pursuant to the Interim Measures for the Finance Leasing Companies, the finance leasing business refers to transaction activities whereby a lessor, in accordance with the selection of lessee on seller and leased property, purchases the leased property from the seller and provides the leased property for the lessee to use, for which the lessor pays the rent, and local financial regulatory authorities at the provincial level shall be specifically responsible for the supervision and administration of finance leasing companies within their respective jurisdictions. 83 Table of Contents Regulations Relating to Financing Guarantee In August 2017, the State Council promulgated the Regulations on the Supervision and Administration of Financing Guarantee Companies (the “Financing Guarantee Regulations”), which became effective on October 1, 2017.
Pursuant to the Interim Measures for the Finance Leasing Companies, the finance leasing business refers to transaction activities whereby a lessor, in accordance with the selection of lessee on seller and leased property, purchases the leased property from the seller and provides the leased property for the lessee to use, for which the lessor pays the rent, and local financial regulatory authorities at the provincial level shall be specifically responsible for the supervision and administration of finance leasing companies within their respective jurisdictions. 82 Table of Contents Regulations Relating to Financing Guarantee In August 2017, the State Council promulgated the Regulations on the Supervision and Administration of Financing Guarantee Companies (the “Financing Guarantee Regulations”), which became effective on October 1, 2017.
Pursuant to the Foreign Investment Information Measures, from January 1, 2020 on, the foreign investors carrying out investment activities directly or indirectly in China and the relevant foreign-invested enterprises shall, through the Enterprise Registration System and the National Enterprise Credit Information Publicity System operated by the SAMR, disclose their investment information to the competent authorities by submitting various reports, including the reports related to their establishments, modifications and cancellations, and their annual reports. 76 Table of Contents In December 2020, the NDRC and the MOFCOM promulgated Measures for Security Review of Foreign Investment, which became effective on January 18, 2021.
Pursuant to the Foreign Investment Information Measures, from January 1, 2020 on, the foreign investors carrying out investment activities directly or indirectly in China and the relevant foreign-invested enterprises shall, through the Enterprise Registration System and the National Enterprise Credit Information Publicity System operated by the SAMR, disclose their investment information to the competent authorities by submitting various reports, including the reports related to their establishments, modifications and cancellations, and their annual reports. 75 Table of Contents In December 2020, the NDRC and the MOFCOM promulgated Measures for Security Review of Foreign Investment, which became effective on January 18, 2021.
The Internet Advertising Measures specifically sets out the following requirements: (1) advertisements must be identifiable and marked with the word “advertisement” to the extent that consumers are able to distinguish them from non-advertisement information; (2) sponsored search results must be clearly distinguished from organic search results; (3) it is forbidden to send advertisements or advertisement links by email without the recipient’s permission or induce internet users to click on an advertisement in a deceptive manner; (4) pop-up advertisements must clearly display the close button so that internet users can close the advertisement with one click; and (5) internet information service providers who do not participate in the business activities of internet advertising but only provide internet information services for the internet advertisement are also required to stop publishing illegal advertisement if they know or should have known that the advertising via their service is illegal.
The Internet Advertising Measures specifically sets out the following requirements: (1) advertisements must be identifiable and marked with the word “advertisement” to the extent that consumers are able to distinguish them from non-advertisement information; (2) sponsored search results must be clearly distinguished from organic search results; (3) it is forbidden to send advertisements or advertisement links by email or other instant message without the recipient’s permission or induce internet users to click on an advertisement in a deceptive manner; (4) pop-up advertisements must clearly display the close button so that internet users can close the advertisement with one click; and (5) internet information service providers who do not participate in the business activities of internet advertising but only provide internet information services for the internet advertisement are also required to stop publishing illegal advertisement if they know or should have known that the advertising via their service is illegal.
According to the EIT Law and its implementation rules, the income tax rate of an enterprise that has been determined to be a high and new technology enterprise may be reduced to 15%. 85 Table of Contents In addition, according to the EIT Law, enterprises registered in countries or regions outside the PRC but have their “de facto management bodies” located within China may be considered as PRC resident enterprises and are therefore subject to PRC enterprise income tax at the rate of 25% on their worldwide income.
According to the EIT Law and its implementation rules, the income tax rate of an enterprise that has been determined to be a high and new technology enterprise may be reduced to 15%. 84 Table of Contents In addition, according to the EIT Law, enterprises registered in countries or regions outside the PRC but have their “de facto management bodies” located within China may be considered as PRC resident enterprises and are therefore subject to PRC enterprise income tax at the rate of 25% on their worldwide income.
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 . 90 Table of Contents Share Option Rules Pursuant to SAFE Circular 37, PRC residents who participate in share incentive plans in overseas non-publicly-listed companies may submit applications to SAFE or its local branches for the foreign exchange registration with respect to offshore special purpose companies.
However, remedial registration applications made by PRC residents that previously failed to comply with the SAFE Circular 37 continue to fall under the jurisdiction of the relevant local branch of SAFE . 89 Table of Contents Share Option Rules Pursuant to SAFE Circular 37, PRC residents who participate in share incentive plans in overseas non-publicly-listed companies may submit applications to SAFE or its local branches for the foreign exchange registration with respect to offshore special purpose companies.
If the trade fair is over, the customer may also demand compensation from the undertaker of such trade fair, in which case the undertaker has the right to recover the compensation from the infringing sellers or service providers afterwards. 82 Table of Contents The Implementation Measures of the PBOC for Protecting Rights and Interests of Financial Consumers (the “Measures for Financial Consumer Protection”), is promulgated by the PBOC in September 2020 and came into force in November 2020.
If the trade fair is over, the customer may also demand compensation from the undertaker of such trade fair, in which case the undertaker has the right to recover the compensation from the infringing sellers or service providers afterwards. 81 Table of Contents The Implementation Measures of the PBOC for Protecting Rights and Interests of Financial Consumers (the “Measures for Financial Consumer Protection”), is promulgated by the PBOC in September 2020 and came into force in November 2020.
Besides, the foreign investors of such company shall not be involved in the company’s operation and management, and their shareholding percentage shall be subject, mutatis mutandis, to the relevant regulations on the domestic securities investments by foreign investors. 91 Table of Contents In February 2023, approved by the State Council, CSRC released new regulations for the filing-based administration of overseas securities offering and listing by domestic companies.
Besides, the foreign investors of such company shall not be involved in the company’s operation and management, and their shareholding percentage shall be subject, mutatis mutandis, to the relevant regulations on the domestic securities investments by foreign investors. 90 Table of Contents In February 2023, approved by the State Council, CSRC released new regulations for the filing-based administration of overseas securities offering and listing by domestic companies.
Any violation of the above provisions may result in, among others, correction order, fines or liability for damage. 78 Table of Contents Regulations Relating to Automobile Sales The sales of new automobiles within the territory of PRC are principally governed by the Administrative Measures for the Automobile Sales (the “Automobile Sales Measures”), promulgated by the MOFCOM in April 2017, which became effective in July 2017.
Any violation of the above provisions may result in, among others, correction order, fines or liability for damage. 77 Table of Contents Regulations Relating to Automobile Sales The sales of new automobiles within the territory of PRC are principally governed by the Administrative Measures for the Automobile Sales (the “Automobile Sales Measures”), promulgated by the MOFCOM in April 2017, which became effective in July 2017.
Violation of these laws and regulations may result in penalties, including fines, confiscation of advertising income, orders to cease dissemination of the advertisements and orders to publish an advertisement correcting the misleading information. In circumstances involving serious violations, the SAIC or its local branches may revoke violators’ licenses or permits for their advertising business operations.
Violation of these laws and regulations may result in penalties, including fines, confiscation of advertising income, orders to cease dissemination of the advertisements and orders to publish an advertisement correcting the misleading information. In circumstances involving serious violations, the SAMR or its local branches may revoke violators’ licenses or permits for their advertising business operations.
In June 2018, the convertible notes were converted into an aggregate of 3,965,043, 1,201,528 and 2,403,057 Series C-4 preferred shares, respectively, all at a conversion price of US$0.8322734 per share. 65 Table of Contents ● Series D-1 financing .
In June 2018, the convertible notes were converted into an aggregate of 3,965,043, 1,201,528 and 2,403,057 Series C-4 preferred shares, respectively, all at a conversion price of US$0.8322734 per share. 64 Table of Contents ● Series D-1 financing .
For instance, under the Internet Security Law, network operators of key information infrastructure generally shall, during their operations in the PRC, store the personal information and important data collected and produced within the territory of the PRC. 80 Table of Contents In June 2021, the Standing Committee of the NPC promulgated the PRC Data Security Law, which took effect in September 2021.
For instance, under the Internet Security Law, network operators of key information infrastructure generally shall, during their operations in the PRC, store the personal information and important data collected and produced within the territory of the PRC. 79 Table of Contents In June 2021, the Standing Committee of the NPC promulgated the PRC Data Security Law, which took effect in September 2021.
Furthermore, advertisers, advertising agencies and advertising distributors may be subject to civil liability if they infringe on the legal rights and interests of third parties. 79 Table of Contents Regulations Relating to Internet Information Security and Privacy Protection Internet information in China is regulated from a national security standpoint.
Furthermore, advertisers, advertising agencies and advertising distributors may be subject to civil liability if they infringe on the legal rights and interests of third parties. 78 Table of Contents Regulations Relating to Internet Information Security and Privacy Protection Internet information in China is regulated from a national security standpoint.
Our and the VIEs’ own online channels consist of the tuanche.com website, our and the VIEs’ mobile apps, our and the VIEs’ official WeChat account and WeChat mini-program. As of December 31, 2022, we have created customized city homepages for over 331 cities around China, each targeting local consumers.
Our and the VIEs’ own online channels consist of the tuanche.com website, our and the VIEs’ mobile apps, our and the VIEs’ official WeChat account and WeChat mini-program. As of December 31, 2023, we have created customized city homepages for over 331 cities around China, each targeting local consumers.
According to the Regulations on Management of Housing Fund, an enterprise that fails to make housing fund contributions may be ordered to rectify the noncompliance and pay the required contributions within a stipulated deadline; otherwise, an application may be made to a local court for compulsory enforcement. 93 Table of Contents C.
According to the Regulations on Management of Housing Fund, an enterprise that fails to make housing fund contributions may be ordered to rectify the noncompliance and pay the required contributions within a stipulated deadline; otherwise, an application may be made to a local court for compulsory enforcement. 92 Table of Contents C.
We began our auto show business in the fourth quarter of 2016, and we expanded our auto shows to tier-3 and below cities in 2017. 64 Table of Contents We conduct our business through our subsidiaries and the VIEs in China. Over the past few years, we underwent a series of restructurings.
We began our auto show business in the fourth quarter of 2016, and we expanded our auto shows to tier-3 and below cities in 2017. 63 Table of Contents We conduct our business through our subsidiaries and the VIEs in China. Over the past few years, we underwent a series of restructurings.
In response to the significant impact of the COVID-19 pandemic, we and the VIEs implemented measures to adjust the pace of our and the VIEs’ business expansion and conserve resources, such as furlough arrangements and scaling back our recruitment budget and employee size, in 2020, 2021 and 2022.
In response to the significant impact of the COVID-19 pandemic, we and the VIEs implemented measures to adjust the pace of our and the VIEs’ business expansion and conserve resources, such as furlough arrangements and scaling back our recruitment budget and employee size, in 2021, 2022 and 2023.
For a description of the risks related to our corporate structure, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure.” D. Property, plants and equipment See “Item 4. Information on the Company—B. Business Overview—Facilities.” 96 Table of Contents ITEM 4A. UNRESOLVED STAFF COMMENTS None.
For a description of the risks related to our corporate structure, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure.” D. Property, plants and equipment See “Item 4. Information on the Company—B. Business Overview—Facilities.” ITEM 4A. UNRESOLVED STAFF COMMENTS None.
Annual planning . At the beginning of each year, we and the VIEs plan the number of auto shows we and the VIEs target to organize in each region, and the cities we and the VIEs plan to revisit and expand into.
At the beginning of each year, we and the VIEs plan the number of auto shows we and the VIEs target to organize in each region, and the cities we and the VIEs plan to revisit and expand into.
We believe that our and the VIEs’ existing facilities are generally adequate to meet our and the VIEs’ current needs, but we and the VIEs expect to seek additional space as needed to accommodate future growth. Our and the VIEs’ servers are primarily hosted at internet data centers owned by major domestic internet data center providers.
We believe that our and the VIEs’ existing facilities are generally adequate to meet our and the VIEs’ current needs, but we and the VIEs expect to seek additional space as needed to accommodate future growth. ​ 73 Table of Contents Our and the VIEs’ servers are primarily hosted at internet data centers owned by major domestic internet data center providers.
These contractual arrangements, as revised from time to time, were most recently revised in February 2023. In June 2018, we, through Chema Beijing, entered into a series of contractual arrangements with (1) Tansuojixian Beijing, and (2) the shareholders of Tansuojixian Beijing, to obtain effective control of Tansuojixian Beijing and its subsidiaries.
These contractual arrangements, as revised from time to time, were most recently revised in February 2023. In June 2018, we, through Chema Beijing, entered into a series of contractual arrangements with (1) Tansuojixian Beijing (currently operating as Hainan Shuke), and (2) the shareholders of Tansuojixian Beijing, to obtain effective control of Tansuojixian Beijing and its subsidiaries.
We and the VIEs primarily provide a series of integrated services, such as event planning and executing, marketing training and onsite coaching, to support our and the VIEs’ industry customers’ special promotion events. In 2020, 2021 and 2022, we facilitated 207, 158 and 90 special promotion events through our services, respectively.
We and the VIEs primarily provide a series of integrated services, such as event planning and executing, marketing training and onsite coaching, to support our and the VIEs’ industry customers’ special promotion events. In 2021, 2022 and 2023, we facilitated 158, 90 and 750 special promotion events through our services, respectively.
As of the date of this annual report, our core social CRM service, Cheshangtong social CRM cloud system, has served more than 18,000 customers. Aftermarket promotion services Starting from August 2021, we provide aftermarket promotion service to support auto dealers’ aftermarket promotion events during a period.
As of the date of this annual report, our core social CRM service, Cheshangtong social CRM cloud system, has served more than 17,080 customers. Aftermarket promotion services Starting from August 2021, we provide aftermarket promotion service to support auto dealers’ aftermarket promotion events during a period.
We believe we and the VIEs’ are differentiated from our and the VIEs’ competitors mainly for two reasons: (1) our and the VIEs’ events are more sales-oriented instead of information-oriented; and (2) our and the VIEs’ business model integrates our and the VIEs’ online platform with offline events. Employees As of December 31, 2022, we had 431 full-time employees.
We believe we and the VIEs’ are differentiated from our and the VIEs’ competitors mainly for two reasons: (1) our and the VIEs’ events are more sales-oriented instead of information-oriented; and (2) our and the VIEs’ business model integrates our and the VIEs’ online platform with offline events. Employees As of December 31, 2023, we had 324 full-time employees.
From January 1, 2016 to December 31, 2022, over 2.8 million consumers have entered their information on our and the VIEs’ online platform. In 2020, 2021 and 2022, the average monthly unique visits to our online platform was 4.4 million, 3.1 million and 1.5 million, respectively.
From January 1, 2016 to December 31, 2023, over 3.2 million consumers have entered their information on our and the VIEs’ online platform. In 2021, 2022 and 2023, the average monthly unique visits to our online platform was 3.1 million, 1.5 million and 1.2 million, respectively.
We and the VIEs seek to protect our and the VIEs’ intellectual properties through a combination of trademark and copyright protection laws in China and other jurisdictions, as well as through confidentiality agreements and other measures. 74 Table of Contents As of the date of this annual report, we, together with the VIEs, hold 159 registered trademarks in China, including the “TuanChe” trademarks.
We and the VIEs seek to protect our and the VIEs’ intellectual properties through a combination of trademark and copyright protection laws in China and other jurisdictions, as well as through confidentiality agreements and other measures. As of the date of this annual report, we, together with the VIEs, hold 168 registered trademarks in China, including the “TuanChe” trademarks.
The chart below illustrates our business model for our integrated marketing solutions: Our and the VIEs’ Consumers We, together with the VIEs, use both online and offline channels to effectively attract automobile consumers to participate in auto shows. 69 Table of Contents Online .
The chart below illustrates our business model for our integrated marketing solutions: Our and the VIEs’ Consumers We, together with the VIEs, use both online and offline channels to effectively attract automobile consumers to participate in auto shows. Online .
However, Shihui Partners has also advised us that there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations and there can be no assurance that the PRC government will ultimately take a view that is consistent with the opinion of our PRC legal counsel.
However, Shihui Partners has also advised us that the interpretation and application of current or future PRC laws and regulations are still evolving and there can be no assurance that the PRC government will ultimately take a view that is consistent with the opinion of our PRC legal counsel.
Risk Factors—Risks Related to Doing Business in China—There are significant uncertainties under the PRC enterprise income tax law relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.” Regulations Relating to Foreign Currency Exchange Foreign Currency Exchange The principal regulations governing foreign currency exchange in China are the Regulations of the People’s Republic of China on Foreign Exchange Administration, promulgated by the State Council and amended in August 2008.
