Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document Information [Line Items] | |
Entity Registrant Name | Molecular Data Inc. |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Period End Date | Dec. 31, 2019 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Central Index Key | 0001758736 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Ordinary shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 310,627,023 |
Common Class A | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 255,807,290 |
Common Class B | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 54,819,733 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Current Assets | |||
Cash and cash equivalents | $ 2,177 | ¥ 15,156 | ¥ 6,477 |
Restricted cash | 6,107 | 42,518 | |
Accounts receivable, net | 2,934 | 20,424 | 40,730 |
Unbilled receivables | 8,982 | 62,529 | 12,813 |
Notes receivable | 17,837 | 124,176 | 2,075 |
Inventories, net | 625 | 4,351 | 7,256 |
Loans to | 119 | 828 | 2,366 |
Prepayments and other current assets | 31,148 | 216,850 | 295,985 |
Total current assets | 69,929 | 486,832 | 367,702 |
Non-current assets | |||
Property and equipment, net | 159 | 1,106 | 1,762 |
Intangible assets, net | 224 | 1,560 | 2,134 |
Right-of-use asset, net | 462 | 3,219 | |
Total non-current assets | 845 | 5,885 | 3,896 |
Total Assets | 70,774 | 492,717 | 371,598 |
Current Liabilities (including current liabilities of the consolidated VIEs and its subsidiary without recourse to the primary beneficiary of RMB185,443 and RMB584,740 (US$ 83,993) as of December 31, 2018 and 2019, respectively) | |||
Short-term borrowings | 1,975 | 13,749 | 82 |
Accounts payable | 43,721 | 304,380 | 49,315 |
Deferred revenue | 15,396 | 107,181 | 153,467 |
Accrued expenses and other liabilities | 14,799 | 103,026 | 24,709 |
Income taxes payable | 56 | 387 | |
Amounts due to related parties | 20,678 | 143,958 | 27,844 |
Lease liabilities | 442 | 3,080 | |
Total current liabilities | 97,067 | 675,761 | 255,417 |
Non-current Liabilities (including non-current liabilities of the consolidated VIEs and its subsidiary without recourse to the primary beneficiary of RMB30 and RMB4,320 (US$621) as of December 31, 2018 and 2019, respectively) | |||
Amounts due to related parties | 4,805 | 33,453 | 177,776 |
Deferred government grants | 30 | ||
Total non-current liabilities | 4,805 | 33,453 | 177,806 |
Total Liabilities | 101,872 | 709,214 | 433,223 |
Commitments and contingencies | |||
Shareholders' deficit | |||
Ordinary shares (par value of US$0.00005 per share; 1,000,000,000 shares authorized; 310,627,024 shares issued and outstanding as of December 31, 2018 and 2019, respectively) | 14 | 98 | 98 |
Additional paid-in capital | 77,223 | 537,618 | 498,626 |
Accumulated other comprehensive loss | (45) | (316) | |
Accumulated deficit | (108,290) | (753,897) | (560,349) |
Total shareholders' deficit | (31,098) | (216,497) | (61,625) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 70,774 | ¥ 492,717 | ¥ 371,598 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018$ / shares | Dec. 31, 2018CNY (¥)shares |
Current liabilities | $ 97,067 | ¥ 675,761 | ¥ 255,417 | |
Non-current liabilities | $ 4,805 | ¥ 33,453 | ¥ 177,806 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.00005 | $ 0.00005 | ||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |
Common stock, shares issued | 310,627,024 | 310,627,024 | 310,627,024 | |
Common stock, shares outstanding | 310,627,024 | 310,627,024 | 310,627,024 | |
VIEs and subsidiary of the VIE | ||||
Current liabilities | $ 83,993 | ¥ 584,740 | ¥ 185,443 | |
Non-current liabilities | $ 621 | ¥ 4,320 | ¥ 30 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net revenues | $ 1,897,112 | ¥ 13,207,315 | ¥ 9,053,266 | ¥ 4,201,907 |
Cost of revenues | (1,882,637) | (13,106,542) | (8,973,097) | (4,151,673) |
Gross profit | 14,475 | 100,773 | 80,169 | 50,234 |
Sales and marketing expenses | (15,636) | (108,858) | (103,293) | (64,962) |
General and administrative expenses | (15,007) | (104,471) | (173,872) | (41,718) |
Research and development expenses | (6,469) | (45,038) | (36,889) | (18,608) |
Allowance for doubtful accounts | (4,972) | (34,618) | (1,907) | (14,677) |
Impairment of long-term investment | ¥ | 0 | 0 | (1,450) | |
Total operating expenses | (42,084) | (292,985) | (315,961) | (141,415) |
Operating loss | (27,609) | (192,212) | (235,792) | (91,181) |
Interest expenses, net | (627) | (4,367) | (19,049) | (16,828) |
Foreign exchange (loss) income | 27 | 185 | (3,033) | (552) |
Other income, net | 475 | 3,311 | 3,235 | 754 |
Loss before income tax | (27,734) | (193,083) | (254,639) | (107,807) |
Income tax expenses | (67) | (465) | 0 | 0 |
Net loss | (27,801) | (193,548) | (254,639) | (107,807) |
Net loss attributable to Molecular Data Inc. | $ (27,801) | ¥ (193,548) | ¥ (254,639) | ¥ (107,807) |
Loss per share: | ||||
Basic and diluted | (per share) | $ (0.09) | ¥ (0.62) | ¥ (0.82) | ¥ (0.35) |
Weighted average shares outstanding | ||||
Basic and diluted | shares | 310,627,024 | 310,627,024 | 310,627,024 | 310,627,024 |
Foreign currency translation adjustments, net of tax of nil | $ 45 | ¥ 316 | ¥ 0 | ¥ 0 |
Comprehensive loss | (27,756) | (193,232) | (254,639) | (107,807) |
Comprehensive loss attributable to Molecular Data Inc. | $ (27,756) | ¥ (193,232) | ¥ (254,639) | ¥ (107,807) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
Foreign currency translation adjustments, Tax | ¥ 0 | ¥ 0 | ¥ 0 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) ¥ in Thousands, $ in Thousands | Ordinary sharesUSD ($)shares | Ordinary sharesCNY (¥)shares | Additional paid-in capitalUSD ($) | Additional paid-in capitalCNY (¥) | Accumulated deficitUSD ($) | Accumulated deficitCNY (¥) | Accumulated other comprehensive incomeUSD ($) | Accumulated other comprehensive incomeCNY (¥) | USD ($) | CNY (¥) |
Balance at beginning of period at Dec. 31, 2016 | ¥ 98 | ¥ 131,933 | ¥ (197,903) | ¥ (65,872) | ||||||
Balance at beginning of period (in shares) at Dec. 31, 2016 | shares | 310,627,024 | 310,627,024 | ||||||||
Capital contribution from shareholders | 179,950 | 179,950 | ||||||||
Foreign exchange difference | 0 | |||||||||
Capital distribution to shareholders | (370) | (370) | ||||||||
Net loss for the year | (107,807) | (107,807) | ||||||||
Balance at end of period at Dec. 31, 2017 | ¥ 98 | 311,513 | (305,710) | 5,901 | ||||||
Balance at end of period (in shares) at Dec. 31, 2017 | shares | 310,627,024 | 310,627,024 | ||||||||
Capital contribution from shareholders | 69,904 | 69,904 | ||||||||
Share-based compensation | 124,022 | 124,022 | ||||||||
Foreign exchange difference | 0 | |||||||||
Capital distribution to shareholders | (6,813) | (6,813) | ||||||||
Net loss for the year | (254,639) | (254,639) | ||||||||
Balance at end of period at Dec. 31, 2018 | ¥ 98 | 498,626 | (560,349) | (61,625) | ||||||
Balance at end of period (in shares) at Dec. 31, 2018 | shares | 310,627,024 | 310,627,024 | ||||||||
Share-based compensation | 38,992 | 38,992 | ||||||||
