Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity Registrant Name | UP Fintech Holding Ltd |
Entity Voluntary Filers | No |
Entity Central Index Key | 0001756699 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Current Fiscal Year End Date | --12-31 |
Entity Well Known Seasoned Issuer | No |
Document Period End Date | Dec. 31, 2019 |
Amendment Flag | false |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Entity Shell Company | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | true |
Class A ordinary shares | |
Entity Common Stock, Shares Outstanding | 1,777,218,449 |
Class B ordinary shares | |
Entity Common Stock, Shares Outstanding | 337,611,722 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Cash and cash equivalents | $ 59,408,555 | $ 34,406,970 |
Cash-segregated for regulatory purpose | 317,915,092 | 6,695,436 |
Term deposits | 65,601,207 | 29,999,865 |
Receivables from customers (net of allowance of US$nil as of December 31, 2018 and 2019) | 106,113,896 | 353,304 |
Receivables from brokers, dealers, and clearing organizations (net of allowance of US$nil as of December 31, 2018 and 2019): | ||
Related parties | 185,047,211 | 9,619,438 |
Others | 9,274,205 | 1,073,972 |
Financial instruments held, at fair value | 14,881,240 | 6,435,241 |
Prepaid expenses and other current assets | 8,020,192 | 5,803,195 |
Amounts due from related parties | 3,484,434 | 8,518,358 |
Total current assets | 769,746,032 | 102,905,779 |
Right-of-use-assets | 5,732,559 | |
Property, equipment and intangible assets, net | 9,535,541 | 2,330,433 |
Goodwill | 2,421,403 | |
Long-term investments | 6,017,219 | 2,386,691 |
Other noncurrent assets | 3,045,732 | 1,255,447 |
Deferred tax assets | 12,561,461 | 6,336,815 |
Total assets | 809,059,947 | 115,215,165 |
Liabilities: | ||
Payables to customers | 512,481,679 | 6,564,154 |
Payables to brokers, dealers and clearing organizations | ||
Related parties | 53,774,882 | |
Others | 1,355,112 | |
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIEs without recourse to the Group of US$6,939,074 and US$9,267,717 as of December 31, 2018 and 2019, respectively) | 16,881,957 | 10,423,107 |
Deferred income - current | 697,330 | |
Lease liabilities - current (including lease liabilities - current of the consolidated VIEs without recourse to the Group of US$1,097,916 as of December 31, 2019) | 2,401,566 | |
Total current liabilities | 587,592,526 | 16,987,261 |
Deferred income - non-current | 1,552,595 | |
Lease liabilities - non-current (including lease liabilities - non-current of the consolidated VIEs without recourse to the Group of US$100,701 as of December 31, 2019) | 3,440,092 | |
Deferred tax liabilities | 1,449,000 | |
Total liabilities | 594,034,213 | 16,987,261 |
Commitments and Contingencies (Note 18) | ||
Mezzanine equity: | ||
Redeemable noncontrolling interest of sponsored fund | 3,084,122 | 2,204,940 |
Total mezzanine equity | 3,084,122 | 124,105,861 |
Shareholders' (deficit)/equity: | ||
Additional paid-in capital | 285,767,622 | 42,520,332 |
Statutory reserve | 724,008 | |
Accumulated deficit | (73,704,745) | (66,391,306) |
Accumulated other comprehensive loss | (866,421) | (544,988) |
Total UP Fintech Holding Limited shareholder's (deficit)/equity | 211,941,612 | (24,406,223) |
Noncontrolling interest | (1,471,734) | |
Total (deficit)/equity | 211,941,612 | (25,877,957) |
Total liabilities, mezzanine equity and (deficit)/equity | 809,059,947 | 115,215,165 |
Series A convertible redeemable preferred shares | ||
Mezzanine equity: | ||
Preferred stock | 16,486,780 | |
Series B-1 convertible redeemable preferred shares | ||
Mezzanine equity: | ||
Preferred stock | 17,169,446 | |
Series B-2 convertible redeemable preferred shares | ||
Mezzanine equity: | ||
Preferred stock | 9,593,789 | |
Series B-3 convertible redeemable preferred shares | ||
Mezzanine equity: | ||
Preferred stock | 21,470,906 | |
Series C convertible redeemable preferred shares | ||
Mezzanine equity: | ||
Preferred stock | 47,980,000 | |
Subscriptions receivable | (800,000) | |
Series C-1 convertible redeemable preferred shares | ||
Mezzanine equity: | ||
Preferred stock | 10,000,000 | |
Class A ordinary shares | ||
Shareholders' (deficit)/equity: | ||
Common stock | 17,772 | 2,166 |
Class B ordinary shares | ||
Shareholders' (deficit)/equity: | ||
Common stock | $ 3,376 | 3,376 |
Angle preferred shares | ||
Shareholders' (deficit)/equity: | ||
Equity with preferential rights | $ 4,197 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance of receivables from customers | $ 0 | $ 0 |
Allowance of receivables from brokers, dealers, and clearing organizations | 0 | 0 |
Payables due to customers | 512,481,679 | 6,564,154 |
Accrued expenses and other current liabilities | 16,881,957 | $ 10,423,107 |
Operating Lease, Liability, Current | 2,401,566 | |
Operating Lease, Liability, Noncurrent | $ 3,440,092 | |
Series A convertible redeemable preferred shares | ||
Temporary equity, par value (in US dollars per share) | $ 0.00001 | |
Temporary equity, shares authorized (in shares) | 279,389,307 | |
Temporary equity, shares issued (in shares) | 279,389,307 | |
Temporary equity, shares outstanding (in shares) | 279,389,307 | |
Temporary equity, liquidation preference | $ 19,784,136 | |
Series B-1 convertible redeemable preferred shares | ||
Temporary equity, par value (in US dollars per share) | $ 0.00001 | |
Temporary equity, shares authorized (in shares) | 188,378,334 | |
Temporary equity, shares issued (in shares) | 188,378,334 | |
Temporary equity, shares outstanding (in shares) | 188,378,334 | |
Temporary equity, liquidation preference | $ 20,263,335 | |
Series B-2 convertible redeemable preferred shares | ||
Temporary equity, par value (in US dollars per share) | $ 0.00001 | |
Temporary equity, shares authorized (in shares) | 76,812,654 | |
Temporary equity, shares issued (in shares) | 76,812,654 | |
Temporary equity, shares outstanding (in shares) | 76,812,654 | |
Temporary equity, liquidation preference | $ 11,512,547 | |
Series B-3 convertible redeemable preferred shares | ||
Temporary equity, par value (in US dollars per share) | $ 0.00001 | |
Temporary equity, shares authorized (in shares) | 147,755,566 | |
Temporary equity, shares issued (in shares) | 147,755,566 | |
Temporary equity, shares outstanding (in shares) | 147,755,566 | |
Temporary equity, liquidation preference | $ 25,765,087 | |
Series C convertible redeemable preferred shares | ||
Temporary equity, par value (in US dollars per share) | $ 0.00001 | |
Temporary equity, shares authorized (in shares) | 205,991,949 | |
Temporary equity, shares issued (in shares) | 98,834,937 | |
Temporary equity, shares outstanding (in shares) | 98,834,937 | |
Temporary equity, liquidation preference | $ 56,616,000 | |
Series C-1 convertible redeemable preferred shares | ||
Temporary equity, par value (in US dollars per share) | $ 0.00001 | |
Temporary equity, shares authorized (in shares) | 18,597,738 | |
Temporary equity, shares issued (in shares) | 18,597,738 | |
Temporary equity, shares outstanding (in shares) | 18,597,738 | |
Temporary equity, liquidation preference | $ 12,000,000 | |
Class A ordinary shares | ||
Common stock, par value (in US dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 4,662,388,278 | 3,144,831,053 |
Common stock, shares issued (in shares) | 1,777,218,449 | 216,546,541 |
Common stock, shares outstanding (in shares) | 1,777,218,449 | 216,546,541 |
Class B ordinary shares | ||
Common stock, par value (in US dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 337,611,722 | 518,507,295 |
Common stock, shares issued (in shares) | 337,611,722 | 337,611,722 |
Common stock, shares outstanding (in shares) | 337,611,722 | 337,611,722 |
Angle preferred shares | ||
Preferred Stock, par value (in US dollar per share) | $ 0.00001 | |
Preferred Stock, Shares Authorized (in shares) | 419,736,104 | |
Preferred stock, shares issued (in shares) | 419,736,104 | |
Preferred Stock, Shares Outstanding (in shares) | 419,736,104 | |
VIEs | ||
Accrued expenses and other current liabilities | $ 9,267,717 | $ 6,939,074 |
Operating Lease, Liability, Current | 1,097,916 | |
Operating Lease, Liability, Noncurrent | $ 100,701 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||
Total revenues | $ 58,662,900 | $ 33,560,265 | $ 16,949,184 |
Interest expense | (4,101,528) | ||
Total Net Revenues | 54,561,372 | 33,560,265 | 16,949,184 |
Operating cost and expenses: | |||
Execution and clearing | (2,519,238) | (257,115) | (38,041) |
Employee compensation and benefits (including share-based compensation of US$349,700, US$34,204,761 and US$4,062,600 for the years ended December 31, 2017, 2018 and 2019, respectively) | (35,787,458) | (55,656,219) | (11,950,692) |
Occupancy, depreciation and amortization | (3,572,260) | (2,621,699) | (1,167,628) |
Communication and market data | (6,494,006) | (3,558,546) | (2,943,301) |
Marketing and branding | (7,103,178) | (10,526,940) | (6,288,254) |
General and administrative | (9,259,484) | (7,831,860) | (3,576,478) |
Total operating cost and expenses | (64,735,624) | (80,452,379) | (25,964,394) |
Other (expense)/income: | |||
Others, net | 869,028 | 725,446 | (95,982) |
Loss before income taxes | (9,305,224) | (46,166,668) | (9,111,192) |
Income tax benefits | 3,355,366 | 1,873,113 | 1,183,698 |
Net Loss | (5,949,858) | (44,293,555) | (7,927,494) |
Less: | |||
Net income attributable to redeemable non-controlling interests | 639,573 | ||
Net loss attributable to noncontrolling interests | (1,085,823) | (417,445) | |
Net loss attributable to UP Fintech Holding Limited | (6,589,431) | (43,207,732) | (7,510,049) |
Net loss attributable to ordinary shareholders of UP Fintech Holding Limited | $ (6,589,431) | $ (43,207,732) | $ (7,510,049) |
Net loss per share attributable to ordinary shareholders of UP Fintech Holding Limited: | |||
Basic and diluted | $ 0 | $ (0.09) | $ (0.02) |
Weighted average shares used in calculating net loss per ordinary share: | |||
Basic and diluted | 1,751,784,176 | 506,393,198 | 443,814,916 |
Other comprehensive income/(loss), net of tax: | |||
Unrealized gain on available-for-sale investments (net of tax effect of US$ nil, US$87,619 and US$ nil for the years ended December 31, 2017, 2018 and 2019, respectively) | $ 262,857 | ||
Changes in cumulative foreign currency translation adjustment | $ (321,433) | (935,612) | $ 1,620,635 |
Total Comprehensive loss | (6,271,291) | (44,966,310) | (6,306,859) |
Commissions | |||
Revenues: | |||
Revenues | 26,697,958 | 26,043,051 | 15,062,955 |
Financing service fees | |||
Revenues: | |||
Revenues | 7,926,766 | 6,442,012 | 1,797,390 |
Interest income | |||
Revenues: | |||
Revenues | 16,505,185 | 85,361 | |
Other revenues | |||
Revenues: | |||
Revenues | $ 7,532,991 | $ 989,841 | $ 88,839 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||
Share-based compensation | $ 4,062,600 | $ 34,204,761 | $ 349,700 |
Unrealized gain on available for sale investments, tax | $ 0 | $ 87,619 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT - USD ($) | Paid in capital | Preferred sharesSeries Angel equity interest with preferential rights | Preferred sharesAngle preferred shares | Ordinary sharesClass A ordinary shares | Ordinary sharesClass B ordinary shares | Additional paid in capitalClass A ordinary shares | Additional paid in capital | Statutory Reserves | Accumulated other comprehensive (loss)/income | Accumulated deficit | Non controlling interests | Redeemable non-controlling interest of sponsored fund | Class A ordinary shares | Class B ordinary shares | Total | |
Beginning balance at Dec. 31, 2016 | $ 357,338 | $ 496,584 | $ 6,942,155 | $ (1,431,921) | $ (15,673,525) | $ 110,816 | $ (9,198,553) | |||||||||
Changes in equity | ||||||||||||||||
Share based compensation | 349,700 | 349,700 | ||||||||||||||
Foreign currency translation adjustment | 1,638,655 | (18,020) | 1,620,635 | |||||||||||||
Net loss | (7,510,049) | (417,445) | (7,927,494) | |||||||||||||
Return of capital to a limited partnership (note1) | [1] | (140,229) | (140,229) | |||||||||||||
Ending balance at Dec. 31, 2017 | 357,338 | 496,584 | 7,291,855 | 206,734 | (23,183,574) | (464,878) | (15,295,941) | |||||||||
Changes in equity | ||||||||||||||||
Reorganization effect (note 2) | [2] | $ (357,338) | $ (496,584) | $ 4,197 | $ 332 | $ 4,106 | 845,287 | |||||||||
Reorganization effect (note 2) (in shares) | [2] | 419,736,104 | 33,170,968 | 410,643,948 | ||||||||||||
Issuance of ordinary shares | $ 25 | $ 1,079 | $ 178,429 | $ 178,454 | $ 1,079 | |||||||||||
Issuance of ordinary shares (In shares) | 2,480,000 | 107,863,347 | ||||||||||||||
Class B ordinary shares converted into Class A ordinary shares | $ 1,809 | $ (1,809) | ||||||||||||||
Class B ordinary shares converted into Class A ordinary shares (in shares) | 180,895,573 | (180,895,573) | ||||||||||||||
Share based compensation | 34,204,761 | 34,204,761 | ||||||||||||||
Foreign currency translation adjustment | (1,014,579) | 78,967 | (935,612) | |||||||||||||
Investment in sponsored fund from noncontrolling shareholders | $ 2,204,940 | |||||||||||||||
Unrealized gain on availableforsale investments | 262,857 | 262,857 | ||||||||||||||
Net loss | (43,207,732) | (1,085,823) | (44,293,555) | |||||||||||||
Ending balance at Dec. 31, 2018 | $ 4,197 | $ 2,166 | $ 3,376 | 42,520,332 | (544,988) | (66,391,306) | (1,471,734) | 2,204,940 | (25,877,957) | |||||||
Ending balance (in shares) at Dec. 31, 2018 | 419,736,104 | 216,546,541 | 337,611,722 | |||||||||||||
Changes in equity | ||||||||||||||||
Issuance of Class A ordinary shares upon initial public offering, net of offering costs of US$3,462,099 | $ 2,373 | 114,763,528 | 114,765,901 | |||||||||||||
Issuance of Class A ordinary shares upon initial public offering, net of offering costs of US$3,462,099 (in shares) | 237,375,000 | |||||||||||||||
Conversion of convertible preferred shares to Class A ordinary shares upon initial public offering | $ (4,197) | $ 12,295 | 122,692,824 | 122,700,922 | ||||||||||||
Conversion of convertible preferred shares to Class A ordinary shares upon initial public offering (in shares) | (419,736,104) | 1,229,518,986 | ||||||||||||||
Issuance of Class A ordinary shares in relation to the acquisition of Marsco Investment Corporation | $ 85 | 2,999,915 | 3,000,000 | |||||||||||||
Issuance of Class A ordinary shares in relation to the acquisition of Marsco Investment Corporation (in shares) | 8,508,390 | |||||||||||||||
Issuance of Class A ordinary shares upon settlement of share-based awards | $ 853 | 200,157 | 201,010 | |||||||||||||
Issuance of Class A ordinary shares upon settlement of share-based awards (in shares) | 85,269,532 | |||||||||||||||
Share based compensation | 4,062,600 | 4,062,600 | ||||||||||||||
Provision of statutory reserve | $ 724,008 | (724,008) | ||||||||||||||
Foreign currency translation adjustment | (321,433) | (321,433) | ||||||||||||||
Investment in sponsored fund from noncontrolling shareholders | 239,609 | |||||||||||||||
Net loss | (6,589,431) | 639,573 | (6,589,431) | |||||||||||||
Acquisition of additional equity interest from non-controlling shareholders | (1,471,734) | $ 1,471,734 | ||||||||||||||
Ending balance at Dec. 31, 2019 | $ 17,772 | $ 3,376 | $ 285,767,622 | $ 724,008 | $ (866,421) | $ (73,704,745) | $ 3,084,122 | $ 211,941,612 | ||||||||
Ending balance (in shares) at Dec. 31, 2019 | 1,777,218,449 | 337,611,722 | ||||||||||||||
[1] | In August 2016, a subsidiary of the Group established a limited partnership, which was dissolved in November 2017. | |||||||||||||||
[2] | Represents the reorganization transactions to redomicile the Company’s business from the People’s Republic of China (the “PRC”) to the Cayman Islands as described in Note 1. |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Class A ordinary shares | |
Offering costs | $ 3,462,099 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net loss | $ (5,949,858) | $ (44,293,555) | $ (7,927,494) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Share-based compensation | 4,062,600 | 34,204,761 | 349,700 |
Depreciation and amortization | 752,167 | 473,730 | 342,450 |
Unrealized fair value change of financial instruments held, at fair value | (1,659,469) | (215,446) | |
Gain on disposal of subsidiaries | (467,500) | ||
Impairment loss of equity investments | 755,524 | ||
Loss on disposal of property and equipment | 34,467 | ||
Foreign currency exchange loss/(gain) | (284,153) | (542,336) | 451,407 |
Deferred income tax | (6,215,140) | (1,874,819) | (1,183,698) |
Changes in operating assets and liabilities: | |||
Financial instruments held, at fair value | (6,627,630) | (6,219,795) | |
Receivables from customers | (101,438,442) | (353,304) | |
Receivables from brokers, dealers and clearing organizations | (183,103,763) | 1,128,931 | 185,906 |
Amounts due from related parties | 401,748 | (10,390,564) | (2,348,838) |
Prepaid expenses and other current assets | (1,259,888) | (3,543,158) | (1,382,291) |
Right-of-use assets | 2,251,301 | ||
Other non-current assets | (435,614) | ||
Payables to customers | 481,105,480 | 5,316,263 | 1,247,803 |
Payables to brokers, dealers and clearing organizations | 55,078,762 | ||
Accrued expenses and other current liabilities | 6,200,824 | 5,137,692 | 2,640,752 |
Lease liabilities | (2,142,202) | ||
Deferred income | 2,249,925 | ||
Amounts due to related parties | (886,331) | ||
Net cash (used in)/provided by operating activities | 243,309,139 | (21,171,600) | (8,510,634) |
Cash flows from investing activities: | |||
Purchase for property, equipment and intangible assets | (1,317,435) | (1,684,382) | (585,016) |
Prepayment for acquisition and long-term investments subject to certain closing conditions | (854,891) | ||
Payment for long-term investments | (600,000) | (2,151,761) | |
Prepayments to acquire the remaining equity interest of an equity method investee | (90,043) | ||
Cash paid for acquisition, net of cash acquired | (6,008,680) | ||
Cash-segregated for regulatory purpose acquired from acquisition | 22,094,198 | ||
Proceeds received from disposal of long-term investment | 227,472 | ||
Repayment of loans from related parties | 1,585,591 | 1,793,993 | |
Cash received from disposal of a subsidiary | 106,105 | ||
Purchase of term deposits | (65,601,207) | (29,999,865) | |
Maturity of term deposits | 29,999,865 | ||
Loans to employees | (1,154,938) | ||
Loans to related parties | (288,719) | (5,233,963) | (1,070,662) |
Net cash used in investing activities | (22,040,111) | (35,124,217) | (3,670,010) |
Cash flows from financing activities: | |||
Net proceeds received from initial public offering (net of offering cost of US$3,462,099) | 114,765,901 | ||
Capital contribution in sponsored fund from redeemable noncontrolling shareholders | 239,609 | 2,204,940 | |
Repayment of loans to bank | (1,100,000) | ||
Return of capital to a limited partnership | (140,229) | ||
Net cash provided by financing activities | 114,906,520 | 79,525,945 | 14,596,081 |
Increase in cash and cash equivalents | 336,175,548 | 23,230,128 | 2,415,437 |
Effect of exchange rate changes | 45,693 | (189,163) | 895,643 |
Cash and cash equivalents and cash-segregated for regulatory purpose, beginning of the year | 41,102,406 | 18,061,441 | 14,750,361 |
Cash and cash equivalents and cash-segregated for regulatory purpose, end of the year | 377,323,647 | 41,102,406 | 18,061,441 |
Supplemental disclosure of cash flow information: | |||
Income tax paid | 762,179 | 22,426 | |
Acquisition consideration paid | 6,348,290 | ||
Noncash investing activity: | |||
Loan converted to longterm investment | 3,846,699 | ||
Series A preferred shares | |||
Cash flows from financing activities: | |||
Amount received for total considerations | 3,633,087 | ||
Series B+ preferred shares | |||
Cash flows from financing activities: | |||
Amount received for total considerations | 9,593,789 | ||
Series B-3 convertible redeemable preferred shares | |||
Cash flows from financing activities: | |||
Advanced subscriptions received from investors of Series B3 convertible redeemable preferred shares | $ 1,509,434 | ||
Proceeds received from issuance of convertible redeemable preferred shares | 19,961,472 | ||
Class A ordinary shares | |||
Cash flows from financing activities: | |||
Proceeds received from issuance of ordinary shares | 178,454 | ||
Proceeds from issuance of Class A Ordinary Shares | 201,010 | ||
Class B ordinary shares | |||
Cash flows from financing activities: | |||
Proceeds received from issuance of ordinary shares | 1,079 | ||
Series C convertible redeemable preferred shares | |||
Cash flows from financing activities: | |||
Proceeds received from issuance of convertible redeemable preferred shares | $ 800,000 | 47,180,000 | |
Series C-1 convertible redeemable preferred shares | |||
Cash flows from financing activities: | |||
Proceeds received from issuance of convertible redeemable preferred shares | $ 10,000,000 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |
Net of offering cost | $ 3,462,099 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2019 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES UP Fintech Holding Limited (the “Company”) was incorporated under the laws of Cayman Islands on January 26, 2018. The Company, its subsidiaries, its consolidated variable interest entities (“VIEs”) and VIEs’ subsidiaries (collectively, the “Group”) are primarily engaged in providing online brokerage services. As of December 31, 2019, details of the Group’s subsidiaries, VIEs and VIEs’ subsidiaries were as follows: Date of Place of Percentage of incorporation or establishment/ legal acquisition incorporation ownership Subsidiaries: Tiger Holdings Group Limited (“Tiger Holdings”) August 01, 2015 New Zealand 100 % Tiger Brokers (NZ) Limited (“TBNZ”) 1 August 02, 2016 New Zealand 100 % U-Tiger SPC (“U-Tiger SPC”) June 18, 2017 Cayman Islands 100 % I-Tiger Global Investment SPC (“I-Tiger SPC”) July 12, 2017 Cayman Islands 100 % I‑Tiger Capital Management Limited (“I‑Tiger Capital Management”) July 12, 2017 Cayman Islands 65 % I‑Tiger Global Investment Management Limited (“I‑Tiger Global Investment”) July 12, 2017 Cayman Islands 100 % I‑Tiger Capital Limited (“I‑Tiger Capital”) July 12, 2017 Cayman Islands 65 % Prosperous Investment Management Limited (“Prosperous Investment”) July 12, 2017 Cayman Islands 100 % Tiger Brokers(AU)Pty Limited (“TBAU”) 2 September 26, 2017 Australia 100 % Up Fintech International Limited (“Up International”) February 08, 2018 Hong Kong 100 % Tiger Fintech (Singapore) PTE Ltd. (“Tiger SG”) March 13, 2018 Singapore 100 % Tiger Brokers (Singapore) PTE Ltd. (“Tiger Brokers SG”) March 27, 2018 Singapore 100 % US Tiger Securities, Inc. (“US Tiger Securities”) March 30, 2018 United States of America(“USA”) 100 % Ningxia Xiangshangyixin Technology Co., Ltd (“Ningxia XSYX”, “Ningxia WFOE”) May 17, 2018 PRC 100 % Up Fintech Global Holdings Limited (“Up Global”) June 15, 2018 BVI 100 % Tiger Fintech Holdings, Inc (“Tiger Fintech Holdings”) July 09, 2018 USA 100 % Xiangshang Upfintech Holding Limited (“Xiangshang Upfintech Holding”) July 11, 2018 BVI 100 % Beijing Xiangshangyixin Technology Co., Ltd (“Beijing XSYX”, “Beijing WFOE”) July 26, 2018 PRC 100 % Trading Front Inc (“Trading Front”) August 01, 2018 USA 100 % Wealthn LLC (“Wealthn”) August 01, 2018 USA 100 % Uptech Global Holding Limited (“Uptech Holding”) August 03, 2018 British Virgin Islands (“BVI”) 100 % Tiger Fixed Income Portfolio Limited (“Tiger Fixed”) September 06, 2018 Cayman Islands 100 % JV Uptech Holding limited (“JV”) September 18, 2018 BVI 100 % Kastle Limited (“Kastle”) October 15, 2018 Hong Kong 100 % Fleming Funds Management Pty Limited (“Fleming”) November 22, 2018 Australia 100 % Amtiger Consultants Private Limited (“Amtiger”) January 09, 2019 India 99.999 % Tung Chi Consulting Limited (“Tung Chi”) January 29, 2019 Hong Kong 100 % Marsco Investment Corporation (“Marsco”) July 12, 2019 USA 100 % Tiger Investor Services Pty Limited (“Tiger Investor”) July 29, 2019 Australia 100 % Subsidiaries: Tradeup Inc. (“Tradeup”) October 10, 2019 USA 100 % VIEs: Ningxia Xiangshang Rongke Technology Co.,LTD (“Ningxia Rongke”, “Ningxia VIE”) June 11, 2014 PRC Consolidated VIE Beijing Xiangshang Yiyi Laohu Technology Group Co.,LTD (“Beijing Yiyi”, “Beijing VIE”) October 29, 2018 PRC Consolidated VIE TigerShares Trust (“Trust”) September 25, 2018 USA Consolidated VIE VIEs’ subsidiaries: Tiger Technology Corporation Limited (“Tiger Technology”) October 14,2014 Hong Kong VIE’s subsidiary Tiger Holdings, LLC (“Tiger LLC”) October 13, 2015 USA VIE’s subsidiary Beijing U‑Tiger Network Technology Co., LTD. (“Beijing U‑Tiger Network”) April 20, 2016 PRC VIE’s subsidiary Beijing U‑Tiger Business Service Co., Ltd (“Beijing U‑Tiger Business”) April 21,2016 PRC VIE’s subsidiary Beijing Chenhao Technology Co., LTD. (“Beijing Chenhao”) August 11, 2016 PRC VIE’s subsidiary Tiger Financial Information Service (NX) Co., Ltd. (“Tiger Financial Information”) September 09, 2016 PRC VIE’s subsidiary Tiger Rongke Technology Co., Ltd. (“Tiger Rongke”) November 09, 2016 PRC VIE’s subsidiary Fangguang Technology (NX) Co., Ltd. (“Fangguang Technology”) November 16, 2016 PRC VIE’s subsidiary Yunxin (Beijing) Information Consulting Co., Ltd. (“Beijing Yunxin”) November 23, 2016 PRC VIE’s subsidiary Xinhu Information Technology (SH) Co., Ltd (“Shanghai Xinhu”) July 05, 2017 PRC VIE’s subsidiary Top Capital Partners Custodians Limited (“Top Capital Partners Custodians”) September 13,2017 New Zealand VIE’s subsidiary Beijing Zhijianfengyi Information Technology Co., Ltd (“Beijing ZJFY”) January 25, 2018 PRC VIE’s subsidiary Shenzhen Xiang Shang Hu Xun Technology Co., LTD. (“Hu Xun”) June 20, 2018 PRC VIE’s subsidiary Beijing Beihu Commercial Service Co., Ltd (“Beihu”) August 10, 2018 PRC VIE’s subsidiary Beijing Huyi Technology Co., Ltd (“Huyi”) September 05, 2018 PRC VIE’s subsidiary Guangzhou U-Tiger Technology Co.,LTD (“Guangzhou U-Tiger”) December 24, 2018 PRC VIE’s subsidiary Shenzhen Huichuang Tianrong Asset Management Co.,Ltd. (“Huichuang Tianrong”) January 26, 2019 PRC VIE’s subsidiary Tiger Brokers International Limited (“TB International”) September 26, 2019 Hong Kong VIE’s subsidiary Tiger Brokers Group Limited (“TB Group”) September 26, 2019 Hong Kong VIE’s subsidiary Tiger Assets Management Corporation Limited (“Tiger Asset Management”) September 26, 2019 Hong Kong VIE’s subsidiary 1 In June, 2019, the name of “Top Capital Partners Limited” was changed to “Tiger Brokers (NZ) Limited” 2 In May, 2019, the name of “Top Capital Partners (Australia) PTY Limited” was changed to “Tiger Brokers (AU) Pty