Risk Factors—Risks Related to Doing Business in China—There are significant uncertainties in certain treaty benefits enjoyed by our PRC subsidiaries with respect to dividends payable by our PRC subsidiaries to our offshore subsidiaries under the PRC enterprise income tax law relating to the withholding tax liabilities.” Regulations Relating to Foreign Currency Exchange Foreign Currency Exchange The principal regulations governing foreign currency exchange in China are the Regulations of the People’s Republic of China on Foreign Exchange Administration, promulgated by the State Council and amended in August 2008.
In addition, we and the VIEs had strategically established field sales offices in 43 cities as of December 31, 2022 as support and local command centers for our and the VIEs’ auto shows in the nearby region.
In addition, we and the VIEs had strategically established field sales offices in seven cities as of December 31, 2023 as support and local command centers for our and the VIEs’ auto shows in the nearby region.
At the same time, we and the VIEs work with various online and offline channels to promote our and the VIEs’ events and maximize consumer attendance. 71 Table of Contents We and the VIEs also concurrently coordinate with our and the VIEs’ industry customers.
At the same time, we and the VIEs work with various online and offline channels to promote our and the VIEs’ events and maximize consumer attendance. We and the VIEs also concurrently coordinate with our and the VIEs’ industry customers.
The telephone number of our principal executive offices is (+86-10) 6399-8902. Investors should contact us for any inquiries through the address and telephone number of our principal executive office. Our agent for service of process in the United States is Cogency Global Inc., located at 10 E. 40th Street, 10th Floor, New York, N.Y. 10016, United States.
Investors should contact us for any inquiries through the address and telephone number of our principal executive office. Our agent for service of process in the United States is Cogency Global Inc., located at 10 E. 40th Street, 10th Floor, New York, N.Y. 10016, United States. Our principal website is tuanche.com.
In June 2016, SAFE issued the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Administrative Provisions on Capital Account Foreign Exchange Settlement (“SAFE Circular 16”), which took effect on the same day.
In June 2016, SAFE issued the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Administrative Provisions on Capital Account Foreign Exchange Settlement (“SAFE Circular 16”), which took effect on the same day and was further amended in December 2023.
Since our incorporation of TuanChe Limited in 2012, we have raised approximately US$135.6 million in equity financing from our dedicated group of investors: ● Series A financing .
Since our incorporation of TuanChe Limited in 2012, we have raised approximately US$146.8 million in equity financing from our dedicated group of investors: ● Series A financing .
Facilities Our and the VIEs’ corporate headquarters are located in Beijing, China, where we, together with the VIEs, lease office space with an area of approximately 4,038.1 square meters as of December 31, 2022.
Facilities Our and the VIEs’ corporate headquarters are located in Beijing, China, where we, together with the VIEs, lease office space with an area of approximately 4,012.0 square meters as of December 31, 2023.
The following table sets forth the number of our full-time employees by functions as of the dates indicated. ​ ​ ​ ​ As of December 31, 2022 Functional Area ​ Number of employees Sales and marketing 329 General and administrative 58 Research and development 44 Total 431 ​ Our and the VIEs’ success depends on our and the VIEs’ ability to attract, retain and motivate qualified employees.
The following table sets forth the number of our full-time employees by functions as of the dates indicated. ​ ​ ​ ​ As of December 31, 2023 Functional Area ​ Number of employees Sales and marketing 252 General and administrative 44 Research and development 28 Total 324 ​ Our and the VIEs’ success depends on our and the VIEs’ ability to attract, retain and motivate qualified employees.
In 2020, 2021 and 2022, we, together with the VIEs, attracted approximately 3.1 million, 3.0 million and 4.0 million consumers to sign up for our and the VIEs offline events through our and the VIEs’ online channels, respectively. Offline .
In 2021, 2022 and 2023, we, together with the VIEs, attracted approximately 3.0 million, 4.0 million and 3.1 million consumers to sign up for our and the VIEs offline events through our and the VIEs’ online channels, respectively. 68 Table of Contents Offline .
We and the VIEs facilitated 90 special promotion events through our and the VIEs’ services in 2022. Historically, we generated net revenues primarily through the offline events.
We and the VIEs facilitated 750 special promotion events through our and the VIEs’ services in 2023. Historically, we generated net revenues primarily through the offline events.
As of the same date, we, together with the VIEs, have 112 registered domain names, including our main website domain names, tuanche.com, as well as one artwork copyright and 98 software copyrights in China.
As of the same date, we, together with the VIEs, have 113 registered domain names, including our main website domain names, tuanche.com, as well as 28 artwork copyright and 119 software copyrights in China.
We and the VIEs charge fixed service fees for special promotion event services. ● Referral service for commercial bank. We and the VIEs collaborate with and facilitate a commercial bank in expanding its cooperation with our and the VIEs’ industry customers to grow its auto loan business. We and the VIEs charge the bank service fees for approved loan applications.
We and the VIEs collaborate with and facilitate a commercial bank in expanding its cooperation with our and the VIEs’ industry customers to grow its auto loan business. We and the VIEs charge the bank service fees for approved loan applications. We and the VIEs ceased to operate the referral services in 2022.
(“TuanYuan”) PRC 100 % Longye International Limited Cayman Islands 100 % Long Ye Information Technology Limited Hong Kong 100 % Beijing Sangu Maolu Information Technology Co., Ltd. (“Sangu Maolu”) PRC 100 % Chema Technology (Beijing) Co., Ltd. (“Chema Beijing”) PRC 100 % Chema (Tianjin) Intelligent Automobile Technology Co., Ltd.
(“TuanYuan”) PRC 100 % Longye International Limited Cayman Islands 100 % Long Ye Information Technology Limited Hong Kong 100 % Beijing Sangu Maolu Information Technology Co., Ltd. (“Sangu Maolu”) PRC 100 % Chema Technology (Beijing) Co., Ltd.
We generated net revenue from referral services, virtual dealership, online marketing services and others, which amounted to RMB74.9 million, RMB110.7 million and RMB127.6 million (US$18.5 million) in 2020, 2021 and 2022, respectively, representing 22.7%, 31.0% and 69.7% of our net revenues for the same periods, respectively.
We generated net revenue from referral services, online marketing services and others, which amounted to RMB110.7 million, RMB127.6 million and RMB47.9 million (US$6.7 million) in 2021, 2022 and 2023, respectively, representing 31.0%, 69.7% and 29.5% of our net revenues for the same periods, respectively.
Our and the VIEs’ big-data analytics technology processes data and offers precise and targeted industry analysis and projections. In particular, our and the VIEs’ big-data analytics technology is capable of determining what brands and models are more popular in a particular city or among a certain consumer income level.
In particular, our and the VIEs’ big-data analytics technology is capable of determining what brands and models are more popular in a particular city or among a certain consumer income level.
The map below shows the cities where we organized at least one auto show as of December 31, 2022. 72 Table of Contents The table below sets forth a breakdown of the number of cities where we and the VIEs have organized auto shows by city tiers in the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2020 2021 2022 Tier-1 cities 4 4 — Tier-2 cities 42 36 15 Tier-3 and below cities 126 102 61 Total 172 142 76 ​ The table below sets forth a breakdown of the number of cities where we and the VIEs have established operations by city tiers in the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 Tier-1 cities 4 4 2 Tier-2 cities 33 30 22 Tier-3 and below cities 89 85 59 Total 126 119 83 ​ Special promotion event services We, together with the VIEs, began to provide special promotion event services to our and the VIEs’ industry customers in January 2019 to better support our industry customers in organizing their special promotion events.
The table below sets forth a breakdown of the number of cities where we and the VIEs have organized auto shows by city tiers in the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2021 2022 2023 Tier-1 cities 4 — 1 Tier-2 cities 36 15 21 Tier-3 and below cities 102 61 59 Total 142 76 81 ​ The table below sets forth a breakdown of the number of cities where we and the VIEs have established operations by city tiers in the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2021 2022 2023 Tier-1 cities 4 2 1 Tier-2 cities 30 22 19 Tier-3 and below cities 85 59 59 Total 119 83 79 ​ 71 Table of Contents Special promotion event services We, together with the VIEs, began to provide special promotion event services to our and the VIEs’ industry customers in January 2019 to better support our industry customers in organizing their special promotion events.
In 2022, our and the VIEs’ top 20 industry customers collectively contributed to approximately 55.3% of our total net revenues with the largest customer accounting for approximately 24.1%. 70 Table of Contents Our and the VIEs’ Services Offline Marketing Solutions Auto shows We, together with the VIEs, organize auto shows to create a many-to-many consumption environment for prospective local consumers.
In 2023, our and the VIEs’ top 20 industry customers collectively contributed to approximately 43.7% of our total net revenues with the largest customer accounting for approximately 16.1%. Our and the VIEs’ Services Offline Marketing Solutions Auto shows We, together with the VIEs, organize auto shows to create a many-to-many consumption environment for prospective local consumers.
In July 2016, SAIC issued the Interim Measures for the Administration of Internet Advertising (the “Internet Advertising Measures”), pursuant to which internet advertisements refers to the commercial advertisement for direct or indirect marketing of goods or services in the form of text, image, audio, video, or others means through websites, webpages, internet applications, or other internet media.
Pursuant to the Internet Advertising Measures, the internet advertisements refers to the commercial advertisement for direct or indirect marketing of goods or services in the form of text, image, audio, video, or others means through websites, webpages, internet applications, or other internet media.
On January 21, 2021, our board of directors received a preliminary non-binding proposal letter from Mr. Wei Wen, our chairman and chief executive officer, proposing a “going-private” transaction. On November 12, 2021, Mr. Wei Wen withdrew the non-binding going private proposal. On January 21, 2022, we announced our preliminary plan to enter the electric vehicle manufacturing business.
On January 21, 2021, our board of directors received a preliminary non-binding proposal letter from Mr. Wei Wen, our chairman and chief executive officer, proposing a “going-private” transaction. On November 12, 2021, Mr. Wei Wen withdrew the non-binding going private proposal.
Our principal website is tuanche.com. 66 Table of Contents For information regarding our principal capital expenditures, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Liquidity and Capital Resources.” SEC maintains an Internet site, http://www.sec/gov , which contains reports, proxy and information statements, and other information regarding us.
For information regarding our principal capital expenditures, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Liquidity and Capital Resources.” SEC maintains an Internet site, http://www.sec/gov , which contains reports, proxy and information statements, and other information regarding us. We also maintain an Internet site, http://ir.tuanche.com/ , for investors’ information.
See “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Year Ended December 31, 2022 Compared to Year Ended December 31, 2021.” Our and the VIEs’ Business Model We, together with the VIEs, are the first company in China to provide a scalable omni-channel automotive marketplace approach to automobile marketing and distribution, according to the iResearch report.
Operating Results—Year Ended December 31, 2023 Compared to Year Ended December 31, 2022.” 67 Table of Contents Our and the VIEs’ Business Model We, together with the VIEs, are the first company in China to provide a scalable omni-channel automotive marketplace approach to automobile marketing and distribution, according to the iResearch report.
The Nasdaq notification letter does not result in the immediate delisting of our securities. Pursuant to Rule 5810(c)(3)(A) of the Nasdaq Listing Rules, we have a compliance period of 180 calendar days, or until August 16, 2023 to regain compliance with Nasdaq’s minimum bid price requirement.
Pursuant to Rule 5810(c)(3)(A) of the Nasdaq Listing Rules, we have a compliance period of 180 calendar days, or until August 16, 2023 to regain compliance with Nasdaq’s minimum bid price requirement.
In 2020, 2021 and 2022, we and the VIEs organized 449, 450 and 150 auto shows, respectively. The total number of automobiles sales transactions we and the VIEs facilitated was 140,264, 104,689 and 22,176 in 2020, 2021 and 2022, respectively.
In 2021, 2022 and 2023, we and the VIEs organized 450, 150 and 299 auto shows, respectively. The total number of automobiles sales transactions we and the VIEs facilitated through the auto shows was 104,689, 22,176 and 61,020 in 2021, 2022 and 2023, respectively.
In 2020, our top 20 industry customers collectively contributed to approximately 14.6% of our total net revenues with the largest customer accounting for approximately 2.6%. In 2021, our top 20 industry customers collectively contributed to approximately 11.3% of our total net revenues with the largest customer accounting for approximately 2.7%.
In 2021, our top 20 industry customers collectively contributed to approximately 11.3% of our total net revenues with the largest customer accounting for approximately 2.7%. In 2022, our and the VIEs’ top 20 industry customers collectively contributed to approximately 55.3% of our total net revenues with the largest customer accounting for approximately 24.1%.
Our adjusted EBITDA was RMB(141.1) million and RMB(82.9) million and RMB(65.1) million (US$(9.4) million) in 2020, 2021 and 2022, respectively. We recorded adjusted net loss of RMB145.8 million, RMB90.0 million and RMB69.5 million (US$10.1 million) in 2020, 2021 and 2022, respectively. For a detailed description of our non-GAAP measures, see “Item 5. Operating and Financial Review and Prospects—A.
Our adjusted EBITDA was RMB(82.9) million, RMB(73.4) million and RMB(92.5) million (US$13.0 million) in 2021, 2022 and 2023, respectively. We recorded adjusted net loss of RMB90.0 million, RMB77.8 million and RMB92.6 million (US$13.0 million) in 2021, 2022 and 2023, respectively. For a detailed description of our non-GAAP measures, see “Item 5. Operating and Financial Review and Prospects—A.
(“Internet Drive Technology”) PRC 100 % Tansuojixian Technology (Beijing) Co., Ltd (“Tansuojixian Beijing”) PRC 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Direct ​ ​ ​ ​ or Indirect ​ ​ ​ ​ ​ Economic ​ Major subsidiaries of VIEs Place of Incorporation Ownership ​ TuanChe (Beijing) Automobile Sales & Service Co., Ltd.
(“Hainashuke”) (formerly known as Tansuojixian Technology (Beijing) Co., Ltd) PRC 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Direct ​ ​ ​ ​ or Indirect ​ ​ ​ ​ ​ Economic ​ Major subsidiaries of VIEs Place of Incorporation Ownership ​ TuanChe (Beijing) Automobile Sales & Service Co., Ltd.
As of December 31, 2022, we and the VIEs had served over 3,112 industry customers in China, covering over 110 domestic and international automobile brands. We and the VIEs facilitated the sale of 22,176 automobiles for our and the VIEs’ industry customers in 2022, with a GMV of approximately RMB3.4 billion (US$0.5 billion).
As of December 31, 2023, we and the VIEs had served over 3,440 industry customers in China, covering over 110 domestic and international automobile brands. We and the VIEs facilitated the sale of 82,364 automobiles for our and the VIEs’ industry customers in 2023, with a GMV of approximately RMB13.5 billion (US$1.9 billion).
The total GMV of all automobile sales transactions we and the VIEs facilitated was approximately RMB14.6 billion and RMB3.4 billion (US$0.5 billion) in 2021 and 2022, respectively.
The total GMV of all automobile sales transactions we and the VIEs facilitated was approximately RMB3.4 billion and RMB9.7 billion (US$1.4 billion) in 2022 and 2023, respectively.
The agreement shall remain effective unless unilaterally terminated by such WFOE with a written notice or pursuant to other provisions of the agreement, whereas the VIEs do not have any right to unilaterally terminate the exclusive business cooperation agreement. ​ 95 Table of Contents Exclusive Call Option Agreement Under the exclusive call option agreement among the applicable WFOE, each of the VIEs and their respective shareholders, each of the shareholders of the VIEs irrevocably granted such WFOE a right to purchase, or designate a third party to purchase, all or any part of their equity interests in the VIEs at a purchase price equal to the lowest price permissible by the then-applicable PRC laws and regulations at such WFOE’s sole and absolute discretion to the extent permitted by PRC law.
Exclusive Call Option Agreement Under the exclusive call option agreement among the applicable WFOE, each of the VIEs and their respective shareholders, each of the shareholders of the VIEs irrevocably granted such WFOE a right to purchase, or designate a third party to purchase, all or any part of their equity interests in the VIEs at a purchase price equal to the lowest price permissible by the then-applicable PRC laws and regulations at such WFOE’s sole and absolute discretion to the extent permitted by PRC law.
The following table sets out the details of our subsidiaries, the VIEs and the subsidiaries held by the VIEs that are significant to us. ​ ​ ​ ​ ​ ​ Subsidiaries Place of Incorporation Ownership Interest TuanChe Information Limited (“TuanChe Information”) ​ Hong Kong ​ 100 % TuanYuan Internet Technology (Beijing) Co., Ltd.
Zhen Ye, hold a 15.2170%, 0.9972%, 13.2840%, 0.0973%, and 0.5836%, equity interest in TuanChe Internet, respectively. ​ 93 Table of Contents The following table sets out the details of our subsidiaries, the VIEs and the subsidiaries held by the VIEs that are significant to us. ​ ​ ​ ​ ​ ​ Subsidiaries Place of Incorporation Ownership Interest TuanChe Information Limited (“TuanChe Information”) ​ Hong Kong ​ 100 % TuanYuan Internet Technology (Beijing) Co., Ltd.