Foreign exchange difference | ¥ (316) | $ (45) | (316) | |||||||
Net loss for the year | (193,548) | (27,801) | (193,548) | |||||||
Balance at end of period at Dec. 31, 2019 | $ 14 | ¥ 98 | $ 77,223 | ¥ 537,618 | $ (108,290) | ¥ (753,897) | $ (45) | ¥ (316) | $ (31,098) | ¥ (216,497) |
Balance at end of period (in shares) at Dec. 31, 2019 | shares | 310,627,024 | 310,627,024 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net loss | $ (27,801) | ¥ (193,548) | ¥ (254,639) | ¥ (107,807) |
Adjustments to reconcile net loss to net cash generated from operating activities: | ||||
Depreciation of property and equipment | 217 | 1,509 | 1,373 | 1,461 |
Amortization of intangible assets | 221 | 1,541 | 1,065 | 27 |
Non- cash lease expense of right-of-use asset | 701 | 4,881 | ||
Allowance for doubtful accounts | 4,972 | 34,618 | 1,609 | 14,677 |
Impairment of long-term investment | 0 | 0 | 1,450 | |
Share-based compensation expense | 5,601 | 38,992 | 124,022 | |
Changes in operating assets and liabilities: | ||||
Accounts receivable | 2,302 | 16,029 | 13,428 | 15,152 |
Unbilled receivables | (7,538) | (52,475) | 18,342 | (611) |
Inventories | 417 | 2,905 | 11,943 | (3,231) |
Notes receivable | (17,539) | (122,101) | 7,061 | (8,741) |
Prepayments and other current assets | 7,386 | 51,415 | (144,849) | 23,481 |
Accounts payable | 29,620 | 206,208 | 14,000 | (26,486) |
Notes payable | (4,158) | |||
Deferred revenue | (6,649) | (46,286) | 108,624 | (103,265) |
Accrued expenses and other liabilities | 11,459 | 79,774 | 12,660 | 11,314 |
Deferred government grants | (4) | (30) | (336) | 34 |
Income taxes payable | 56 | 387 | ||
Lease liabilities | (701) | (4,881) | ||
Amounts due to related parties | (16,484) | (114,759) | (48,939) | |
Net cash used in operating activities | (13,764) | (95,821) | (134,636) | (186,703) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchases of property and equipment | (123) | (853) | (484) | (537) |
Purchases of intangible assets | (139) | (967) | (1,758) | (1,395) |
Payment for long-term investment | (2,050) | |||
Net cash used in investing activities | (262) | (1,820) | (2,242) | (3,982) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from capital contribution | 69,904 | 179,950 | ||
Payment for capital distribution | (6,813) | (370) | ||
Proceeds from bank borrowings | 4,950 | |||
Repayment of bank borrowings | (9,485) | |||
Proceeds from loans from related parties | 12,767 | 88,881 | 166,989 | 55,096 |
Repayment of loans to related parties | (114) | (794) | (72,397) | (72,934) |
Proceeds from other borrowings | 14,778 | 102,883 | 712,823 | 1,080,638 |
Repayment of other borrowings | (5,971) | (41,571) | (833,173) | (974,996) |
Net cash generated from financing activities | 21,460 | 149,399 | 37,333 | 262,849 |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (80) | (561) | ||
Net increase/(decrease) in cash, cash equivalents and restricted cash | 7,354 | 51,197 | (99,545) | 72,164 |
Cash, cash equivalents and restricted cash at beginning of year | 930 | 6,477 | 106,022 | 33,858 |
Cash, cash equivalents and restricted cash at end of year | 8,284 | 57,674 | 6,477 | 106,022 |
Reconciliation of cash, cash equivalents and restricted cash | ||||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | 8,284 | 57,674 | 6,477 | 106,022 |
Supplemental disclosure of cash flow information: | ||||
Interest paid | (636) | (4,428) | (19,386) | (16,977) |
Interest received | 9 | 61 | ¥ 337 | ¥ 149 |
Income tax paid | (11) | (78) | ||
Supplemental disclosure of non-cash activities | ||||
Operating lease liabilities arising from obtaining right-of-use assets | $ 488 | ¥ 3,394 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2019 | |
Organization | |
Organization | 1. Molecular Data Inc. (the “Company”) was incorporated as an exempted company with limited liability in the Cayman Islands on February 28, 2018 by MOLBASE Inc. The Company is considered a foreign entity under the laws of the People’s Republic of China (the “PRC” or “China”). The Company does not conduct any substantive operations on its own but instead conducts its business operations through its subsidiaries, variable interest entities (the “VIEs”) and subsidiary of the VIE which are all located in the PRC and Hong Kong. The Company is principally engaged in chemical e-commerce business. The Company, through a series of transactions which are accounted for as a reorganization of entities and transfer of businesses under common control in 2018 (the ‘‘Reorganization’’), became the parent entity of its subsidiaries, VIEs and the subsidiary of the VIE. Accordingly, these consolidated financial statements reflect the historical operations of the Company as if the current organization structure had been in existence throughout the periods presented. As of December 31, 2019, the Company’s significant subsidiaries, VIEs and subsidiary of the VIE are as follows: Percentage of Date of Place of ownership by the Entity incorporation incorporation Company Principal activities Direct Indirect Subsidiaries: Molecular Data (HK) Limited (“MKD HK”) 14 March, 2018 Hong Kong 100 % — Investment holding Shanghai MOHUA Information Technology Co., Ltd. (“Shanghai MOHUA”) 27 July, 2018 PRC 100 % — E-commerce platform Shanghai MOKAI Biotechnology Co., Ltd. (“Shanghai MOKAI”) 11 December, 2018 PRC 100 % — Chemical trading Shanghai MOCHUANG Biotechnology Co., Ltd. (“Shanghai MOCHUANG”) 11 December, 2018 PRC 100 % — Chemical trading VIEs: Shanghai MOLBASE Technology Co., Ltd. (“Shanghai MOLBASE”) 26 January, 2014 PRC — 100 % E-commerce platform Jiaxing MOLBASE Information Technology Co., Ltd. (“Jiaxing MOLBASE”) 21 March, 2013 PRC — 100 % Chemical trading Subsidiary of the VIE: ShaanXi MOLBASE Biotechnology Co., Ltd. (“ShaanXi MOLBASE”) 29 August, 2017 PRC — 100 % Chemical trading The VIE agreements As PRC laws and regulations prohibit and restrict foreign ownership of internet value-added businesses, the Company operates its websites and conducts some of its business in the PRC through the VIEs and the subsidiary of the VIE. On December 21, 2018, the Company entered into share pledge agreements with the nominee shareholders of the VIE through its wholly-owned subsidiary, Shanghai MOHUA (the “WFOE”) in the PRC, for the equity interests in the VIEs held by the shareholders of the VIEs. In addition, the Company entered into a power of attorney and an exclusive call option agreement with the VIEs and nominee shareholders of the VIEs through its wholly-owned subsidiary in the PRC, which provide its wholly-owned subsidiary the power to direct the activities that most significantly affect the economic performance of the VIEs and to acquire the equity interests in the VIEs when permitted by the PRC laws, respectively. In addition, pursuant to the resolution of all shareholders of the Company and the resolution of the board of directors of the Company on December 21, 2018 (the “Resolutions”), the rights under the aforementioned power of attorney and the exclusive