Limited” History of the Group and reorganization under identical common ownership The Group’s history began in June 2014 with the commencement of operations of Ningxia Rongke, as a limited liability company in PRC incorporated by Mr. Tianhua, Wu, Chief Executive Officer (the “CEO”). From December 2014 to January 2017, after the incorporation of the Ningxia Rongke, series Angel, A, B, B+ investors (collectively, the “equity investors”) each acquired certain equity interest with preferential rights of Ningxia Rongke. In June 2018, the Company undertook a series of reorganization transactions to re‑domicile its business from the PRC to the Cayman Islands (the “Re‑domiciliation”). The main purpose of the Re‑domiciliation was to establish a Cayman holding company for the existing business in preparation for its overseas initial public offering. At the same shareholding percentages and the rights of each shareholder were substantially the same in Ningxia Rongke and the Company, the Re‑domiciliation was accounted for as a reorganization of entities under common ownership. As a result, the consolidated financial statements for the year ended December 31, 2017 represent Ningxia Rongke’s historical consolidated financial statements as if the corporate structure of the Company had been in existence since the beginning of the periods presented. The consolidated financial statements as of and for the year ended December 31, 2018 represent the consolidated financial statements of the Group. The VIE arrangements To provide the Company control over the VIEs and the rights to the expected residual returns of the VIEs and VIEs’ subsidiaries, on June 7, 2018, Ningxia WFOE entered into a series of contractual arrangements as described below, and as amended on December 17, 2018, with the Ningxia Rongke and its equity investors. On October 30, 2018, Beijing WFOE entered into a series of substantially same contractual arrangements with Beijing Yiyi. As a result of entering into these contractual agreements, the Company through its wholly owned subsidiaries, Ningxia WFOE and Beijing WFOE (the “WOFEs”), has (1) power to direct the activities of the VIEs that most significantly affect the entities’ economic performance and (2) the right to receive economic benefits of the VIEs that could be significant to the VIEs. Accordingly, The Company is considered the primary beneficiary of the VIEs and consolidate the VIEs’ financial results of operations, assets, and liabilities in the Company’s consolidated financial statements. The Company also believes that this ability to exercise control ensures that the VIEs will continue to execute and renew the exclusive business cooperation agreements and pay service fees to the Company. The ability to charge service fees in amounts determined at the Company’s sole discretion, and by ensuring that the exclusive business cooperation agreements are executed and renewed indefinitely, the Company has the right to receive substantially all of the economic benefits from the VIEs. Agreements that were entered to provide the Company effective control over the VIEs Exclusive Option Agreements. The respective equity investors of the VIEs entered into Exclusive Option Agreements with the WFOEs respectively, pursuant to which the equity investors of the VIEs grant the WFOEs an irrevocable and exclusive right to purchase or designate one or more persons to purchase the equity interests in the VIEs then held by the equity investors of the VIEs once or at multiple times at any time in part or in whole at the WFOEs’ sole and absolute discretion to the extent permitted by PRC laws. The standard equity interest purchase price is RMB10 (US$1.5). If a minimum price limited by PRC law applicable is more than RMB10 (US$1.5), the purchase price of the equity interest shall equal such minimum price. The agreement shall remain effective for a term of ten years and renewable at the WFOEs’ election. Powers of Attorney. The equity investors of the VIEs signed the irrevocable Powers of Attorney to appoint the WFOEs as the attorney‑in‑fact to act on the equity investors’ behalf on all rights that the equity investors have in respect of their equity interest in the VIEs conferred by relevant laws and regulations and the articles of association of the VIEs. The rights include but not limited to attending shareholders meeting, exercising voting rights, designating and appointing on behalf of the equity investors, the legal representative (chairperson), the director, supervisor, the chief executive officer and other senior management members of the VIEs. Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of the Powers of Attorney. Spousal Consent letters. The spouse of each married equity investors of the VIEs has signed a spousal consent letter, which unconditionally and irrevocably agreed not to assert any rights over the equity interest in the VIEs held by and registered in the name of their spouse. In addition, in the event that the spouse obtains any equity interest in the VIEs for any reason, they agreed to be bound by the contractual arrangements. Commitment letters. The respective equity investors of the VIEs entered into Commitment letters with the WFOEs respectively. The equity investors of the VIEs undertake that, when exercising their options, they will refund, without any conditions, any amount and fees to the WFOEs which exceed the share purchase price provided in the Exclusive Option Agreements. Agreements that were entered to transfer economic benefits to the Company Exclusive Business Cooperation Agreements. The WFOEs entered into Exclusive Business Cooperation Agreements with the VIEs and their equity investors. Under the agreements, VIEs agree to appoint the WFOEs as their exclusive services provider to provide the business support, technical and consulting services at a determined price. The WFOEs shall have exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual properties arising out of or created during the performance of the agreement. The annual service fee should not be less than 99% of VIEs’ total net profit and could be decided and adjusted by the WFOEs. The service agreement shall remain effective for ten years. The WFOEs has the right to unilaterally extend the agreement and the VIEs shall accept the extended term unconditionally. Equity Pledge Agreements. The equity investors of the VIEs entered into Equity Pledge Agreements with the WFOEs, under which the equity investors pledged all of the equity interest in the VIEs to the WFOEs to ensure that the WFOEs collect all payments due by the VIEs, including without limitation the consulting and service fees regularly from the VIEs under the Exclusive Business Cooperation Agreements. The WFOEs shall have the right to collect dividends generated by the equity interest during the term of pledge. If any event of default, the WFOEs, as the pledgee, will be entitled to take possession of the equity interest pledged and to dispose of the pledged equity interest. The Equity Pledge Agreements remain continuously valid until all payments due under the Exclusive Business Cooperation Agreements have been fulfilled by the VIEs. Risks in relation to the VIE structure The Company believes that the WFOEs’ contractual arrangements with the VIEs and their respective subsidiaries are in compliance with PRC laws and are legally enforceable. The equity investors of the VIEs are also major shareholders of the Company and therefore have no current interest in seeking to act contrary to the contractual arrangements. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and if the shareholders were to reduce their interest in the Company, their interests may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so. The Company’s ability to control the VIEs also depends on the power of attorney. The WFOEs have to vote on all matters requiring shareholders’ approval in the VIEs. As noted above, the Company believes this power of attorney is legally enforceable but may not be as effective as direct equity ownership. The shareholders are required to complete the registration of the equity pledge under the agreements with competent government authorities. In case any of the shareholders is in breach, the WFOEs will be entitled to certain right, including the right to dispose the pledged equity interest and to receive proceeds from the auction or sale of the pledge equity interests. The Company has completed the registration of the equity pledges relating to the VIEs with the local government authorities. In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the PRC regulatory authorities could: · revoke the Group’s business and operating licenses; · require the Group to discontinue or restrict its operations; · restrict the Group’s right to collect revenues; · restrict or prohibit the Group to finance its business and operations in China; · require the Group to restructure the operations; · impose additional conditions or requirements with which the Group might not be able to comply, levy fines, confiscate the Group’s income or the income of its PRC subsidiary or affiliated PRC entities; or · take other regulatory or enforcement actions against the Group that could be harmful to its business. The imposition of any of these penalties could result in a material adverse effect on the Group’s ability to conduct the Group’s business. In addition, if the imposition of any of these penalties causes the Group to lose the rights to direct the activities of the VIEs, VIEs’ subsidiaries, or the right to receive their economic benefits, the Group would no longer be able to consolidate the VIEs and VIEs’ subsidiaries. The Group does not believe that any penalties imposed or actions taken by the PRC government would result in the liquidation or dissolution of the Company, the WFOEs, the VIEs and their respective subsidiaries. The following financial statement amounts and balances of the VIEs were included in the accompanying consolidated financial statements after the elimination of intercompany transaction and balances within the Group: As of December 31, 2018 2019 US$ US$ Current assets 17,648,541 11,412,715 Non-current assets 9,581,582 5,838,056 Total assets 27,230,123 17,250,771 Current liabilities 6,939,074 10,365,633 Non-current liabilities — 100,701 Total liabilities 6,939,074 10,466,334 For the years ended December 31, 2017 2018 2019 US$ US$ US$ Total revenues 16,949,184 27,536,436 3,089,605 Net Loss (7,927,494) (4,948,406) (24,539,413) For the years ended December 31, 2017 2018 2019 US$ US$ US$ Net cash (used in)/provided by operating activities (8,510,634) 3,768,318 33,354,051 Net cash used in investing activities (3,670,010) (2,456,147) (726,601) Net cash provided by/(used in) financing activities 14,596,081 (1,509,434) — The VIEs contributed an aggregate of 100%, 82% and 6% of the consolidated revenues for the years ended December 31, 2017, 2018 and 2019, respectively. As of December 31, 2018 and 2019, the VIEs accounted for an aggregate of 24% and 2%, respectively, of the consolidated total assets, and 41% and 2%, respectively, of the consolidated total liabilities. There are no consolidated VIEs’ assets that are collateralized for the VIEs’ obligations and can only be used to settle the VIEs’ obligations. There are no creditors (or beneficial interest holders) of the VIEs that have recourse to the general credit of the Company or any of its consolidated subsidiaries. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholders of the VIEs or entrustment loans to the VIEs. Relevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of their statutory reserve and their share capital, to the Company in the form of loans and advances or cash dividends. Please refer to Note 21 for disclosure of restricted net assets. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principle of consolidation The consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). As described in Note 1, the consolidated financial statements of the Group for the year ended December 31, 2017 represent Ningxia Rongke's historical consolidated financial statements as if the corporate structure of the Company had been in existence since the beginning of the periods presented. The consolidated financial statements as of and for the years ended December 31, 2018 and 2019 represent the consolidated financial statements of the Group. The Company believes that the disclosures are adequate to make the information presented not misleading. Consolidation of sponsored funds The Company has a trust that develops and holds an exchange‑trade fund (the “sponsored fund”) that is publicly traded. The fund is managed by a subsidiary of the Company. Decisions regarding the trustees of the trust and certain key activities of the sponsored fund within the trust, such as appointment of the sponsored fund’s investment adviser, resides at the trust level. As a result, shareholders of the sponsored fund lack the ability to control the key decision‑making processes that most significantly affect the economic performance of the sponsored fund. Accordingly, the Company believes that the trust and the sponsored fund are variable interest entities (“VIEs”) and shall be evaluated for consolidation as VIEs. The Company provides seed funding to new sponsored fund and may hold a significant interest in the shares of a sponsored fund during the seed investment stage when the sponsored fund’s investment track record is being established. To the extent that the Company’s interest in a sponsored fund is limited to: (i) fixed management fee and (ii) other interests that, in aggregate, would absorb an insignificant amount of variability in the fund, the Company’s management contract would not be considered a variable interest that provides the Company with the power to direct the activities of the fund and would therefore not be required to consolidate the fund. However, the Company has concluded that its fees earned from asset management arrangement with sponsored fund in which the Company holds a significant (at least 10 percent) ownership interest in the fund do represent variable interests that convey both power, in combination with the ownership interest, and significant economic exposure (both characteristics of a controlling financial interest) to the Company and therefore the Company would be the primary beneficiary that required to consolidate the fund. Upon consolidation, management fee revenue earned on, as well as the Company’s investments in, the consolidated sponsored funds are eliminated. The Company retains the specialized accounting treatment of the sponsored fund in consolidation whereby the underlying investments are carried at fair value, reflected in financial instruments held, at fair value, in the Company’s consolidated balance sheets, with corresponding changes in fair value reflected in others, net in the Company’s consolidated statements of operations. The non-controlling interest represents third-party interests of the Company's consolidated sponsored fund. This interest is redeemable at the option of the investors and therefore is recorded as mezzanine equity. Redeemable non-controlling interest is recorded at redemption value which approximates the fair value at each reporting period. When the Company no longer holds a controlling financial interest in the sponsored fund, the Company deconsolidates the sponsored fund and removes the related assets, liabilities and redeemable non-controlling interests from its balance sheet. Because consolidated sponsored funds carry their assets and liabilities at fair value, there is no incremental gain or loss recognized upon deconsolidation . Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s consolidated financial statements include allowance for doubtful accounts, the useful lives of long‑lived assets, impairment of long‑lived assets and goodwill, fair value measurement of long-term equity securities without readily determinable fair value, long‑term available‑for‑sale investments, fair value measurement of ordinary shares and preferred shares, purchase price allocation for business acquisition, share‑based compensation, the valuation allowance for deferred tax assets and income tax. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements. Fair value Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model‑derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Fair value of financial instruments The Group’s financial instruments consist primarily of cash and cash equivalents, cash—segregated for regulatory purpose, term deposits, financial instruments held, at fair value, derivative assets or liabilities in relation to the Company’s derivative transactions, receivables from or payable to customers, receivables from or payables to brokers, dealers, clearing organizations, amount due from related parties, long–term equity securities without readily determinable fair value, and long-term available–for– sale investments. The Company carries its financial instruments held, at fair value, long-term available–for–sales investments at fair value. Financial instruments held, at fair value, based upon quoted market price, consist of stock investments related to the exchange trade funds (“ETFs”), US treasuries and corporate bonds. The carrying amounts of cash and cash equivalents, cash—segregated for regulatory purpose, term deposits, receivables from or payables to customers, receivables from or payables to brokers, dealers and clearing organizations, amount due from related parties approximate their fair values due to the short–term maturities of these instruments. Derivative financial instruments The Company may utilize derivative financial instruments to mitigate the risk of fair value change of its investments in certain consolidated sponsored funds seeded for business development purposes. These derivative financial instruments are not designated as hedging instruments for accounting purposes. The Company does not use derivative financial instruments for speculative purposes. The Company records the derivative financial instruments in financial instrument held, at fair value or accrued expenses and other current liabilities on its consolidated balance sheets and measures these instruments at fair value. The Company has entered into certain stock index future contracts. As of December 31, 2018 and 2019, the Company held 48 and 34 outstanding future contracts with a notional value of US$6,079,920 and US$5,951,530, respectively, and the remaining contract term for the contracts outstanding at December 31, 2018 and 2019 was 2.5 and 2.6 months, respectively. For the years ended December 31, 2018 and 2019, the Company recognized US$123,662 realized gain and US$1,766,679 realized loss from settled future contracts; US$507,810 unrealized investment gain and US$158,900 unrealized investment loss arise from fair value changes were recorded in others, net on the consolidated statements of operations, respectively. Cash and cash equivalents Cash and cash equivalents consist of cash on hand, demand deposits with financial institutions, term deposits with an original maturity of three months or less and highly liquid investments, which are unrestricted from withdrawal or use, or which have original maturities of three months or less when purchased. Cash—segregated for regulatory purposes Certain subsidiaries of the Company are obligated by rules mandated by their primary regulators to segregate or set aside amount of cash deposited by the customer and the Company. Such regulations are promulgated to protect customer assets and meet the capital adequacy and other regulatory requirement. A corresponding payable to customers is recorded upon receipt of the cash from the customer. As of December 31, 2019, Marsco, the Company’s broker-dealer subsidiary located in the USA, had a cash of US$25,167,014 segregated for the exclusive benefit of customers under Rule 15c3-3 of the Securities Exchange Act. Term deposits Term deposits consist of bank deposits with an original maturity of greater than three months and less than one year. Receivables from and payable to Customers Receivables from customers include the margin loans extended to consolidated accounts customers by the Group. Securities owned by the customers, which are not recorded in the consolidated balance sheets, are held as collateral for amounts due on the loan receivables. Receivables from customers are recorded net of allowance for doubtful accounts. Revenues earned from the margin loan transactions are included in interest income. The amounts receivable from customers that are determined by management to be uncollectible when the fair value of the collaterals fall under the carrying value of the receivables are recorded as bad debt expense in the consolidated statements of operations. For the years ended December 31, 2017, 2018 and 2019, no allowance for doubtful accounts were recorded. Receivables from customers also include cash collateral advanced to consolidated account customers derived from security lending activities. Payable to customers represent the closing cash balance to the customers, which include cash deposit and cash collateral received from consolidated account customers derived from security borrowing activities. The Company receives or advances cash collateral, in an amount generally equal to or in excess of the fair value of the securities borrowed and loaned by customers. The Company monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. Interest income and interest expense are recorded on an accrual basis. Receivables from and Payables to brokers, dealers and clearing organizations Receivables from brokers, dealers and clearing organizations include customers’ cash deposits, the Group’s revenue receivables, cash collateral advanced for consolidated account customers’ security borrowing activities, and net receivables arising from unsettled trades. Payables to brokers, dealers and clearing organizations include cash collateral received for consolidated account customers’ security lending activities. Securities borrowing transactions require the Company to deposit cash with the lender, and securities lending transactions result in the Company receiving collateral in the form of cash from the brokers, dealers and clearing organization. The cash collateral advanced to or received from the brokers are in an amount generally equal to or in excess of the market value of the securities that borrowed or loaned by the consolidated account customers. The Company monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. Interest income and interest expense are recorded on an accrual basis. Property, equipment, and intangible assets, net Property and equipment mainly consist of electronic equipment, office equipment, leasehold improvements and software. The property and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straight‑line basis over the following estimated useful lives: Electronic equipment 3 years Office equipment 5 years Software 5 years Leasehold improvement Shorter of the lease terms or the estimated useful lives of the assets Intangible assets mainly consists of the brokerage’s license in USA, New Zealand and Australia acquired by the Company, which are recognized as intangible assets with indefinite life, and it should not be amortized until its useful life is determined to be no longer indefinite. An intangible asset that is not subject to amortization is tested for impairment at least annually or if events or changes in circumstances indicate that the asset might be impaired. Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The estimation of fair value of each reporting unit using a discounted cash flow methodology also requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the Group's business, estimation of the useful life over which cash flows will occur, and determination of the Group's weighted average cost of capital. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results and market conditions. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for the reporting unit. The Group first assesses relevant events and circumstances to determine whether it is necessary to perform the two-step goodwill impairment test. If, after assessing the totality of events or circumstances such as those described in the preceding paragraph, the Group determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the first and second steps of the goodwill impairment test are unnecessary. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit is greater than zero and its fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of the affected reporting unit’s goodwill to the carrying value of that goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. The Group concluded that the estimated fair value for its reporting unit with goodwill substantially exceeded the related carrying value and no impairment charges was recognized for the years ended December 31, 2017, 2018 and 2019. Lease The Group leases offices and other facilities in different cities in the PRC, New Zealand, USA and other countries. The Group determines whether an arrangement constitutes a lease and records lease liabilities and right-of-use assets on its consolidated balance sheets at the lease commencement. The Group measures its lease liabilities based on the present value of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or its incremental borrowing rate, which is the estimated rate the Group would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. The Group estimates its incremental borrowing rate based on an analysis of publicly traded debt securities of companies with credit and financial profiles similar to its own. The Group measures right-of-use assets based on the corresponding lease liability adjusted for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Group begins recognizing operating lease expense when the lessor makes the underlying asset available to the Group. The Group's leases have remaining lease terms of up to ten years, some of which include options to extend the leases for an additional period which has to be agreed with the lessors based on mutual negotiation. After considering the factors that create an economic incentive, the Group did not include renewal option periods in the lease term for which it is not reasonably certain to exercise. For short-term leases, the Group records operating lease expense in its consolidated statements of operations on a straight-line basis over the lease term and record variable lease payments as incurred. Long‑term investment The Group’s long‑term investments consist of equity securities without readily determinable fair values, and available‑for‑sale securities investments. (a) Equity securities without readily determinable fair values For investments in equity securities without readily determinable fair values, the Group elects to use the measurement alternative defined as cost, less impairment, adjusted by observable price change. The Group reviews its equity securities without readily determinable fair values investments for impairment at each reporting period by performing a qualitative assessment considering impairment indicators. The Group recorded nil, nil and US$755,524 impairment loss on its equity securities without readily determinable fair values during the years ended December 31, 2017, 2018 and 2019. (b) Available‑for‑sale investments For investments which are determined to be debt securities, the Group accounts for them as long‑term available‑for‑sale investments when they are not classified as either trading or held‑to‑maturity investments. Available‑for‑sale investment is carried at its fair value and the unrealized gains or losses from the changes in fair values are included in accumulated other comprehensive income or loss. The Group reviews its investments for other than temporary impairment based on the specific identification method. The Group considers available quantitative and qualitative evidence in evaluating potential impairment of its investments. If the cost of an investment exceeds the investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than the cost, the Group’s intent and ability to hold the investment, and the financial condition and near term prospects of the investees. The Group recorded nil impairment losses on its available‑for‑sale investments during the years ended December 31, 2017, 2018 and 2019, respectively. Revenue recognition Commissions Commissions earned for the Group’s online brokerage business in customers’ fully disclosed accounts and consolidated accounts are accrued on a trade date basis and are reported as commissions in the consolidated statements of operations. (a) Fully disclosed accounts According to the attributes of transactions under fully disclosed accounts, the Group provides the agreed services to its customers in facilitating the trades and recognizes the commission revenue collected from its partner, net of clearing cost and execution cost of the trades. (b) Consolidated accounts According to the attributes of transactions under consolidated accounts, the Group provides brokerage service for its customers and therefore recognize the full amount of revenue for the commission fee charged to the customers. Financing service fees The Group earns financing service fees in connection with the margin financing and securities borrowing and lending transactions provided by brokers to fully disclosed account customers, which are recorded on an accrual basis and is included in financing service fees in the consolidated statements of operations. Interest income and expense The Group earns interest income and incurs interest expense primarily in connection with its margin financing and its securities borrowing and lending activities offered by the Group to consolidated account customers. The Group also earns interest income from bank deposits. Interest income and expense are recorded on an accrual basis and are included in the consolidated statements of operations. Other revenues Other revenues consist of the revenue arising from initial public offering (“IPO”) distribution service and other services. Revenue from the IPO distribution service is derived from IPO underwriting and new share subscription services in relation to IPOs in the USA and Hong Kong capital market. IPO distribution revenue are generally recognized when the services are completed. The Group also earns revenue from promotional and advertisement services and financial advisory service rendered to the customers, which are recorded over the period of service provided. Research and development expenses Research and development expenses primarily consist of salaries and employee benefits for research and development personnel, rental and depreciation expenses in the development of the Group’s proprietary trading platform, back‑end technology and customer relationship management system. For the years ended December 31, 2017, 2018 and 2019, US$6,059,525 and US$11,282,241 and US$18,033,074 of research and development costs have been expensed as incurred as the costs qualifying for capitalization have been insignificant. Occupancy, Depreciation and Amortization Occupancy expenses consist primarily of lease payments on office and data center leases and related occupancy costs, such as utilities. Depreciation and amortization expenses result from the depreciation of fixed assets, such as electronic equipment, office equipment as well as leasehold improvements, and the amortization of intangible assets. Share‑based compensation Share‑based payment transactions with employees and managements, such as share options are measured based on the grant date fair value of the equity instrument. The Group has elected to recognize compensation expenses using the straight‑line method for all employee equity awards granted with graded vesting provided that the amount of compensation cost recognized at any date is at least equal to the portion of the grant‑date value of the options that are vested at that date, over the requisite service period of the award, which is generally the vesting period of the award. Compensation expenses for awards with performance conditions is recognized when it is probable that the performance condition will be achieved. The Group elects to recognize forfeitures when they occur. Income taxes Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more‑likely‑than‑not that a portion of or all of the deferred tax assets will not be realized. The Group accounts for uncertain tax positions by reporting a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. Tax benefits are recognized from uncertain tax positions when the Group believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The Group recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. Comprehensive loss Comprehensive loss consists of two components, net loss and other comprehensive income or loss, net of tax. Other comprehensive income or loss refers to revenue, expenses, and gains and losses that are recorded as an element of shareholders’ equity but are excluded from net loss. The Group’s other comprehensive income or loss consists of foreign currency translation adjustments from its subsidiaries not using the US$ as their functional currency and the fair value change of long‑term available‑for‑sale investments of the Group, if any. Comprehensive loss is reported in the consolidated statements of comprehensive loss. Non‑controlling interests For the Company’s consolidated subsidiaries, non‑controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. Non‑controlling interests are classified as a separate line item in the equity section of the Group’s consolidated balance sheets and have been separately disclosed in the Group’s consolidated statements of operations to distinguish the interests from that of the Company. Foreign currencies The reporting currency of the Company is the US$. The Company and the Company’s subsidiaries with operations in the PRC, Hong Kong, New Zealand, Singapore, Australia, the United States and other jurisdictions generally use their respective local currencies as their functional currencies. The financial statements of the Company’s subsidiaries, other than the subsidiaries with functional currency in US$, are translated into US$ using the exchange rate as of the balance sheet date for assets and liabilities and the average daily exchange rate for each month for income and expense items. Translation gains and losses are recorded as a separate component of other comprehensive income or loss in the consolidated statements of change in deficit and consolidated statements of comprehensive loss. In the financial statements of the Company’s subsidiaries, transactions in currencies other than the functional currency are measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the functional currency are translated into the functional currency using the exchange rate at the balance sheet date. All gains and losses arising from foreign currency transactions are recorded in the consolidated statements of operations during the year in which they occur. RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into other currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The Group’s cash and cash equivalents denominated in RMB amounted to US$6,884,354, US$3,696,283 and US$9,473,171 as of December 31, 2017, 2018 and 2019, respectively. Net loss per share Basic loss per ordinary share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The Group’s preferred shares were participating securities as they participated in undistributed earnings on an as‑if‑converted basis. Accordingly, the Group uses the two‑class method whereby undistributed net income is allocated on a pro rata basis to the ordinary shares and preferred shares to the extent that each class may share in income for the period; whereas the undistributed net loss for the period is allocated to ordinary shares only because the redeemable and non‑redeemable preferred shares are not contractually obligated to share the loss. Diluted loss per ordinary share reflects the potential dilution that could occur if securities were exercised or converted into ordinary shares. The Group had redeemable and non‑redeemable preferred shares, share options and restricted share units, which could potentially dilute basic loss per share. To calculate the number of shares for diluted loss per ordinary share, the effect of the preferred shares is computed using the as‑if‑converted method; the effect of the share options and restricted share units is computed using the treasury stock method. Concentration of credit risk The Group's exposure to credit risk associated with its trading and other activities is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. Concentrations of credit risk can be affected by changes in political, industry, or economic factors. To reduce the potential for risk concentration, credit limits are established and exposure is monitored in light of changing counterparty and market conditions. As of December 31, 2018 and 2019, the Group did not have any material concentrations of credit risk outside the ordinary course of business. Concentration of revenue There is no customer accounting for 10% or more of total revenues for the years ended December 31, 2017, 2018 and 2019, respectively. Concentration of supplier The Group relies on third parties for the execution and clearing of trade requests made by customers. In instances where these parties fail to perform their obligations, the Company may be temporarily unable to find alternative suppliers to satisfactorily deliver services to its customers in a timely manner, if at all. For the years ended December 31, 2017, 2018 and 2019, 99.5%, 96.8% and 78.4% of its total net revenues were executed and cleared by one supplier, Interactive Brokers. Newly adopted accounting pronouncements In February 2016, the FASB issued ASU 2016–02, Leases (Topic 842) . The guidance supersedes existing guidance on accounting for leases with the main difference being that operating leases are to be recorded in the state |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2019 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3. REVENUE FROM CONTRACTS WITH CUSTOMERS The Group has early adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) in fiscal year ended December 31, 2017 using the full retrospective approach. The adoption had no impact on the Group's opening accumulated deficit. Revenue from contracts with customers is recognized when or as the Group satisfies its performance obligations by transferring the promised services to the customers. A service is transferred to a customer when or as the customer obtains control of that service. A performance obligation may be satisfied at a point in time or over time. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Group determines the customer obtains control over the promised service. Revenue from a performance obligation satisfied over time is recognized by measuring the Group’s progress in satisfying the performance obligation in a manner that depicts the transfer of the services to the customer. The amount of revenue recognized reflects the consideration the Group expects to receive in exchange for those promised services (i.e., the “transaction price”). The Group’s revenues from contracts with customers are recognized when the performance obligations are satisfied at an amount that reflects the consideration expected to be received in exchange for such services. The majority of the Group’s performance obligations are satisfied at a point in time upon the successful execution and clearing of the customer’s trade order. Revenue is collected from the Group’s clearing partners in the brokerage business or from the customers directly by debiting their brokerage account with the Group. Nature of Services The Group’s services under contracts with customers are mainly related to its commission earned from its online brokerage business under the consolidated accounts (which customer information are not disclosed to the broker) and the fully disclosed accounts. The Group’s main sources of revenue from contracts with customers are as follows: i) Commissions are charged for each customer trade order executed and cleared by a third‑party broker. For consolidated accounts, commission fees are deducted from the customer’s account at the time of trade order initiation and a pre‑determined portion is directed to the broker. The Group recognizes revenue at the time of execution of the order (i.e., trade date) on a gross basis as the Group is determined to be the primary obligor in fulfilling the trade order initiated by the customer. For fully disclosed accounts, every time the broker executes and clears a trade, the broker collects the commissions, deducts its pre‑determined portion and returns the rest of the commission fees to the Group. Accordingly, the commission fee is recorded on a net basis. ii) Finance servicing fees are related to margin loans and securities borrowing and lending activities provided by the brokers under the fully disclosed accounts. Revenue is recognized over the period that the margin loans and securities borrowing and lending activities are outstanding. iii) Interest income is generated from margin loans and securities borrowing and lending activities provided to consolidated account customers and interest income from bank deposits. Interest income is recognized on an accrual basis . The Group provides IPO distribution services, including IPO underwriting and new share subscription services in relation to IPOs in the USA and Hong Kong capital market amounted at nil, US$475,055 and US$3,142,763 for the years ended December 31, 2017, 2018 and 2019. The Group also provides promotional and advertisement service and financial advisory service under the contracts with customers. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 12 Months Ended |
Dec. 31, 2019 | |
BUSINESS ACQUISITIONS | |
BUSINESS ACQUISITIONS | 4. BUSINESS ACQUISITIONS Acquisition of Marsco In July 2019, the Group acquired 100% of the equity interests in Marsco for a total consideration of US$9,348,290 in a combination of US$6,348,290 of cash and US$3,000,000 of Class A ordinary shares of the Company. Marsco is a licensed U.S self-clearing broker-dealer that focuses on empowering self-directed investors with the necessary tools to manage their portfolios. Marsco brings in rich broker dealer experience in execution and clearing. The acquisition was recorded using the acquisition method of accounting. Accordingly, the acquired assets and liabilities were recorded at their fair value at the date of acquisition. The tangible and intangible assets valuation disclosed below was based on a valuation analysis prepared by the management with the assistance from an independent third-party appraiser. In order to value the intangible asset, a multi period excess earnings method (“MPEEM”), a method of discount cash flow, was used. The MPEEM requires significant judgment and estimates by the management on future earnings as well as the economic useful life, taking into account certain factors including the appropriate discount rate. Marsco’s financial statements constituted less than 1% of revenue and 4.1% of total assets of the Company for and as of the year ended December 31, 2019. The purchase price was allocated at the date of acquisition as follows: US$ Amortization period Cash and cash equivalents 339,611 Cash-segregated for regulatory purpose 22,094,198 Other current assets 5,098,900 Property, plant and equipment 5,581 3-5 years Intangible assets Operating License 6,900,000 Indefinite life Goodwill 2,421,403 Other current liabilities (26,062,403) Deferred tax liabilities (1,449,000) 9,348,290 The goodwill is mainly attributable to intangible assets that cannot be recognized separately as identifiable assets under U.S.GAAP, and comprise of (a) the assembled work force and (b) the expected but unidentifiable business growth as a result of synergy effect from the acquisition. The acquired goodwill is not deductible for tax purposes. The Group incurred total acquisition costs of $377,239. The acquisition costs were primarily related to legal, accounting and advisory services and were expensed as incurred for the year ended December 31, 2019 and are included in general and administrative expenses in the consolidated statements of operations. The following information summarizes the results of operations attributable to the acquisition included in the Group's consolidated statement of operations since the acquisition date: For the year ended December 31, 2019 US$ Net revenues 416,143 Net income 15,723 Pro forma information of acquisitions The following unaudited pro forma information summarizes the results of operations of the Group for the years ended December 31, 2018 and 2019 assuming that the acquisition of Marsco occurred as of January 1, 2018. The following pro forma financial information is not necessarily indicative of the results that would have occurred had the acquisitions been completed at the beginning of the periods as indicated, nor is it indicative of future operating results: For the years ended December 31, 2018 2019 US$ US$ Unaudited Unaudited Pro forma net revenue 34,652,211 55,150,145 Pro forma net loss (44,107,663) (5,799,848) |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS As of December 31, 2018 2019 US$ US$ IPO distribution and promotional and advertisement service receivables — 2,080,411 Input VAT receivables 1,030,107 1,626,213 Interest receivables 158,306 1,526,625 Prepayment for share purchase in relation to acquisition (Note 18) and long-term investment — 854,891 Prepaid professional service fees 1,161,320 405,094 Prepaid data and IT service expenses — 391,214 Advances to employees 1,258,313 286,900 Prepaid marketing expenses 189,503 222,167 Rental and other deposits 421,059 215,182 Prepaid IPO related professional fees 1,391,231 — Others 193,356 411,495 5,803,195 8,020,192 |
PROPERTY, EQUIPMENT AND INTANGI
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2019 | |
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS, NET | |
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS, NET | 6. PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS, NET Property, equipment and intangible assets, net, consisted of the following: As of December 31, 2018 2019 US$ US$ Electronic Equipment 1,638,673 1,530,269 Office Equipment 38,130 219,418 Leasehold improvement 655,975 543,262 Software — 197,564 Less: accumulated depreciation (997,991) (1,028,796) Property and equipment, net 1,334,787 1,461,717 Licenses 995,646 7,967,036 Trademark — 117,424 Less: accumulated amortization — (10,636) Intangible assets, net 995,646 8,073,824 Total 2,330,433 9,535,541 Depreciation and amortization expenses for the years ended December 31, 2017, 2018 and 2019 were US$342,450, US$473,730 andUS$752,167, respectively. |
LONG TERM INVESTMENTS
LONG TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2019 | |
LONG TERM INVESTMENTS | |
LONG TERM INVESTMENTS | 7. LONG‑TERM INVESTMENTS Equity securities without readily determinable fair value The Group had the following equity securities without readily determinable fair value: As of December 31, 2018 2019 US$ US$ Tibet Gelonghui Information Technology Co., LTD (“Gelonghui”) (a) 1,454,440 1,436,413 UNext Group Limited ("UNext") (b) — 600,000 Total 1,454,440 2,036,413 (a) In October 2017, the Group acquired 1.0% of the equity interests of Gelonghui for a purchase consideration of US$1,536,972 (RMB10,000,000). Gelonghui is principally engaged in information technology development, technical consultation and technical services. On January 1, 2018, the Group adopted ASU 2016‑01 and ASU 2018‑03 with no significant impacts noted. No fair value change was recorded for the years ended December 31, 2018 and 2019. The change of balance was foreign exchange difference. (b) In December 2019, the Group acquired 0.6% of the equity interests of UNext for a purchase consideration of US$600,000. UNext is principally engaged in financing service. No fair value change was recorded for the year ended December 31, 2019. Available‑for‑sale investments The Group had the following available‑for‑sale investments: As of December 31, 2018 2019 US$ US$ Beijing Yingxin Network Technology Co., LTD (“Yingxin”) (c) 762,955 753,496 Beijing Smart Zhenzhi Technology Co., LTD (“Zhenzhi”) (d) 169,296 167,197 Alphalion Technology Holding Limited (“Alphalion”) (e) — 3,060,113 Total 932,251 3,980,806 (c) In September 2017, the Group acquired 2.91% of the equity interests of Yingxin for a purchase consideration of US$461,092 (RMB3,000,000). Yingxin is principally engaged in IT services, including systems, data or maintenance. The investment was classified as available‑for‑sale security as the Group determined that the preferred shares were debt securities due to the redemption option available to the investor and measured the investment subsequently at fair value . The unrealized holding gains of nil, US$326,623 and nil were reported in other comprehensive income or loss for the years ended December 31, 2017, 2018 and 2019, respectively. The change of balance in 2019 was foreign exchange difference. (d) In July 2017, the Group acquired a 3.33% equity interest of Zhenzhi for a purchase consideration of US$153,697 (RMB1,000,000). Zhenzhi is principally engaged in IT services, including software maintenance, application service and data processing. The investment was classified as available‑for‑sale security as the Group determined that the preferred shares were debt securities due to the redemption option available to the investors and measured the investment subsequently at fair value. The unrealized holding gains of nil, US$23,853 and nil were reported in other comprehensive income or loss for the years ended December 31, 2017, 2018 and 2019, respectively. The change of balance in 2019 was foreign exchange difference. (e) In February 2019, the Group entered into a series of agreements to convert its short-term interest-free loans to Alphalion Technology Holding Limited and its affiliates amounted at US$3,060,113 into a 25% equity interest of Alphalion (Note 15). Alphalion is principally engaged in IT services, including software maintenance, application service and data processing. The investment was classified as available-for-sale security as the Group determined that the preferred shares were debt securities due to the redemption option available to investors and measured the investment subsequently at fair value. No fair value change was recorded for the year ended December 31, 2019. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: As of December 31, 2018 2019 US$ US$ Accrued payroll and welfare 6,157,611 9,444,626 Tax payables 862,487 2,677,610 Accrued marketing expenses 1,331,988 2,416,759 Accrued professional expenses 543,335 1,185,326 Accrued data and IT service expenses — 552,814 Advanced from customers 375,481 294,881 Rental payables 468,472 — Others 683,733 309,941 10,423,107 16,881,957 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