Exclusive Business Cooperation Agreement Pursuant to the exclusive business cooperation agreement between each of the VIEs and the applicable WFOE, the respective WFOE has the exclusive right to provide or designate any third party to provide, among other things, comprehensive business support, technical support and consulting services to the VIEs.
Below is a summary of the currently effective contractual arrangements by and among our WFOEs, the VIEs and their respective shareholders. 94 Table of Contents Exclusive Business Cooperation Agreement Pursuant to the exclusive business cooperation agreement between each of the VIEs and the applicable WFOE, the respective WFOE has the exclusive right to provide or designate any third party to provide, among other things, comprehensive business support, technical support and consulting services to the VIEs.
(“Chema Tianjin”) ​ PRC ​ 100 % ​ 94 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Direct or ​ ​ ​ ​ Indirect ​ ​ ​ ​ ​ Economic ​ Major VIEs ​ Place of Incorporation ​ Ownership ​ TuanChe Internet Information Service (Beijing) Co., Ltd.
(“Chema Beijing”) PRC 100 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of Direct or ​ ​ ​ ​ Indirect ​ ​ ​ ​ ​ Economic ​ Major VIEs ​ Place of Incorporation ​ Ownership ​ TuanChe Internet Information Service (Beijing) Co., Ltd. (“TuanChe Internet”) PRC 100 % Shenzhen Drive New Media Co., Ltd.
(“TuanChe Automobile”) PRC 100 % Aikesipo Exhibition Display (Tianjin) Co., Ltd. PRC 100 % Tansuojixian (Tianjin) Intelligent Automobile Technology Co., Ltd. (“Tansuojixian Tianjin”) PRC 100 % ​ Our Contractual Arrangements PRC laws and regulations place certain restrictions on foreign investment in value-added telecommunications service businesses.
(“TuanChe Automobile”) PRC 100 % Aikesipo Exhibition Display (Tianjin) Co., Ltd. PRC 100 % ​ Our Contractual Arrangements PRC laws and regulations place certain restrictions on foreign investment in value-added telecommunications service businesses. We conduct operations in the PRC principally through our PRC subsidiaries, the VIEs, and their subsidiaries.
Our and the VIEs’ online marketing services primarily include (1) demand-side platform services, where we and the VIEs either provide online advertising services on our and the VIEs’ website or provide advertising space resale services in collaboration with third parties, such as search engines and other online advertising channels, and (2) marketing information services, through which we and the VIEs provide industry customers with individual consumers’ demands information regarding their purchase preferences for automobiles generated through our and the VIEs’ online channels upon consumers’ consent. 73 Table of Contents Other Services Social CRM cloud services In January 2020, we acquired Longye International Limited, a leading system developer that develops and implements social customer relationship management cloud systems (“social CRM cloud systems”) to provide social CRM services to the automotive industry in China.
Our and the VIEs’ online marketing services primarily include (1) demand-side platform services, where we and the VIEs either provide online advertising services on our and the VIEs’ website or provide advertising space resale services in collaboration with third parties, such as search engines and other online advertising channels, and (2) marketing information services, through which we and the VIEs provide industry customers with individual consumers’ demands information regarding their purchase preferences for automobiles generated through our and the VIEs’ online channels upon consumers’ consent.
In addition, we and the VIEs also invite industry customers other than auto dealers and automakers in order to provide consumers with value-added services and products, such as insurance products, automobile accessories, and aftermarket services. Our and the VIEs’ organization of auto shows involves four phases: (1) annual planning, (2) event request initiation, (3) event planning, and (4) event execution.
In addition, we and the VIEs also invite industry customers other than auto dealers and automakers in order to provide consumers with value-added services and products, such as insurance products, automobile accessories, and aftermarket services.
Operating Results—Key Components of Results of Operations—Net Revenues.” 68 Table of Contents Our net revenues were RMB330.2 million, RMB357.6 million and RMB183.2 million (US$26.6 million) in 2020, 2021 and 2022, respectively. Our net loss was RMB163.5 million, RMB101.9 million and RMB158.1 million (US$22.9 million) in 2020, 2021 and 2022, respectively.
Operating Results—Key Components of Results of Operations—Net Revenues.” Our net revenues were RMB357.6 million, RMB183.2 million and RMB162.4 million (US$22.9 million) in 2021, 2022 and 2023, respectively. Our net loss was RMB101.9 million, RMB166.5 million and RMB83.0 million (US$11.7 million) in 2021, 2022 and 2023, respectively.
Organizational Structure The following diagram illustrates our corporate structure, including our principal subsidiaries and the VIEs, as of the date of this annual report: (1) Mr. Jianchen Sun, Mr. Qiuhua Xu, Mr. Xingyu Du, Mr. Zijing Zhou, and Mr. Zhen Ye, hold a 15.2170%, 0.9972%, 13.2840%, 0.0973%, and 0.5836%, equity interest in TuanChe Internet, respectively.
Organizational Structure The following diagram illustrates our corporate structure, including our principal subsidiaries and the VIEs, as of the date of this annual report: (1) Mr. Jianchen Sun, Mr. Qiuhua Xu, Mr. Xingyu Du, Mr. Zijing Zhou, and Mr.
Our and the VIEs’ industry customers typically offer the same price to every consumer at a particular auto show who purchases the same brand and model, thus offering consumers transparent pricing. During 2022, consumers who placed purchase orders during our and the VIEs’ offline events paid on average 4.5% less than the manufacturer suggested retail price.
Our and the VIEs’ industry customers typically offer the same price to every consumer at a particular auto show who purchases the same brand and model, thus offering consumers transparent pricing.
Our principal executive offices are located at 9F, Ruihai Building, No. 21 Yangfangdian Road, Haidian District, Beijing 100038, People’s Republic of China. Our registered office in the Cayman Islands is located at the offices of Osiris International Cayman Limited, Suite #4-210, Governors Square, 23 Lime Tree Bay Avenue, PO Box 32311, Grand Cayman KY1-1209, Cayman Islands.
Our registered office in the Cayman Islands is located at the offices of Osiris International Cayman Limited, Suite #4-210, Governors Square, 23 Lime Tree Bay Avenue, PO Box 32311, Grand Cayman KY1-1209, Cayman Islands. The telephone number of our principal executive offices is (+86-10) 6399-8902.
We also maintain an Internet site, http://ir.tuanche.com/ , for investors’ information. Nasdaq Listing Standards Compliance On February 17, 2023, we received a notice from Nasdaq that we have failed to comply with the minimum closing bid price requirement set forth in Rule 5550(a)(2) of the Nasdaq Listing Rules.
Nasdaq Listing Standards Compliance On February 17, 2023, we received a notice from Nasdaq that we have failed to comply with the minimum closing bid price requirement set forth in Rule 5550(a)(2) of the Nasdaq Listing Rules. The Nasdaq notification letter does not result in the immediate delisting of our securities.
(“TuanChe Internet”) PRC 100 % Shenzhen Drive New Media Co., Ltd. (“Drive New Media”) PRC 100 % Beijing Internet Drive Technology Co., Ltd.
(“Drive New Media”) PRC 100 % Beijing Internet Drive Technology Co., Ltd. (“Internet Drive Technology”) PRC 100 % Hainashuke (Beijing) Technology Co., Ltd.
In providing advertising services, advertising agencies and advertising distributors must review the supporting documents provided by advertisers for advertisements and verify the content of the advertisements against these supporting documents before publishing.
In providing advertising services, advertising agencies and advertising distributors must review the supporting documents provided by advertisers for advertisements and verify the content of the advertisements against these supporting documents before publishing. In February 2023, SAMR issued the Administrative Measures for Internet Advertising (the “Internet Advertising Measures”), which came into effect on May 1, 2023.).

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Based on cash flow projections from operating and financing activities, our current balance of cash and cash equivalents, and the impact of the COVID-19 pandemic on our operations, our management believes that our current cash and cash equivalents, time deposits and anticipated cash flow from operations upon successful execution of our business plans will be sufficient to meet our anticipated cash needs from operations and other commitments for at least the next 12 months from the date of this annual report.
Based on cash flow projections from operating and financing activities, our current balance of cash and cash equivalents, and the impact of the COVID-19 pandemic on our operations, our management believes that our current cash and cash equivalents, time deposits and anticipated cash flow from operations upon successful execution of our business plans and financing plans will be sufficient to meet our anticipated cash needs from operations and other commitments for at least the next 12 months from the date of this annual report.
Long-lived assets Long-lived assets or asset group, including intangible assets with finite lives, are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than we had originally estimated.
Impairment of long-lived assets Long-lived assets or asset group, including intangible assets with finite lives, are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than we had originally estimated.
An allowance for doubtful accounts is recorded in the period when a loss is probable based on an assessment of specific evidence indicating collection is unlikely, historical bad debt rates, accounts aging, financial conditions of the customer and industry trends. To estimate expected credit losses, we have identified the relevant risk characteristics of the receivables which include size and nature.
An allowance for credit loss is recorded in the period when a loss is probable based on an assessment of specific evidence indicating collection is unlikely, historical bad debt rates, accounts aging, financial conditions of the customer and industry trends. To estimate expected credit losses, we have identified the relevant risk characteristics of the receivables which include size and nature.
However, there is no assurance that the plans will be successfully implemented. Failure to successfully implement the plan will have a material adverse effect on our business, results of operations and financial position, and may materially and adversely affect our ability to continue as a going concern. See “Item 3. Key Information—D.
However, there is no assurance that the plans will be successfully implemented. Failure to successfully implement the plans will have a material adverse effect on our business, results of operations and financial position, and may materially and adversely affect our ability to continue as a going concern. See “Item 3. Key Information—D.
Critical Accounting Estimates We prepare financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect the reported amounts of our assets and liabilities and the disclosure of our contingent assets and liabilities at the end of each fiscal period and the reported amounts of revenues and expenses during each fiscal period.
E. Critical Accounting Estimates We prepare financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect the reported amounts of our assets and liabilities and the disclosure of our contingent assets and liabilities at the end of each fiscal period and the reported amounts of revenues and expenses during each fiscal period.
In contrast, we and the VIEs may experience higher net revenues growth during the last quarter of each year than any of the other three quarters when consumers increase their purchasing activities in preparation for the coming holiday season, subject to industry-wide and macroeconomic uncertainties beyond our and the VIEs’ control, such as general marketing conditions and government incentives or restrictions. ​ 99 Table of Contents Non-Commercial Contingencies Due to the nature of our and the VIEs’ business, certain contingencies and non-commercial factors, such as weather conditions and number of weekends during a specific period, may also affect our results of operations.
In contrast, we and the VIEs may experience higher net revenues growth during the last quarter of each year than any of the other three quarters when consumers increase their purchasing activities in preparation for the coming holiday season, subject to industry-wide and macroeconomic uncertainties beyond our and the VIEs’ control, such as general marketing conditions and government incentives or restrictions. ​ 98 Table of Contents Non-Commercial Contingencies Due to the nature of our and the VIEs’ business, certain contingencies and non-commercial factors, such as weather conditions and number of weekends during a specific period, may also affect our results of operations.
Our sales staff compensation expenses decreased by 46.1% from RMB110.7 million in 2021 to RMB59.7 million (US$8.7 million) in 2022, primarily due to the decrease in the number of offline events held by us and the corresponding adjustment of our and the VIEs’ workforce structure.
Our sales staff compensation expenses decreased by 46.1% from RMB110.7 million in 2021 to RMB59.7 million in 2022, primarily due to the decrease in the number of offline events held by us and the corresponding adjustment of our and the VIEs’ workforce structure.
We primarily consider the following factors when evaluating impairment: ● significant underperformance relative to projected operating results; ● significant changes in the overall business strategy; ● significant adverse changes in legal or business environment; and ● significant competition, unfavorable industry trends, or economic outlook. 118 Table of Contents When these events occur, we evaluate the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition.
We primarily consider the following factors when evaluating impairment: ● significant underperformance relative to projected operating results; ● significant changes in the overall business strategy; ● significant adverse changes in legal or business environment; and ● significant competition, unfavorable industry trends, or economic outlook. ​ 117 Table of Contents When these events occur, we evaluate the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition.
In particular, tier-3 and below cities are experiencing, and are expected to continue to experience, a faster growth rate than tier-1 and tier-2 cities in terms of new automobile sales volume, according to the iResearch report. ​ 97 Table of Contents Since 2020, we and the VIEs have faced continuing macroeconomic and industry-wide headwinds, such as the continuing impact of the COVID-19 pandemic and the shortage in vehicle supply caused by the global chip shortage.
In particular, tier-3 and below cities are experiencing, and are expected to continue to experience, a faster growth rate than tier-1 and tier-2 cities in terms of new automobile sales volume, according to the iResearch report. ​ 96 Table of Contents Since 2020, we and the VIEs have faced continuing macroeconomic and industry-wide headwinds, such as the impact of the COVID-19 pandemic and the shortage in vehicle supply caused by the global chip shortage.
Revenue is recorded net of Value Added Tax (“VAT”), and related surcharges collected from customers, which are subsequently remitted to government authorities. 115 Table of Contents Offline marketing services revenue Auto show revenue Our and the VIEs’ online website and offline infrastructure allow us and the VIEs to organize auto shows, which aim at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers.
Revenue is recorded net of Value Added Tax (“VAT”), and related surcharges collected from customers, which are subsequently remitted to government authorities. 114 Table of Contents Offline marketing services revenue Auto show revenue Our and the VIEs’ online website and offline infrastructure allow us and the VIEs to organize auto shows, which aim at facilitating transactions between consumers and industry customers that includes auto dealers, automakers and automotive service providers.
The live streaming promotion events revenue is recognized on a straight-line basis over the period of the contract, which is usually one week, when the services are provided. 116 Table of Contents Other revenue We and the VIEs also commenced customer referral services from the first quarter of 2020 by referring industry customers to Baidu to use the membership services of a Baidu’s auto content distribution platform.
The live streaming promotion events revenue is recognized on a straight-line basis over the period of the contract, which is usually one week, when the services are provided. 115 Table of Contents Other revenue We and the VIEs also commenced customer referral services from the first quarter of 2020 by referring industry customers to Baidu to use the membership services of a Baidu’s auto content distribution platform.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders.” 106 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders.” 105 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated.
Our and the VIEs’ scale has also enabled us and the VIEs to establish an extensive network of industry customers, which is critical to our and the VIEs’ ability to expand the variety of services we and the VIEs offer and solidify our and the VIEs’ market leadership. ​ 98 Table of Contents Pricing Our and the VIEs’ ability to maintain or potentially increase the service fees we and the VIEs charge industry customers directly impacts our and the VIEs’ results of operations.
Our and the VIEs’ scale has also enabled us and the VIEs to establish an extensive network of industry customers, which is critical to our and the VIEs’ ability to expand the variety of services we and the VIEs offer and solidify our and the VIEs’ market leadership. ​ 97 Table of Contents Pricing Our and the VIEs’ ability to maintain or potentially increase the service fees we and the VIEs charge industry customers directly impacts our and the VIEs’ results of operations.
In 2021 and 2022, we organized 450 and 150 auto shows in 142 and 76 cities, offering a total of 12,372 and 2,868 booths, respectively. ● Net revenues from special promotion event services decreased by 59.7% from RMB4.0 million in 2021 to RMB1.6 million (US$0.2 million) in 2022, primarily due to a reduced number of special promotion events held by us and the VIEs as a result of tightened government restrictions in response to regional COVID-19 outbreaks.
In 2021 and 2022, we organized 450 and 150 auto shows in 142 and 76 cities, offering a total of 12,372 and 7,144 booths, respectively. ● Net revenues from special promotion event services decreased by 59.7% from RMB4.0 million in 2021 to RMB1.6 million in 2022, primarily due to a reduced number of special promotion events held by us and the VIEs as a result of tightened government restrictions in response to regional COVID-19 outbreaks.
We had ceased operation of the referral services since April 1, 2022 102 Table of Contents Online marketing services We and the VIEs commenced live streaming promotion events services in the first quarter of 2020. For the live streaming promotion events services, we and the VIEs hold promotional events on the live streaming platform of Zhejiang Tmall Technology Co., Ltd.
We had ceased operation of the referral services since April 1, 2022. 101 Table of Contents Online marketing services We and the VIEs commenced live streaming promotion events services in the first quarter of 2020. For the live streaming promotion events services, we and the VIEs hold promotional events on the live streaming platform of Zhejiang Tmall Technology Co., Ltd.
Payments of dividends by the subsidiary to the Company are not subject to withholding tax in Hong Kong. 105 Table of Contents PRC Our subsidiaries and the VIEs are incorporated under PRC law and, as such, are subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws.
Payments of dividends by the subsidiary to the Company are not subject to withholding tax in Hong Kong. 104 Table of Contents PRC Our subsidiaries and the VIEs are incorporated under PRC law and, as such, are subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws.
General and administrative expenses Our general and administrative expenses decreased by 11.1% from RMB72.8 million in 2021 to RMB64.7 million (US$9.4 million) in 2022, primarily due to (1) a decrease in the administrative staff compensation expenses, as a result of adjustment of our and the VIEs’ workforce structure and (2) a decrease in allowance for doubtful accounts, as a result of strengthened collection efforts of accounts receivable, partially offset by an increase in professional service expenses in connection with the November 2022 Offering.