call option agreements were assigned to the board of directors of the Company (the “Board”) or any officer authorized by the Board, which entitle the Company or its WFOE to receive economic benefits from the VIEs that potentially could be significant to the VIEs. Despite the lack of technical majority ownership, the Company has effective control of the VIEs through a series of VIE Agreements and a parent-subsidiary relationship exists between the Company and the VIEs. Through the VIE Agreements, the shareholders of the VIEs effectively assigned all of their voting rights underlying their equity interest in the VIEs to the Company. In addition, through the exclusive business operation agreement, the Company, through its WFOE in the PRC, have the right to receive economic benefits from the VIEs that potentially could be significant to the VIEs. Therefore, the Company is considered the primary beneficiary of the VIEs and consolidates the VIEs and its subsidiary as required by SEC Regulation S-X Rule 3A‑02 and ASC topic 810 (“ASC 810”), Consolidation . The following is a summary of the VIE Agreements: Shareholders’ Voting Rights Proxy Agreements Pursuant to the irrevocable shareholders’ voting rights proxy agreements, Shanghai MOHUA is authorized by each of the nominee shareholders as their attorney-in-fact to exercise all shareholder rights under PRC law and the relevant articles of association, including but not limited to, exercise the right of operation and management, the sale or transfer or pledge or disposition of all or part of the nominee shareholders’ equity interests, and designate and appoint directors, chief executive officers and general manager, and other senior management members of the VIEs. Each shareholders’ voting rights proxy agreements will remain in force and irrevocable during the period when the nominee shareholders continue to be shareholders of the VIEs, unless Shanghai MOHUA issues adverse instructions in writing. Exclusive Option Agreements The nominee shareholders of the VIEs have granted Shanghai MOHUA the exclusive and irrevocable option to purchase from the nominee shareholders. The exercise price of the option to purchase all or part of the equity interests in the VIE will be RMB one dollar or the minimum amount of consideration permitted by the applicable PRC laws. Any proceeds received by the Nominee Shareholders from the exercise of the options shall be remitted to the WFOE or its designated party, to the extent permitted by the PRC law. Shanghai MOHUA may exercise such option after issuing the written consent of option purchase. In addition, the VIEs and their nominee shareholders have agreed that without prior written consent of Shanghai MOHUA, they will not create any pledge or encumbrance on their equity interests in the VIEs, or transfer or otherwise dispose of their equity interests in the VIEs. These agreements are not terminated until all of the equity interest of the VIE has been transferred to Shanghai MOHUA or the person(s) designated by Shanghai MOHUA. Neither the nominee shareholders nor the VIEs have the right to terminate or revoke the agreements under any circumstance. Equity Pledge Agreements Pursuant to the relevant equity pledge agreements, the nominee shareholders of the VIEs have pledged all of their equity interests in the VIEs to Shanghai MOHUA as collateral for all of the VIEs’ payments due to Shanghai MOHUA and to secure the VIEs’ obligations under the exclusive business cooperation agreement. The nominee shareholders shall not transfer or assign the equity interests, the rights and obligations in the equity pledge agreement or create or permit to create any pledges which may have an adverse effect on the rights or benefits of Shanghai MOHUA without Shanghai MOHUA’s written consent. Shanghai MOHUA is entitled to transfer or assign in full or in part the equity interests pledged. In the event of default, Shanghai MOHUA as the pledgee, will be entitled to dispose of the pledged equity. These agreements are not terminated until all of the technical support and consulting and service fees are fully paid under the exclusive technical support and service agreements and all of VIEs’ obligations have been terminated under the other controlling agreements. As of January 10, 2019, the Company completed the registration of all the equity pledges with the relevant office of the administration for industry and commerce in accordance with the PRC Property Rights Law. Exclusive technical support and service agreements Shanghai MOHUA and the VIEs entered into exclusive technical support and service agreements under which the VIEs engage Shanghai MOHUA as their exclusive provider of technical services and business consulting services. The VIEs shall pay to Shanghai MOHUA service fees quarterly, which is at Shanghai MOHUA’s discretion. Shanghai MOHUA shall have exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual property arising from the performance of the agreement. During the term of the agreements, the VIEs shall not accept any consultations and/or services provided by any third party and shall not cooperate with any third party for the provision of identical or similar services without prior consent of Shanghai MOHUA. These agreements are irrevocable and has a term of 10 years and can be unilaterally extended or amended by Shanghai MOHUA. Resolutions of all shareholders and resolution of the board of directors of Molecular Data Inc. The shareholders and the Company’s Board resolved that the rights under the shareholder voting rights proxy agreements and the exclusive call option agreements were assigned to the board of directors of the Company or any officer authorized by the Board. In the opinion of the Company’s legal counsel, (i) the ownership structure of the Company and its VIEs is in compliance with PRC laws and regulations; and (ii) the contractual arrangements with the VIEs and their shareholders are valid and binding, and not in violation of current PRC laws or regulations; (iii) the resolutions are valid in accordance with the articles of association of the Company and the Cayman Islands Law. However, uncertainties in the PRC legal system could cause the Company’s current ownership structure to be found in violation of existing and/or future PRC laws or regulations and could limit the Company’s ability to enforce its rights under these contractual arrangements. Furthermore, the nominee shareholders of the VIEs may have interests that are different from those of the Company, which could potentially increase the risk that they would seek to act contrary to the terms of the contractual agreements with the VIEs. In addition, if the current structure or any of the contractual arrangements were found to be in violation of any existing or future PRC laws or regulations, the Company may be subject to penalties, including but not be limited to, revocation of business and operating licenses, discontinuing or restricting business operations, restricting the Company’s