INCOME TAXES | 9. INCOME TAXES PRC Under the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate for domestic enterprises and foreign invested enterprises is 25%. In addition, the EIT Law and its implementing rules permit qualified “High and New Technologies Enterprise” (the “HNTE”) to enjoy a reduced 15% EIT rate. Beijing U‑Tiger Business began to qualify as an HNTE under the EIT Law in 2017, subject to the tax rate of 15% with a valid period of three years starting from December 2017, respectively. The Group’s other subsidiaries are subject to income tax rate of 25%, according to EIT Law. Cayman Islands Under the current laws of the Cayman Islands, the Group is not subject to tax on its income or capital gains. New Zealand The Group’s subsidiaries, TBNZ, Tiger Holdings and Top Capital Custodians, are located in New Zealand and are subject to an income tax rate of 28% for taxable income earned in New Zealand. Hong Kong The Group’s subsidiaries, Up International, Tiger Technology, Tiger Brokers, Tiger Securities, Tung Chi and Tiger Assets, are located in Hong Kong and are subject to a profits tax rate of 8.25% on assessable profits on the first Hong Kong Dollars (“HK$”) 2,000,000 and 16.5% for any assessable profits in excess of HK$2,000,000 starting from the financial commencing on April 1, 2018. USA The Group’s subsidiaries, Marsco, Tiger LLC, US Tiger Securities, Tiger Fintech Holdings, Trading Front, Tradeup, Wealthn LLC and Trust, are located in the USA and are subject to income tax rate of up to 35% for taxable income earned in the USA. On December 22, 2017, the 2017 U.S. Tax Cuts and Jobs Act (the “Tax Act”) was signed into law. The Tax Act reduced tax rates and modified certain policies, credits, and deductions and has certain international tax consequences. The Tax Act reduced the federal corporate tax rate from a maximum of 35% to a flat 21% rate. The Tax Act’s corporate rate reduction became effective January 1, 2018. Singapore The Group’s subsidiaries, Tiger SG and Tiger Brokers SG, are located in Singapore and are subject to an income tax rate of 17% for taxable income earned in Singapore. Australia The Group’s subsidiaries, TBAU and Fleming, are located in Australia and are subject to an income tax rate of 27.5% for taxable income earned in Australia. India The Group's subsidiary, Amtiger is located in India and is subject to an income tax rate of 25% for taxable income earned in India. The current and deferred portions of income taxes included in the consolidated statements of operations were as follows: For the years ended December 31, 2017 2018 2019 US$ US$ US$ Current tax expenses — 1,706 2,859,774 Deferred tax benefits (1,183,698) (1,874,819) (6,215,140) Income tax benefits (1,183,698) (1,873,113) (3,355,366) The significant components of the Group’s deferred tax assets were as follows: As of December 31, 2018 2019 US$ US$ Deferred tax assets Accrued expenses 16,965 46,004 Impairment loss from equity investments — 134,304 Deductible advertising expenses 522,076 429,228 Net operating loss carryforwards 8,738,089 16,926,698 Trading losses 78,500 — Less: valuation allowance (2,931,196) (4,888,240) Less: changes in fair value of investment (87,619) (86,533) Deferred tax assets, net 6,336,815 12,561,461 Deferred tax liabilities Acquired intangible assets — 1,449,000 Valuation allowance is provided against deferred tax assets when the Group determines that it is more‑likely‑than‑not that the deferred tax assets will not be utilized in the future. The Group considers positive and negative evidence on each individual subsidiary basis to determine whether some portion or all of the deferred tax assets will be more‑likely‑than‑not realized. As of December 31, 2018 and 2019, the Group had net operating loss carryforwards of US$42,118,357 and US$70,615,285, respectively. As of December 31, 2019, the net operating loss carryforwards will begin to expire in 2021. Management assessed the positive and negative evidence in certain entities in the PRC, United States, New Zealand and Singapore, and estimated they will have sufficient future taxable income to utilize the existing deferred tax assets. Significant objective positive evidence included the significant growth in customer trading activities in the New Zealand entities where tax losses could be carried forward indefinitely , net operating loss in the United States can be carried forward for 20 years for losses recognized in 2017 or prior and carry forward indefinitely for net operating loss generated starting in 2018, up to 80% limit of taxable income, and the net operating loss can be carried forward with no time limit in Singapore per the local tax laws. Other factors management considered include the likelihood for continued qualification of a PRC entity as “HNTE” which provides tax loss carryforward of 10 years as opposed to the typical 5 years. On the basis of this evaluation, the Group have concluded that deferred tax asset recognized for certain entities in the PRC, United States, New Zealand and Singapore is more likely than not to be realized. The recording and ultimate reversal of valuation allowances for the deferred tax asset requires significant judgment associated with past and projected performance. In assessing the realizability of deferred tax assets, management considered the taxable future earnings and the expected timing of the reversal of temporary differences. As of December 31, 2018 and 2019, valuation allowances of US$2,931,196 and US$4,888,240 respectively, were provided for net operating loss carryforwards totaled US$14,729,491 and US$23,654,338. To the extent that actual experience deviates from the assumptions, the projections would be affected and hence management’s assessment of realizability of deferred tax assets may change. Reconciliation between the income tax benefit computed by applying the PRC tax rate to loss before income taxes and the actual income tax benefit were as follows: For the years ended December 31, 2017 2018 2019 US$ US$ US$ Net loss before provision for income taxes (9,111,192) (46,166,668) (9,305,224) PRC statutory tax rate 25 % 25 % 25 % Income tax at statutory tax rate (2,277,798) (11,541,667) (2,326,306) Effect of income tax rate difference in other jurisdictions 132,949 439,213 124,406 Effect of income tax exemptions and preferential tax rates 151,317 (1,679,031) (5,153,269) Effect of expenses not deductible for tax purposes 81,938 9,053,735 1,425,861 Changes in valuation allowance 727,896 1,854,637 2,573,942 Income tax benefit (1,183,698) (1,873,113) (3,355,366) |
ORDINARY SHARES
ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2019 | |
ORDINARY SHARES | |
ORDINARY SHARES | 10. ORDINARY SHARES The Company’s Amended and Restated Memorandum of Association authorizes the Company to issue 4,662,388,278 Class A ordinary shares and 337,611,722 Class B ordinary shares with a par value of US$0.00001 per share. The shareholders of Class A ordinary shares and Class B ordinary shares have the same rights except for the voting and conversion rights. Each Class A ordinary share is entitled to one vote, and is not convertible into Class B ordinary share under any circumstance; and each Class B ordinary share is entitled to twenty votes, and will be automatically converted into one Class A ordinary share under certain circumstances. Upon the Re-domiciliation described in Note 1, the Company had 33,170,968 Class A ordinary shares and 410,643,948 Class B ordinary shares issued and outstanding, respectively. In June 2018, the Company further issued 2,480,000 Class A ordinary shares and 107,863,347 Class B ordinary shares. In November 2018, 180,895,573 Class B ordinary shares were redesignated into Class A ordinary shares. As of December 31, 2018, the Company had 216,546,541 Class A ordinary shares and 337,611,722 Class B ordinary shares issued and outstanding, respectively. In March 2019, the Company completed its initial public offering, and newly issued 237,375,000 Class A ordinary shares (represented by 15,825,000 ADSs), including 13,125,000 Class A ordinary shares issued through a private placement from an existing shareholder, IB Global Investment LLC, an affiliate of Interactive Brokers and 29,250,000 Class A ordinary shares issued from exercising the over-allotment option by the underwriters. Upon the completion of the initial public offering, 1,210,906,902 outstanding Series Angel, A, B-1, B-2, B-3 and C preferred shares were converted into 1,210,906,902 Class A ordinary shares on a one-for-one basis, and 18,597,738 outstanding Series C-1 preferred shares were converted into 18,612,084 Class A ordinary shares, reflecting the anti-dilution adjustments to the conversion rate based on the initial public offering price of US$8.00 per ADS. As of December 31, 2019, the Company had 1,777,218,449 Class A ordinary shares and 337,611,722 Class B ordinary shares issued and outstanding, respectively. |
PREFERRED SHARES
PREFERRED SHARES | 12 Months Ended |
Dec. 31, 2019 | |
PREFERRED SHARES | |
PREFERRED SHARES | 11. PREFERRED SHARES The Series Angel preferred shares are recorded as permanent equity in the consolidated balance sheet as such preferred shares do not have redemption right. The Series A, B‑1, B‑2, B‑3, C and C‑1 preferred shares, which were redeemable by the Company upon occurrence of certain events, are recorded as mezzanine equity in the consolidated balance sheets. The significant terms of the preferred shares issued by the Company are as follows: Voting rights The holders of preferred shares and ordinary shares shall vote together based on their shareholding ratio. Dividends No dividend, whether in cash, in property or in shares of the Company, shall be paid on any other shares, unless and until a preferential dividend in cash and/or share is, in advance, paid in full on each preferred share. If the Board of Directors decides to pay dividends, the holders of Series A, B‑1, B‑2, B‑3, C and C‑1 preferred shares shall be entitled to receive, on a pro rata basis, out of any funds legally available therefor, non‑cumulative dividends of 8% of the consideration that they paid for the equity interests. Liquidation preference In the event of liquidation, each holder of preferred shares, shall be entitled to receive, prior to the holders of ordinary shares, the relevant amount equal to 120% of issued price, plus all declared but unpaid dividends (“preference amount”) on each such preferred shares. In the event of insufficient funds available to pay in full the preference amount in respect of each preferred shares, the entire assets and funds of the Company legally available for distribution to the holders of the preferred shares shall be distributed on a pro rata basis among the holders in proportion to issued price. Redemption For Series A, B‑1, B‑2, B‑3, C and C‑1 preferred shares, upon the occurrence of any of the following events (the “Redemption Events”), (i) The Company fails to complete a Qualified IPO within sixty (60) months from February 21, 2017 ; (which under the former agreement, it was from the issuance date); (ii) Certain shareholders or the Company committed significant breach of its obligations, and no corrections were made within thirty (30) days after being notified by the preferred shareholders (upon the expiration of thirty (30) days which is earlier); or (iii) The principal business of the Group companies suffered a material adverse effect or become unable to carry on as the principal business of Group companies, as the Group companies (i) violated applicable laws, regulations, departmental rules and mandatory provisions of normative documents existing currently and enacted later, (ii) were deemed as not compliant with regulatory requirements, or (iii) were under attention or warning by relevant government departments, each of which had the adverse effect unable to eliminate and results in the business unable to carry on even after an adjustment by the Group companies. Each holder of the Series A, B‑1, B‑2, B‑3, C and C‑1 preferred shares may require that the Company redeem any or all of the outstanding Series A, B‑1, B‑2, B‑3, C and C‑1 preferred shares held by such holder with redemption price calculated on the agreed terms. Conversion (i) Optional Conversion Each holder of the preferred shares shall be entitled to convert any or all of its preferred shares at any time, without the payment of any additional consideration, into such number of fully paid and non‑assessable Class A ordinary shares per preferred share. The number of the Class A ordinary shares to which a holder shall be entitled upon conversion of each preferred share shall be the quotient of the original purchase price divided by the then‑effective conversion price. The initial conversion price of the preferred shares shall be equal to the applicable original purchase price, and the initial conversion ratio for the preferred shares into the Class A ordinary shares shall be 1:1, subject to adjustments of (a) share splits and combinations; (b) ordinary share dividends and distributions; (c) reorganizations, mergers, consolidations, reclassifications, exchanges, substitutions; (d) anti‑dilution. (ii) Automatic Conversion Each preferred share shall automatically be converted into the appropriate number of fully‑paid, non‑assessable Class A ordinary shares at the then‑effective conversion price upon the earlier of (a) immediately prior to the closing of a Qualified IPO, or (b) the written consent of the holders of a majority of the preferred shares. As stated above, upon the completion of the initial public offering, 1,210,906,902 outstanding Series Angel, A, B-1, B-2, B-3 and C preferred shares were converted into 1,210,906,902 Class A ordinary shares on a one-for-one basis, and 18,597,738 outstanding Series C-1 preferred shares were converted into 18,612,084 Class A ordinary shares, reflecting the anti-dilution adjustments to the conversion rate based on the initial public offering price of US$8.00 per ADS. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | 12. FAIR VALUE MEASUREMENT Measured at fair value on a recurring basis The Company measures financial instruments held, at fair value and long-term available‑for‑sale investments on a recurring basis. The fair value of the Company’s financial instruments held, at fair value are determined based on the quoted market price (Level 1). The Group measured the fair value of its long‑term available‑for‑sale investments using the income approach and considered those as Level 3 measurement because the Group used unobservable inputs to determine their fair values. Specifically, the Group estimates the fair value of these investments based on the discounted cash flow approach which requires significant judgments, including the estimation of future cash flows, which is dependent on internal forecasts, the estimation of long‑term growth rate of a company’s business, the estimation of the useful life over which cash flows will occur, and the determination of the weighted average cost of capital. Significant increases or decreases in any of those inputs in isolation would result in a significant change in fair value measurement. As of December 31, 2018 and 2019, information about inputs for the fair value measurements of the Group’s assets that were measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows: As of December 31, 2018 Quoted prices in active Significant markets for other Significant identical observable unobservable instruments inputs inputs Total (Level 1) (Level 2) (level 3) balance US$ US$ US$ US$ Financial instruments held, at fair value 6,435,241 — — 6,435,241 Long‑term available‑for‑sale investments — — 932,251 932,251 Total 6,435,241 — 932,251 7,367,492 As of December 31, 2019 Quoted prices in active Significant markets for other Significant identical observable unobservable instruments inputs inputs Total (Level 1) (Level 2) (level 3) balance US$ US$ US$ US$ Financial instruments held, at fair value ETFs 9,096,579 — — 9,096,579 US T-bill 5,527,192 — — 5,527,192 Corporate bonds 257,469 — — 257,469 Accrued expenses and other current liabilities 158,900 — — 158,900 Long‑term available‑for‑sale investments — — 3,980,806 3,980,806 Total 15,040,140 — 3,980,806 19,020,946 Measured at fair value on a non‑recurring basis The Group measures the equity securities without readily determinable fair value at fair value on a nonrecurring basis whenever there is an impairment indicator or any changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Group recognized nil, nil and US$755,524 impairment loss related to the long-term equity securities without readily determinable fair value for the years ended December 31, 2017, 2018 and 2019, respectively. The Group measured the value of its share options and restricted share units granted to employees and management at fair value to determine the share‑based compensation expenses on each of the grant date. The fair value was determined using models with significant unobservable inputs (Level 3 inputs). The Group measures goodwill at fair value on a nonrecurring basis and will perform goodwill impairment test annually or more often if event occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carry amount. The Group measured acquired intangible assets using the income approach‑discounted cash flow method when events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. The Group did not recognize any impairment loss related to other intangible assets arising from acquisitions during the year ended December 31, 2019. The fair value of goodwill is determined using discounted cash flows, and an impairment loss will be recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. The Group did not recognize any impairment loss related to goodwill during the year ended December 31, 2019. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2019 | |
SHARE BASED COMPENSATION | |
SHARE BASED COMPENSATION | 13. SHARE‑BASED COMPENSATION The Group implemented a share incentive plan in June 2014 (the “2014 Plan”) which allows the Group to grant options and restricted share units to employees, directors and consultants of the Group. Under the 2014 Plan, the maximum aggregate number of shares that may be issued shall not exceed 187,697,314 ordinary shares. In relation with the Re‑domiciliation, the Company adopted the 2018 share incentive plan, which was approved by the board of directors of the Company to replace the previous 2014 share incentive plan created in June 2014 of the Group. The terms of the 2018 share incentive plan are substantially the same as those under the 2014 share incentive plan, except that the number of options and restricted share units and exercise price were adjusted on a diluted basis in accordance to the number of shares of the Company upon the Re‑domiciliation. The awards granted and outstanding under the 2014 share incentive plan survived and remained effective and binding under the 2018 share incentive plan. In December 2018, the Board of Directors of the Company approved to expand the aggregate number of shares that may be issued to not exceed 254,697,314 ordinary shares. In March 2019, the Group implemented the 2019 Performance Incentive Plan (the “2019 Plan”), which was approved by the board of directors of the Company to grant a maximum number of 52,000,000 ordinary shares under the 2019 Plan. Share options The Company has granted service-based share options, which will vest and become exercisable in three instalments, with 50% of the total number of ordinary shares subject to such option becoming vested and exercisable on the second anniversary of the vesting commencement date, and 25% becoming vested and exercisable on each of the third and fourth anniversary of the vesting commencement date. The grant date of the share options is the vesting commencement date. The Company also has granted performance-based share options with performance conditions included semi-annual performance results and operating and financial results of the Company. The performance-based share options will commence to vest once the performance conditions are been satisfied. Upon termination of employment, all the options that have not been vested will be forfeited. The terms of the options shall not exceed ten years from the date of grant. In addition, the company has the right to purchase: 1. upon termination for death, disability or retirement, the employees’ vested and/or exercised options at a price of 50% of the fair market value as of the latest practicable date prior to the termination, within 6 months from the employees’ termination; 2. upon dismissal for cause, all the employees’ vested and/or exercised option at a purchase price equals to the exercise price the employees paid to the Company; 3. upon other terminations of employment, the employees’ vested and/or exercised option at a price of 30% of the fair market value as of the latest practicable date prior to the termination, within 6 months from the employees’ termination. As the terms permit the Company to purchase these share options at an amount that is equal to or less than the fair value, the Company evaluates the classification for each awards upon the occurrence of each employment termination. The termination of employees have been insignificant for all periods presented. As of December 31, 2018 and 2019, the share option award is classified as equity. The Group calculated the estimated fair value of the options on the respective grant dates using the binomial‑lattice option valuation model with the following assumptions for each applicable period which took into account variables such as volatility, dividend yield, and risk‑free interest rate, the probability that the option will be exercised prior to the end of its contractual life, and the probability of termination or retirement of the option holder in computing the value of the option. The fair value of the options granted was estimated on the date of grant that prepared by the management with the assistance of an independent third‑party appraiser, and was determined using a binomial model with the following assumptions: Fair value per ordinary share Exercise Expected Contractual Risk‑free Expected at grant date(1) price(2) volatility(3) life(4) interest rate(5) dividend(6) US$ US$ Granted in 2014 0.008 40 % 10 years 3.0-3.1 % 0.0 Granted in 2015 0.008-0.016 39 % 10 years 2.5-3.1 % 0.0 Granted in 2016 0.019-0.030 39 % 10 years 2.3-3 % 0.0 Granted in 2017 0.034-0.059 0.00001-0.040 39 % 10 years 3.0-3.2 % 0.0 Granted in 2018 0.147-0.405 0.0001-0.200 35-38 % 10 years 3.1-3.8 % 0.0 Granted in 2019 0.274-0.484 0.00001-0.274 37-39 % 10 years 3.0-3.4 % 0.0 (1) Fair value of underlying ordinary shares. Prior to the completion of initial public offering, the estimated fair value of the ordinary shares underlying the options as of the respective grant dates was determined based on a valuation with the assistance of a third party appraiser. The fair value of the underlying ordinary shares is determined based on the closing market price of the share after the completion of initial public offering in March 2019. (2) Exercise price. The exercise price of the options was determined by the Company’s Board of Directors. (3) Volatility. The volatility of the underlying ordinary shares was estimated based on the historical share price movement of the comparable companies for the period of time close to the expected time to exercise. (4) Contractual life. The contractual life of the share options was the period between the grant date and the expiry date. (5) Risk free rate. Risk free rate is estimated based on market yield of U.S. Sovereign Curve with maturity close to the share options as of the valuation date, plus country spread. (6) Expected dividend. The Company does not expect to declare any dividends in the foreseeable future. A summary of the Company’s share option activities for the year ended December 31, 2019 is presented below: Service-based share options: Weighted Weighted Number of average average Aggregate share exercise remaining intrinsic options price contractual life value US$ Years US$ Outstanding as of January 1, 2019 136,028,000 0.01666 7.27 74,861,376 Granted 14,159,744 Exercised (82,857,500) Forfeited (8,455,000) 0.05521 Outstanding as of December 31, 2019 58,875,244 0.05868 8.11 10,478,715 The aggregate intrinsic value is calculated as the difference between the exercise price of the awards and the fair value of the underlying ordinary shares at each reporting date, for those awards that had exercise price below the estimated fair value of the relevant ordinary shares. The Group recognized share-based compensation expenses for service-based share options at US$345,203, US$1,522,271 and US$2,231,270 for the years ended December 31, 2017, 2018 and 2019, respectively. As of December 31, 2019, total unrecognized share-based compensation expenses relating to these share options was US$6,015,195. The expense is expected to be recognized over a weighted-average period of 2.7 years. Performance-based share options: Number of Weighted Weighted average Aggregate share average remaining intrinsic options exercise price contractual life value US$ Years US$ Outstanding as of January 1, 2019 — — — — Granted 47,108,000 0.00524 Forfeited (10,050,000) 0.00137 Outstanding as of December 31, 2019 37,058,000 0.00629 9.01 8,537,131 The Group recognized share-based compensation expenses for performance-based share options when it is probable that the performance condition will be achieved. For the years ended December 31, 2017, 2018 and 2019, nil, nil and US$7,866 of share-based compensation expenses were recorded, respectively. As of December 31, 2019, total unrecognized share-based compensation expenses relating to these share options was US$17,627,760. The expense is expected to be recognized over a weighted-average period of 4.0 years. RSUs During the years ended December 31, 2017, 2018 and 2019, the Company granted nil, 10,200,000 and 20,019,012 service-based RSUs and performance-based RSUs to certain management and employees, respectively. The RSUs are not transferable and may not be sold or pledged and the holder has no voting or dividend right on the non vested shares. In the event a non vested shareholder’s employment for the Group is terminated for any reason prior to the fourth anniversary of the grant date, the holder’s right to the non vested shares will terminate effectively. The outstanding RSUs shall be automatically terminate and be cancelled without payment of any consideration. In addition, the RSUs has substantially the same terms as the options described above. The fair value of such RSUs is measured at the fair value of the Company’s ordinary shares on the grant date. A summary of the Company’s RSU activities for the year ended December 31, 2019 is presented below: Service-based RSUs: Weighted-Average Number of Units Grant-Date Fair Value US$ Unvested as of January 1, 2019 10,800,000 0.33 Granted 18,319,012 0.35 Exercised (2,162,032) 0.47 Forfeited — Unvested as of December 31, 2019 26,956,980 0.36 The Group recognized share-based compensation expenses for service-based RSUs at US$4,497, US$324,565 and US$1,685,646 for the years ended December 31, 2017, 2018 and 2019, respectively. As of December 31, 2019, total unrecognized share-based compensation expenses relating to these RSUs was US$7,803,087. The expense is expected to be recognized over a weighted average period of 3.3 years. Performance-based RSUs: Weighted-Average Number of Units Grant-Date Fair Value US$ Unvested as of January 1, 2019 — — Granted 1,700,000 0.40 Exercised (250,000) 0.48 Forfeited — Unvested as of December 31, 2019 1,450,000 0.38 The Group recognizes share-based compensation expenses for performance-based RSUs when it is probable that the performance condition will be achieved. For the years ended December 31, 2017, 2018 and 2019, nil, nil and US$137,818 of share-based compensation expenses were recorded, respectively. As of December 31, 2019, total unrecognized share-based compensation expenses relating to these RSUs was US$511,464. The expense is expected to be recognized over a weighted-average period of 3.7 years. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
NET LOSS PER SHARE | |