General and administrative expenses Our general and administrative expenses decreased by 11.1% from RMB72.8 million in 2021 to RMB64.7 million in 2022, primarily due to (1) a decrease in the administrative staff compensation expenses, as a result of adjustment of our and the VIEs’ workforce structure and (2) a decrease in allowance for doubtful accounts, as a result of strengthened collection efforts of accounts receivable, partially offset by an increase in professional service expenses in connection with the November 2022 Offering.
Based on an assessment of the qualitative factors, management determined that it is more likely than not that the fair value of the reporting unit is less than its carrying amount as of December 31, 2021 and 2022.
Based on an assessment of the qualitative factors, management determined that it is more likely than not that the fair value of the reporting unit is less than its carrying amount as of December 31, 2022 and 2023.
In 2021 and 2022, we facilitated 158 and 90 special promotion events for our industry customers, respectively. ● Net revenues from referral service for a commercial bank decreased by 34.0% from RMB67.0 million in 2021 to RMB44.2 million (US$6.4 million) in 2022, primarily because we ceased operation of the referral services since April 1, 2022. ● Net revenues from our online marketing services increased significantly from approximately RMB14.5 million in 2021 to RMB50.8 million (US$7.4 million), primarily due to the increase in the number of live streaming events held by us and the VIEs and the newly launched online promotion services. 107 Table of Contents ● Net revenues from other services increased by 11.8% from approximately RMB29.2 million in 2021 to RMB32.7 million (US$4.7 million), primarily due to the substantial expansion of our and the VIEs’ aftermarket promotion service.
In 2021 and 2022, we facilitated 158 and 90 special promotion events for our industry customers, respectively. ● Net revenues from referral service for a commercial bank decreased by 34.0% from RMB67.0 million in 2021 to RMB44.2 million in 2022, primarily because we ceased operation of the referral services since April 1, 2022. ● Net revenues from our online marketing services increased significantly from approximately RMB14.5 million in 2021 to RMB50.8 million, primarily due to the increase in the number of live streaming events held by us and the VIEs and the newly launched online promotion services. ● Net revenues from other services increased by 11.8% from approximately RMB29.2 million in 2021 to RMB32.7 million, primarily due to the substantial expansion of our and the VIEs’ aftermarket promotion service.
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 2022 that are reasonably likely to have a material adverse effect on our net revenue, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition. 114 Table of Contents E.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the 2023 that are reasonably likely to have a material adverse effect on our net revenue, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.
In 2022, the difference between our cash used in operating activities and our net loss of RMB158.1 million (US$22.9 million) resulted primarily from (1) provisions for goodwill impairment of RMB69.9 million (US$10.1 million), (2) provisions for long-lived asset impairment of RMB19.7 million (US$2.9 million), (3) share-based compensation of RMB10.3 million (US$1.5 million), (4) allowance of doubtful accounts of RMB8.1 million (US$1.2 million), and (5) a decrease in prepayment and other current assets of RMB5.2 million (US$0.7 million), partially offset by (1) a decrease in accounts payable of RMB24.3 million (US$3.5 million), (2) a decrease in advance from customers of RMB11.7 million (US$1.7 million), (3) income on changes in fair value of RMB11.2 million (US$1.6 million), (4) a decrease in other current liabilities of RMB8.0 million (US$1.2 million) and (5) a decrease in salary and welfare benefits payable of RMB6.9 million (US$1.0 million).
In 2022, the difference between our cash used in operating activities and our net loss of RMB166.5 million resulted primarily from (1) provisions for goodwill impairment of RMB69.9 million, (2) provisions for long-lived asset impairment of RMB19.7 million, (3) share-based compensation of RMB10.3 million, (4) allowance of doubtful accounts of RMB8.1 million, and (5) a decrease in prepayment and other current assets of RMB5.2 million, partially offset by (1) a decrease in accounts payable of RMB15.9 million, (2) a decrease in advance from customers of RMB11.7 million, (3) income on changes in fair value of RMB11.2 million, (4) a decrease in other current liabilities of RMB8.0 million and (5) a decrease in salary and welfare benefits payable of RMB6.9 million.
In 2020, 2021 and 2022, net revenues from special promotion events were RMB4.9 million, RMB4.0 million and RMB1.6 million (US$0.2 million), representing 1.4%, 1.1% and 0.9% of our net revenues, respectively.
In 2021, 2022 and 2023, net revenues from special promotion events were RMB4.0 million, RMB1.6 million and RMB3.2 million (US$0.4 million), representing 1.1%, 0.9% and 1.9% of our net revenues, respectively.
Financing Activities Net cash generated from financing activities was RMB91.2 million (US$13.2 million) in 2022, primarily due to (1) net proceeds after deducting placement agent fee and offering expenses from the November 2022 Offering of approximately RMB93.5 million (US$13.6 million) and (2) proceeds from borrowings of RMB6.2 million (US$0.9 million), partially offset by cash repayments of short-term borrowings of RMB8.5 million (US$1.2 million).
Net cash generated from financing activities was RMB91.2 million in 2022, primarily due to (1) net proceeds after deducting placement agent fee and offering expenses from the November 2022 Offering of approximately RMB93.5 million and (2) proceeds from borrowings of RMB6.2 million, partially offset by cash repayments of short-term borrowings of RMB8.5 million.
We recorded impairment of long-lived assets of nil, nil and RMB19.7 million (US$2.9 million) in 2020, 2021 and 2022, respectively, accounting for nil, nil and 10.8% of our net revenues in the same periods, respectively. Taxation Cayman Islands We are incorporated in the Cayman Islands.
We recorded impairment of long-lived assets of nil, RMB19.7 million and RMB1.5 million (US$0.2 million) in 2021, 2022 and 2023, respectively, accounting for nil, 10.8% and 0.9% of our net revenues in the same periods, respectively. Taxation Cayman Islands We are incorporated in the Cayman Islands.
We provide a scalable omni-channel automotive marketplace approach to automobile marketing and distribution. We offer marketing solutions by integrating our online platform and offline sales events. In 2020, 2021 and 2022, we hosted 449, 450 and 150 auto shows across 172, 142 and 76 cities in China, respectively.
We provide a scalable omni-channel automotive marketplace approach to automobile marketing and distribution. We offer marketing solutions by integrating our online platform and offline sales events. In 2021, 2022 and 2023, we hosted 450, 150 and 299 auto shows across 142, 76 and 81 cities in China, respectively.
We performed qualitative analysis regarding the existence of impairment indicators pursuant to ASC 360-10-35-21 and concluded that there are indicators that the asset group might be impaired mainly due to the adverse impact of COVID-19 and the recurring net losses and operating cash out- flows for the years ended December 31, 2020 and 2021.
We performed qualitative analysis regarding the existence of impairment indicators pursuant to ASC 360-10-35-21 and concluded that there are indicators that the asset group might be impaired mainly due to recurring net losses and operating cash out-flows for the years ended December 31, 2023.
In 2020, 2021 and 2022, net revenues generated from referral service for the commercial bank were RMB18.7 million, RMB67.0 million and RMB44.2 million (US$6.4 million), respectively, representing 5.7%, 18.8% and 24.1% of our net revenues for the same periods, respectively.
In 2021, 2022 and 2023, net revenues generated from referral service for the commercial bank were RMB67.0 million, RMB44.2 million and RMB2.6 million (US$0.4 million), respectively, representing 18.8%, 24.1% and 1.6% of our net revenues for the same periods, respectively.
C. Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Technology” and “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” D.
C. Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Technology” and “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” 113 Table of Contents D.
Allowance for doubtful account The carrying value of accounts receivable is reduced by an allowance that reflects our best estimate of the amounts that will not be collected.
Allowance for credit loss The carrying value of accounts receivable is reduced by an allowance that reflects our best estimate of the amounts that will not be collected.
Cost of Revenues Our cost of revenues decreased by 27.1% from RMB85.3 million in 2021 to RMB62.2 million (US$9.0 million), primarily due to the following reasons. ● Our venue set-up costs decreased by 73.0% from RMB24.1 million in 2021 to RMB6.5 million (US$0.9 million) in 2022, generally in line with the decreases in net revenues from auto show services and special promotion event services. ● Our venue rental costs decreased by 71.4% from RMB33.3 million in 2021 to RMB9.5 million (US$1.4 million) in 2022, generally in line with the decreases in net revenues from auto show services and special promotion event services.. ● Our other direct costs increased by 65.6% from RMB27.9 million in 2021 to RMB46.2 million (US$6.7 million) in 2022, primarily due to an increase in information acquisition costs in connection with our and the VIEs’ online marketing services.
Cost of Revenues Our cost of revenues decreased by 17.3% from RMB85.3 million in 2021 to RMB70.5 million, primarily due to the following reasons. ● Our venue set-up costs decreased by 73.0% from RMB24.1 million in 2021 to RMB6.5 million in 2022, generally in line with the decreases in net revenues from auto show services and special promotion event services. ● Our venue rental costs decreased by 71.4% from RMB33.3 million in 2021 to RMB9.5 million in 2022, generally in line with the decreases in net revenues from auto show services and special promotion event services. ● Our other direct costs increased by 95.6% from RMB27.9 million in 2021 to RMB54.5 million in 2022, primarily due to an increase in information acquisition costs in connection with our and the VIEs’ online marketing services.
The total number of industry customers we and the VIEs served through our and the VIEs’ various service offerings decreased from 6,555 in 2020 to 6,097 in 2021, and further to 3,112 in 2022. As of December 31, 2020, 2021 and 2022, our and the VIEs’ sales operations cover 126, 119 and 83 cities across China, respectively.
The total number of industry customers we and the VIEs served through our and the VIEs’ various service offerings decreased from 6,097 in 2021 to 3,112 in 2022 and 3,443 in 2023. As of December 31, 2021, 2022 and 2023, our and the VIEs’ sales operations cover 119, 83 and 79 cities across China, respectively.
We recorded research and development expenses of RMB34.3 million, RMB35.7 million and RMB19.8 million (US$2.9 million) in 2020, 2021 and 2022, respectively, accounting for 10.4%, 9.9% and 10.8% of our net revenues in the same periods, respectively. Impairment of long-lived assets Impairment of long-lived assets was in relation to property, equipment and software, intangible assets and right-of-use assets.
We recorded research and development expenses of RMB35.7 million, RMB19.8 million and RMB11.3 million (US$1.6 million) in 2021, 2022 and 2023, respectively, accounting for 9.9%, 10.8% and 6.9% of our net revenues in the same periods, respectively. Impairment of long-lived assets Impairment of long-lived assets was in relation to property, equipment and software, intangible assets and right-of-use assets.
In exchange, we and the VIEs pay these service providers service fees, which we recognize as venue set-up costs after the relevant services are rendered. Our venue set-up costs were RMB24.7 million, RMB24.1 million and RMB6.5 million (US$0.9 million) in 2020, 2021 and 2022, respectively.
In exchange, we and the VIEs pay these service providers service fees, which we recognize as venue set-up costs after the relevant services are rendered. Our venue set-up costs were RMB24.1 million, RMB6.5 million and RMB14.4 million (US$2.0 million) in 2021, 2022 and 2023, respectively.
We generated net revenues from other services of approximately RMB25.2 million, RMB29.2 million and RMB32.7 million (US$4.7 million) in 2020, 2021 and 2022, representing 7.6%, 8.1% and 17.8% of our net revenues for the same periods, respectively. Cost of Revenues Our cost of revenues consists of (1) venue set-up costs, (2) venue rental costs, and (3) other direct costs.
We generated net revenues from other services of approximately RMB29.2 million, RMB32.7 million and RMB21.9 million (US$3.1 million) in 2021, 2022 and 2023, representing 8.1%, 17.8% and 13.5% of our net revenues for the same periods, respectively. Cost of Revenues Our cost of revenues consists of (1) venue set-up costs, (2) venue rental costs, and (3) other direct costs.
Net cash generated from investing activities was RMB47.9 million in 2021, primarily due to (1) cash of RMB45.7 million received from maturity of time deposits and (2) cash of RMB5.4 million received from disposal of long-term investments, partially offset by (1) cash of RMB2.3 million paid for long-term investments and (2) purchase of property, equipment and software, and other non-current assets of RMB1.0 million.
Net cash generated from investing activities was RMB47.9 million in 2021, primarily due to (1) cash of RMB45.7 million received from maturity of time deposits and (2) cash of RMB5.4 million received from disposal of long-term investments, partially offset by (1) cash of RMB2.3 million paid for long-term investments and (2) purchase of property, equipment and software, and other non-current assets of RMB1.0 million. ​ 112 Table of Contents Financing Activities Net cash generated from financing activities was RMB14.0 million (US$2.0 million) in 2023, primarily due to proceeds from borrowings of RMB20.4 million (US$2.9 million), partially offset by cash repayments of borrowings of RMB6.4 million (US$0.9 million).
Auto shows We typically generate net revenues from industry customers that pay for booth spaces in our and the VIEs’ auto shows. In 2020, 2021 and 2022, net revenues generated from our auto shows were RMB250.5 million, RMB242.9 million and RMB54.0 million (US$7.8 million), respectively, representing 75.9%, 67.9% and 29.5% of our net revenues for the same periods, respectively.
Auto shows We typically generate net revenues from industry customers that pay for booth spaces in our and the VIEs’ auto shows. In 2021, 2022 and 2023, net revenues generated from our auto shows were RMB242.9 million, RMB54.0 million and RMB111.3 million (US$15.7 million), respectively, representing 67.9%, 29.5% and 68.6% of our net revenues for the same periods, respectively.
We generated net revenues from online marketing services of approximately RMB31.0 million, RMB14.5 million and RMB50.8 million (US$7.4 million) in 2020, 2021 and 2022, representing 9.4%, 4.1% and 27.7% of our net revenues for the same periods, respectively.
We generated net revenues from online marketing services of approximately RMB14.5 million, RMB50.8 million and RMB23.4 million (US$3.3 million) in 2021, 2022 and 2023, representing 4.1%, 27.7% and 14.4% of our net revenues for the same periods, respectively.
Operating Expenses Selling and marketing expenses Our selling and marketing expenses decreased by 53.5% from RMB274.7 million in 2021 to RMB127.7 million (US$18.5 million) in 2022, primarily due to a decrease in advertising and promotion expenses and sales staff compensation expenses, as a result of the decrease in the number of offline events held by us and the VIEs and the adjustment of our and the VIEs’ workforce structure.
Operating Expenses Selling and marketing expenses Our selling and marketing expenses decreased by 53.5% from RMB274.7 million in 2021 to RMB127.7 million in 2022, primarily due to a decrease in advertising and promotion expenses and sales staff compensation expenses, as a result of the decrease in the number of offline events held by us and the VIEs and the adjustment of our and the VIEs’ workforce structure. 109 Table of Contents Our advertising and promotion expenses decreased by 58.9% from RMB140.1 million in 2021 to RMB57.6 million in 2022, primarily due to the decrease in the number of offline events held by us and the VIEs during 2022.
Others, net included in other income/(expenses) primarily include government grants and VAT refunds, partially offset by change of guarantee liability. Net Loss As a result of the foregoing, we had net loss of RMB163.5 million and RMB101.9 million in 2020 and 2021, respectively. B.
Others, net included in other income/(expenses) primarily include government grants and VAT refunds, change in fair value of warrant liability, partially offset by impairment of goodwill. Net Loss As a result of the foregoing, we had net loss of RMB101.9 million and RMB166.5 million in 2021 and 2022, respectively. B.
Our venue rental costs were RMB33.7 million, RMB33.3 million and RMB9.5 million (US$1.4 million) in 2020, 2021 and 2022, respectively. 103 Table of Contents Other direct costs Other direct costs primarily include costs related to the planning and organization of our and the VIEs’ offline and online events, such as security costs, direct labor costs and information acquisition costs.
Our venue rental costs were RMB33.3 million, RMB9.5 million and RMB20.6 million (US$2.9 million) in 2021, 2022 and 2023, respectively. 102 Table of Contents Other direct costs Other direct costs primarily include costs related to the planning and organization of our and the VIEs’ offline and online events, such as security costs, direct labor costs and information acquisition costs.
Liquidity and Capital Resources Liquidity and Capital Resources Our principal sources of liquidity have been cash generated from operations, proceeds from our initial public offering, the November 2022 Offering and loans from banks. As of December 31, 2020, 2021 and 2022, we had RMB109.0 million, RMB63.5 million and RMB69.9 million (US$10.1 million), respectively, in cash and cash equivalents.
Liquidity and Capital Resources Liquidity and Capital Resources Our principal sources of liquidity have been cash generated from operations, proceeds from our initial public offering, the November 2022 Offering and loans from banks. As of December 31, 2022 and 2023, we had RMB69.9 million and RMB9.6 million (US$1.3 million), respectively, in cash and cash equivalents.
We also historically generated net revenues from referral services for a commercial bank. In 2020, 2021 and 2022, our net revenues were RMB330.2 million, RMB357.6 million and RMB183.2 million (US$26.6 million), respectively.
We also historically generated net revenues from referral services for a commercial bank. In 2021, 2022 and 2023, our net revenues were RMB357.6 million, RMB183.2 million and RMB162.4 million (US$22.9 million), respectively.