right to collect revenues, temporary or permanent blocking of the Company’s internet financial services platforms, restructuring of the Company’s operations, imposition of additional conditions or requirements with which the Company may not be able to comply, or other regulatory or enforcement actions against the Company that could be harmful to its business. The imposition of any of these or other penalties could have a material adverse effect on the Company’s ability to conduct its business. Creditors of the VIEs have no recourse to the general credit of the Company, who is the primary beneficiary of the VIEs, through its wholly-owned subsidiary, Shanghai MOHUA. The Company did not provide any additional financial or other support that it was not previously contractually required to provide to the VIEs during the periods presented. The table sets forth the assets and liabilities of the VIEs and subsidiary of the VIE included in the Company’s consolidated balance sheets: As of December 31, 2018 2019 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 1,250 3,382 486 Restricted cash — 4,148 596 Accounts receivable, net 7,322 11,774 1,691 Unbilled receivables 2,925 41,211 5,920 Notes receivable 1,085 107,404 15,428 Inventories, net — 725 104 Prepayments and other current assets 83,759 132,152 18,982 Amounts due from related parties 5,307 95,651 13,739 Total current assets 101,648 396,447 56,946 Non-current assets: Property and equipment, net 411 1,049 151 Intangible assets, net 5 1,560 224 Right-of-use assets, net — 3,219 462 Total non-current assets 416 5,828 837 Total assets 102,064 402,275 57,783 Current liabilities: Short-term borrowings 82 — — Accounts payable 4,352 185,188 26,601 Accrued expenses and other liabilities 18,458 65,443 9,400 Income taxes payable — 387 56 Deferred revenue 43,860 68,662 9,863 Current portion of lease liabilities — 3,080 442 Amounts due to related parties 118,691 261,980 37,631 Total current liabilities 185,443 584,740 83,993 Non-current liabilities: Amounts due to related parties — 4,320 621 Deferred government grants 30 — — Total non-current liabilities 30 4,320 621 Total liabilities 185,473 589,060 84,614 The table sets forth the results of operations and cash flows of the VIEs and subsidiary of the VIE included in the Company’s consolidated statements of comprehensive loss and cash flows: For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Net revenues 210,807 2,187,683 10,208,796 1,466,402 Net loss (19,532) (19,451) (103,375) (14,850) Net cash used in operating activities (18,747) (48,944) (47,912) (6,882) Net cash used in investing activities (1,734) (99) (3,535) (508) Net cash generated from financing activities 21,211 49,135 57,727 8,292 As of December 31, 2018, and 2019, there were nil and RMB4,148 (US$596) for pledge or collateralization of the assets of the VIEs and the subsidiary of the VIE, respectively. The amount of the net liabilities of the VIEs and subsidiary of the VIE were RMB83,409 and RMB186,784 (US$26,831) as of December 31, 2018 and 2019, respectively. The creditors of the VIEs and the subsidiary of the VIE’s third-party liabilities did not have recourse to the general credit of the primary beneficiary in the normal course of business. |
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. (a) The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). The Company experienced a net loss of RMB193,548 (US$27,801) and negative cash flows from operating activities of RMB95,821 (US$13,764) for the year ended December 31, 2019. As of December 31, 2019, the Company had current liabilities exceeded its current asset by RMB188,929 (US$27,138). The management believes the Company has the ability to fulfill its financial obligations and will continue as a going concern considering a) subsequent events as disclosed in Note 21 that the cash inflows from Initial Public Offering with a total offering size of approximately US$61,870, though in January 2020, the Company purchased a US$58,400 note (the “Note”) issued by a third party, L. R. Capital Property Investment Limited. The Note matures in December 2023 and bears interest at 6% per annum, on an annual and non-compounded basis, payable in full at the maturity date. The Note may be redeemed in part or in full at the request of the Company. US$8,000 of the note was redeemed by the Company in June 2020, and b) supplemental agreements signed with related parties subsequently to extend the maturity of loans, with total amount of RMB143,958 (US$20,678), from December 31, 2020 to December 31, 2021. As a result, it is appropriate for the consolidated financial statements to be prepared on a going concern basis. (b) The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and the subsidiary of the VIE. All significant inter-company transactions and balances between the Company, its subsidiaries, the VIEs and subsidiary of the VIE have been eliminated upon consolidation. (c) The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and revenues and expenses during the reporting periods. Significant accounting estimates reflected in the Company’s consolidated financial statements include, but not limited to, estimating variable consideration, the useful lives of long-lived assets and intangible assets, determining the provision for accounts receivable and prepayments, determining the provision for inventories, impairment assessment for long-term investment and long-lived assets, accounting for share-based compensation, valuation allowance for deferred tax assets, measurement of right-of-use assets and lease liabilities. Changes in facts and circumstances may result in revised estimates. Actual results could materially differ from those estimates. (d) The functional currency of the Company and its Hong Kong subsidiary is the United States dollars (“US$”). The Company’s PRC subsidiaries, the VIEs and the subsidiary of the VIE determined their functional currency to be the Chinese Renminbi (“RMB”). The determination of functional currency is based on the criteria of ASC 830 , Foreign Currency Matters ("ASC 830") . The Company uses the RMB as its reporting currency. The financial statements of the Company and its Hong Kong subsidiary are translated from the functional currency to the reporting currency, RMB. Monetary assets and liabilities of the subsidiaries are translated into RMB using the exchange rate in effect at each balance sheet date. Income and expense items are translated at the average exchange rate prevailing during the fiscal year. Translation gains and losses are accumulated in other comprehensive loss, as a component of shareholders’ deficit in the consolidated financial statements. Transactions denominated in other than the functional currencies are remeasured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Financial assets and liabilities denominated in other than the functional currency are re-measured into the functional currency at the exchange rates prevailing at the balance sheet date. The foreign exchange