NET LOSS PER SHARE | 14. NET LOSS PER SHARE For the purpose of calculating net loss per share as a result of the Re‑domiciliation as described in Note 1, the number of shares used in the calculation reflects the outstanding shares of the Company as if the Re‑domiciliation took place at the earliest period presented. The following table sets forth the computation of basic and diluted net loss per share for the following years: For the years ended December 31, 2017 2018 2019 US$ US$ US$ Numerator: Net loss attributable to UP Fintech Holding Limited (7,510,049) (43,207,732) (6,589,431) Net loss attributable to ordinary shareholders of UP Fintech Holding Limited (7,510,049) (43,207,732) (6,589,431) Denominator: Weighted average shares used in calculating net loss per ordinary shares Basic and diluted 443,814,916 506,393,198 1,751,784,176 Net loss per ordinary shares Basic and diluted (0.02) (0.09) The following table summarizes potential ordinary shares outstanding excluded from the computation of diluted net loss per ordinary share for the years ended December 31, 2017, 2018 and 2019, because their effect is anti-dilutive: For the years ended December 31, 2017 2018 2019 Share issuable upon exercise of share options 103,175,000 136,028,000 95,933,244 Share issuable upon exercise of RSUs 600,000 10,800,000 28,406,980 Share issuable upon conversion of Series Angel preferred shares 419,736,104 419,736,104 — Share issuable upon conversion of Series A preferred shares 279,389,307 279,389,307 — Share issuable upon conversion of Series B-1 preferred shares 188,378,334 188,378,334 — Share issuable upon conversion of Series B-2 preferred shares 76,812,654 76,812,654 — Share issuable upon conversion of Series B-3 preferred shares — 147,755,566 — Share issuable upon conversion of Series C preferred shares — 98,834,937 — Share issuable upon conversion of Series C-1 preferred shares — 18,597,738 — |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
RELATED PARTY BALANCES AND TRANSACTIONS | 15. RELATED PARTY BALANCES AND TRANSACTIONS Amount due from related parties: As of December 31, Name Relationship with the Company 2018 2019 US$ US$ Interactive Brokers LLC (1) Under common control with a shareholder of the Company 9,619,438 185,047,211 Xiaomi Corporation and its affiliates (2) Shareholder of the Company 919,964 397,590 Alphalion Technology Holding Limited and its affiliates (“Alphalion Group”) (3) Long-term available-for-sale investee 3,320,113 886,844 Guangzhou 88 Technology Limited (“Guangzhou 88”) (4) Entity controlled by management of the Company’s subsidiary 786,586 — Fast Connection Limited (5) Entity controlled by a shareholder of the Company 2,200,000 2,200,000 Officer of the Company (6) Management of the Company 1,291,695 — (1) The amount represents the Group’s customer deposit, revenue receivables, cash collaterals for securities borrowing transactions from the Company’s trade execution partner and principle shareholder, Interactive Brokers. (2) The amount represents the Group’s prepaid marketing expense to Xiaomi Corporation and its affiliates. (3) The amounts represent short-term, interest-free loans provided to the respective parties to facilitate their daily operational cash flow needs as of December 31, 2018 and 2019. In February of 2019, the Group entered into a series of agreements whereby US$3,060,113 of the loans provided to Alphalion Group were converted into a long-term available-for-sale investment (Note 7) and the remaining US$260,000 was repaid. The balance as of December 31, 2019 represents the new short-term, interest-free loans provided to its affiliate. (4) The amounts represent short-term loans provided to the Guangzhou 88 to facilitate their daily operational cash flow needs, which was subsequently converted into equity securities of Guangzhou 88 and fully impaired during the year of 2019. (5) The amount represents the Group’s prepaid consulting fee to Fast Connection Limited as of December 31, 2018 and 2019. (6) The amount represents personal interest-free loan to the Company’s officers, including Mr. Tianhua Wu and others, which were fully repaid in February of 2019. Amount due to related parties: As of December 31, Name Relationship with the Company 2018 2019 US$ US$ Interactive Brokers LLC (7) Under common control with a shareholder of the Company — 53,774,882 — 53,774,882 (7) The amount represents the Group’s cash collaterals received for securities lending transactions from the Company’s trade execution partner and principle shareholder, Interactive Brokers. Transactions with related parties: For the years ended December 31, Name Relationship with the Company 2017 2018 2019 US$ US$ US$ Xiaomi Corporation and its affiliates (8) Shareholder of the Company 497,635 1,297,395 517,134 (8) For the years ended December 31, Name Relationship with the Company 2017 2018 2019 US$ US$ US$ Interactive Brokers LLC (9) Under common control with a shareholder of the Company — 19,664,763 38,089,982 (9) For the years ended December 31, Name Relationship with the Company 2017 2018 2019 US$ US$ US$ Interactive Brokers LLC (10) Under common control with a shareholder of the Company — 210,535 2,102,385 (10) For the years ended December 31, Name Relationship with the Company 2017 2018 2019 US$ US$ US$ Alphalion Group (11) Long-term available-for-sale investee — — 617,500 (11) For the years ended December 31, Name Relationship with the Company 2017 2018 2019 US$ US$ US$ Guangzhou 88 (12) Entity controlled by management of the Company’s subsidiary — — 755,524 (12) |
COLLATERALIZED TRANSACTIONS
COLLATERALIZED TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
COLLATERALIZED TRANSACTIONS | |
COLLATERALIZED TRANSACTIONS | 16. COLLATERALIZED TRANSACTIONS The Group accepted collateral in connection with client margin loans and security borrowing and lending transactions for consolidated account customers. The Group monitors required margin and collateral level on a daily basis in compliance with regulatory and internal guidelines and controls its risk exposure through financial, credit, legal reporting system. Under applicable agreements, customers are required to deposit additional collateral or reduce holding positions, when necessary to avoid forced liquidation of their positions. Margin loans are extended to customers on demand and are not committed facilities. Underlying collateral for margin loans is evaluated with respect to the liquidity of the collateral positions, valuation of securities, volatility analysis and an evaluation of industry concentrations. The Group’s collateral policies minimize the Group’s credit exposure to margin loans in the event of a customer’s default. The following table summarizes the amounts related to collateralized transactions as of December 31, 2018 and 2019: As of December 31, 2018 2019 US$ US$ Total client margin asset 2,036,488 332,460,879 Fulfillment of client margin financings — 42,704,203 Fulfillment of client short sales — 10,815,155 Securities lending to other brokers — 55,098,508 Total collateral repledged — 108,617,866 |
Lease
Lease | 12 Months Ended |
Dec. 31, 2019 | |
Lease | |
Lease | 17. Lease Operating leases The Group’s leases consist of operating leases for corporate offices, data centers, and other facilities. The Group determines if an arrangement is a lease at inception. Some lease agreements contain lease and non-lease components, which the Group choose to account for as separate components. The allocation of the consideration between the lease and the non-lease components is based on the relative stand-alone prices of lease components included in the lease contracts. As of December 31, 2019, the Group had no long-term leases that were classified as a financing lease. As of December 31, 2019, the operating leases that have not yet commenced is immaterial. The arrangements of remaining lease terms are one year to ten years. Total operating lease expenses for the year ended December 31, 2019 was US$2,692,632, and was recorded in occupancy, depreciation and amortization on the consolidated statements of operations, including short-term lease expenses of US$378,830. A summary of supplemental information related to operating leases as of December 31, 2019 is as follows: For the year ended December 31, 2019 US$ Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases 2,389,515 Non-cash right-of-use assets in exchange for new lease obligations: Operating leases 5,050,642 Weighted average remaining lease term: Operating leases 4 years Weighted average discount rate: Operating leases 6.0 % The following is a maturity analysis of the annual undiscounted cash flows for the years ended December 31: As of December 31, 2019 US$ Years ending December 31: 2020 2,672,568 2021 1,380,725 2022 867,840 2023 578,422 2024 488,389 2025 and after 561,804 Total undiscounted operating lease payments 6,549,748 Less: imputed interest 708,090 Present value of operating lease liabilities 5,841,658 Future minimum payments under non-cancelable operating leases in accordance with ASC Topic 840 consisted of the following at December 31, 2018: As of December 31, 2018 US$ Years ending December 31: 2019 1,799,942 2020 1,155,540 2021 and after 91,249 Total 3,046,731 Payments under operating leases are expensed on a straight-line basis over the periods of their respective leases. The terms of the leases do not contain contingent rents. |
COMMITMENTS AND CONTINGENCY
COMMITMENTS AND CONTINGENCY | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCY | |
COMMITMENTS AND CONTINGENCY | 18. COMMITMENTS AND CONTINGENCY Capital commitments In April 2019, the Company entered into a sale and purchase agreement to acquire 100% equity interest of a company located in Hong Kong in a total consideration of US$1,540,555 (HK$12,000,000). The closing of the acquisition is subject to the approval of changes of control from local regulatory authorities. As of December 31, 2019, the acquisition is not closed and the capital commitment contracted but not paid was US$1,078,389 (HK$8,400,000). |
REGULATORY REQUIREMENT
REGULATORY REQUIREMENT | 12 Months Ended |
Dec. 31, 2019 | |
REGULATORY REQUIREMENT | |
REGULATORY REQUIREMENT | 19. REGULATORY REQUIREMENT The Company’s broker-dealer subsidiaries, TBNZ, Marsco, US Tiger Securities and Tiger Brokers SG are subject to capital requirements determined by its respective regulators. TBNZ, the Company’s New Zealand subsidiary, is subject to New Zealand’s Exchange (“NZX”) capital adequacy requirements under the Section 19, NZX Participant Rules, by which TBNZ’s current financial health is measured by assessing its liquidity against the risks it is exposed to. At all times TBNZ must maintain its net capital (described as “net tangible current assets” or “NTCA” under NZX’s rule), at a level equal to, or greater than the net capital requirement (described as “prescribed minimum capital adequacy” or “PMCA”). In December 2019, TBNZ received an inspection report from FMA ("Financial Market Authority of New Zealand") for failing to have several adequate anti-money laundering protections in place. The warnings do not suggest that the business have allowed or enabled illegal activity to take place. TBNZ has submitted the remediation plan on April 17, 2020 which outlined and described the measures and time line to amend the issues to become compliant. Marsco and US Tiger Securities, the Company’s USA subsidiaries, are subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Exchange Act in the USA, which requires the maintenance of minimum net capital. Tiger Brokers SG, the Company’s Singapore subsidiary, is subject to the Securities and Futures Regulations 2013 (Rg 2013) under the Chapter 289 of Securities and Futures Act in Singapore, which requires the maintenance of minimum net capital. As of December 31, 2018 and 2019, all of the Company’s broker-dealer subsidiaries met applicable minimum net capital requirements. The tables below summaries the net capital, the capital requirement and the excess net capital for the Company’s broker-dealer subsidiaries as of December 31, 2018 and 2019: Net Capital Requirement Excess Net Capital US$ US$ US$ December 31, 2018 TBNZ 4,940,125 1,292,056 3,648,069 US Tiger Securities 1,058,863 5,000 1,053,863 Total 5,998,988 1,297,056 4,701,932 Net Capital Requirement Excess Net Capital US$ US$ US$ December 31, 2019 TBNZ 26,633,575 17,279,461 9,354,114 Marsco(1) 15,224,882 250,000 14,974,882 US Tiger Securities 4,227,994 100,000 4,127,994 Tiger Brokers SG(2) 1,615,957 823,313 792,644 Total 47,702,408 18,452,774 29,249,634 (1) Marsco was acquired by the Company in July of 2019. (2) Tiger Brokers SG started to operate its business in December of 2019. |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2019 | |
EMPLOYEE BENEFIT PLAN | |
EMPLOYEE BENEFIT PLAN | 20. EMPLOYEE BENEFIT PLAN Full time PRC employees of the Group are eligible to participate in a government‑mandated multi‑employer defined contribution plan under which certain pension benefits, medical care, unemployment insurance and employee housing fund are provided to these employees. The PRC labor regulations require the Group to accrue for these benefits based on a percentage of each employee’s salary income. Total provisions for employee benefits were US$2,654,545 , US$4,332,246 and US$5,618,209 for the years ended December 31, 2017, 2018 and 2019, respectively, reported as a component of salary and compensation expenses when incurred. |
STATUTORY RESERVES AND RESTRICT
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | 21. STATUTORY RESERVES AND RESTRICTED NET ASSETS In accordance with the PRC laws and regulations, the Group’s subsidiaries located in the PRC, are required to provide for certain statutory reserves. These statutory reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion fund or discretionary reserve fund, and (iii) a staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires a minimum annual appropriation of 10% of after‑tax profit (as determined under accounting principles generally accepted in China at each year‑end); the other fund appropriations are at the subsidiaries’ or the affiliated PRC entities’ discretion. These statutory reserve funds can only be used for specific purposes of enterprise expansion, staff bonus and welfare, and are not distributable as cash dividends except in the event of liquidation of Group’s subsidiaries, affiliated PRC entities and their respective subsidiaries. The Group’s subsidiaries are required to allocate at least 10% of their after‑tax profits to the general reserve until such reserve has reached 50% of their respective registered capital. As of December 31, 2018, none of the Group’s PRC subsidiaries has a general reserve that reached 50% of their registered capital threshold. The Group did not made appropriation to these statutory reserve funds due to the loss position of the Group’s PRC subsidiaries for the years ended December 31, 2017 and 2018. For the year ended December 31, 2019, Beijing U-Tiger Business made appropriation to these statutory reserve funds of US$724,008 due to the profit position, which also reached the maximum required amount of 50% of its registered capital. Appropriations to the enterprise expansion reserve and the staff welfare and bonus reserve are to be made at the discretion of the Board of Directors of each of the Group’s subsidiaries. As a result of these PRC laws and regulations and the requirement that distributions by the PRC entities can only be paid out of distributable profits computed in accordance with the PRC GAAP, the PRC entities are restricted from transferring a portion of their net assets to the Group. Amounts restricted include paid‑in capital and the statutory reserves of the Group’s PRC subsidiaries. The aggregate amounts of capital and statutory reserves restricted which represented the amount of net assets of the relevant subsidiaries in the Group not available for distribution were US$15,870,509, US$26,348,780 and US$40,221,504 as of December 31, 2017, 2018 and 2019, respectively. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 22. SEGMENT INFORMATION Segments are business units that offer different services and are reviewed separately by the chief operating decision maker (the “CODM”), or the decision‑making group, in deciding how to allocate resources and in assessing performance. The CODM, who is responsible for allocating resources and assessing performance of the operating segment, has been identified as the Group’s Chief Executive Officer. The Group operates as a single operating segment. The single operating segment is reported in a manner consistent with the internal reporting provided to the CODM. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2019 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | 23. SUBSEQUENT EVENT The Group has evaluated subsequent events through April 29th, 2020, which is the date when the audited consolidated financial statements were issued. On March 25, 2020, the Board of Directors of the Company approved a share repurchase program, which the Company may purchase a maximum of US$20.0 million outstanding ADSs over the next twelve months. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation and principle of consolidation | Basis of presentation and principle of consolidation The consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). As described in Note 1, the consolidated financial statements of the Group for the year ended December 31, 2017 represent Ningxia Rongke's historical consolidated financial statements as if the corporate structure of the Company had been in existence since the beginning of the periods presented. The consolidated financial statements as of and for the years ended December 31, 2018 and 2019 represent the consolidated financial statements of the Group. The Company believes that the disclosures are adequate to make the information presented not misleading. |
Consolidation of sponsored funds | Consolidation of sponsored funds The Company has a trust that develops and holds an exchange‑trade fund (the “sponsored fund”) that is publicly traded. The fund is managed by a subsidiary of the Company. Decisions regarding the trustees of the trust and certain key activities of the sponsored fund within the trust, such as appointment of the sponsored fund’s investment adviser, resides at the trust level. As a result, shareholders of the sponsored fund lack the ability to control the key decision‑making processes that most significantly affect the economic performance of the sponsored fund. Accordingly, the Company believes that the trust and the sponsored fund are variable interest entities (“VIEs”) and shall be evaluated for consolidation as VIEs. The Company provides seed funding to new sponsored fund and may hold a significant interest in the shares of a sponsored fund during the seed investment stage when the sponsored fund’s investment track record is being established. To the extent that the Company’s interest in a sponsored fund is limited to: (i) fixed management fee and (ii) other interests that, in aggregate, would absorb an insignificant amount of variability in the fund, the Company’s management contract would not be considered a variable interest that provides the Company with the power to direct the activities of the fund and would therefore not be required to consolidate the fund. However, the Company has concluded that its fees earned from asset management arrangement with sponsored fund in which the Company holds a significant (at least 10 percent) ownership interest in the fund do represent variable interests that convey both power, in combination with the ownership interest, and significant economic exposure (both characteristics of a controlling financial interest) to the Company and therefore the Company would be the primary beneficiary that required to consolidate the fund. Upon consolidation, management fee revenue earned on, as well as the Company’s investments in, the consolidated sponsored funds are eliminated. The Company retains the specialized accounting treatment of the sponsored fund in consolidation whereby the underlying investments are carried at fair value, reflected in financial instruments held, at fair value, in the Company’s consolidated balance sheets, with corresponding changes in fair value reflected in others, net in the Company’s consolidated statements of operations. The non-controlling interest represents third-party interests of the Company's consolidated sponsored fund. This interest is redeemable at the option of the investors and therefore is recorded as mezzanine equity. Redeemable non-controlling interest is recorded at redemption value which approximates the fair value at each reporting period. When the Company no longer holds a controlling financial interest in the sponsored fund, the Company deconsolidates the sponsored fund and removes the related assets, liabilities and redeemable non-controlling interests from its balance sheet. Because consolidated sponsored funds carry their assets and liabilities at fair value, there is no incremental gain or loss recognized upon deconsolidation. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s consolidated financial statements include allowance for doubtful accounts, the useful lives of long‑lived assets, impairment of long‑lived assets and goodwill, fair value measurement of long-term equity securities without readily determinable fair value, long‑term available‑for‑sale investments, fair value measurement of ordinary shares and preferred shares, purchase price allocation for business acquisition, share‑based compensation, the valuation allowance for deferred tax assets and income tax. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements. |
Fair value | Fair value Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model‑derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
Fair value of financial instruments | Fair value of financial instruments The Group’s financial instruments consist primarily of cash and cash equivalents, cash—segregated for regulatory purpose, term deposits, financial instruments held, at fair value, derivative assets or liabilities in relation to the Company’s derivative transactions, receivables from or payable to customers, receivables from or payables to brokers, dealers, clearing organizations, amount due from related parties, long–term equity securities without readily determinable fair value, and long-term available–for– sale investments. The Company carries its financial instruments held, at fair value, long-term available–for–sales investments at fair value. Financial instruments held, at fair value, based upon quoted market price, consist of stock investments related to the exchange trade funds (“ETFs”), US treasuries and corporate bonds. The carrying amounts of cash and cash equivalents, cash—segregated for regulatory purpose, term deposits, receivables from or payables to customers, receivables from or payables to brokers, dealers and clearing organizations, amount due from related parties approximate their fair values due to the short–term maturities of these instruments. |
Derivative financial instruments | Derivative financial instruments The Company may utilize derivative financial instruments to mitigate the risk of fair value change of its investments in certain consolidated sponsored funds seeded for business development purposes. These derivative financial instruments are not designated as hedging instruments for accounting purposes. The Company does not use derivative financial instruments for speculative purposes. The Company records the derivative financial instruments in financial instrument held, at fair value or accrued expenses and other current liabilities on its consolidated balance sheets and measures these instruments at fair value. The Company has entered into certain stock index future contracts. As of December 31, 2018 and 2019, the Company held 48 and 34 outstanding future contracts with a notional value of US$6,079,920 and US$5,951,530, respectively, and the remaining contract term for the contracts outstanding at December 31, 2018 and 2019 was 2.5 and 2.6 months, respectively. For the years ended December 31, 2018 and 2019, the Company recognized US$123,662 realized gain and US$1,766,679 realized loss from settled future contracts; US$507,810 unrealized investment gain and US$158,900 unrealized investment loss arise from fair value changes were recorded in others, net on the consolidated statements of operations, respectively |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of cash on hand, demand deposits with financial institutions, term deposits with an original maturity of three months or less and highly liquid investments, which are unrestricted from withdrawal or use, or which have original maturities of three months or less when purchased. |
Cash-segregated for regulatory purposes | Cash—segregated for regulatory purposes Certain subsidiaries of the Company are obligated by rules mandated by their primary regulators to segregate or set aside amount of cash deposited by the customer and the Company. Such regulations are promulgated to protect customer assets and meet the capital adequacy and other regulatory requirement. A corresponding payable to customers is recorded upon receipt of the cash from the customer. As of December 31, 2019, Marsco, the Company’s broker-dealer subsidiary located in the USA, had a cash of US$25,167,014 segregated for the exclusive benefit of customers under Rule 15c3-3 of the Securities Exchange Act. |
Term deposits | Term deposits Term deposits consist of bank deposits with an original maturity of greater than three months and less than one year. |
Receivables from and payable to Customers | Receivables from and payable to Customers Receivables from customers include the margin loans extended to consolidated accounts customers by the Group. Securities owned by the customers, which are not recorded in the consolidated balance sheets, are held as collateral for amounts due on the loan receivables. Receivables from customers are recorded net of allowance for doubtful accounts. Revenues earned from the margin loan transactions are included in interest income. The amounts receivable from customers that are determined by management to be uncollectible when the fair value of the collaterals fall under the carrying value of the receivables are recorded as bad debt expense in the consolidated statements of operations. For the years ended December 31, 2017, 2018 and 2019, no allowance for doubtful accounts were recorded. Receivables from customers also include cash collateral advanced to consolidated account customers derived from security lending activities. Payable to customers represent the closing cash balance to the customers, which include cash deposit and cash collateral received from consolidated account customers derived from security borrowing activities. The Company receives or advances cash collateral, in an amount generally equal to or in excess of the fair value of the securities borrowed and loaned by customers. The Company monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. Interest income and interest expense are recorded on an accrual basis |