The fair value of the warrant liabilities was valued using Black Scholes Option Pricing model with (1) risk-free rate, (2) expect warrants life, (3) exercise price of warrant, (4) stock price, (5) standard derivation in the value of stock, and (6) expected dividend yield. As of December 31, 2021 and 2022, we had nil and RMB24,376 million of warrant liability.
The fair value of the warrant liabilities was valued using Black Scholes Option Pricing model with (1) risk-free rate, (2) expect warrants life, (3) exercise price of warrant, (4) stock price, (5) standard derivation in the value of stock, and (6) expected dividend yield.
Our and the VIEs’ offline events may also be halted as a result of any public health crisis.
Our and the VIEs’ offline events may also be halted as a result of any public health crisis. For more information, see “Item 3.
Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) long-lived assets; (iii) accounts and note receivables, net; (iv) goodwill, (v) warrant and (vi) income tax expenses. See Note 3—Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies.
Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) allowance for credit loss; (iii) goodwill; (iv) impairment of long-lived assets; and (v) warrant liability. See Note 3—Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies.
As of December 31, 2022, future minimum payments under non-cancelable operating lease agreements were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment due by period ​ ​ Total ​ Less than 1 year ​ 1-3 years ​ More than 3 years ​ ​ (RMB in thousands) Office spaces and venues for auto shows(1) 13,700 5,826 5,817 2,057 (1) Represents minimum payments under non-cancelable operating lease agreements related to our office spaces and venues for auto shows.
As of December 31, 2023, future minimum payments under non-cancelable operating lease agreements were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment due by period ​ ​ Total Less than 1 year 1-3 years More than 3 years ​ ​ (RMB in thousands) Office spaces and venues for auto shows(1) 11,381 4,735 6,646 — (1) Represents minimum payments under non-cancelable operating lease agreements related to our office spaces and venues for auto shows.
In 2020, 2021 and 2022, we and the VIEs organized 449, 450 and 150 auto shows, respectively. The total number of automobiles sales transactions we and the VIEs facilitated decreased from 140,264 in 2020 to 104,689 in 2021, and further to 22,176 in 2022.
In 2021, 2022 and 2023, we and the VIEs organized 450, 150 and 299 auto shows, respectively. The total number of automobiles sales transactions we and the VIEs facilitated decreased from 104,689 in 2021 to 22,176 in 2022 and increased to 61,020 in 2023.
We recognized nil, nil and RMB19.7 million (US$2.9 million) in impairment loss related to long-lived assets in 2020, 2021 and 2022, respectively. Specifically, the impairment loss of RMB1.1 million (US$0.2 million), RMB3.0 million (US$0.4 million) and RMB15.6 million (US$2.3 million) was recognized in relation to property, equipment and software, right-of-use assets and intangible assets, respectively. Future cash flow assumptions.
Specifically, the impairment loss of RMB1.1 million, RMB3.0 million and RMB15.6 million in 2022 was recognized in relation to property, equipment and software, right-of-use assets and intangible assets, respectively, and the impairment loss of RMB1.5 million (US$0.2 million) in 2023 related to right-of-use assets. Future cash flow assumptions.
Accounts receivable balances are written off against the allowance when they are determined to be uncollectible. Notes receivable represents notes receivable issued by reputable financial institutions that entitle us to receive the full face amount from the financial institutions at maturity. 117 Table of Contents Assumptions Used.
Accounts receivable balances are written off against the allowance when they are determined to be uncollectible. Notes receivable represents notes receivable issued by reputable financial institutions that entitle us to receive the full face amount from the financial institutions at maturity. Assumptions Used . Our allowance for credit losses is based on its assumptions regarding the probability of default.
We intend to fund our future capital expenditures with our existing cash balance, proceeds from debt or equity financing and other financing alternatives. We will continue to incur capital expenditures to support the growth of our business. Off-Balance Sheet Arrangements We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
We will continue to incur capital expenditures to support the growth of our business. Off-Balance Sheet Arrangements We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
Our ability to continue as a going concern is dependent on our management's ability to successfully execute the business plan of reducing the fixed labor cost, pursuing cooperation opportunities in the electric vehicles industry, pursuing potential financing to improve our cash flow from operating and financing activities, and effectively responding to the future development of the COVID-19 pandemic.
Our ability to continue as a going concern is dependent on our management’s ability to successfully execute the business plan of improving staff efficiency, pursuing cooperation opportunities in the electric vehicles industry, and pursuing potential financing to improve our cash flow from operating and financing activities.
The following table sets forth the components of operating expenses, in absolute amounts and as a percentage of net revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues 330,228 100.0 357,552 100.0 183,188 26,560 100.0 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling and marketing expenses 279,665 84.7 274,670 76.8 127,696 18,514 69.7 General and administrative expenses 98,820 29.9 72,788 20.4 64,708 9,382 35.3 Research and development expenses 34,267 10.4 35,651 9.9 19,799 2,871 10.8 Impairment of long-lived assets ​ — ​ — ​ — ​ — ​ 19,743 ​ 2,863 ​ 10.8 Total operating expenses 412,752 125.0 383,109 107.1 231,946 33,630 126.6 ​ Selling and marketing expenses Our selling and marketing expenses consist primarily of (1) advertising and promotion expenses, which entail expenditures related to online and offline promotion of our and the VIEs’ business, (2) sales staff compensation, (3) others, including transportation expenses incurred by our and the VIEs’ sales staff, field sales office rental expenses and call center expenses.
The following table sets forth the components of operating expenses, in absolute amounts and as a percentage of net revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues 357,552 100.0 183,188 100.0 162,367 22,868 100.0 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling and marketing expenses 274,670 76.8 127,696 69.7 157,004 22,114 96.7 General and administrative expenses 72,788 20.4 64,708 35.3 44,666 6,291 27.5 Research and development expenses 35,651 9.9 19,799 10.8 11,267 1,587 6.9 Impairment of long-lived assets ​ — ​ — ​ 19,743 ​ 10.8 ​ 1,515 ​ 213 ​ 0.9 Total operating expenses 383,109 107.1 231,946 126.6 214,452 30,205 132.0 ​ Selling and marketing expenses Our selling and marketing expenses consist primarily of (1) advertising and promotion expenses, which entail expenditures related to online and offline promotion of our and the VIEs’ business, (2) sales staff compensation, (3) others, including transportation expenses incurred by our and the VIEs’ sales staff, field sales office rental expenses and call center expenses.
Warrants recorded as liabilities are recorded at their fair value and remeasured on each reporting date with change in estimated fair value of warrant liability in the consolidated statement of operations and comprehensive loss.
We evaluate the warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. Warrants recorded as liabilities are recorded at their fair value and remeasured on each reporting date with change in estimated fair value of warrant liability in the consolidated statement of operations and comprehensive loss.
The following table sets forth the components of general and administrative expenses, in absolute amounts and as a percentage of net revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues 330,228 100.0 357,552 100.0 183,188 26,560 100.0 General and administrative expenses: ​ ​ ​ ​ ​ ​ ​ Administrative staff compensation 36,752 11.1 22,520 6.3 17,741 2,572 9.7 Professional service expenses 10,509 3.2 11,172 3.1 24,111 3,496 13.2 Office expenses 13,365 4.0 12,765 3.6 9,500 1,377 5.2 Others 38,194 11.6 26,331 7.4 13,356 1,937 7.2 Total general and administrative expenses 98,820 29.9 72,788 20.4 64,708 9,382 35.3 ​ Research and development expenses Research and development expenses consist primarily of compensation for research and development personnel.
The following table sets forth the components of general and administrative expenses, in absolute amounts and as a percentage of net revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues 357,552 100.0 183,188 100.0 162,367 22,868 100.0 General and administrative expenses: ​ ​ ​ ​ ​ ​ ​ Administrative staff compensation 22,520 6.3 17,741 9.7 16,688 2,350 10.3 Professional service expenses 11,172 3.1 24,111 13.2 16,517 2,326 10.2 Office expenses 12,765 3.6 9,500 5.2 4,279 603 2.6 Others 26,331 7.4 13,356 7.2 7,182 1,012 4.4 Total general and administrative expenses 72,788 20.4 64,708 35.3 44,666 6,291 27.5 ​ Research and development expenses Research and development expenses consist primarily of compensation for research and development personnel.
Our auto shows offered a total of 14,341, 12,372 and 2,868 booth spaces in 2020, 2021 and 2022, respectively. The total number of automobile sales transactions we facilitated was 104,689 and 22,176 in 2021 and 2022, respectively, with a total GMV of approximately RMB14.6 billion and RMB3.4 billion (US$0.5 billion) in the same year, respectively.
Our auto shows offered a total of 12,372, 2,868 and 7,144 booth spaces in 2021, 2022 and 2023, respectively. The total number of automobile sales transactions we facilitated with our auto shows was 22,176 and 61,020 in 2022 and 2023, respectively, with a total GMV of approximately RMB3.4 billion and RMB9.7 billion (US$1.4 billion) in the same year, respectively.
Gross Profit As a result of the foregoing, our gross profit decreased by 55.6% from RMB272.3 million in 2021 to RMB121.0 million (US$17.5 million) in 2022.
Gross Profit As a result of the foregoing, our gross profit decreased by 58.6% from RMB272.3 million in 2021 to RMB112.7 million in 2022.
The following table sets forth the components of our selling and marketing expenses, in absolute amounts and as a percentage of net revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues 330,228 100.0 357,552 100.0 183,188 26,560 100.0 Selling and marketing expenses: Advertising and promotion expense 156,594 47.4 140,088 39.2 57,562 8,346 31.4 Sales staff compensation 103,786 31.4 110,680 31.0 59,667 8,651 32.6 Others 19,285 5.9 23,902 6.6 10,467 1,517 5.7 Total selling and marketing expenses 279,665 84.7 274,670 76.8 127,696 18,514 69.7 ​ 104 Table of Contents General and administrative expenses General and administrative expenses consist primarily of (1) administrative staff compensation, (2) professional service expenses, (3) office expenses, and (4) others, including allowance of doubtful accounts and insurance expenses.
The following table sets forth the components of our selling and marketing expenses, in absolute amounts and as a percentage of net revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues 357,552 100.0 183,188 100.0 162,367 22,868 100.0 Selling and marketing expenses: Advertising and promotion expense 140,088 39.2 57,562 31.4 98,490 13,872 60.7 Sales staff compensation 110,680 31.0 59,667 32.6 43,964 6,192 27.1 Others 23,902 6.6 10,467 5.7 14,550 2,050 8.9 Total selling and marketing expenses 274,670 76.8 127,696 69.7 157,004 22,114 96.7 ​ 103 Table of Contents General and administrative expenses General and administrative expenses consist primarily of (1) administrative staff compensation, (2) professional service expenses, (3) office expenses, and (4) others, including allowance of doubtful accounts and insurance expenses.
The following table sets forth the breakdown of our total net revenues, both in absolute amounts and as a percentage of total net revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % ​ RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues: Offline marketing services Auto show 250,481 75.9 242,860 67.9 53,962 7,824 29.5 Special promotion events 4,851 1.4 3,994 1.1 1,609 233 0.9 Referral service for commercial bank ​ 18,694 ​ 5.7 ​ 67,010 ​ 18.8 ​ 44,202 ​ 6,409 ​ 24.1 Online marketing services 31,009 9.4 14,489 4.1 50,757 7,359 27.7 Other services ​ 25,193 ​ 7.6 ​ 29,199 ​ 8.1 ​ 32,658 ​ 4,735 ​ 17.8 Total net revenues 330,228 100.0 357,552 100.0 183,188 26,560 100.0 ​ Offline marketing services revenue Our offline marketing services revenue primarily consists of revenues from auto shows and special promotion events.
The following table sets forth the breakdown of our total net revenues, both in absolute amounts and as a percentage of total net revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % ​ RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues: Offline marketing services Auto show 242,860 67.9 53,962 29.5 111,349 15,683 68.6 Special promotion events 3,994 1.1 1,609 0.9 3,166 446 1.9 Referral service for commercial bank ​ 67,010 ​ 18.8 ​ 44,202 ​ 24.1 ​ 2,572 ​ 362 ​ 1.6 Online marketing services 14,489 4.1 50,757 27.7 23,411 3,297 14.4 Other services ​ 29,199 ​ 8.1 ​ 32,658 ​ 17.8 ​ 21,869 ​ 3,080 ​ 13.5 Total net revenues 357,552 100.0 183,188 100.0 162,367 22,868 100.0 ​ Offline marketing services revenue Our offline marketing services revenue primarily consists of revenues from auto shows and special promotion events.
In accordance with ASC 350, Goodwill and Other Intangible Assets, recorded goodwill amounts are not amortized, but rather are tested for impairment annually or more frequently if there are indicators of impairment present.
Our goodwill as of December 31, 2022 and 2023 was related to its acquisition of Longye in January 2020. In accordance with ASC 350, Goodwill and Other Intangible Assets, recorded goodwill amounts are not amortized, but rather are tested for impairment annually or more frequently if there are indicators of impairment present.
Historically, we generated our net revenues primarily through our offline events. Our net revenues were RMB330.2 million, RMB357.6 million and RMB183.2 million (US$26.6 million) in 2020, 2021 and 2022, respectively. Our net loss was RMB163.5 million, RMB101.9 million and RMB158.1 million (US$22.9 million) in 2020, 2021 and 2022, respectively.
Historically, we generated our net revenues primarily through our offline events. Our net revenues were RMB357.6 million, RMB183.2 million and RMB162.4 million (US$22.9 million) in 2021, 2022 and 2023, respectively. Our net loss was RMB101.9 million, RMB166.5 million and RMB83.0 million (US$11.7 million) in 2021, 2022 and 2023, respectively.
General and administrative expenses, as a percentage of total net revenues, increased from 20.4% in 2021 to 35.3% in 2022, primarily due to the decrease in our net revenues. 108 Table of Contents Research and Development Expenses Our research and development expenses decreased by 44.5% from RMB35.7 million in 2021 to RMB19.8 million (US$2.9 million) in 2022, primarily due to the decrease in the staff compensation expenses, as a result of the adjustment of our and the VIEs’ workforce structure.
Research and Development Expenses Our research and development expenses decreased by 44.5% from RMB35.7 million in 2021 to RMB19.8 million in 2022, primarily due to the decrease in the staff compensation expenses, as a result of the adjustment of our and the VIEs’ workforce structure.
Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments that might result from the outcome of uncertainties described above.
Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.
We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. 100 Table of Contents The following tables set forth a reconciliation of our adjusted EBITDA and adjusted net loss to net loss for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Net loss (163,478) (101,945) (158,140) (22,929) Add: Depreciation and amortization 7,109 7,668 4,237 614 Subtract: ​ ​ ​ ​ Interest income/(expenses), net 2,409 625 (174) (25) EBITDA (158,778) (94,902) (153,729) (22,290) Add: Share-based compensation expenses 17,448 9,796 10,282 1,491 Change of guarantee liability 233 1,542 — — Impairment of long-term investment — 700 — — Change in fair value of warrant liability ​ — ​ — ​ (11,219) ​ (1,627) Impairment of long-lived assets — — 19,743 2,863 Impairment of goodwill ​ — ​ — ​ 69,853 ​ 10,128 Adjusted EBITDA (141,097) (82,864) (65,070) (9,435) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB ​ RMB ​ RMB ​ US$ Net loss (163,478) (101,945) (158,140) (22,929) Add: ​ ​ ​ ​ ​ ​ ​ ​ Share-based compensation expenses 17,448 9,796 10,282 1,491 Change of guarantee liability ​ 233 ​ 1,542 ​ — ​ — Impairment of long-term investment — 700 — — Change in fair value of warrant liability ​ — ​ — ​ (11,219) ​ (1,627) Impairment of long-lived assets ​ — ​ — ​ 19,743 ​ 2,863 Impairment of goodwill ​ — ​ — ​ 69,853 ​ 10,128 Adjusted net loss (145,797) (89,907) (69,481) (10,074) ​ 101 Table of Contents Key Components of Results of Operations Net Revenues We generate net revenues primarily from offline marketing service, referral services for commercial bank, online marketing services and other services.
We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. 99 Table of Contents The following tables set forth a reconciliation of our adjusted EBITDA and adjusted net loss to net loss for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 2022 2023 ​ ​ RMB ​ RMB ​ RMB US$ ​ ​ (in thousands) Net loss (101,945) (166,490) (82,971) (11,687) Add: Depreciation and amortization 7,668 4,237 — — Subtract: ​ ​ ​ ​ Interest income/(expenses), net 625 (174) (143) (20) EBITDA (94,902) (162,079) (82,828) (11,667) Add: Share-based compensation expenses 9,796 10,282 9,546 1,345 Change of guarantee liability 1,542 — — — Impairment of long-term investment 700 — — — Change in fair value of warrant liability ​ — ​ (11,219) ​ (20,732) ​ (2,920) Impairment of long-lived assets — 19,743 1,515 213 Impairment of goodwill ​ — ​ 69,853 ​ — ​ — Adjusted EBITDA (82,864) (73,420) (92,499) (13,029) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 2022 2023 ​ ​ RMB ​ RMB ​ RMB US$ Net loss (101,945) (166,490) (82,971) (11,687) Add: ​ ​ ​ ​ ​ ​ ​ ​ Share-based compensation expenses 9,796 10,282 9,546 1,345 Change of guarantee liability ​ 1,542 ​ — ​ — ​ — Impairment of long-term investment 700 — — — Change in fair value of warrant liability ​ — ​ (11,219) ​ (20,732) ​ (2,920) Impairment of long-lived assets ​ — ​ 19,743 ​ 1,515 ​ 213 Impairment of goodwill ​ — ​ 69,853 ​ — ​ — Adjusted net loss (89,907) (77,831) (92,642) (13,049) ​ 100 Table of Contents Key Components of Results of Operations Net Revenues We generate net revenues primarily from offline marketing service, referral services for commercial bank, online marketing services and other services.
However, according to SAT Circular 81 and SAT Circular 35, if the relevant tax authorities consider the transactions or arrangements we have are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future.If our holding company in the Cayman Islands or any of our subsidiaries outside of China 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%, which could result in unfavorable tax consequences to us and our non-PRC shareholders.
If our holding company in the Cayman Islands or any of our subsidiaries outside of China 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%, which could result in unfavorable tax consequences to us and our non-PRC shareholders.
Information acquisition costs primarily related to costs incurred for acquiring vehicle sales leads. In 2020, 2021 and 2022, our other costs were RMB30.3 million, RMB27.9 million and RMB46.2 million (US$6.7 million), respectively.
Information acquisition costs primarily related to costs incurred for acquiring vehicle sales leads. In 2021, 2022 and 2023, our other costs were RMB27.9 million, RMB54.5 million and RMB33.9 million (US$4.8 million), respectively.
The following table sets forth the components of cost of revenues, both in absolute amount and as a percentage of net revenues for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues 330,228 100.0 357,552 100.0 183,188 26,560 100.0 Cost of revenues: Venue set-up costs 24,725 7.5 24,119 6.7 6,505 943 3.6 Venue rental costs 33,734 10.2 33,304 9.4 9,522 1,381 5.2 Other direct costs 30,342 9.2 27,867 7.8 46,160 6,692 25.1 Total cost of revenues 88,801 26.9 85,290 23.9 62,187 9,016 33.9 ​ Venue set-up costs We and the VIEs engage third-party service providers to assemble exhibition booths and coordinate maintenance issues with participating industry customers.
The following table sets forth the components of cost of revenues, both in absolute amount and as a percentage of net revenues for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Net revenues 357,552 100.0 183,188 100.0 162,367 22,868 100.0 Cost of revenues: Venue set-up costs 24,119 6.7 6,505 3.6 14,391 2,027 8.9 Venue rental costs 33,304 9.4 9,522 5.2 20,605 2,902 12.7 Other direct costs 27,867 7.8 54,510 29.7 33,946 4,781 20.9 Total cost of revenues 85,290 23.9 70,537 38.5 68,942 9,710 42.5 ​ Venue set-up costs We and the VIEs engage third-party service providers to assemble exhibition booths and coordinate maintenance issues with participating industry customers.
For example, we and the VIEs implemented measures to adjust the pace of business expansion and conserve resources, such as furlough arrangements and scaling back our recruitment budget and employee size, in 2020, 2021 and 2022. We and the VIEs are closely monitoring the status of the COVID-19 pandemic to timely adjust our and the VIEs’ strategies.
For example, we and the VIEs implemented measures to adjust the pace of business expansion and conserve resources, such as furlough arrangements and scaling back our recruitment budget and employee size, in 2021, 2022 and 2023. For more details, see “Item 3.
Our adjusted EBITDA was RMB(141.1) million, RMB(82.9) million and RMB(65.1) million (US$(9.4) million) in 2020, 2021 and 2022, respectively. We recorded adjusted net loss of RMB145.8 million, RMB90.0 million and RMB69.5 million (US$10.1 million) in 2020, 2021 and 2022, respectively.
Our adjusted EBITDA was RMB(82.9) million, RMB(73.4) million and RMB(92.5) million (US$(13.0) million) in 2021, 2022 and 2023, respectively. We recorded adjusted net loss of RMB90.0 million, RMB77.8 million and RMB92.6 million (US$13.0 million) in 2021, 2022 and 2023, respectively.
Special promotion event services We and the VIEs began to provide special promotion event services to industry customers in January 2019 to better support them in organizing their special promotion events.
Special promotion event services We and the VIEs began to provide special promotion event services to industry customers in January 2019 to better support them in organizing their special promotion events. We and the VIEs primarily provide a series of integrated services, such as event planning and executing, marketing training and onsite coaching.
We have not yet achieved a business scale that is able to generate a sufficient level of revenues to achieve net profit and positive cash flows from operating activities, and we expect the operating losses and negative cash flows from operations will continue for the foreseeable future.
Risk Factors—Risks Related to Our Business and Industry—The consolidated financial statements included herein contain disclosures that express substantial doubt about our ability to continue as a going concern.” We have not yet achieved a business scale that is able to generate a sufficient level of revenues to achieve net profit and positive cash flows from operating activities, and we expect the operating losses and negative cash flows from operations will continue for the foreseeable future.
Gross Profit As a result of the foregoing, our gross profit was RMB241.4 million, RMB272.3 million and RMB121.0 million (US$17.5 million) in 2020, 2021 and 2022, respectively, and our gross profit margin was 73.1%, 76.1% and 66.1% in 2020, 2021 and 2022, respectively.
Gross Profit As a result of the foregoing, our gross profit was RMB272.3 million, RMB112.7 million and RMB93.4 million (US$13.2 million) in 2021, 2022 and 2023, respectively, and our gross profit margin was 76.1%, 61.5% and 57.5% in 2021, 2022 and 2023, respectively.
Impairment of long-lived assets Impairment of long-lived assets increased from nil in 2021 to RMB19.7 million (US$2.9 million) in 2022, primarily due to impairment in relation to property, equipment and software, intangible assets and right-of-use assets.
Impairment of long-lived assets Impairment of long-lived assets decreased from RMB19.7 million in 2022 to RMB1.5 million (US$0.2 million) in 2023, primarily due to (1) a decrease in impairment loss of RMB1.1 million in relation to property, equipment and software, (2) a decrease in impairment loss of RMB1.5 million in relation to right-of-use assets, and (3) a decrease in impairment loss of RMB15.6 million in relation to intangible assets.
Historically, we have relied principally on cash from operating activities, non-operational sources of financing from investors to fund our operations and business development.
These conditions raise substantial doubt about our ability to continue as a going concern. Historically, we have relied principally on cash from operating activities, non-operational sources of equity and debt financing to fund our operations and business development.
We and the VIEs primarily provide a series of integrated services, such as event planning and executing, marketing training and onsite coaching. 2020, 2021 and 2022, we facilitated 207, 158 and 90 special promotion events through our and the VIEs’ services, respectively. We typically generate net revenues by charging industry customers fixed service fees per event.
In 2021, 2022 and 2023, we facilitated 158, 90 and 750 special promotion events through our and the VIEs’ services, respectively. We typically generate net revenues by charging industry customers fixed service fees per event.
General and administrative expenses, as a percentage of total net revenues, decreased from 29.9% in 2020 to 20.4% in 2021, primarily due to (1) the decrease in our general and administrative expenses for reasons described above and (2) our net revenue growth.
General and administrative expenses, as a percentage of total net revenues, increased from 20.4% in 2021 to 35.3% in 2022, primarily due to the decrease in our net revenues.
We recognized nil, nil and RMB11.2 million (US$1.6 million) in gain in fair value of warrant liability in 2020, 2021 and 2022, respectively.
As of December 31, 2022 and 2023, we had RMB24,376 million and RMB4.0 million (US$0.6 million) of warrant liability. We recognized nil, RMB11.2 million and RMB20.7 million (US$2.9 million) in gain in fair value of warrant liability in 2021, 2022 and 2023, respectively.
The following table sets forth a summary of our cash flows for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Net cash used in operating activities (88,854) (92,255) (109,679) (15,901) Net cash generated from/(used in) investing activities 37,698 47,865 (212) (31) Net cash (used in)/ generated from financing activities (63) 7,000 91,241 13,228 Effect of exchange rate effect on cash and cash equivalents (4,485) (5,048) (1,805) (262) Net decrease in cash, cash equivalents and restricted cash (55,704) (42,447) (20,455) (2,966) Cash and cash equivalents, and restricted cash at beginning of the period 195,449 139,745 97,298 14,107 Cash and cash equivalents, and restricted cash at end of the period 139,745 97,298 76,843 11,141 ​ 112 Table of Contents Operating Activities Cash used in operating activities was RMB109.7 million (US$15.9 million) in 2022.
The consolidated financial statements do not include any adjustments that might result from the outcome of uncertainties described above. 111 Table of Contents The following table sets forth a summary of our cash flows for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ ​ December 31, ​ 2021 2022 2023 ​ ​ RMB ​ RMB ​ RMB US$ ​ ​ (in thousands) Net cash used in operating activities (92,255) (109,679) (74,892) (10,550) Net cash generated from/(used in) investing activities 47,856 (212) — — Net cash generated from financing activities 7,000 91,241 13,972 1,968 Effect of exchange rate effect on cash and cash equivalents (5,048) (1,805) 70 10 Net decrease in cash, cash equivalents and restricted cash (42,447) (20,455) (60,850) (8,572) Cash and cash equivalents, and restricted cash at beginning of the period 139,745 97,298 76,843 10,824 Cash and cash equivalents, and restricted cash at end of the period 97,298 76,843 15,993 2,252 ​ Operating Activities Cash used in operating activities was RMB74.9 million (US$10.6 million) in 2023.
As of the same dates, we held a cash balance of RMB56.7 million, RMB10.1 million and RMB8.8 million (US$1.3 million) denominated in RMB, respectively, representing 51.6%, 15.9% and 12.6% of our total cash and cash equivalents, respectively. We had time deposits of RMB45.7 million, nil and nil as of December 31, 2020, 2021 and 2022, respectively.
As of December 31, 2022 and 2023, we held a cash balance of RMB61.1 million and RMB3.0 million (US$0.4 million) denominated in U.S. dollars, respectively. As of the same dates, we held a cash balance of RMB8.8 million and RMB6.6 million (US$0.9 million) denominated in RMB, respectively, representing 12.6% and 68.5% of our total cash and cash equivalents, respectively.
Investing Activities Net cash used in investing activities was RMB212.0 thousand (US$31.0 thousand) in 2022, representing purchase of property, equipment and software.
Investing Activities Net cash used in and generated from investing activities was nil in 2023. Net cash used in investing activities was RMB0.2 million in 2022, representing purchase of property, equipment and software.
Cash used in operating activities was RMB88.9 million in 2020.
Cash used in operating activities was RMB109.7 million in 2022.

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Item 6. [Reserved]

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

47 edited+11 added−8 removed51 unchanged
We may grant awards to our employees, directors and consultants of our company, and other individuals, as determined by the plan administrator. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries. Vesting schedule .
We may grant awards to our employees, directors and consultants of our company, and other individuals, as determined by the plan administrator. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees of our parent companies and subsidiaries. Vesting schedule .
In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Restricted shares . Restricted shares are subject to such restrictions on transferability and other restrictions as the committee may impose. Exercise of options . The committee determines the exercise price of each option, which is set forth in the Award Agreement.
In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Restricted shares . Restricted shares are subject to such restrictions on transferability and other restrictions as the committee may impose. Exercise of options . The committee determines the exercise price of each option, which is set forth in the Award Agreement.
The audit committee will be responsible for, among other things: ● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; ● reviewing and reassessing annually the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; 124 Table of Contents ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ● reporting regularly to the board.
The audit committee will be responsible for, among other things: ● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; 123 Table of Contents ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; ● reviewing and reassessing annually the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ● reporting regularly to the board.
The calculation of each director or executive’s beneficial ownership does not take into account that person’s restricted shares which were still held by Best Cars Limited and would not be vested within 60 days after March 20, 2023. † For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after March 20, 2023. †† For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
The calculation of each director or executive’s beneficial ownership does not take into account that person’s restricted shares which were still held by Best Cars Limited and would not be vested within 60 days after March 20, 2024. † For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after March 20, 2024. †† For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
The calculation of each director or executive’s percentage of aggregate voting power does not take into account that person’s unvested restricted shares which were still held by Best Cars Limited, the nominee of our equity incentive trust, as of March 20, 2023, the voting power of which remains vested with the trustee who shall follow the instruction of the Board or a committee of the Board consisting one or more members of the Board in respect of the exercise of such power until such vested restricted shares have been transferred outside of the trust and/or the nominee to the personal accounts of the relevant grant recipient.
The calculation of each director or executive’s percentage of aggregate voting power does not take into account that person’s unvested restricted shares which were still held by Best Cars Limited, the nominee of our equity incentive trust, as of March 20, 2024, the voting power of which remains vested with the trustee who shall follow the instruction of the Board or a committee of the Board consisting one or more members of the Board in respect of the exercise of such power until such vested restricted shares have been transferred outside of the trust and/or the nominee to the personal accounts of the relevant grant recipient.
C. Board Practices Board of Directors Our board of directors consists of five directors. A director is not required to hold any shares in our company for qualification, and may be an individual or a company.
Board Practices Board of Directors Our board of directors consists of five directors. A director is not required to hold any shares in our company for qualification, and may be an individual or a company.
( 8) Represents 38,155,408 Class A ordinary shares, held by Sabby Volatility Warrant Master Fund, Ltd. (“Sabby Fund”) in the from of ADSs, according to a Schedule 13G filed on January 4, 2023. The registered office of Sabby Fund is c/o Ogier Fiduciary Services (Cayman) Limited, 89 Nexus Way, Camana Bay, Grand Cayman KY1-9008, Cayman Islands.
( 7) Represents 38,155,408 Class A ordinary shares, held by Sabby Volatility Warrant Master Fund, Ltd. (“Sabby Fund”) in the from of ADSs, according to a Schedule 13G filed on January 4, 2023. The registered office of Sabby Fund is c/o Ogier Fiduciary Services (Cayman) Limited, 89 Nexus Way, Camana Bay, Grand Cayman KY1-9008, Cayman Islands.
The Plan shall be administered by the board or a committee of one or more members of the board to whom the board shall delegate the authority to grant or amend awards to participants other than any of the committee members.
The 2023 Plan shall be administered by the board or a committee of one or more members of the board to whom the board shall delegate the authority to grant or amend awards to participants other than any of the committee members.
KGaA is Carl-Bertelsmann-Strasse 270, 33311 Gütersloh, Germany. (7) Represents 30,482,380 Class A ordinary shares held by Beijing Z-Park Fund Investment Center (Limited Partner) (“Z-Park Fund”). The registered office of Z-Park Fund is Room 208, No. 11 Fengzhi East Road, Baiwang Innovation Technology Park, Haidian District, Beijing, PRC.
KGaA is Carl-Bertelsmann-Strasse 270, 33311 Gütersloh, Germany. (6) Represents 30,482,380 Class A ordinary shares held by Beijing Z-Park Fund Investment Center (Limited Partner) (“Z-Park Fund”). The registered office of Z-Park Fund is Room 208, No. 11 Fengzhi East Road, Baiwang Innovation Technology Park, Haidian District, Beijing, PRC.
Our board of directors or a committee of one or more members of the board will administer the Plan. The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant. Award agreement .
Our board of directors or a committee of one or more members of the board will administer the 2018 Plan. The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of March 20, 2023 by: ● each of our directors and executive officers; and ● each person known to us to beneficially own 5.0% or more of our ordinary shares.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of March 20, 2024 by: ● each of our directors and executive officers; and ● each person known to us to beneficially own 5.0% or more of our ordinary shares.
(6) Represents 28,715,429 Class A ordinary shares held by BAI GmbH, a company organized and existing under the laws of Germany. BAI GmbH is a wholly-owned subsidiary of subsidiary of Bertelsmann SE & Co. KGaA, a company organized and existing under the laws of Germany. The registered office of BAI GmbH and Bertelsmann SE & Co.
(5) Represents 28,715,429 Class A ordinary shares held by BAI GmbH, a company organized and existing under the laws of Germany. BAI GmbH is a wholly-owned subsidiary of subsidiary of Bertelsmann SE & Co. KGaA, a company organized and existing under the laws of Germany. The registered office of BAI GmbH and Bertelsmann SE & Co.
The committee also determines the exercise time and conditions for each option, provided that the maximum exercisable term is 10 years absent amendment or modification. 121 Table of Contents Transfer restrictions .
The committee also determines the exercise time and conditions for each option, provided that the maximum exercisable term is 10 years absent amendment or modification. 120 Table of Contents Transfer restrictions .
The registered office of WW Long Limited is Start Chambers, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands. (2) Represents (i) 2,810,672 Class A shares in the form of ADS, representing the number of restricted shares granted to Mr.
The registered office of WW Long Limited is Start Chambers, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands. 127 Table of Contents (2) Represents (i) 2,810,672 Class A shares in the form of ADS, representing the number of restricted shares granted to Mr.