Receivables from brokers, dealers and clearing organizations | Receivables from and Payables to brokers, dealers and clearing organizations Receivables from brokers, dealers and clearing organizations include customers’ cash deposits, the Group’s revenue receivables, cash collateral advanced for consolidated account customers’ security borrowing activities, and net receivables arising from unsettled trades. Payables to brokers, dealers and clearing organizations include cash collateral received for consolidated account customers’ security lending activities. Securities borrowing transactions require the Company to deposit cash with the lender, and securities lending transactions result in the Company receiving collateral in the form of cash from the brokers, dealers and clearing organization. The cash collateral advanced to or received from the brokers are in an amount generally equal to or in excess of the market value of the securities that borrowed or loaned by the consolidated account customers. The Company monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. Interest income and interest expense are recorded on an accrual basis. |
Property, equipment, and intangible assets, net | Property, equipment, and intangible assets, net Property and equipment mainly consist of electronic equipment, office equipment, leasehold improvements and software. The property and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straight‑line basis over the following estimated useful lives: Electronic equipment 3 years Office equipment 5 years Software 5 years Leasehold improvement Shorter of the lease terms or the estimated useful lives of the assets Intangible assets mainly consists of the brokerage’s license in USA, New Zealand and Australia acquired by the Company, which are recognized as intangible assets with indefinite life, and it should not be amortized until its useful life is determined to be no longer indefinite. An intangible asset that is not subject to amortization is tested for impairment at least annually or if events or changes in circumstances indicate that the asset might be impaired. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The estimation of fair value of each reporting unit using a discounted cash flow methodology also requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the Group's business, estimation of the useful life over which cash flows will occur, and determination of the Group's weighted average cost of capital. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results and market conditions. Changes in these estimates and assumptions could materially affect the determination of fair value and goodwill impairment for the reporting unit. The Group first assesses relevant events and circumstances to determine whether it is necessary to perform the two-step goodwill impairment test. If, after assessing the totality of events or circumstances such as those described in the preceding paragraph, the Group determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the first and second steps of the goodwill impairment test are unnecessary. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit is greater than zero and its fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of the affected reporting unit’s goodwill to the carrying value of that goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. The Group concluded that the estimated fair value for its reporting unit with goodwill substantially exceeded the related carrying value and no impairment charges was recognized for the years ended December 31, 2017, 2018 and 2019. |
Lease | Lease The Group leases offices and other facilities in different cities in the PRC, New Zealand, USA and other countries. The Group determines whether an arrangement constitutes a lease and records lease liabilities and right-of-use assets on its consolidated balance sheets at the lease commencement. The Group measures its lease liabilities based on the present value of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or its incremental borrowing rate, which is the estimated rate the Group would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. The Group estimates its incremental borrowing rate based on an analysis of publicly traded debt securities of companies with credit and financial profiles similar to its own. The Group measures right-of-use assets based on the corresponding lease liability adjusted for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Group begins recognizing operating lease expense when the lessor makes the underlying asset available to the Group. The Group's leases have remaining lease terms of up to ten years, some of which include options to extend the leases for an additional period which has to be agreed with the lessors based on mutual negotiation. After considering the factors that create an economic incentive, the Group did not include renewal option periods in the lease term for which it is not reasonably certain to exercise. For short-term leases, the Group records operating lease expense in its consolidated statements of operations on a straight-line basis over the lease term and record variable lease payments as incurred |
Long term investment | Long‑term investment The Group’s long‑term investments consist of equity securities without readily determinable fair values, and available‑for‑sale securities investments. (a) Equity securities without readily determinable fair values For investments in equity securities without readily determinable fair values, the Group elects to use the measurement alternative defined as cost, less impairment, adjusted by observable price change. The Group reviews its equity securities without readily determinable fair values investments for impairment at each reporting period by performing a qualitative assessment considering impairment indicators. The Group recorded nil, nil and US$755,524 impairment loss on its equity securities without readily determinable fair values during the years ended December 31, 2017, 2018 and 2019. (b) Available‑for‑sale investments For investments which are determined to be debt securities, the Group accounts for them as long‑term available‑for‑sale investments when they are not classified as either trading or held‑to‑maturity investments. Available‑for‑sale investment is carried at its fair value and the unrealized gains or losses from the changes in fair values are included in accumulated other comprehensive income or loss. The Group reviews its investments for other than temporary impairment based on the specific identification method. The Group considers available quantitative and qualitative evidence in evaluating potential impairment of its investments. If the cost of an investment exceeds the investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than the cost, the Group’s intent and ability to hold the investment, and the financial condition and near term prospects of the investees. The Group recorded nil impairment losses on its available‑for‑sale investments during the years ended December 31, 2017, 2018 and 2019, respectively |
Revenue recognition | Revenue recognition Commissions Commissions earned for the Group’s online brokerage business in customers’ fully disclosed accounts and consolidated accounts are accrued on a trade date basis and are reported as commissions in the consolidated statements of operations. (a) Fully disclosed accounts According to the attributes of transactions under fully disclosed accounts, the Group provides the agreed services to its customers in facilitating the trades and recognizes the commission revenue collected from its partner, net of clearing cost and execution cost of the trades. (b) Consolidated accounts According to the attributes of transactions under consolidated accounts, the Group provides brokerage service for its customers and therefore recognize the full amount of revenue for the commission fee charged to the customers. Financing service fees The Group earns financing service fees in connection with the margin financing and securities borrowing and lending transactions provided by brokers to fully disclosed account customers, which are recorded on an accrual basis and is included in financing service fees in the consolidated statements of operations. Interest income and expense The Group earns interest income and incurs interest expense primarily in connection with its margin financing and its securities borrowing and lending activities offered by the Group to consolidated account customers. The Group also earns interest income from bank deposits. Interest income and expense are recorded on an accrual basis and are included in the consolidated statements of operations. Other revenues Other revenues consist of the revenue arising from initial public offering (“IPO”) distribution service and other services. Revenue from the IPO distribution service is derived from IPO underwriting and new share subscription services in relation to IPOs in the USA and Hong Kong capital market. IPO distribution revenue are generally recognized when the services are completed. The Group also earns revenue from promotional and advertisement services and financial advisory service rendered to the customers, which are recorded over the period of service provided. |
Research and development expenses | Research and development expenses Research and development expenses primarily consist of salaries and employee benefits for research and development personnel, rental and depreciation expenses in the development of the Group’s proprietary trading platform, back‑end technology and customer relationship management system. For the years ended December 31, 2017, 2018 and 2019, US$6,059,525 and US$11,282,241 and US$18,033,074 of research and development costs have been expensed as incurred as the costs qualifying for capitalization have been insignificant. |
Occupancy, Depreciation and Amortization | Occupancy, Depreciation and Amortization Occupancy expenses consist primarily of lease payments on office and data center leases and related occupancy costs, such as utilities. Depreciation and amortization expenses result from the depreciation of fixed assets, such as electronic equipment, office equipment as well as leasehold improvements, and the amortization of intangible assets. |
Share based compensation | Share‑based compensation Share‑based payment transactions with employees and managements, such as share options are measured based on the grant date fair value of the equity instrument. The Group has elected to recognize compensation expenses using the straight‑line method for all employee equity awards granted with graded vesting provided that the amount of compensation cost recognized at any date is at least equal to the portion of the grant‑date value of the options that are vested at that date, over the requisite service period of the award, which is generally the vesting period of the award. Compensation expenses for awards with performance conditions is recognized when it is probable that the performance condition will be achieved. The Group elects to recognize forfeitures when they occur. |
Income taxes | Income taxes Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more‑likely‑than‑not that a portion of or all of the deferred tax assets will not be realized. The Group accounts for uncertain tax positions by reporting a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. Tax benefits are recognized from uncertain tax positions when the Group believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The Group recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. |
Comprehensive loss | Comprehensive loss Comprehensive loss consists of two components, net loss and other comprehensive income or loss, net of tax. Other comprehensive income or loss refers to revenue, expenses, and gains and losses that are recorded as an element of shareholders’ equity but are excluded from net loss. The Group’s other comprehensive income or loss consists of foreign currency translation adjustments from its subsidiaries not using the US$ as their functional currency and the fair value change of long‑term available‑for‑sale investments of the Group, if any. Comprehensive loss is reported in the consolidated statements of comprehensive loss. |
Non controlling interests | Non‑controlling interests For the Company’s consolidated subsidiaries, non‑controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. Non‑controlling interests are classified as a separate line item in the equity section of the Group’s consolidated balance sheets and have been separately disclosed in the Group’s consolidated statements of operations to distinguish the interests from that of the Company. |
Foreign currencies | Foreign currencies The reporting currency of the Company is the US$. The Company and the Company’s subsidiaries with operations in the PRC, Hong Kong, New Zealand, Singapore, Australia, the United States and other jurisdictions generally use their respective local currencies as their functional currencies. The financial statements of the Company’s subsidiaries, other than the subsidiaries with functional currency in US$, are translated into US$ using the exchange rate as of the balance sheet date for assets and liabilities and the average daily exchange rate for each month for income and expense items. Translation gains and losses are recorded as a separate component of other comprehensive income or loss in the consolidated statements of change in deficit and consolidated statements of comprehensive loss. In the financial statements of the Company’s subsidiaries, transactions in currencies other than the functional currency are measured and recorded in the functional currency using the exchange rate in effect at the date of the transaction. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the functional currency are translated into the functional currency using the exchange rate at the balance sheet date. All gains and losses arising from foreign currency transactions are recorded in the consolidated statements of operations during the year in which they occur. RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into other currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The Group’s cash and cash equivalents denominated in RMB amounted to US$6,884,354, US$3,696,283 and US$9,473,171 as of December 31, 2017, 2018 and 2019, respectively. |
Net loss per share | Net loss per share Basic loss per ordinary share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The Group’s preferred shares were participating securities as they participated in undistributed earnings on an as‑if‑converted basis. Accordingly, the Group uses the two‑class method whereby undistributed net income is allocated on a pro rata basis to the ordinary shares and preferred shares to the extent that each class may share in income for the period; whereas the undistributed net loss for the period is allocated to ordinary shares only because the redeemable and non‑redeemable preferred shares are not contractually obligated to share the loss. Diluted loss per ordinary share reflects the potential dilution that could occur if securities were exercised or converted into ordinary shares. The Group had redeemable and non‑redeemable preferred shares, share options and restricted share units, which could potentially dilute basic loss per share. To calculate the number of shares for diluted loss per ordinary share, the effect of the preferred shares is computed using the as‑if‑converted method; the effect of the share options and restricted share units is computed using the treasury stock method. |
Concentration of credit risk | Concentration of credit risk The Group's exposure to credit risk associated with its trading and other activities is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. Concentrations of credit risk can be affected by changes in political, industry, or economic factors. To reduce the potential for risk concentration, credit limits are established and exposure is monitored in light of changing counterparty and market conditions. As of December 31, 2018 and 2019, the Group did not have any material concentrations of credit risk outside the ordinary course of business. |
Concentration of revenue | Concentration of revenue There is no customer accounting for 10% or more of total revenues for the years ended December 31, 2017, 2018 and 2019, respectively. |
Concentration of supplier | Concentration of supplier The Group relies on third parties for the execution and clearing of trade requests made by customers. In instances where these parties fail to perform their obligations, the Company may be temporarily unable to find alternative suppliers to satisfactorily deliver services to its customers in a timely manner, if at all. For the years ended December 31, 2017, 2018 and 2019, 99.5%, 96.8% and 78.4% of its total net revenues were executed and cleared by one supplier, Interactive Brokers. |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Schedule of details of the Group's subsidiaries, VIEs and VIEs' subsidiaries | Date of Place of Percentage of incorporation or establishment/ legal acquisition incorporation ownership Subsidiaries: Tiger Holdings Group Limited (“Tiger Holdings”) August 01, 2015 New Zealand 100 % Tiger Brokers (NZ) Limited (“TBNZ”) 1 August 02, 2016 New Zealand 100 % U-Tiger SPC (“U-Tiger SPC”) June 18, 2017 Cayman Islands 100 % I-Tiger Global Investment SPC (“I-Tiger SPC”) July 12, 2017 Cayman Islands 100 % I‑Tiger Capital Management Limited (“I‑Tiger Capital Management”) July 12, 2017 Cayman Islands 65 % I‑Tiger Global Investment Management Limited (“I‑Tiger Global Investment”) July 12, 2017 Cayman Islands 100 % I‑Tiger Capital Limited (“I‑Tiger Capital”) July 12, 2017 Cayman Islands 65 % Prosperous Investment Management Limited (“Prosperous Investment”) July 12, 2017 Cayman Islands 100 % Tiger Brokers(AU)Pty Limited (“TBAU”) 2 September 26, 2017 Australia 100 % Up Fintech International Limited (“Up International”) February 08, 2018 Hong Kong 100 % Tiger Fintech (Singapore) PTE Ltd. (“Tiger SG”) March 13, 2018 Singapore 100 % Tiger Brokers (Singapore) PTE Ltd. (“Tiger Brokers SG”) March 27, 2018 Singapore 100 % US Tiger Securities, Inc. (“US Tiger Securities”) March 30, 2018 United States of America(“USA”) 100 % Ningxia Xiangshangyixin Technology Co., Ltd (“Ningxia XSYX”, “Ningxia WFOE”) May 17, 2018 PRC 100 % Up Fintech Global Holdings Limited (“Up Global”) June 15, 2018 BVI 100 % Tiger Fintech Holdings, Inc (“Tiger Fintech Holdings”) July 09, 2018 USA 100 % Xiangshang Upfintech Holding Limited (“Xiangshang Upfintech Holding”) July 11, 2018 BVI 100 % Beijing Xiangshangyixin Technology Co., Ltd (“Beijing XSYX”, “Beijing WFOE”) July 26, 2018 PRC 100 % Trading Front Inc (“Trading Front”) August 01, 2018 USA 100 % Wealthn LLC (“Wealthn”) August 01, 2018 USA 100 % Uptech Global Holding Limited (“Uptech Holding”) August 03, 2018 British Virgin Islands (“BVI”) 100 % Tiger Fixed Income Portfolio Limited (“Tiger Fixed”) September 06, 2018 Cayman Islands 100 % JV Uptech Holding limited (“JV”) September 18, 2018 BVI 100 % Kastle Limited (“Kastle”) October 15, 2018 Hong Kong 100 % Fleming Funds Management Pty Limited (“Fleming”) November 22, 2018 Australia 100 % Amtiger Consultants Private Limited (“Amtiger”) January 09, 2019 India 99.999 % Tung Chi Consulting Limited (“Tung Chi”) January 29, 2019 Hong Kong 100 % Marsco Investment Corporation (“Marsco”) July 12, 2019 USA 100 % Tiger Investor Services Pty Limited (“Tiger Investor”) July 29, 2019 Australia 100 % Subsidiaries: Tradeup Inc. (“Tradeup”) October 10, 2019 USA 100 % VIEs: Ningxia Xiangshang Rongke Technology Co.,LTD (“Ningxia Rongke”, “Ningxia VIE”) June 11, 2014 PRC Consolidated VIE Beijing Xiangshang Yiyi Laohu Technology Group Co.,LTD (“Beijing Yiyi”, “Beijing VIE”) October 29, 2018 PRC Consolidated VIE TigerShares Trust (“Trust”) September 25, 2018 USA Consolidated VIE VIEs’ subsidiaries: Tiger Technology Corporation Limited (“Tiger Technology”) October 14,2014 Hong Kong VIE’s subsidiary Tiger Holdings, LLC (“Tiger LLC”) October 13, 2015 USA VIE’s subsidiary Beijing U‑Tiger Network Technology Co., LTD. (“Beijing U‑Tiger Network”) April 20, 2016 PRC VIE’s subsidiary Beijing U‑Tiger Business Service Co., Ltd (“Beijing U‑Tiger Business”) April 21,2016 PRC VIE’s subsidiary Beijing Chenhao Technology Co., LTD. (“Beijing Chenhao”) August 11, 2016 PRC VIE’s subsidiary Tiger Financial Information Service (NX) Co., Ltd. (“Tiger Financial Information”) September 09, 2016 PRC VIE’s subsidiary Tiger Rongke Technology Co., Ltd. (“Tiger Rongke”) November 09, 2016 PRC VIE’s subsidiary Fangguang Technology (NX) Co., Ltd. (“Fangguang Technology”) November 16, 2016 PRC VIE’s subsidiary Yunxin (Beijing) Information Consulting Co., Ltd. (“Beijing Yunxin”) November 23, 2016 PRC VIE’s subsidiary Xinhu Information Technology (SH) Co., Ltd (“Shanghai Xinhu”) July 05, 2017 PRC VIE’s subsidiary Top Capital Partners Custodians Limited (“Top Capital Partners Custodians”) September 13,2017 New Zealand VIE’s subsidiary Beijing Zhijianfengyi Information Technology Co., Ltd (“Beijing ZJFY”) January 25, 2018 PRC VIE’s subsidiary Shenzhen Xiang Shang Hu Xun Technology Co., LTD. (“Hu Xun”) June 20, 2018 PRC VIE’s subsidiary Beijing Beihu Commercial Service Co., Ltd (“Beihu”) August 10, 2018 PRC VIE’s subsidiary Beijing Huyi Technology Co., Ltd (“Huyi”) September 05, 2018 PRC VIE’s subsidiary Guangzhou U-Tiger Technology Co.,LTD (“Guangzhou U-Tiger”) December 24, 2018 PRC VIE’s subsidiary Shenzhen Huichuang Tianrong Asset Management Co.,Ltd. (“Huichuang Tianrong”) January 26, 2019 PRC VIE’s subsidiary Tiger Brokers International Limited (“TB International”) September 26, 2019 Hong Kong VIE’s subsidiary Tiger Brokers Group Limited (“TB Group”) September 26, 2019 Hong Kong VIE’s subsidiary Tiger Assets Management Corporation Limited (“Tiger Asset Management”) September 26, 2019 Hong Kong VIE’s subsidiary |
Schedule of amounts and balances of the VIEs | As of December 31, 2018 2019 US$ US$ Current assets 17,648,541 11,412,715 Non-current assets 9,581,582 5,838,056 Total assets 27,230,123 17,250,771 Current liabilities 6,939,074 10,365,633 Non-current liabilities — 100,701 Total liabilities 6,939,074 10,466,334 For the years ended December 31, 2017 2018 2019 US$ US$ US$ Total revenues 16,949,184 27,536,436 3,089,605 Net Loss (7,927,494) (4,948,406) (24,539,413) For the years ended December 31, 2017 2018 2019 US$ US$ US$ Net cash (used in)/provided by operating activities (8,510,634) 3,768,318 33,354,051 Net cash used in investing activities (3,670,010) (2,456,147) (726,601) Net cash provided by/(used in) financing activities 14,596,081 (1,509,434) — |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of estimated useful lives of property, plant and equipment | Electronic equipment 3 years Office equipment 5 years Software 5 years Leasehold improvement Shorter of the lease terms or the estimated useful lives of the assets |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
BUSINESS ACQUISITIONS | |
Schedule of allocation of purchase price as of the acquisition date | US$ Amortization period Cash and cash equivalents 339,611 Cash-segregated for regulatory purpose 22,094,198 Other current assets 5,098,900 Property, plant and equipment 5,581 3-5 years Intangible assets Operating License 6,900,000 Indefinite life Goodwill 2,421,403 Other current liabilities (26,062,403) Deferred tax liabilities (1,449,000) 9,348,290 |
Marsco | |
BUSINESS ACQUISITIONS | |
Schedule of operations attributable to the acquisition included in the Group's consolidated statement of operations | For the year ended December 31, 2019 US$ Net revenues 416,143 Net income 15,723 |
Schedule of proforma acquistion | For the years ended December 31, 2018 2019 US$ US$ Unaudited Unaudited Pro forma net revenue 34,652,211 55,150,145 Pro forma net loss (44,107,663) (5,799,848) |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Summary of prepaid expenses and other assets | As of December 31, 2018 2019 US$ US$ IPO distribution and promotional and advertisement service receivables — 2,080,411 Input VAT receivables 1,030,107 1,626,213 Interest receivables 158,306 1,526,625 Prepayment for share purchase in relation to acquisition (Note 18) and long-term investment — 854,891 Prepaid professional service fees 1,161,320 405,094 Prepaid data and IT service expenses — 391,214 Advances to employees 1,258,313 286,900 Prepaid marketing expenses 189,503 222,167 Rental and other deposits 421,059 215,182 Prepaid IPO related professional fees 1,391,231 — Others 193,356 411,495 5,803,195 8,020,192 |
PROPERTY, EQUIPMENT AND INTAN_2
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS, NET | |
Summary of property, equipment and intangible assets, net | As of December 31, 2018 2019 US$ US$ Electronic Equipment 1,638,673 1,530,269 Office Equipment 38,130 219,418 Leasehold improvement 655,975 543,262 Software — 197,564 Less: accumulated depreciation (997,991) (1,028,796) Property and equipment, net 1,334,787 1,461,717 Licenses 995,646 7,967,036 Trademark — 117,424 Less: accumulated amortization — (10,636) Intangible assets, net 995,646 8,073,824 Total 2,330,433 9,535,541 |
LONG TERM INVESTMENTS (Tables)
LONG TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LONG TERM INVESTMENTS | |
Summary of equity securities without readily determinable fair value | As of December 31, 2018 2019 US$ US$ Tibet Gelonghui Information Technology Co., LTD (“Gelonghui”) (a) 1,454,440 1,436,413 UNext Group Limited ("UNext") (b) — 600,000 Total 1,454,440 2,036,413 (a) In October 2017, the Group acquired 1.0% of the equity interests of Gelonghui for a purchase consideration of US$1,536,972 (RMB10,000,000). Gelonghui is principally engaged in information technology development, technical consultation and technical services. On January 1, 2018, the Group adopted ASU 2016‑01 and ASU 2018‑03 with no significant impacts noted. No fair value change was recorded for the years ended December 31, 2018 and 2019. The change of balance was foreign exchange difference. (b) In December 2019, the Group acquired 0.6% of the equity interests of UNext for a purchase consideration of US$600,000. UNext is principally engaged in financing service. No fair value change was recorded for the year ended December 31, 2019. |