Jianchen Sun that have vested or will vest within 60 days after March 31, 2022, and (ii) 11,320,000 Class A ordinary shares directly held by Sunzhiyuan Limited, a company organized and existing under the laws of the British Virgin Islands and wholly owned by Mr. Jianchen Sun. The registered office of Sunzhiyuan Limited is Start Chambers, Wickham’s Cay II, P.O.
Jianchen Sun that have vested or will vest within 60 days after March 20, 2024, and (ii) 11,320,000 Class A ordinary shares directly held by Sunzhiyuan Limited, a company organized and existing under the laws of the British Virgin Islands and wholly owned by Mr. Jianchen Sun. The registered office of Sunzhiyuan Limited is Start Chambers, Wickham’s Cay II, P.O.
Wei Wen that have vested as of March 31, 2022, (ii) 2,188,160 Class A ordinary shares held in the form of ADSs by WW Long Limited, and (iii) 55,260,580 Class B ordinary shares directly held by WW Long Limited, a company organized and existing under the laws of the British Virgin Islands and wholly owned by Mr. Wei Wen.
Wei Wen that have vested as of March 20, 2024, (ii) 2,188,160 Class A ordinary shares held in the form of ADSs by WW Long Limited, and (iii) 55,260,580 Class B ordinary shares directly held by WW Long Limited, a company organized and existing under the laws of the British Virgin Islands and wholly owned by Mr. Wei Wen.
To the extent permitted under the Plan and applicable law and regulations, the trustee shall follow the instruction of the Board or a committee of the Board consisting one or more members of the Board in respect of the exercise of voting rights (if any) and powers in relation to the Class A ordinary shares held by Best Cars Limited until they have been transferred outside of the trust and/or the nominee to the personal accounts of the relevant grant recipient.
To the extent permitted under the 2018 Plan and applicable law and regulations, the trustee shall follow the instruction of the Board or a committee of the Board consisting one or more members of the Board in respect of the exercise of voting rights (if any) and powers in relation to the Class A ordinary shares held by Best Cars Limited until they have been transferred outside of the trust and/or the nominee to the personal accounts of the relevant grant recipient. ​ 122 Table of Contents C.
Through the equity incentive trust, our Class A ordinary shares underlying equity awards granted pursuant to our Share Incentive Plan may be provided to certain of recipients of such equity awards. As of March 20, 2023, Best Cars Limited held 6,663,321 Class A ordinary shares pursuant to our Share Incentive Plan.
Through the equity incentive trust, our Class A ordinary shares underlying equity awards granted pursuant to our 2018 Plan may be provided to certain of recipients of such equity awards. As of March 20, 2024, Best Cars Limited held 6,663,321 Class A ordinary shares pursuant to our 2018 Plan.
Nominating and Corporate Governance Committee . Our nominating and corporate governance committee consists of Mr. Wei Wen, Mr. Zijing Zhou and Mr. Fei Han, and is chaired by Mr. Wei Wen. Mr. Fei Han and Mr. Zijing Zhou satisfy the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules.
Nominating and Corporate Governance Committee . Our nominating and corporate governance committee consists of Mr. Wei Wen, Mr. Zijing Zhou and Mr. Tong Zhang, and is chaired by Mr. Wei Wen. Mr. Tong Zhang and Mr. Zijing Zhou satisfy the “independence” requirements of Rule 5605(a)(2) of the Nasdaq Stock Market Rules.
Each executive officer has also agreed to assign to us all his or her all inventions, improvements, designs, original works of authorship, formulas, processes, compositions of matter, computer software programs, databases, mask works and trade secrets. D. Employees As of December 31, 2020, 2021 and 2022, we had 769, 621 and 431 full-time employees.
Each executive officer has also agreed to assign to us all his or her all inventions, improvements, designs, original works of authorship, formulas, processes, compositions of matter, computer software programs, databases, mask works and trade secrets. 125 Table of Contents D. Employees As of December 31, 2021, 2022 and 2023, we had 621, 431 and 324 full-time employees.
The committee, with the prior approval of the board, may terminate, amend or modify the 2023 Plan, subject to some limitations. 122 Table of Contents The following table sets forth information on restricted shares that we have awarded or have agreed to award as of March 20, 2023 pursuant to the 2018 Plan. ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ Restricted ​ ​ ​ Shares Awarded(1) Grant Date Directors and Executive Officers ​ ​ ​ ​ ​ ​ ​ ​ June 15, 2018 Wei Wen * July 1, 2018 ​ ​ ​ ​ June 15, 2018 Jianchen Sun * July 1, 2018 ​ ​ ​ ​ July 1, 2019 Hui Yuan 5,000,000 July 1, 2020 Zijing Zhou * June 15, 2018 ​ ​ ​ ​ November 20, 2018 ​ ​ ​ ​ November 20, 2019 ​ ​ ​ ​ November 20, 2020 ​ ​ ​ ​ November 20, 2021 Wendy Hayes * November 20, 2022 Fei Han ​ — ​ — Total 11,337,904 * Less than 1% of our total outstanding shares on an as-converted basis.
The committee, with the prior approval of the board, may terminate, amend or modify the 2023 Plan, subject to some limitations. 121 Table of Contents The following table sets forth information on restricted shares that we have awarded or have agreed to award as of March 20, 2024 pursuant to the 2018 Plan and 2023 Plan. ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ Restricted ​ ​ ​ Shares Awarded(1) Grant Date Directors and Executive Officers ​ ​ ​ ​ ​ ​ ​ ​ June 15, 2018 Wei Wen ​ * July 1, 2018 Simon Li * June 15, 2023 ​ ​ ​ ​ June 15, 2018 Jianchen Sun * July 1, 2018 ​ ​ ​ ​ July 1, 2019 Hui Yuan 5,000,000 July 1, 2020 Zijing Zhou * June 15, 2018 ​ ​ ​ ​ November 20, 2018 ​ ​ ​ ​ November 20, 2019 ​ ​ ​ ​ November 20, 2020 ​ ​ ​ ​ November 20, 2021 Wendy Hayes * November 20, 2022 Tong Zhang ​ — ​ — Total 14,547,904 * Less than 1% of our total outstanding shares on an as-converted basis.
The following table sets forth the numbers of our and the VIEs’ full-time employees by functions as of the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ As of the December 31, ​ ​ 2020 ​ 2021 ​ 2022 Sales and marketing 610 488 329 General and administrative 91 73 58 Research and development 68 60 44 Total 769 621 431 ​ 126 Table of Contents As required by PRC laws and regulations, we participate in various employee social security plans for our and the VIEs’ employees that are administered by local PRC governments, including housing, pension, medical insurance and unemployment insurance.
The following table sets forth the numbers of our and the VIEs’ full-time employees by functions as of the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ As of the December 31, ​ ​ 2021 2022 2023 Sales and marketing 488 329 252 General and administrative 73 58 44 Research and development 60 44 28 Total 621 431 324 ​ As required by PRC laws and regulations, we participate in various employee social security plans for our and the VIEs’ employees that are administered by local PRC governments, including housing, pension, medical insurance and unemployment insurance.
Each committee’s members and functions are described below. Audit Committee . Our audit committee consists of Ms. Wendy Hayes, Mr. Zijing Zhou and Mr. Fei Han and is chaired by Ms. Wendy Hayes.
Each committee’s members and functions are described below. Audit Committee . Our audit committee consists of Ms. Wendy Hayes, Mr. Zijing Zhou and Mr. Tong Zhang and is chaired by Ms. Wendy Hayes.
(8) 38,155,408 — 9.7 % 3.3 % * Less than 1% of our total outstanding shares as of March 20, 2023. 127 Table of Contents ** The business address of our directors and executive officers is 9F, Ruihai Building, No. 21 Yangfangdian Road, Haidian District, Beijing 100038, People’s Republic of China .
(7) 38,155,408 — 9.0 % 3.2 % * Less than 1% of our total outstanding shares as of March 20, 2024. ** The business address of our directors and executive officers is 9F, Ruihai Building, No. 21 Yangfangdian Road, Haidian District, Beijing 100038, People’s Republic of China .
For more details, see “Item 3. Key Information—Risk Factors—Risks Related to Our Business and Industry—Our business operations have been and may continue to be materially and adversely affected by the COVID-19 pandemic.” E.
Key Information—Risk Factors—Risks Related to Our Business and Industry—Our business operations have been and may continue to be materially and adversely affected by the COVID-19 pandemic.” E.
Sun received a bachelor’s degree in international economics and trade from Renmin University of China and executive MBA from Beijing Jiaotong University. Wendy Hayes has served as our independent director since November 2018. Ms. Hayes has served as an independent director of TuSimple Holdings Inc.
Sun received a bachelor’s degree in international economics and trade from Renmin University of China and executive MBA from Beijing Jiaotong University. Wendy Hayes has served as our independent director since November 2018. Ms. Hayes has served as an independent director of ShakNinja, Inc (NYSE: SN) since July 2023, Apollomics, Inc.
Zhou served as a senior financial adviser of China Renaissance Holding Limited (HK:1911). From 2009 to 2011, Mr. Zhou served as a senior product manager of Alibaba Group Holding Limited (NYSE: BABA). From 2006 to 2009, Mr. Zhou served as an internet technology developer of Anhui Jinyu Internet Technology Co., Ltd. Mr.
Zhou served as a senior product manager of Alibaba Group Holding Limited (NYSE: BABA). From 2006 to 2009, Mr. Zhou served as an internet technology developer of Anhui Jinyu Internet Technology Co., Ltd. Mr.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary shares Beneficially Owned Voting Power Beneficially Owned ​ Class A Ordinary Shares Class B Ordinary Shares % † % †† Directors and Executive Officers** ​ ​ ​ ​ ​ ​ ​ ​ Wei Wen (1) ​ 4,686,944 ​ 55,260,580 ​ 15.2 % 71.4 % Jianchen Sun (2) 14,130,672 — 3.6 % 1.2 % Wendy Hayes * — * * ​ Zijing Zhou * — * * ​ Hui Yuan * — * * ​ Fei Han ​ — ​ — ​ — ​ — ​ Directors and executive officers as a group 25,786,064 55,260,580 20.6 % 73.3 % Principal Shareholders ​ WW Long Limited (3) 2,188,160 55,260,580 14.6 % 71.2 % K2 Partners (4) 41,390,679 — 10.5 % 3.5 % Highland Funds (5) 30,550,709 — 7.8 % 2.6 % BAI GmbH (6) 28,715,429 — 7.3 % 2.5 % Beijing Z-Park Fund Investment Center (Limited Partner) (7) 30,482,380 — 7.8 % 2.6 % Sabby Volatility Warrant Master Fund, Ltd.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary shares Beneficially Owned Voting Power Beneficially Owned ​ Class A Ordinary Shares Class B Ordinary Shares % † % †† Directors and Executive Officers** ​ ​ ​ ​ ​ ​ ​ ​ Wei Wen (1) ​ 4,686,944 ​ 55,260,580 ​ 14.0 % 69.4 % Jianchen Sun (2) 14,130,672 — 3.3 % 1.2 % Wendy Hayes * — * * ​ Zijing Zhou * — * * ​ Hui Yuan * — * * ​ Tong Zhang — — — — ​ Simon Li ​ * ​ — ​ — ​ — ​ Directors and executive officers as a group 25,846,064 55,260,580 18.9 % 71.1 % Principal Shareholders ​ WW Long Limited (3) 2,188,160 55,260,580 13.4 % 69.1 % Highland Funds (4) 30,550,709 — 7.1 % 2.5 % BAI GmbH (5) 28,715,429 — 6.7 % 2.4 % Beijing Z-Park Fund Investment Center (Limited Partner) (6) 30,482,380 — 7.1 % 2.5 % Sabby Volatility Warrant Master Fund, Ltd.
The nominating and corporate governance committee will be responsible for, among other things: ● recommending nominees to the board for election or re-election to the board, or for appointment to fill any vacancy on the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, age, skills, experience and availability of service to us; ● selecting and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; ● developing and reviewing the corporate governance principles adopted by the board and advising the board with respect to significant developments in the law and practice of corporate governance and our compliance with such laws and practices; and ● evaluating the performance and effectiveness of the board as a whole. 125 Table of Contents Duties of Directors Under Cayman Islands law, our directors owe to us fiduciary duties, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests.
The nominating and corporate governance committee will be responsible for, among other things: ● recommending nominees to the board for election or re-election to the board, or for appointment to fill any vacancy on the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, age, skills, experience and availability of service to us; ● selecting and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; 124 Table of Contents ● developing and reviewing the corporate governance principles adopted by the board and advising the board with respect to significant developments in the law and practice of corporate governance and our compliance with such laws and practices; and ● evaluating the performance and effectiveness of the board as a whole.
Our directors must also exercise their powers only for a proper purpose. Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances.
Our directors also have a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances.
We may grant options, restricted shares, restricted share units and other equity-based awards under the 2023 Plan to our employees, directors and consultants. Under the 2023 Plan, a total of 169,172,564 Class A ordinary shares were initially reserved for issuance. As of the date of this annual report, we have not issued or granted awards under the 2023 Plan.
We may grant options, restricted shares, restricted share units and other equity-based awards under the 2023 Plan to our employees, directors and consultants. Under the 2023 Plan, a total of 169,172,564 Class A ordinary shares were initially reserved for issuance.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A Directors and Senior Management The following table sets forth information regarding our directors and senior management as of the date of this annual report: ​ ​ ​ ​ ​ Directors and Executive Officers Age Position/Title Wei Wen 47 Chairman, Chief Executive Officer and Acting Chief Financial Officer Jianchen Sun 45 Director and President Wendy Hayes 53 Independent Director Zijing Zhou 41 Independent Director Fei Han 44 Independent Director Hui Yuan 46 Chief Operating Officer ​ 119 Table of Contents Wei Wen is our co-founder and has been serving as the chairman of our board of directors and our chief executive officer since our inception, and has served as our acting chief financial officer since February 2023.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A Directors and Senior Management The following table sets forth information regarding our directors and senior management as of the date of this annual report: ​ ​ ​ ​ ​ Directors and Executive Officers Age Position/Title Wei Wen 48 Chairman and Chief Executive Officer Simon Li 40 Chief Financial Officer Jianchen Sun 46 Director and President Wendy Hayes 54 Independent Director Zijing Zhou 42 Independent Director Tong Zhang 49 Independent Director Hui Yuan 47 Chief Operating Officer ​ Wei Wen is our co-founder and has been serving as the chairman of our board of directors and our chief executive officer since our inception, and has served as our acting chief financial officer since February 2023.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company . For information regarding our stock options, see “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Critical Accounting Policies—Share-based Compensation.”
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. For information regarding our stock options, see “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Critical Accounting Policies—Share-based Compensation.” F. Disclosure of a Registrant’s Action to Recover Errorneously Awarded Compensation Not applicable. 128 Table of Contents
As of March 20, 2023, a total of 196,624,649 Class A ordinary shares are held by four record holders in the United States, including The Bank of New York Mellon, the depositary of the ADS program, representing 50.02% of our total outstanding shares. None of our outstanding Class B ordinary shares are held by record holders in the United States.
As of March 20, 2024, a total of 230,846,688 Class A ordinary shares are held by four record holders in the United States, including The Bank of New York Mellon, the depositary of the ADS program, representing 53.9% of our total outstanding shares. None of our outstanding Class B ordinary shares are held by record holders in the United States.
A director may exercise all the powers of the company to borrow money, mortgage or charge its undertaking, property and assets (present and future) and uncalled capital, or any part thereof, to issue debentures, debenture stock, bonds and other securities whether outright or as collateral security for any obligation of the company or of any third party. 123 Table of Contents Board Diversity The following board diversity matrix sets forth the information concerning the gender, demographic background and certain other characteristics of our board of directors as of the date of this annual report, as self-identified by its members, in accordance with Rule 5606 of the Nasdaq Listing Rules. ​ ​ ​ ​ ​ ​ ​ ​ ​ Country of Principal Executive Offices People’s Republic of China Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 5 ​ Female Male Non-Binary Did Not ​ ​ ​ ​ ​ ​ ​ Disclose ​ ​ ​ ​ ​ ​ ​ Gender Part I: Gender Identity Directors 1 4 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction ​ 0 LGBTQ+ ​ 0 Did Not Disclose Demographic Background ​ 0 ​ ​ Committees of the Board of Directors Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, and has adopted a charter for each of the three committees.
Board Diversity The following board diversity matrix sets forth the information concerning the gender, demographic background and certain other characteristics of our board of directors as of the date of this annual report, as self-identified by its members, in accordance with Rule 5606 of the Nasdaq Listing Rules. ​ ​ ​ ​ ​ ​ ​ ​ ​ Country of Principal Executive Offices People’s Republic of China Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 5 ​ Female Male Non-Binary Did Not ​ ​ ​ ​ ​ ​ ​ Disclose ​ ​ ​ ​ ​ ​ ​ Gender Part I: Gender Identity Directors 1 4 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction ​ 0 LGBTQ+ ​ 0 Did Not Disclose Demographic Background ​ 0 ​ ​ Committees of the Board of Directors Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee, and has adopted a charter for each of the three committees.
Hayes served as the inspections leader at the Public Company Accounting Oversight Board in the United States. Prior to that, Ms. Hayes was an audit partner at Deloitte (China). Ms. Hayes received her bachelor’s degree in international finance from University of International Business and Economics in 1991, and her executive MBA from Cheung Kong Graduate School of Business in 2012.
Hayes was an audit partner at Deloitte (China). Ms. Hayes received her bachelor’s degree in international finance from University of International Business and Economics in 1991, and her executive MBA from Cheung Kong Graduate School of Business in 2012. Ms. Hayes is a certified public accountant in the United States (California) and China.
Ms. Hayes is a certified public accountant in the United States (California) and China. Zijing Zhou has been serving as our independent director since November 2019. Mr. Zhou founded Aplus Investment Consulting (Beijing) Co., Ltd. (“Ether Capital”), in 2014 and served as the chief executive officer of Ether Capital since 2014. From 2011 to 2014, Mr.
Zijing Zhou has been serving as our independent director since November 2019. Mr. Zhou founded Aplus Investment Consulting (Beijing) Co., Ltd. (“Ether Capital”), in 2014 and served as the chief executive officer of Ether Capital since 2014. From 2011 to 2014, Mr. Zhou served as a senior financial adviser of China Renaissance Holding Limited (HK:1911). From 2009 to 2011, Mr.
Due to the COVID-19 outbreak, we and the VIEs’ implemented measures to adjust the pace of our business expansion and conserve resources, such as furlough arrangements and scaling back recruitment budget and employee size, in 2020, 2021 and 2022. We may resort to other cost cutting measures if the outbreak of COVID-19 and its impact persist or escalate.
Due to the COVID-19 outbreak, we and the VIEs’ implemented measures to adjust the pace of our business expansion and conserve resources, such as furlough arrangements and scaling back recruitment budget and employee size, in 2021, 2022 and 2023. For more details, see “Item 3.
As of December 31, 2022, there were 5,560,752 restricted shares outstanding under the Plan. The following paragraphs describe the principal terms of the 2018 Plan: Types of awards . The Plan permits the awards of options, restricted shares or restricted share units. Plan administration .
As of December 31, 2023, there were 6,327,321 ordinary shares available for grants and 3,640,000 restricted shares outstanding under the 2018 Plan. The following paragraphs describe the principal terms of the 2018 Plan: Types of awards . The 2018 Plan permits the awards of options, restricted shares or restricted share units. Plan administration .
The calculations in the table below are based on the fact that there were 393,105,031 ordinary shares outstanding as March 20, 2023, including (1) 337,844,451 Class A ordinary shares, including the 6,663,321 Class A ordinary shares held by Best Cars Limited, the nominee of our equity incentive trust that, although legally issued and outstanding, are not deemed as outstanding from an accounting perspective and (2) 55,260,580 Class B ordinary shares, excluding 169,172,564 Class A ordinary shares reserved for future issuance under our 2023 Plan.
The calculations in the table below are based on the fact that there were 428,336,063 ordinary shares outstanding as March 20, 2024, including (1) Class A ordinary shares, including the 6,663,321 Class A ordinary shares held by Best Cars Limited, the nominee of our equity incentive trust that, although legally issued and outstanding, are not deemed as outstanding from an accounting perspective and (2) 55,260,580 Class B ordinary shares. ​ 126 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Yuan also held product R&D positions in several Chinese internet companies, including Dangdang.com. 120 Table of Contents B. Compensation Compensation of Directors and Executive Officers In 2022, the aggregate cash compensation to directors and executive officers was approximately RMB2.1 million (US$0.3 million). This amount consisted only of cash and did not include any share-based compensation or benefits in kind.
Compensation Compensation of Directors and Executive Officers In 2023, the aggregate cash compensation to directors and executive officers was approximately RMB2.4 million (US$0.3 million). This amount consisted only of cash and did not include any share-based compensation or benefits in kind.
Zhou received a bachelor’s degree in physics and a bachelor’s degree in computer science, both from Zhejiang University in 2003, and a master’s degree in computer science from Tsinghua University in 2006. Fei Han has been serving as our independent director since September 2020. Mr.
Zhou received a bachelor’s degree in physics and a bachelor’s degree in computer science, both from Zhejiang University in 2003, and a master’s degree in computer science from Tsinghua University in 2006.
The following paragraphs describe the principal terms of the 2023 Plan: Types of awards . The Plan permits the awards of options, restricted shares or restricted share units. Plan administration .
As of the date of this annual report, there were 17,600,000 restricted shares issued and 240,000 restricted shares outstanding under the 2023 Plan. The following paragraphs describe the principal terms of the 2023 Plan: Types of awards . The 2023 Plan permits the awards of options, restricted shares or restricted share units. Plan administration .
Before he started his own companies, Mr. Wen was a channel manager of Mitsubishi Electric Shanghai. Mr. Wen received a bachelor’s degree in industrial foreign trade from Beijing Jiaotong University. Jianchen Sun has been serving as our director since 2010 and is our co-founder and president. Prior to joining us, Mr.
Before he started his own companies, Mr. Wen was a channel manager of Mitsubishi Electric Shanghai. Mr. Wen received a bachelor’s degree in industrial foreign trade from Beijing Jiaotong University. 118 Table of Contents Simon Li has extensive experience in investment and corporate finance. Prior to joining the Company, Mr.
(NASDAQ: TSP) since December 2022, SciClone Pharmaceuticals (Holdings) Limited (SEHK: 6600) since March 2021, Gracell Biotechnologies Inc. (NASDAQ: GRCL) since January 2021, IHuman Inc. (NYSE: IH) since October 2020 and Burning Rock Biotech Limited (NASDAQ: BNR) since June 2020. Between May 2013 and September 2018, Ms.
(NASDAQ: APML) since March 2023, SciClone Pharmaceuticals (Holdings) Limited (SEHK: 6600) since March 2021, IHuman Inc. (NYSE: IH) since October 2020 and Burning Rock Biotech Limited (NASDAQ: BNR) since June 2020. Between May 2013 and September 2018, Ms. Hayes served as the inspections leader at the Public Company Accounting Oversight Board in the United States. Prior to that, Ms.
Yuan has over 20 years of experience in China’s automotive industry with expertise in the management of product development, operations, sales, and marketing. Prior to joining TuanChe, Mr. Yuan co-founded XiongmaoCar and served as a Vice President of Bitauto Holdings Limited (NYSE: BITA). Before launching his career in the automotive industry, Mr.
Prior to joining TuanChe, Mr. Yuan co-founded XiongmaoCar and served as a Vice President of Bitauto Holdings Limited (NYSE: BITA). Before launching his career in the automotive industry, Mr. Yuan also held product R&D positions in several Chinese internet companies, including Dangdang.com. 119 Table of Contents B.
The registered office of K2 Partners III Limited and K2 Family Partners Limited is RM C 20/F, Lucky Plaza, 315-321, Lockhart Rd, Wanchai, Hong Kong. 128 Table of Contents (5) Represents (i) 20,125,289 Class A ordinary shares directly held by Highland Capital Partners 9 Limited Partnership, a Delaware limited partnership, (ii) 8,668,760 Class A ordinary shares directly held by Highland Capital Partners 9-B Limited Partnership, a Delaware limited partnership, (iii) 1,756,660 Class A ordinary shares directly held by Highland Entrepreneurs’ Fund 9 Limited Partnership, a Delaware limited partnership, (iv) 658,752 Class A ordinary shares in the form of 164,688 ADSs owned by Highland Capital Partners 9 Limited Partnership, (v) 283,752 Class A ordinary shares in the form of 70,938 ADSs owned by Highland Capital Partners 9-B Limited Partnership, and (vi) 57,500 Class A ordinary shares in the form of 14,375 ADSs owned by Highland Entrepreneurs’ Fund 9 Limited Partnership.
(4) Represents (i) 19,542,537 Class A ordinary shares directly held by Highland Capital Partners 9 Limited Partnership, a Delaware limited partnership, (ii) 8,417,752 Class A ordinary shares directly held by Highland Capital Partners 9-B Limited Partnership, a Delaware limited partnership, (iii) 1,705,800 Class A ordinary shares directly held by Highland Entrepreneurs’ Fund 9 Limited Partnership, a Delaware limited partnership, and (iv) 884,620 Class A ordinary shares in the form of the ADSs.
Removed
Han has served as a managing director of Zhongguancun M&A Fund and Zhongguancun Longmen Fund since 2017. From 2013 to 2016, Mr. Han served as an investment director of Fosun International (HK: 0656). From 2010 to 2013, Mr. Han served as an associate director of Oppenheimer Holdings Inc. From 2007 to 2010, Mr.
Added
Li served as a partner at Hongmenge (Beijing) Private Equity Management Co., Ltd. from June 2020 to May 2023, leading its financing and investment portfolio management business lines. Prior to that, Mr. Li was the general manager of the capital market department of Chang’An NIO New Energy Automotive Technology Co., Ltd (now AVATR Technology (Chongqing) Co.
Removed
Han served as an associate of Brean Murray, Carret & Co., LLC. Mr. Han received his bachelor’s degree in engineering from Xidian University in 2000, and his MBA from University of South Dakota in 2006. Hui Yuan has been serving as our chief operating officer since May 2019. Mr.
Added
Ltd.), a joint venture formed by Chang’An Auto and NIO. Mr. Li, as one of the founding partners, served as a managing director and the head of fund risk control at Ether Capital from April 2014 to August 2019. Mr.
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Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Added
Li was an investment manager at Digital China from April 2012 to March 2014, and an associate manager in the transactions and restructuring department of KPMG Advisory (China) Limited from September 2009 to April 2012. Mr.
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(4) Represents (i) 6,971,174 Class A ordinary shares directly held by K2 Evergreen Partners L.P., a Cayman Islands exempted limited partnership, (ii) 29,804,362 Class A ordinary shares directly held and 512,800 Class A ordinary shares held in the form of ADS, by K2 Partners II L.P., a Cayman Islands exempted limited partnership, (iii) 3,076,757 Class A ordinary shares directly held by K2 Partners III Limited, a Hong Kong limited company, and (iv) 1,025,586 Class A ordinary shares directly held by K2 Family Partners Limited, a Hong Kong limited company.
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Li received a bachelor’s degree in international economics and trade from Beijing University of Commerce and Industry in 2007 and a degree of master of science in the field of quantitative and applied statistics from the University of Pennsylvania. Mr. Li is currently pursuing an executive master’s degree of business administration in Tsinghua University.
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K2 Evergreen Partners L.P., K2 Partners II L.P., K2 Partners III Limited, and K2 Family Partners Limited are collectively referred to as K2 Partners.
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Jianchen Sun has been serving as our director since 2010 and is our co-founder and president. Prior to joining us, Mr.
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K2 Evergreen Partners LLC acts as the general partner of K2 Evergreen Partners L.P., K2 Partners II GP, LLC is the general partner of K2 Partners II GP, L.P., which is the general partner of K2 Partners II L.P., K2 Partners III GP, L.P. acts as the general partner of K2 Partners III L.P., which is the sole shareholder of K2 Partners III Limited.
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Tong Zhang has over 10 years of experiences in the fields of vehicle trading, e-commerce and technology research, particularly with respect to vehicle electrification, vehicle intelligence and V2X (vehicle-to-everything) technologies. Since 2015, Mr.
Removed
K2 Family Partners GP, L.P. acts as the general partner of K2 Family Partners L.P., which is the sole shareholder of K2 Family Partners Limited. K2 Evergreen Partners LLC, K2 Partners II GP, LLC, K2 Partners III GP, L.P. and K2 Family Partners GP, L.P. are all controlled by KPartners Limited, a Cayman Islands limited company.
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Zhang has served as vice president of the Automotive Intelligent Industry Research Institute of the Ministry of Industry and Information Technology, where he also serves as the secretary general of the Automotive Intelligent Services Consortium and focuses on the integration of domestic and foreign advanced technologies in the automotive industry, promoting the innovative development and transformation of automotive services.
Removed
The registered office of K2 Evergreen Partners L.P. and K2 Partners II L.P. is Osiris International Cayman Limited of Suite #4-210, Governors Square, 23 Lime Tree Bay Avenue, Po Box 32311, Grand Cayman KY1-1209, Cayman Islands.
Added
Prior to that, Mr. Zhang served as the deputy director of the China Automobile Dealers Association from 2012 to 2015, where he participated in and presided over the drafting and promulgation of the first national standard in the domestic automobile dealing industry for used car inspection. Mr.
Added
Zhang received his bachelor’s and master’s degrees in economics and management from Beijing Administration College in 2002 and 2004, respectively. Hui Yuan has been serving as our chief operating officer since May 2019. Mr. Yuan has over 20 years of experience in China’s automotive industry with expertise in the management of product development, operations, sales, and marketing.
Added
A director may exercise all the powers of the company to borrow money, mortgage or charge its undertaking, property and assets (present and future) and uncalled capital, or any part thereof, to issue debentures, debenture stock, bonds and other securities whether outright or as collateral security for any obligation of the company or of any third party.
Added
Duties of Directors Under Cayman Islands law, our directors owe to us fiduciary duties, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose.

Item 7. Management's Discussion & Analysis

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

7 edited+1 added−1 removed1 unchanged
History and Development of the Company.” Employment Agreements See “Item 6. Directors, Senior Management and Employees—C. Board Practices—Employment Agreements.” Share Incentive Plan See “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” C. Interests of Experts and Counsel Not applicable. 130 Table of Contents
History and Development of the Company.” Employment Agreements See “Item 6. Directors, Senior Management and Employees—C. Board Practices—Employment Agreements.” Share Incentive Plan See “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” 129 Table of Contents C. Interests of Experts and Counsel Not applicable.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” 129 Table of Contents B.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders See “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B.
Wei Wen, the chairman of the board, the chief executive officer and the acting chief financial officer of our company, who used the fund to assist business development with third parties on behalf of our company, and Mr. Wei Wen repaid RMB13.7 million to us in 2022. The other payable due to Mr.
Wei Wen In 2022 and 2023, we provided RMB13.6 million and RMB12.6 million, respectively, to Mr. Wei Wen, the chairman of the board, the chief executive officer of our company, who used the fund to assist business development with third parties on behalf of our company, and Mr.
The outsourcing service expenses due to STDC was RMB1.6 million, RMB2.7 million and RMB1.5 million for the years ended December 31, 2020, 2021 and 2022, respectively. In 2022, we entered into marketing service agreements with the STDC. The marketing service expenses provided by us for the STDC is RMB1.4 million in 2022.
The outsourcing service expenses provided by STDC for us is RMB2.7 million, RMB1.5 million and RMB4.0 million for the years ended December 31, 2021, 2022 and 2023, respectively.
The ultimate beneficial owner of Kuka is Mr. Wei Wen, chairman of the board of directors and CEO of the Company. Outsourcing Agreement with STDC On 2020, 2021 and 2022, we entered into outsourcing service agreements with Shanghai Three Drivers Culture Media Co., Limited (“STDC”), of which we own 49% equity interest.
For a description of these contractual arrangements, see “Item 4. Information on the Company—C. Organizational Structure—Our Contractual Arrangements.” Outsourcing Agreement with STDC In 2021, 2022 and 2023, we entered into outsourcing service agreements with Shanghai Three Drivers Culture Media Co., Limited (“STDC”), of which we own 49% equity interest.
Wei Wen is nil and RMB0.1 million as of December 31, 2021 and 2022, respectively, which is included in other current liabilities in our consolidated balance sheets. Private Placements See “Item 4. Information on the Company—A. History and Development of the Company.” Shareholders Agreement See “Item 4. Information on the Company—A.
Hui Yuan, the chief operating officer of our company. The loan payable balance due to Mr. Hui Yuan’s spouse is nil and RMB1.5 million as of December 31, 2022 and 2023, respectively. Private Placements See “Item 4. Information on the Company—A. History and Development of the Company.” Shareholders Agreement See “Item 4. Information on the Company—A.
Our prepayment balance is RMB0.3 million and RMB0.2 million as of December 31, 2021 and 2022, respectively. Transaction with Mr. Wei Wen In 2022, we provided RMB13.6 million to Mr.
Wei Wen repaid RMB13.7 million to us in 2022 and repaid RMB12.5 million to us in 2023. The other payable due to Mr. Wei Wen is RMB0.1 million and nil as of December 31, 2022 and 2023, respectively. Transaction with Mr. Hui Yuan On November 22, 2023, we received a loan of RMB1.5 million from the spouse of Mr.
Removed
For a description of these contractual arrangements, see “Item 4. Information on the Company—C. Organizational Structure—Our Contractual Arrangements.” Disposal of Long-term Investment to Kuka On December 2, 2020, we disposed the long-term investment in Beijing Hengpengzhixin Automobile Sales Co., Ltd. to Kuka Technology (Tianjin) Co., Ltd. (“Kuka”), with a consideration of RMB0.3 million.
Added
In 2022 and 2023, we entered into promotion service agreements with STDC, under which the promotion service expenses provided by us for STDC is RMB1.4 million and RMB1.0 million for the years ended December 31, 2022 and 2023. The prepayment balance is RMB248 and RMB1,125 as of December 31, 2022 and 2023, respectively. Transaction with Mr.

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