Summary of available for sale investments | As of December 31, 2018 2019 US$ US$ Beijing Yingxin Network Technology Co., LTD (“Yingxin”) (c) 762,955 753,496 Beijing Smart Zhenzhi Technology Co., LTD (“Zhenzhi”) (d) 169,296 167,197 Alphalion Technology Holding Limited (“Alphalion”) (e) — 3,060,113 Total 932,251 3,980,806 (c) In September 2017, the Group acquired 2.91% of the equity interests of Yingxin for a purchase consideration of US$461,092 (RMB3,000,000). Yingxin is principally engaged in IT services, including systems, data or maintenance. The investment was classified as available‑for‑sale security as the Group determined that the preferred shares were debt securities due to the redemption option available to the investor and measured the investment subsequently at fair value . The unrealized holding gains of nil, US$326,623 and nil were reported in other comprehensive income or loss for the years ended December 31, 2017, 2018 and 2019, respectively. The change of balance in 2019 was foreign exchange difference. (d) In July 2017, the Group acquired a 3.33% equity interest of Zhenzhi for a purchase consideration of US$153,697 (RMB1,000,000). Zhenzhi is principally engaged in IT services, including software maintenance, application service and data processing. The investment was classified as available‑for‑sale security as the Group determined that the preferred shares were debt securities due to the redemption option available to the investors and measured the investment subsequently at fair value. The unrealized holding gains of nil, US$23,853 and nil were reported in other comprehensive income or loss for the years ended December 31, 2017, 2018 and 2019, respectively. The change of balance in 2019 was foreign exchange difference. (e) In February 2019, the Group entered into a series of agreements to convert its short-term interest-free loans to Alphalion Technology Holding Limited and its affiliates amounted at US$3,060,113 into a 25% equity interest of Alphalion (Note 15). Alphalion is principally engaged in IT services, including software maintenance, application service and data processing. The investment was classified as available-for-sale security as the Group determined that the preferred shares were debt securities due to the redemption option available to investors and measured the investment subsequently at fair value. No fair value change was recorded for the year ended December 31, 2019. |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Summary of accrued expenses and other current liabilities | As of December 31, 2018 2019 US$ US$ Accrued payroll and welfare 6,157,611 9,444,626 Tax payables 862,487 2,677,610 Accrued marketing expenses 1,331,988 2,416,759 Accrued professional expenses 543,335 1,185,326 Accrued data and IT service expenses — 552,814 Advanced from customers 375,481 294,881 Rental payables 468,472 — Others 683,733 309,941 10,423,107 16,881,957 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
Schedule of current and deferred portions of income taxes included in the consolidated statements of operations | For the years ended December 31, 2017 2018 2019 US$ US$ US$ Current tax expenses — 1,706 2,859,774 Deferred tax benefits (1,183,698) (1,874,819) (6,215,140) Income tax benefits (1,183,698) (1,873,113) (3,355,366) |
Schedule of significant components of the Group's deferred tax assets | As of December 31, 2018 2019 US$ US$ Deferred tax assets Accrued expenses 16,965 46,004 Impairment loss from equity investments — 134,304 Deductible advertising expenses 522,076 429,228 Net operating loss carryforwards 8,738,089 16,926,698 Trading losses 78,500 — Less: valuation allowance (2,931,196) (4,888,240) Less: changes in fair value of investment (87,619) (86,533) Deferred tax assets, net 6,336,815 12,561,461 Deferred tax liabilities Acquired intangible assets — 1,449,000 |
Schedule of Reconciliation between the income tax benefit computed by applying the PRC tax rate to loss before income taxes and the actual income tax benefit | For the years ended December 31, 2017 2018 2019 US$ US$ US$ Net loss before provision for income taxes (9,111,192) (46,166,668) (9,305,224) PRC statutory tax rate 25 % 25 % 25 % Income tax at statutory tax rate (2,277,798) (11,541,667) (2,326,306) Effect of income tax rate difference in other jurisdictions 132,949 439,213 124,406 Effect of income tax exemptions and preferential tax rates 151,317 (1,679,031) (5,153,269) Effect of expenses not deductible for tax purposes 81,938 9,053,735 1,425,861 Changes in valuation allowance 727,896 1,854,637 2,573,942 Income tax benefit (1,183,698) (1,873,113) (3,355,366) |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE MEASUREMENT | |
Schedule of fair value measurements of the Group's assets that were measured at fair value on a recurring basis | As of December 31, 2018 Quoted prices in active Significant markets for other Significant identical observable unobservable instruments inputs inputs Total (Level 1) (Level 2) (level 3) balance US$ US$ US$ US$ Financial instruments held, at fair value 6,435,241 — — 6,435,241 Long‑term available‑for‑sale investments — — 932,251 932,251 Total 6,435,241 — 932,251 7,367,492 As of December 31, 2019 Quoted prices in active Significant markets for other Significant identical observable unobservable instruments inputs inputs Total (Level 1) (Level 2) (level 3) balance US$ US$ US$ US$ Financial instruments held, at fair value ETFs 9,096,579 — — 9,096,579 US T-bill 5,527,192 — — 5,527,192 Corporate bonds 257,469 — — 257,469 Accrued expenses and other current liabilities 158,900 — — 158,900 Long‑term available‑for‑sale investments — — 3,980,806 3,980,806 Total 15,040,140 — 3,980,806 19,020,946 |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SHARE BASED COMPENSATION | |
Summary of fair value of the options granted was estimated on the date of grant that prepared by the management with the assistance of an independent third party appraiser, and was determined using a binomial model | The fair value of the options granted was estimated on the date of grant that prepared by the management with the assistance of an independent third‑party appraiser, and was determined using a binomial model with the following assumptions: Fair value per ordinary share Exercise Expected Contractual Risk‑free Expected at grant date(1) price(2) volatility(3) life(4) interest rate(5) dividend(6) US$ US$ Granted in 2014 0.008 40 % 10 years 3.0-3.1 % 0.0 Granted in 2015 0.008-0.016 39 % 10 years 2.5-3.1 % 0.0 Granted in 2016 0.019-0.030 39 % 10 years 2.3-3 % 0.0 Granted in 2017 0.034-0.059 0.00001-0.040 39 % 10 years 3.0-3.2 % 0.0 Granted in 2018 0.147-0.405 0.0001-0.200 35-38 % 10 years 3.1-3.8 % 0.0 Granted in 2019 0.274-0.484 0.00001-0.274 37-39 % 10 years 3.0-3.4 % 0.0 (1) Fair value of underlying ordinary shares. Prior to the completion of initial public offering, the estimated fair value of the ordinary shares underlying the options as of the respective grant dates was determined based on a valuation with the assistance of a third party appraiser. The fair value of the underlying ordinary shares is determined based on the closing market price of the share after the completion of initial public offering in March 2019. (2) Exercise price. The exercise price of the options was determined by the Company’s Board of Directors. (3) Volatility. The volatility of the underlying ordinary shares was estimated based on the historical share price movement of the comparable companies for the period of time close to the expected time to exercise. (4) Contractual life. The contractual life of the share options was the period between the grant date and the expiry date. (5) Risk free rate. Risk free rate is estimated based on market yield of U.S. Sovereign Curve with maturity close to the share options as of the valuation date, plus country spread. (6) Expected dividend. The Company does not expect to declare any dividends in the foreseeable future. |
Summary of share option activities | Service-based share options: Weighted Weighted Number of average average Aggregate share exercise remaining intrinsic options price contractual life value US$ Years US$ Outstanding as of January 1, 2019 136,028,000 0.01666 7.27 74,861,376 Granted 14,159,744 Exercised (82,857,500) Forfeited (8,455,000) 0.05521 Outstanding as of December 31, 2019 58,875,244 0.05868 8.11 10,478,715 Performance-based share options: Number of Weighted Weighted average Aggregate share average remaining intrinsic options exercise price contractual life value US$ Years US$ Outstanding as of January 1, 2019 — — — — Granted 47,108,000 0.00524 Forfeited (10,050,000) 0.00137 Outstanding as of December 31, 2019 37,058,000 0.00629 9.01 8,537,131 |
Schedule of restricted share units activity | Service-based RSUs: Weighted-Average Number of Units Grant-Date Fair Value US$ Unvested as of January 1, 2019 10,800,000 0.33 Granted 18,319,012 0.35 Exercised (2,162,032) 0.47 Forfeited — Unvested as of December 31, 2019 26,956,980 0.36 Performance-based RSUs: Weighted-Average Number of Units Grant-Date Fair Value US$ Unvested as of January 1, 2019 — — Granted 1,700,000 0.40 Exercised (250,000) 0.48 Forfeited — Unvested as of December 31, 2019 1,450,000 0.38 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
NET LOSS PER SHARE | |
Schedule of basic and diluted net loss per share | For the years ended December 31, 2017 2018 2019 US$ US$ US$ Numerator: Net loss attributable to UP Fintech Holding Limited (7,510,049) (43,207,732) (6,589,431) Net loss attributable to ordinary shareholders of UP Fintech Holding Limited (7,510,049) (43,207,732) (6,589,431) Denominator: Weighted average shares used in calculating net loss per ordinary shares Basic and diluted 443,814,916 506,393,198 1,751,784,176 Net loss per ordinary shares Basic and diluted (0.02) (0.09) |
Schedule of potential ordinary shares outstanding excluded from the computation of diluted net loss per ordinary share | For the years ended December 31, 2017 2018 2019 Share issuable upon exercise of share options 103,175,000 136,028,000 95,933,244 Share issuable upon exercise of RSUs 600,000 10,800,000 28,406,980 Share issuable upon conversion of Series Angel preferred shares 419,736,104 419,736,104 — Share issuable upon conversion of Series A preferred shares 279,389,307 279,389,307 — Share issuable upon conversion of Series B-1 preferred shares 188,378,334 188,378,334 — Share issuable upon conversion of Series B-2 preferred shares 76,812,654 76,812,654 — Share issuable upon conversion of Series B-3 preferred shares — 147,755,566 — Share issuable upon conversion of Series C preferred shares — 98,834,937 — Share issuable upon conversion of Series C-1 preferred shares — 18,597,738 — |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
Schedule of amount due from related parties | Amount due from related parties: As of December 31, Name Relationship with the Company 2018 2019 US$ US$ Interactive Brokers LLC (1) Under common control with a shareholder of the Company 9,619,438 185,047,211 Xiaomi Corporation and its affiliates (2) Shareholder of the Company 919,964 397,590 Alphalion Technology Holding Limited and its affiliates (“Alphalion Group”) (3) Long-term available-for-sale investee 3,320,113 886,844 Guangzhou 88 Technology Limited (“Guangzhou 88”) (4) Entity controlled by management of the Company’s subsidiary 786,586 — Fast Connection Limited (5) Entity controlled by a shareholder of the Company 2,200,000 2,200,000 Officer of the Company (6) Management of the Company 1,291,695 — (1) The amount represents the Group’s customer deposit, revenue receivables, cash collaterals for securities borrowing transactions from the Company’s trade execution partner and principle shareholder, Interactive Brokers. (2) The amount represents the Group’s prepaid marketing expense to Xiaomi Corporation and its affiliates. (3) The amounts represent short-term, interest-free loans provided to the respective parties to facilitate their daily operational cash flow needs as of December 31, 2018 and 2019. In February of 2019, the Group entered into a series of agreements whereby US$3,060,113 of the loans provided to Alphalion Group were converted into a long-term available-for-sale investment (Note 7) and the remaining US$260,000 was repaid. The balance as of December 31, 2019 represents the new short-term, interest-free loans provided to its affiliate. (4) The amounts represent short-term loans provided to the Guangzhou 88 to facilitate their daily operational cash flow needs, which was subsequently converted into equity securities of Guangzhou 88 and fully impaired during the year of 2019. (5) The amount represents the Group’s prepaid consulting fee to Fast Connection Limited as of December 31, 2018 and 2019. (6) The amount represents personal interest-free loan to the Company’s officers, including Mr. Tianhua Wu and others, which were fully repaid in February of 2019. Amount due to related parties: As of December 31, Name Relationship with the Company 2018 2019 US$ US$ Interactive Brokers LLC (7) Under common control with a shareholder of the Company — 53,774,882 — 53,774,882 (7) The amount represents the Group’s cash collaterals received for securities lending transactions from the Company’s trade execution partner and principle shareholder, Interactive Brokers. |
COLLATERALIZED TRANSACTIONS (Ta
COLLATERALIZED TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
COLLATERALIZED TRANSACTIONS | |
Schedule of fair values of client margin asset and security borrowings that were available to utilize as collateral | As of December 31, 2018 2019 US$ US$ Total client margin asset 2,036,488 332,460,879 Fulfillment of client margin financings — 42,704,203 Fulfillment of client short sales — 10,815,155 Securities lending to other brokers — 55,098,508 Total collateral repledged — 108,617,866 |
Lease (Tables)
Lease (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Lease | |
Summary of total operating lease cost | For the year ended December 31, 2019 US$ Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases 2,389,515 Non-cash right-of-use assets in exchange for new lease obligations: Operating leases 5,050,642 Weighted average remaining lease term: Operating leases 4 years Weighted average discount rate: Operating leases 6.0 % |
Summary of maturity analysis of the annual undiscounted cash flows | As of December 31, 2019 US$ Years ending December 31: 2020 2,672,568 2021 1,380,725 2022 867,840 2023 578,422 2024 488,389 2025 and after 561,804 Total undiscounted operating lease payments 6,549,748 Less: imputed interest 708,090 Present value of operating lease liabilities 5,841,658 |
Summary of future minimum payments under non-cancelable operating leases | As of December 31, 2018 US$ Years ending December 31: 2019 1,799,942 2020 1,155,540 2021 and after 91,249 Total 3,046,731 |
REGULATORY REQUIREMENT (Tables)
REGULATORY REQUIREMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
REGULATORY REQUIREMENT | |
Schedule of net capital requirement and the excess net capital for the Company's broker dealer subsidiaries | Net Capital Requirement Excess Net Capital US$ US$ US$ December 31, 2018 TBNZ 4,940,125 1,292,056 3,648,069 US Tiger Securities 1,058,863 5,000 1,053,863 Total 5,998,988 1,297,056 4,701,932 Net Capital Requirement Excess Net Capital US$ US$ US$ December 31, 2019 TBNZ 26,633,575 17,279,461 9,354,114 Marsco(1) 15,224,882 250,000 14,974,882 US Tiger Securities 4,227,994 100,000 4,127,994 Tiger Brokers SG(2) 1,615,957 823,313 792,644 Total 47,702,408 18,452,774 29,249,634 (1) Marsco was acquired by the Company in July of 2019. (2) Tiger Brokers SG started to operate its business in December of 2019. |
ORGANIZATION AND PRINCIPAL AC_3
ORGANIZATION AND PRINCIPAL ACTIVITIES - Subsidiaries (Details) | Dec. 31, 2019 |
Tiger Holdings | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
TBNZ | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
I-Tiger SPC | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
I-Tiger Capital Management | |
Organization: | |
Legal ownership (as a percent) | 65.00% |
I-Tiger Global Investment | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
I-Tiger Capital | |
Organization: | |
Legal ownership (as a percent) | 65.00% |
TBAU | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Up International | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Tiger SG | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Tiger Brokers SG | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
US Tiger Securities | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Ningxia XSYX, Ningxia WFOE | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Up Global | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Prosperous Investment | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
U-Tiger SPC | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Tiger Fintech Holdings | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Xiangshang Upfintech Holding | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Beijing XSYX, Beijing WFOE | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Tradingfront | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Wealthn | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Uptech Holding | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Tiger Fixed | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
JV | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Kastle | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Fleming | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Amtiger | |
Organization: | |
Legal ownership (as a percent) | 99.999% |
Tung Chi | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Marsco | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Tiger Investor | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
Tradeup | |
Organization: | |
Legal ownership (as a percent) | 100.00% |
ORGANIZATION AND PRINCIPAL AC_4
ORGANIZATION AND PRINCIPAL ACTIVITIES - The VIE arrangements (Details) | 12 Months Ended | |
Dec. 31, 2019$ / shares | Dec. 31, 2019¥ / shares | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Standard equity interest purchase price | (per share) | $ 1.5 | ¥ 10 |
Term (in years) | 10 years | 10 years |
ORGANIZATION AND PRINCIPAL AC_5
ORGANIZATION AND PRINCIPAL ACTIVITIES - Balances of the VIEs (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Variable interest entity: | |||
Current assets | $ 769,746,032 | $ 102,905,779 | |
Total assets | 809,059,947 | 115,215,165 | |
Current liabilities | 587,592,526 | 16,987,261 | |
Total liabilities | 594,034,213 | 16,987,261 | |
Total revenues | 58,662,900 | 33,560,265 | $ 16,949,184 |
Net loss | (5,949,858) | (44,293,555) | (7,927,494) |
Net cash (used in)/provided by operating activities | 243,309,139 | (21,171,600) | (8,510,634) |
Net cash used in investing activities | (22,040,111) | (35,124,217) | (3,670,010) |
Net cash provided by/(used in) financing activities | 114,906,520 | 79,525,945 | 14,596,081 |
VIEs | |||
Variable interest entity: | |||
Current assets | 11,412,715 | 17,648,541 | |
Non-current assets | 5,838,056 | 9,581,582 | |
Total assets | 17,250,771 | 27,230,123 | |
Current liabilities | 10,365,633 | 6,939,074 | |
Non-current liabilities | 100,701 | ||
Total liabilities | 10,466,334 | 6,939,074 | |
Total revenues | 3,089,605 | 27,536,436 | 16,949,184 |
Net loss | (24,539,413) | (4,948,406) | (7,927,494) |
Net cash (used in)/provided by operating activities | 33,354,051 | 3,768,318 | (8,510,634) |
Net cash used in investing activities | $ (726,601) | (2,456,147) | (3,670,010) |
Net cash provided by/(used in) financing activities | $ (1,509,434) | $ 14,596,081 | |
Consolidated revenues contributed by VIE | 6.00% | 82.00% | 100.00% |
Consolidated total assets contributed by VIE | 2.00% | 24.00% | |
Consolidated total liabilities contributed by VIE | 2.00% | 41.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Derivative financial instruments (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)contract | Dec. 31, 2018USD ($)contract | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of outstanding future contracts | contract | 34 | 48 |
Notional value | $ 5,951,530 | $ 6,079,920 |
Remaining contract term (in months) | 2 months 18 days | 2 months 15 days |
Futures realized gain/(loss) | $ (1,766,679) | $ 123,662 |
Futures unrealized gain/(loss) | $ (158,900) | $ 507,810 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash Segregated for Regulatory Purposes (Details) | Dec. 31, 2019USD ($) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Cash-segregated for regulatory purposes | $ 25,167,014 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Receivables from Customers (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Allowance for doubtful accounts | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, equipment, and intangible assets, net (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Electronic Equipment | |
Property, equipment, and intangible assets, net | |
Useful life (in years) | 3 years |
Office Equipment | |
Property, equipment, and intangible assets, net | |
Useful life (in years) | 5 years |
Software | |
Property, equipment, and intangible assets, net | |
Useful life (in years) | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill and Long-term investment (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Impairment loss on equity securities without readily determinable fair values | $ 755,524 | $ 0 | $ 0 |
Impairment loss on available-for-sale investments | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Research and development expenses and Foreign currencies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Significant accounting policies | |||
Research and development expenses | $ 18,033,074 | $ 11,282,241 | $ 6,059,525 |
Cash and cash equivalents | 59,408,555 | 34,406,970 | |
CNY | |||
Significant accounting policies | |||
Cash and cash equivalents | $ 9,473,171 | $ 3,696,283 | $ 6,884,354 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of supplier (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Total net revenues were executed and cleared by one supplier, Interactive Brokers | Concentration of supplier | |||
Concentration risk | |||
Concentration risk (in percent) | 78.40% | 96.80% | 99.50% |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
IPO Distribution Services | |||
Disaggregation of revenue | |||
Revenue from contracts with customers | $ 3,142,763 | $ 475,055 | $ 0 |
BUSINESS ACQUISITION (Details)
BUSINESS ACQUISITION (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
Jul. 31, 2019 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||
Payments to Acquire Businesses, Gross | $ 6,348,290 | |
Marsco | ||
Business Acquisition [Line Items] | ||
Equity interest acquired (as a percentage) | 100.00% | |
Business Combination, Consideration Transferred | $ 9,348,290 | |
Payments to Acquire Businesses, Gross | 6,348,290 | |
Business Combination, Acquisition Related Costs | $ 377,239 | |
Business Combination, Consideration Transferred, Equity Interests Issued | $ 3,000,000 | |
Maximum percentage of acquired entity revenue combined in consolidated financial statements | 1.00% | |
Maximum percentage of acquired entity assets combined in consolidated financial statements | 4.10% |
BUSINESS ACQUISITIONS - Purchas
BUSINESS ACQUISITIONS - Purchase price allocation (Details) - USD ($) | Jul. 12, 2019 | Dec. 31, 2019 |
Intangible assets | ||
Goodwill | $ 2,421,403 | |
Marsco | ||
Business Acquisition [Line Items] | ||
Cash and cash equivalents | $ 339,611 | |
Cash-segregated for regulatory purpose | 22,094,198 | |
Other current assets | 5,098,900 | |
Property, plant and equipment | 5,581 | |
Intangible assets | ||
Operating License | 6,900,000 | |
Goodwill | 2,421,403 | |
Other current liabilities | (26,062,403) | |
Deferred tax liabilities | (1,449,000) | |
Total purchase price | $ 9,348,290 | |
Marsco | Minimum | ||
Business Acquisition [Line Items] | ||
Property, plant and equipment, Amortization period (in years) | 3 years | |
Marsco | Maximum | ||
Business Acquisition [Line Items] | ||
Property, plant and equipment, Amortization period (in years) | 5 years |
BUSINESS ACQUISITIONS - Results
BUSINESS ACQUISITIONS - Results of operations attributable to acquisition (Details) - Marsco | 6 Months Ended |
Dec. 31, 2019USD ($) | |
Business Acquisition [Line Items] | |
Net revenues | $ 416,143 |
Net income | $ 15,723 |
BUSINESS ACQUISITIONS - Proform
BUSINESS ACQUISITIONS - Proforma Acquisition (Details) - Marsco - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Pro forma information of acquisitions | ||
Pro forma net revenue | $ 55,150,145 | $ 34,652,211 |
Pro forma net loss | $ (5,799,848) | $ (44,107,663) |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||
IPO distribution and promotional and advertisement service receivables | $ 2,080,411 | |
Input VAT receivables | 1,626,213 | $ 1,030,107 |
Interest receivables | 1,526,625 | 158,306 |
Prepayment for share purchase in relation to acquisition and long-term investment | 854,891 | |
Prepaid professional service fees | 405,094 | 1,161,320 |
Prepaid data and IT service expenses | 391,214 | |
Advances to employees | 286,900 | 1,258,313 |
Prepaid marketing expenses | 222,167 | 189,503 |
Rental and other deposits | 215,182 | 421,059 |
Prepaid IPO related professional fees | 1,391,231 | |
Others | 411,495 | 193,356 |
Prepaid expenses and other current assets | $ 8,020,192 | $ 5,803,195 |
PROPERTY, EQUIPMENT AND INTAN_3
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS, NET (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Equipment and Intangible Assets [Line Items] | |||
Less: accumulated depreciation | $ (1,028,796) | $ (997,991) | |
Property and equipment, net | 1,461,717 | 1,334,787 | |
Intangible assets, net | 8,073,824 | 995,646 | |
Less: accumulated amortization | (10,636) | ||
Property, equipment and intangible assets, net | 9,535,541 | 2,330,433 | |
Depreciation and amortization expenses | 752,167 | 473,730 | $ 342,450 |
Licenses | |||
Property, Equipment and Intangible Assets [Line Items] | |||
Intangible assets, net | 7,967,036 | 995,646 | |
Electronic Equipment | |||
Property, Equipment and Intangible Assets [Line Items] | |||
Property and equipment, gross | 1,530,269 | 1,638,673 | |
Office Equipment | |||
Property, Equipment and Intangible Assets [Line Items] | |||
Property and equipment, gross | 219,418 | 38,130 | |
Leasehold improvement | |||
Property, Equipment and Intangible Assets [Line Items] | |||
Property and equipment, gross | 543,262 | $ 655,975 | |
Software | |||
Property, Equipment and Intangible Assets [Line Items] | |||
Property and equipment, gross | 197,564 | ||
Trademark | |||
Property, Equipment and Intangible Assets [Line Items] | |||
Intangible assets, net | $ 117,424 |
LONG TERM INVESTMENTS -Equity s
LONG TERM INVESTMENTS -Equity securities without readily determinable fair value - (Details) | 1 Months Ended | |||
Dec. 31, 2019USD ($) | Oct. 31, 2017CNY (¥) | Dec. 31, 2018USD ($) | Oct. 31, 2017USD ($) | |
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Equity securities without readily determinable fair value | $ 2,036,413 | $ 1,454,440 | ||
Tibet Gelonghui Information Technology Co., LTD ("Gelonghui") | ||||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Equity securities without readily determinable fair value | 1,436,413 | $ 1,454,440 | ||
Percentage of equity interest acquired | 1.00% | |||
Purchase consideration | ¥ 10,000,000 | $ 1,536,972 | ||
UNext Group Limited ("UNext") | ||||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||||
Equity securities without readily determinable fair value | $ 600,000 | |||
Percentage of equity interest acquired | 0.60% | |||
Purchase consideration | $ 600,000 |
LONG TERM INVESTMENTS - Availab
LONG TERM INVESTMENTS - Available for sale investments - (Details) | 1 Months Ended | 12 Months Ended | |||||
Sep. 30, 2017CNY (¥) | Sep. 30, 2017USD ($) | Jul. 31, 2017CNY (¥) | Jul. 31, 2017USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Debt Securities, Available-for-sale | |||||||
Long term available for sale investments | $ 3,980,806 | $ 932,251 | |||||
Unrealized gain on availableforsale investments | 262,857 | ||||||
Beijing Yingxin Network Technology Co., LTD ("Yingxin") | |||||||
Debt Securities, Available-for-sale | |||||||
Long term available for sale investments | 753,496 | 762,955 | |||||
Percentage of equity interest acquired | 2.91% | 2.91% | |||||
Purchase consideration | ¥ 3,000,000 | $ 461,092 | |||||
Unrealized gain on availableforsale investments | 0 | 326,623 | $ 0 | ||||
Beijing Smart Zhenzhi Technology Co., LTD ("Zhenzhi") | |||||||
Debt Securities, Available-for-sale | |||||||
Long term available for sale investments | 167,197 | 169,296 | |||||
Percentage of equity interest acquired | 3.33% | 3.33% | |||||
Purchase consideration | ¥ 1,000,000 | $ 153,697 | |||||
Unrealized gain on availableforsale investments | 0 | $ 23,853 | $ 0 | ||||
Alphalion Technology Holding Limited ("Alphalion") | |||||||
Debt Securities, Available-for-sale | |||||||
Long term available for sale investments | $ 3,060,113 | ||||||
Percentage of equity interest acquired | 25.00% |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Accrued payroll and welfare | $ 9,444,626 | $ 6,157,611 |
Tax payables | 2,677,610 | 862,487 |
Accrued marketing expenses | 2,416,759 | 1,331,988 |
Accrued professional expenses | 1,185,326 | 543,335 |
Accrued data and IT service expenses | 552,814 | |
Advanced from customers | 294,881 | 375,481 |
Rental payables | 468,472 | |
Others | 309,941 | 683,733 |
Accrued expenses and other current liabilities | $ 16,881,957 | $ 10,423,107 |
INCOME TAXES (Details)
INCOME TAXES (Details) - HKD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure | |||
Income tax rate (as a percent) | 25.00% | 25.00% | 25.00% |
HNTE | |||
Income Tax Disclosure | |||
Preferential tax rate (as a percent) | 15.00% | 15.00% | 15.00% |
HNTE | Beijing U Tiger Business | |||
Income Tax Disclosure | |||
Preferential tax rate (as a percent) | 15.00% | 15.00% | 15.00% |
PRC | |||
Income Tax Disclosure | |||
Income tax rate (as a percent) | 25.00% | 25.00% | 25.00% |
Hong Kong | Scenario 1 | |||
Income Tax Disclosure | |||
Income tax rate (as a percent) | 8.25% | ||
Base profit for calculating tax rate | $ 2,000,000 | ||
Hong Kong | Scenario 2 | |||
Income Tax Disclosure | |||
Income tax rate (as a percent) | 16.50% | ||
Base profit for calculating tax rate | $ 2,000,000 | ||
USA | |||
Income Tax Disclosure | |||
Income tax rate (as a percent) | 21.00% | 21.00% | 35.00% |
SINGAPORE | |||
Income Tax Disclosure | |||
Income tax rate (as a percent) | 17.00% | ||
AUSTRALIA | |||
Income Tax Disclosure | |||
Income tax rate (as a percent) | 27.50% | ||
Tiger Holdings | New Zealand | |||
Income Tax Disclosure | |||
Income tax rate (as a percent) | 28.00% | ||
Top Capital Custodians | New Zealand | |||
Income Tax Disclosure | |||
Income tax rate (as a percent) | 28.00% | ||
Tiger Brokers | New Zealand | |||
Income Tax Disclosure | |||
Income tax rate (as a percent) | 28.00% | ||
Amtiger | India | |||
Income Tax Disclosure | |||
Income tax rate (as a percent) | 25.00% |
INCOME TAXES - Current and defe
INCOME TAXES - Current and deferred portions of income taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
INCOME TAXES | |||
Current tax expenses | $ 2,859,774 | $ 1,706 | |
Deferred tax benefits | (6,215,140) | (1,874,819) | $ (1,183,698) |
Income tax benefits | $ (3,355,366) | $ (1,873,113) | $ (1,183,698) |
INCOME TAXES - Significant comp
INCOME TAXES - Significant components of the Group's deferred tax assets (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets | ||
Accrued expenses | $ 46,004 | $ 16,965 |
Impairment loss from equity investments | 134,304 | |
Deductible advertising expenses | 429,228 | 522,076 |
Net operating loss carryforwards | 16,926,698 | 8,738,089 |
Trading losses | 78,500 | |
Less: valuation allowance | (4,888,240) | (2,931,196) |
Less: changes in fair value of investment | (86,533) | (87,619) |
Deferred tax assets | 12,561,461 | 6,336,815 |
Deferred tax liabilities | ||
Acquired intangible assets | 1,449,000 | |
Net operating loss carryforwards | 70,615,285 | 42,118,357 |
Valuation allowance for Operating loss carryforwards | $ 23,654,338 | $ 14,729,491 |
INCOME TAXES - Income Tax Recon
INCOME TAXES - Income Tax Reconciliation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
INCOME TAXES | |||
Net loss before provision for income taxes | $ (9,305,224) | $ (46,166,668) | $ (9,111,192) |
PRC statutory tax rate | 25.00% | 25.00% | 25.00% |
Income tax at statutory tax rate | $ (2,326,306) | $ (11,541,667) | $ (2,277,798) |
Effect of income tax rate difference in other jurisdictions | 124,406 | 439,213 | 132,949 |
Effect of income tax exemptions and preferential tax rates | (5,153,269) | (1,679,031) | 151,317 |
Effect of expenses not deductible for tax purposes | 1,425,861 | 9,053,735 | 81,938 |
Changes in valuation allowance | 2,573,942 | 1,854,637 | 727,896 |
Income tax benefits | $ (3,355,366) | $ (1,873,113) | $ (1,183,698) |
ORDINARY SHARES (Details)
ORDINARY SHARES (Details) | 1 Months Ended | 12 Months Ended | ||||
Apr. 30, 2019$ / sharesshares | Mar. 31, 2019shares | Nov. 30, 2018shares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2018$ / sharesshares | Jun. 30, 2018shares | |
Class A ordinary shares | ||||||
Class of Stock | ||||||
Common stock, shares authorized (in shares) | 4,662,388,278 | 3,144,831,053 | ||||
Par value per share (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||
Votes per share (in votes) | one | |||||
Common stock, shares issued (in shares) | 1,777,218,449 | 216,546,541 | 2,480,000 | |||
Common stock, shares outstanding (in shares) | 1,777,218,449 | 216,546,541 | ||||
Number of shares issued in conversion (in shares) | 1,210,906,902 | 180,895,573 | ||||
Shares issued during the period (in shares) | 237,375,000 | |||||
ADS issued during period | 15,825,000 | |||||
Offering price | $ / shares | $ 8 | |||||
Conversion ratio | 1 | |||||
Class A ordinary shares | IPO | ||||||
Class of Stock | ||||||
Common stock, shares issued (in shares) | 33,170,968 | |||||
Common stock, shares outstanding (in shares) | 33,170,968 | |||||
Class A ordinary shares | Over allotment option | ||||||
Class of Stock | ||||||
Shares issued during the period (in shares) | 29,250,000 | |||||
Class A ordinary shares | Private placement | ||||||
Class of Stock | ||||||
Shares issued during the period (in shares) | 13,125,000 | |||||
Class B ordinary shares | ||||||
Class of Stock | ||||||
Common stock, shares authorized (in shares) | 337,611,722 | 518,507,295 | ||||
Par value per share (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||
Votes per share (in votes) | twenty | |||||
Common stock, shares issued (in shares) | 337,611,722 | 337,611,722 | 107,863,347 | |||
Common stock, shares outstanding (in shares) | 337,611,722 | 337,611,722 | ||||
Class B ordinary shares | IPO | ||||||
Class of Stock | ||||||
Common stock, shares issued (in shares) | 410,643,948 | |||||
Common stock, shares outstanding (in shares) | 410,643,948 | |||||
Series Angel, A, B-1, B-2, B-3 and C | ||||||
Class of Stock | ||||||
Number of shares issued in conversion (in shares) | 1,210,906,902 | |||||
Number of shares converted | 1,210,906,902 | |||||
Series Angel, A, B-1, B-2, B-3 and C | IPO | ||||||
Class of Stock | ||||||
Number of shares converted | 1,210,906,902 | |||||
Series C-1 convertible redeemable preferred shares | ||||||
Class of Stock | ||||||
Number of shares issued in conversion (in shares) | 18,612,084 | 18,612,084 | ||||
Number of shares converted | 18,597,738 | 18,597,738 | ||||
Offering price | $ / shares | $ 8 |
PREFERRED SHARES (Details)
PREFERRED SHARES (Details) | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2019shares | Feb. 21, 2017 | Dec. 31, 2019$ / sharesshares | |
Class of Stock [Line Items] | |||
Non-cumulative Dividend rate, as calculated on consideration paid for equity interests (as a percent) | 8.00% | ||
Liquidation preference (as a percent) | 120.00% | ||
Redemption events | |||
Qualified IPO Threshold completion period | 60 months | ||
Significant breach, threshold correction period | 30 days | ||
Conversion | |||
Conversion ratio | 1 | ||
Series Angel, A, B-1, B-2, B-3 and C | |||
Conversion | |||
Number of shares issued in conversion (in shares) | 1,210,906,902 | ||
Conversion ratio | 1 | ||
Number of shares converted | 1,210,906,902 | ||
Series C-1 convertible redeemable preferred shares | |||
Conversion | |||
Number of shares issued in conversion (in shares) | 18,612,084 | 18,612,084 | |
Number of shares converted | 18,597,738 | 18,597,738 | |
Offering price | $ / shares | $ 8 |
FAIR VALUE MEASUREMENT - Measur
FAIR VALUE MEASUREMENT - Measured at fair value on a recurring basis (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial instruments held, at fair value | $ 14,881,240 | $ 6,435,241 |
Long term available for sale investments | 3,980,806 | 932,251 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial instruments held, at fair value | 6,435,241 | |
Accrued expenses and other current liabilities | 158,900 | |
Long term available for sale investments | 3,980,806 | 932,251 |
Total | 19,020,946 | 7,367,492 |
Recurring | Quoted prices in active markets for identical instruments (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial instruments held, at fair value | 6,435,241 | |
Accrued expenses and other current liabilities | 158,900 | |
Total | 15,040,140 | 6,435,241 |
Recurring | Significant unobservable inputs (level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Long term available for sale investments | 3,980,806 | 932,251 |
Total | 3,980,806 | $ 932,251 |
Recurring | ETFs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial instruments held, at fair value | 9,096,579 | |
Recurring | ETFs | Quoted prices in active markets for identical instruments (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial instruments held, at fair value | 9,096,579 | |
Recurring | US T-bill | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial instruments held, at fair value | 5,527,192 | |
Recurring | US T-bill | Quoted prices in active markets for identical instruments (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial instruments held, at fair value | 5,527,192 | |
Recurring | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial instruments held, at fair value | 257,469 | |
Recurring | Corporate bonds | Quoted prices in active markets for identical instruments (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Financial instruments held, at fair value | $ 257,469 |
FAIR VALUE MEASUREMENT - Meas_2
FAIR VALUE MEASUREMENT - Measured at fair value on a non recurring basis (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
FAIR VALUE MEASUREMENT | |||
Impairment loss on equity securities without readily determinable fair values | $ 755,524 | $ 0 | $ 0 |
Impairment loss on other intangible assets arising from acquisitions | 0 | 0 | |
Impairment loss on goodwill | $ 0 | $ 0 |
SHARE BASED COMPENSATION (Detai
SHARE BASED COMPENSATION (Details) - shares | 12 Months Ended | |||
Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Maximum aggregate number of shares that may be issued | 254,697,314 | 187,697,314 | ||
2019 Performance Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Maximum aggregate number of shares that may be issued | 52,000,000 | |||
Share options | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Term of option | 10 years | |||
Percentage of fair market value as of the latest practicable date upon termination for death, disability or retirement of employees | 50.00% | |||
Threshold period for vesting or exercising option upon termination for death, disability or retirement, the employees | 6 months | |||
Percentage of fair market value as of the latest practicable date upon other termination | 30.00% | |||
Threshold period for vesting or exercising option upon other termination | 6 months | |||
Share options | Vested and exercisable on second anniversary | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Vesting percentage | 50.00% | |||
Share options | Vested and exercisable on third anniversary | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Vesting percentage | 25.00% | |||
Share options | Vested and exercisable on fourth anniversary | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Vesting percentage | 25.00% |
SHARE BASED COMPENSATION - Fair
SHARE BASED COMPENSATION - Fair value of options granted (Details) - $ / shares | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Contractual life | 10 years | 10 years | 10 years | 10 years | 10 years | 10 years |
Share options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Fair value per ordinary share at grant date | $ 0.008 | |||||
Exercise price (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||
Expected volatility | 39.00% | 39.00% | 39.00% | 40.00% | ||
Expected dividend | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Share options | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Fair value per ordinary share at grant date | $ 0.274 | $ 0.147 | $ 0.034 | $ 0.019 | $ 0.008 | |
Exercise price (in dollars per share) | $ 0.00001 | $ 0.0001 | $ 0.00001 | |||
Expected volatility | 37.00% | 35.00% | ||||
Risk free interest rate | 3.00% | 3.10% | 3.00% | 2.30% | 2.50% | 3.00% |
Share options | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Fair value per ordinary share at grant date | $ 0.484 | $ 0.405 | $ 0.059 | $ 0.030 | $ 0.016 | |
Exercise price (in dollars per share) | $ 0.274 | $ 0.200 | $ 0.040 | |||
Expected volatility | 39.00% | 38.00% | ||||
Risk free interest rate | 3.40% | 3.80% | 3.20% | 3.00% | 3.10% | 3.10% |
SHARE BASED COMPENSATION - Summ
SHARE BASED COMPENSATION - Summary of share option activities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted average remaining contractual life and aggregate intrinsic value | |||
Share-based compensation | $ 4,062,600 | $ 34,204,761 | $ 349,700 |
Share options | |||
Number of share options | |||
Outstanding at the beginning | 136,028,000 | ||
Granted | 14,159,744 | ||
Exercised | (82,857,500) | ||
Forfeited | (8,455,000) | ||
Outstanding at the end | 58,875,244 | 136,028,000 | |
Weighted average exercise price | |||
Outstanding at the beginning (in dollars per share) | $ 0.01666 | ||
Granted (in dollars per share) | 0.25409 | ||
Exercised (in dollars per share) | 0.00001 | ||
Forfeited (in dollars per share) | 0.05521 | ||
Outstanding at the end (in dollars per share) | $ 0.05868 | $ 0.01666 | |
Weighted average remaining contractual life and aggregate intrinsic value | |||
Weighted average remaining contractual life | 8 years 1 month 10 days | 7 years 3 months 7 days | |
Aggregate intrinsic value | $ 10,478,715 | $ 74,861,376 | |
Share-based compensation | 2,231,270 | 1,522,271 | 345,203 |
Total unrecognized share based compensation expense | $ 6,015,195 | ||
Weighted average period expected to be recognized for unrecognized share based compensation expense | 2 years 8 months 12 days | ||
Performance-based share options | |||
Number of share options | |||
Granted | 47,108,000 | ||
Forfeited | (10,050,000) | ||
Outstanding at the end | 37,058,000 | ||
Weighted average exercise price | |||
Granted (in dollars per share) | $ 0.00524 | ||
Forfeited (in dollars per share) | 0.00137 | ||
Outstanding at the end (in dollars per share) | $ 0.00629 | ||
Weighted average remaining contractual life and aggregate intrinsic value | |||
Weighted average remaining contractual life | 9 years 4 days | ||
Aggregate intrinsic value | $ 8,537,131 | ||
Share-based compensation | 7,866 | $ 0 | $ 0 |
Total unrecognized share based compensation expense | $ 17,627,760 | ||
Weighted average period expected to be recognized for unrecognized share based compensation expense | 4 years |
SHARE BASED COMPENSATION - Rest
SHARE BASED COMPENSATION - Restricted Share Units ("RSUs") (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted-Average Grant-Date Fair Value | |||
Total share based compensation | $ 4,062,600 | $ 34,204,761 | $ 349,700 |
Service-based RSUs | |||
Number of Units | |||
Beginning balance | 10,800,000 | ||
Granted | 18,319,012 | ||
Exercised | (2,162,032) | ||
Ending balance | 26,956,980 | 10,800,000 | |
Weighted-Average Grant-Date Fair Value | |||
Beginning balance | $ 0.33 | ||
Granted | 0.35 | ||
Exercised | 0.47 | ||
Ending balance | $ 0.36 | $ 0.33 | |
Total share based compensation | $ 1,685,646 | $ 324,565 | 4,497 |
Total unrecognized share based compensation expense | $ 7,803,087 | ||
Weighted average period expected to be recognized for unrecognized share based compensation expense | 3 years 3 months 18 days | ||
Performance-based RSUs | |||
Number of Units | |||
Granted | 1,700,000 | ||
Exercised | (250,000) | ||
Ending balance | 1,450,000 | ||
Weighted-Average Grant-Date Fair Value | |||
Granted | $ 0.40 | ||
Exercised | 0.48 | ||
Ending balance | $ 0.38 | ||
Total share based compensation | $ 137,818 | $ 0 | $ 0 |
Total unrecognized share based compensation expense | $ 511,464 | ||
Weighted average period expected to be recognized for unrecognized share based compensation expense | 3 years 8 months 12 days |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | |||
Net loss attributable to UP Fintech Holding Limited | $ (6,589,431) | $ (43,207,732) | $ (7,510,049) |
Net loss attributable to ordinary shareholders of UP Fintech Holding Limited | $ (6,589,431) | $ (43,207,732) | $ (7,510,049) |
Weighted average shares used in calculating net loss per ordinary share: | |||
Basic and diluted | 1,751,784,176 | 506,393,198 | 443,814,916 |
Net loss per ordinary shares | |||
Basic and diluted | $ 0 | $ (0.09) | $ (0.02) |
NET LOSS PER SHARE - Antidiluti
NET LOSS PER SHARE - Antidilutive securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share options | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive securities excluded from computation of earnings per share | 95,933,244 | 136,028,000 | 103,175,000 |
Restricted Share Units ("RSUs") | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive securities excluded from computation of earnings per share | 28,406,980 | 10,800,000 | 600,000 |
Angle preferred shares | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive securities excluded from computation of earnings per share | 0 | 419,736,104 | 419,736,104 |
Series A convertible redeemable preferred shares | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive securities excluded from computation of earnings per share | 0 | 279,389,307 | 279,389,307 |
Series B-1 convertible redeemable preferred shares | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive securities excluded from computation of earnings per share | 0 | 188,378,334 | 188,378,334 |
Series B-2 convertible redeemable preferred shares | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive securities excluded from computation of earnings per share | 0 | 76,812,654 | 76,812,654 |
Series B-3 convertible redeemable preferred shares | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive securities excluded from computation of earnings per share | 0 | 147,755,566 | 0 |
Series C convertible redeemable preferred shares | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive securities excluded from computation of earnings per share | 0 | 98,834,937 | 0 |
Series C-1 convertible redeemable preferred shares | |||
Antidilutive securities excluded from computation of earnings per share | |||
Antidilutive securities excluded from computation of earnings per share | 0 | 18,597,738 | 0 |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS (Details) - USD ($) | 1 Months Ended | ||
Feb. 28, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Amounts due from related parties | $ 3,484,434 | $ 8,518,358 | |
Amount due to related parties | 53,774,882 | ||
Interactive Brokers | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Amounts due from related parties | 185,047,211 | 9,619,438 | |
Amount due to related parties | 53,774,882 | ||
Xiaomi Corporation and its affiliates | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Amounts due from related parties | 397,590 | 919,964 | |
Alphalion Group Limited | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Amounts due from related parties | $ 3,060,113 | 886,844 | 3,320,113 |
Repayments of Debt | $ 260,000 | ||
Guangzhou 88 Technology Limited | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Amounts due from related parties | 786,586 | ||
Fast Connection Limited | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Amounts due from related parties | $ 2,200,000 | 2,200,000 | |
Officer of the Company | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Amounts due from related parties | $ 1,291,695 |
RELATED PARTY BALANCES AND TR_4
RELATED PARTY BALANCES AND TRANSACTIONS - Transactions with related parties (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Xiaomi Corporation and its affiliates | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Transactions with related parties | $ 517,134 | $ 1,297,395 | $ 497,635 |
Alphalion Group Limited | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Transactions with related parties | 617,500 | ||
Consideration for sale | 106,105 | ||
Guangzhou 88 Technology Limited | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Transactions with related parties | 755,524 | ||
Commissions, financing service fees and other revenues | Interactive Brokers | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Transactions with related parties | 38,089,982 | 19,664,763 | |
Execution and clearing fees | Interactive Brokers | |||
RELATED PARTY BALANCES AND TRANSACTIONS | |||
Transactions with related parties | $ 2,102,385 | $ 210,535 |
COLLATERALIZED TRANSACTIONS (De
COLLATERALIZED TRANSACTIONS (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
COLLATERALIZED TRANSACTIONS | ||
Total client margin asset | $ 332,460,879 | $ 2,036,488 |
Fulfillment of client margin financings | 42,704,203 | |
Fulfillment of client short sales | 10,815,155 | |
Securities lending to other brokers | 55,098,508 | |
Total collateral repledged | $ 108,617,866 |
Lease - Operating leases (Detai
Lease - Operating leases (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Total operating lease cost | $ 2,692,632 |
Short-term lease expenses | 378,830 |
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases | 2,389,515 |
Non-cash right-of-use assets in exchange for new lease obligations: Operating leases | $ 5,050,642 |
Weighted average remaining lease term: Operating leases | 4 years |
Weighted average discount rate: Operating leases | 6.00% |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 10 years |
Lease - Maturity analysis of th
Lease - Maturity analysis of the annual undiscounted cash flows (Details) | Dec. 31, 2019USD ($) |
Years ending December 31: | |
2020 | $ 2,672,568 |
2021 | 1,380,725 |
2022 | 867,840 |
2023 | 578,422 |
2024 | 488,389 |
2025 and after | 561,804 |
Total undiscounted operating lease payment | 6,549,748 |
Less: imputed interest | 708,090 |
Present value of operating lease liabilities | $ 5,841,658 |
Lease - Future minimum payments
Lease - Future minimum payments under non-cancelable operating leases (Details) | Dec. 31, 2019USD ($) |
Years ending December 31: | |
2019 | $ 1,799,942 |
2020 | 1,155,540 |
2021 and after | 91,249 |
Total | $ 3,046,731 |
COMMITMENTS AND CONTINGENCY - C
COMMITMENTS AND CONTINGENCY - Capital commitments (Details) - Hong Kong | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2019HKD ($) | Apr. 30, 2019USD ($) | Dec. 31, 2019HKD ($) | Dec. 31, 2019USD ($) | |
Business Acquisition [Line Items] | ||||
Equity interest acquired (as a percentage) | 100.00% | 100.00% | ||
Total consideration | $ 12,000,000 | $ 1,540,555 | ||
Capital commitment contracted but not paid | $ 8,400,000 | $ 1,078,389 |
REGULATORY REQUIREMENT (Details
REGULATORY REQUIREMENT (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
REGULATORY REQUIREMENT | ||
Net Capital | $ 47,702,408 | $ 5,998,988 |
Requirement | 18,452,774 | 1,297,056 |
Excess Net Capital | 29,249,634 | 4,701,932 |
TBNZ | ||
REGULATORY REQUIREMENT | ||
Net Capital | 26,633,575 | 4,940,125 |
Requirement | 17,279,461 | 1,292,056 |
Excess Net Capital | 9,354,114 | 3,648,069 |
Marsco | ||
REGULATORY REQUIREMENT | ||
Net Capital | 15,224,882 | |
Requirement | 250,000 | |
Excess Net Capital | 14,974,882 | |
US Tiger Securities | ||
REGULATORY REQUIREMENT | ||
Net Capital | 4,227,994 | 1,058,863 |
Requirement | 100,000 | 5,000 |
Excess Net Capital | 4,127,994 | $ 1,053,863 |
Tiger Brokers SG | ||
REGULATORY REQUIREMENT | ||
Net Capital | 1,615,957 | |
Requirement | 823,313 | |
Excess Net Capital | $ 792,644 |
EMPLOYEE BENEFIT PLAN (Details)
EMPLOYEE BENEFIT PLAN (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
EMPLOYEE BENEFIT PLAN | |||
Provision for employee benefits | $ 5,618,209 | $ 4,332,246 | $ 2,654,545 |
STATUTORY RESERVES AND RESTRI_2
STATUTORY RESERVES AND RESTRICTED NET ASSETS (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
STATUTORY RESERVES AND RESTRICTED NET ASSETS | |||
Statutory reserve funds | $ 724,008 | ||
Amount of restricted net asset unconsolidated subsidiaries | $ 40,221,504 | $ 26,348,780 | $ 15,870,509 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) $ in Millions | Mar. 25, 2020USD ($) |
SUBSEQUENT EVENT | |
Maximum number of ADSs authorized to be repurchased | $ 20 |