differences are recorded in the consolidated statements of comprehensive loss. (e) Amounts in US$ are presented for the convenience of the readers and are translated at the noon buying rate of US$1.00 to RMB6.9618 on December 31, 2019 as published on the website of the United States Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at such rate. (f) Cash and cash equivalents consist of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. The Company considers all highly liquid investments that are readily convertible to known amounts of cash and with original maturities from the date of purchase of three months or less to be cash equivalents. (g) Restricted cash mainly represents cash held in escrow as security for financial service and related party’s credit facilities. The Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , effective January 1, 2017 retrospectively and presented restricted cash within the ending cash, cash equivalents, and restricted cash balance on the Company’s consolidated statements of cash flows for the periods presented. (h) Accounts receivable are carried at net realizable value. An allowance for doubtful debt is recorded in the period when loss is probable based on an assessment of specific evidence indicating troubled collection, historical experience, accounts aging and other factors. An accounts receivable is written off when it is deemed uncollectible. (i) Inventories of the Company are chemical products. Inventories are stated at the lower of cost or net realizable value. Costs of inventory are determined using the weighted average method. Adjustments to reduce the cost of inventories are made, if required, for decreases in sales prices, obsolescence or similar reductions in the estimated net realizable value. (j) Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets as follows: Category Estimated useful life Office equipment 1~3 years Leasehold improvements 5 years Repair and maintenance costs are charged to expenses as incurred. (k) Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets with finite useful lives are amortized using a straight-line method. The amortization method reflects the estimated pattern in which the economic benefits of the respective intangible assets are to be consumed. Intangible assets have estimated economic lives from the date of purchase as follows: Category Estimated economic life Purchased software 3 years The Company does not have any indefinite-lived intangible assets. (l) The Company’s long-term investment represents an equity method investment. Investments in equity investees represent investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC 323‑10, Investments-Equity Method and Joint Ventures : Overall . Under the equity method, the Company initially records its investment at cost and prospectively recognizes its proportionate share of each equity investee’s net profit or loss into its consolidated statements of comprehensive loss. The difference between the cost of the equity investee and the amount of the underlying equity in the net assets of the equity investee is recognized as equity method goodwill included in equity method investment on the consolidated balance sheets. The Company evaluates its equity method investment for impairment under ASC 323‑10. An impairment loss on the equity method investment is recognized in the consolidated statements of comprehensive loss when the decline in value is determined to be other-than-temporary. (m) The Company evaluates its long-lived assets or asset group, including intangible assets with finite lives, for impairment whenever events or changes in circumstances, such as a significant adverse change to market conditions that will impact the future use of the assets, indicate that the carrying amount of an asset or a group of long-lived assets may not be recoverable. When these events occur, the Company evaluates for impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available for the long-lived assets. No impairment loss was recognized for the years ended December 31, 2017, 2018 and 2019. (n) The Company’s financial instruments include cash and cash equivalents, restricted cash, accounts receivable, notes receivable, unbilled receivables, amounts due from related parties, other receivables, accounts payable, other payables, amounts due to related parties, and short-term borrowings. Other than the non-current amounts due to related parties, the carrying values of these financial instruments approximate to their fair values due to their short-term maturities, which are categorized in level 1. The Company applies ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), in measuring fair value. ASC 820 defines fair value, establishes a framework for measuring fair value and requires disclosures to be provided on fair value measurement. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: · Level 1—Observable inputs that reflect quoted prices in active markets for identical assets or liabilities. · Level 2—Include other inputs that are directly or indirectly observable in the marketplace. · Level 3—Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. The Company had no financial assets and liabilities measured and recorded at fair value on a non-recurring basis as of December 31, 2018 and 2019. The fair values of the Company’s non-current amounts due to related parties for disclosure purpose were RMB165,822 and RMB30,488 (US$4,379) as of December 31, 2018 and 2019, respectively, determined based on the discounted cash flow model using the market interest rates, which are level 2 significant other observable inputs. (o) Effective January 1, 2017, the Company elected to early adopt the requirements of Accounting Standards Update (ASU) 2014-09, Revenue from contracts with Customers (“ASC 606”) using the full retrospective method. The Company’s revenues are primarily derived from sales of chemical products through direct sales model, provision of matching service through marketplace model, provision of online membership services and provision of financial service. Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services under ASC 606. Chemical trading – direct sales model The Company sells chemical products to customers through an online platform or sales representatives. Sales contracts are entered into with each individual customer. The Company is the principal under the chemical direct sales model as the Company controls the chemical products with the ability to direct the use of, and obtain substantially all the remaining benefits from the chemical products before they are sold to its customers. The Company has a single performance obligation to sell chemical products to the buyers. The Company estimates the amount of variable consideration including sales return using the expected value method and includes variable consideration in the transaction price to the extent that it is probable that a significant reversal will not occur. Revenue for chemical trading under direct sales model is recognized at a point in time when the single performance obligation is satisfied when the chemical products are delivered to the customer. Chemical trading – marketplace model The Company matches product suppliers and platform buyers through its vendor-supplier matching recommendation system. The Company charges a commission fee to either the buyer or seller, depending on which party requests the matching services based on the commission agreements signed. The Company has a single performance obligation to provide the matching service. As the Company is a service provider and does not control the goods prior to transfer to the end customer, the Company recognizes commission fee as an agent on a net basis. The Company considers both the buyer and end customer to be its customers in the transaction. The Company estimates the amount of variable consideration including payment contingent on product delivery to platform buyer using the most likely amount method and includes in the transaction price to the extent that it is probable that a significant reversal will not occur. Revenue for chemical trading under marketplace model is recognized at a point in time when the performance obligation is satisfied upon the completion of the matching service. Online membership service The Company provides access to the users who subscribed for its online membership service to upload their product information on its online platform for promotion purpose and to attend the online trainings and marketing activities organized by the Company during the membership period. The Company typically charges a fixed fee over the membership period. The Company has a single performance obligation to stand ready to perform the membership services during the membership period. As the users simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs, revenue for online membership service is recognized ratably over the contract period. Prior to July 2019, for certain transactions under the direct sales model and marketplace model, the Company provides guarantee on the customers’ loan repayments to certain financial institutions. The guarantees are within the scope of ASC 460, Guarantees, which is accounted for at fair value at inception. The Company first allocates the fair value of the guarantee obligation from the total transaction price and allocates the remaining transaction price to the performance obligation under ASC 606. Subsequently, the Company amortizes the guarantee obligation into revenue outside the scope of ASC 606 as the Company is released from risk under the guarantee. The Company subsequently accounts for the contingent loss arising from the arrangement in accordance with ASC 450, Contingencies. Financial service Starting from July 2019, the Company enters into financial service contracts with its suppliers, customers, and financing providers, including banks and non-bank financial institutions, to facilitate lending arrangements between the financing providers and the customers and suppliers who use the Company’s online platforms. In addition to the loan facilitation service, the Company provides a guarantee to the financing providers on the loan repayments. The guarantees are within the scope of ASC 460, Guarantees. The Company typically charges its customers and suppliers a fixed fee based on a percentage of the loan amount for the facilitation service and the guarantee. The Company first allocates the transaction price to the guarantee obligation at fair value and allocates the remaining transaction price to the facilitation service under ASC 606. The Company recognizes revenue generated from the facilitation service when the Company successfully matches the customers or suppliers with the financing providers. The Company amortizes the guarantee obligation into revenue outside the scope of ASC 606 as the Company is released from risk under the guarantee. The Company subsequently accounts for the contingent loss arising from the guarantee arrangement in accordance with ASC 450, Contingencies. The transaction price allocated to guarantee obligation and the subsequent contingent loss were historically immaterial for the years ended December 31, 2017, 2018 and 2019. The maximum potential undiscounted future payments which the Company would be required to make under its guarantee obligation were RMB16,782, RMB26,433 and RMB39,773 (US$5,713) as of December 31, 2017, 2018 and 2019, respectively. When the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, and the right to consideration is conditioned only on the passage of time, the Company recognizes an unbilled receivable on the consolidated balance sheets. Contract assets, which arise when revenue is recognized prior to invoicing and the right to the amount due from customers is conditioned on something other than the passage of time, such as the completion of a related performance obligation, were nil as of December 31, 2018 and 2019. When a customer pays consideration before the Company transfers goods or services, the Company records its obligation as a contract liability, which is classified as deferred revenue. (p) Cost of revenue consists primarily of cost of chemical products sold. (q) Shipping and other handling costs are expensed as incurred and are included in sales and marketing expenses, which amounted to RMB11,802, RMB12,565 and RMB13,945 (US$2,003) for the years ended December 31, 2017, 2018 and 2019, respectively. (r) Research and development expenses consist primarily of personnel-related expenses and rental expenses incurred for the development of, enhancement to, and maintenance of the Company’s technology infrastructure to support its business operations. Research and development costs are expensed as incurred unless such costs qualify for capitalization as software development costs. In order to qualify for capitalization, (i) the preliminary project should be completed, (ii) management has committed to funding the project and it is probable that the project will be completed and the software will be used to perform the function intended, and (iii) it will result in significant additional functionality in the Company’s services. The amount of costs qualifying for capitalization has been immaterial during the periods presented, and as a result, all development costs were expensed as incurred. (s) The Company adopted ASU No. 2016-02, Leases (Topic 842 ), (“ASU 842”) from January 1, 2019 using the modified retrospective method and chose to apply the new standard as of the effective date and did not restate the comparable periods. The Company has elected the package of practical expedients, which allows the Company not to reassess (i) whether any expired or existing contracts as of the adoption date are or contain a lease, (ii) lease classification for any expired or existing leases as of the adoption date and (iii) initial direct costs for any existing leases as of the adoption date. The Company also elected the short-term lease exemption for all contracts with lease terms of 12 months or less. The Company determines if an arrangement is a lease or contains a lease at the inception. For operating leases, the Company recognizes a right-of-use asset (“ROU asset”) and a lease liability based on the present value of the lease payments over the lease term in the consolidated balance sheets at the lease commencement date. For finance leases, assets are included in property and equipment in the consolidated balance sheets. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s leases often include options to extend and lease terms include such extended terms when the Company is reasonably certain to exercise those options. Lease terms also include periods covered by options to terminate the leases when the Company is reasonably certain not to exercise those options. Upon adoption on January 1, 2019, the Company recognized total lease liabilities (including current and non-current) of RMB4,567 (US$656), with corresponding ROU assets of RMB4,706 (US$676), based on the present value of the remaining minimum rental payments under existing operating leases. The difference between the lease liabilities and ROU assets represented the prepaid rent balances of RMB139 (US$20). There is no impact of adoption on the Company’s opening retained earnings and current period net loss. (t) Government grants are provided by the relevant PRC municipal government authorities to subsidize the cost of certain research and development projects. The amount of such government grants are determined solely at the discretion of the relevant government authorities. The government grants of non-operating nature with no further conditions to be met are recorded as non-operating income in “Other income, net” when received. The government subsidies with certain operating conditions are recorded as liabilities when received and will be recorded as operating income when the conditions are met. For the years ended December 31, 2017, 2018 and 2019, government grants in the amounts of RMB698, RMB1,886 and RMB1,699 (US$244) were recognized as other income in the consolidated statements of comprehensive loss. (u) The Company follows the liability method of accounting for income taxes in accordance with ASC 740 Accounting for Income Taxes (“ASC 740”) , to account for uncertainty in income taxes . Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portions, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate. The Company evaluates its uncertain tax positions using the provisions of ASC 740, which prescribes a recognition threshold that a tax position is required to meet before being recognized in the consolidated financial statements. The Company recognizes in the consolidated financial statements the benefit of a tax position which is “more likely than not” to be sustained under examination based solely on the technical merits of the position assuming a review by tax authorities having all relevant information. Tax positions that meet the recognition threshold are measured using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. It is the Company’s policy to recognize interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense. (v) Share-Based Compensation The Company applies ASC 718, Compensation – Stock Compensation (“ASC 718”), to account for its employee share-based payments. In accordance with ASC 718, the Company determines whether an award should be classified and accounted for as a liability award or an equity award. All of the Company’s share-based awards to employees were classified as equity awards and are recognized in the consolidated financial statements based on their grant date fair values. For awards with only service conditions, the Company has elected to recognize compensation expense using the accelerated method for the awards that have a graded vesting schedule. The Company adopted Accounting Standard Update (“ASU”) ASU 2016‑09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting and elected to account for forfeitures as they occur. The Company, with the assistance of an independent third-party valuation firm, determined the fair value of the stock options granted to employees. The binominal option pricing model was applied in determining the estimated fair value of the options granted to employees. (w) Comprehensive income (loss) is defined as the changes in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive Income, requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the periods presented, the Company’s comprehensive loss includes only net loss and is presented in the consolidated statements of comprehensive loss. (x) In accordance with ASC 260, Earnings per Share , basic loss per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of unrestricted ordinary shares outstanding during the year. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such shares would be anti-dilutive. (y) The Company’s Chief Executive Officer as the chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole. In accordance with ASC 280, Segment Reporting , the Company has only one reportable segment. As the Company generates substantially all its revenues in the PRC and all of the Company’s long-lived assets are substantially located in the PRC, no geographical segments are presented. (z) Advertising costs are expensed as incurred in accordance with ASC 720‑35, Other Expense-Advertising Costs . The Company recognized advertising costs of RMB2,945, RMB25,324 and RMB10,693 (US$1,536) for the years ended December 31, 2017, 2018 and 2019, respectively. (aa) The Company is subject to VAT at the rate of 17%, 16%, 13%, 6%, 5% or 3%, depending on whether the entity is a general taxpayer or small-scale taxpayer, and related surcharges on revenue generated from providing services. VAT is reported as a deduction to revenue when incurred and amounted to RMB713,676, RMB1,466,302 and RMB1,798,899 (US$258,396) for the years ended December 31, 2017, 2018 and 2019, respectively. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in accrued expenses and other current liabilities on the consolidated balance sheets. The Company is also subject to certain government surcharges on the VAT payable in the PRC, which is recorded as cost of revenues. (bb) Direct and incremental costs incurred by the Company attributable to its proposed IPO of ordinary shares in the U.S. is deferred and recorded as deferred IPO costs in the consolidated balance sheets and will be charged against the gross proceeds received from such offering. (cc) The Company records liabilities for contingencies when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company's financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. (dd) Certain items reported in the prior year’s consolidated financial statements have been reclassified to conform with the current year’s presentation. (ee) Recent accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. The standard will replace “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. The standard is effective for public business entities for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted. The Company does not currently anticipate the adoption of this ASU to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement . The update eliminates, modifies, and adds certain disclosure requirements for fair value measurements. This update is effective in fiscal years, including interim periods, beginning after December 15, 2019, and early adoption is permitted. The added disclosure requirements and the modified disclosure on the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented. All other changes to disclosure requirements in this update should be applied retrospectively to all periods presented upon their effective date. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . This update simplifies the accounting for income taxes as part of the FASB’s overall initiative to reduce complexity in accounting standards. The amendments include removal of certain exceptions to the general principles of ASC 740, Income taxes, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The update is effective in fiscal years beginning after December 15, 2020, and interim periods therein, and early adoption is permitted. Certain amendments in this update should be applied retrospectively or modified retrospectively, all other amendments should be applied prospectively. The Company does not expect the impact of this guidance to have a material impact on the Company’s consolidated financial statements. |
Concentration of Risks
Concentration of Risks | 12 Months Ended |
Dec. 31, 2019 | |
Concentration of Risks | |
Concentration of Risks | 3. (a) Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, restricted cash and accounts receivable. The Company places its cash and cash equivalents and restricted cash with reputable financial institutions with high-credit ratings. There has been no recent history of default in relation to these financial institutions. The Company continues to monitor the financial strength of the financial institutions. Accounts receivable are typically unsecured and derived from revenue earned from customers in the PRC, which are exposed to credit risk. The risk is mitigated by credit evaluations the Company performs on its customers and its ongoing monitoring process of outstanding balances. (b) The success of the Company’s business going forward will rely in part on the Company’s ability to continue to obtain and expand business from existing suppliers and customers while also attracting new suppliers and customers. No supplier accounted for 10% or more of the Company’s total costs for the years ended December 31, 2017, 2018 and 2019 . No customer accounted for 10% or more of the Company’s revenues for the years ended December 31, 2017, 2018 and 2019 . (c) The Company participates in a dynamic and competitive high technology industry and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations or cash flows: changes in the overall demand for services; competitive pressures due to new entrants; advances and new trends in new technology; strategic relationships or customer relationships; regulatory considerations; and risks associated with the Company’s ability to attract and retain employees necessary to support its growth. The Company’s operations could be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than 20 years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC political, economic and social conditions. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective. (d) The Company transacts all of its business in RMB, which is not freely convertible into foreign currencies. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China (the ‘‘PBOC’’). However, the unification of the exchange rates does not imply that the RMB may be readily convertible into US$ or other foreign currencies. All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approval of foreign currency payments by the PBOC or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. (e) From July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. The (appreciation)/ depreciation of the RMB against US$ was approximately (5.8%), 5.0% and 1.6% in the years ended December 31, 2017, 2018 and 2019, respectively. The functional currency and the reporting currency of the Company and its Hong Kong subsidiary are the US$ and the RMB, respectively. Most of the Company’s PRC subsidiaries, the VIEs and subsidiary of the VIE’s revenues and costs are denominated in RMB, while a portion of cash and cash equivalents is denominated in U.S. dollars. Any significant revaluation of RMB may materially and adversely affect the Company’s cash flows, revenues, earnings and financial position in U.S. dollars. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Dec. 31, 2019 | |
Accounts Receivable, Net | |
Accounts Receivable, Net | 4. As of December 31, 2018 2019 RMB RMB US$ Accounts receivable 56,493 40,464 5,813 Allowance for doubtful accounts (15,763) (20,040) (2,879) Total accounts receivable, net 40,730 20,424 2,934 An analysis of the allowance for doubtful accounts is as follows: As of December 31, 2018 2019 RMB RMB US$ Balance at beginning of the year 21,192 15,763 2,264 Provision 6,827 8,487 1,220 Reversal (7,057) (4,210) (605) Write-off (5,199) — — Balance at end of the year 15,763 20,040 2,879 |
Inventories, Net
Inventories, Net | 12 Months Ended |
Dec. 31, 2019 | |
Inventories, Net | |
Inventories, Net | 5. Inventories consist of the following: As of December 31, 2018 2019 RMB RMB US$ Chemical products 7,256 4,351 625 Provision for obsolete stock — — — Total 7,256 4,351 625 No inventories were pledged for the years ended December 31, 2018 and 2019. |
Prepayments and Other Current A
Prepayments and Other Current Assets | 12 Months Ended |
Dec. 31, 2019 | |
Prepayments and Other Current Assets | |
Prepayments and Other Current Assets | 6. Prepayments and other current assets consist of the following: As of December 31, 2018 2019 RMB RMB US$ Prepayments to suppliers, net 290,060 156,958 22,545 Capitalized listing expenses — 35,261 5,065 Prepaid expenses 1,653 21,436 3,079 Other receivables, net 3,755 3,195 459 VAT recoverable 517 — — Total 295,985 216,850 31,148 As of December 31, 2018, and 2019, prepayments to suppliers and other receivables are net of allowance for doubtful accounts of RMB13,988 and RMB41,569 (US$5,971), respectively. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment, Net | |
Property and Equipment, Net | 7. Property and equipment consist of the following: As of December 31, 2018 2019 RMB RMB US$ At cost: Office equipment 3,693 4,133 594 Leasehold improvements 2,282 2,695 387 5,975 6,828 981 Less: accumulated depreciation (4,213) (5,722) (822) Property and equipment, net 1,762 1,106 159 For the years ended December 31, 2017, 2018 and 2019, the Company recorded depreciation expenses of RMB1,461, RMB1,373 and RMB1,509 (US$217), respectively, and are included in the following accounts: For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Sales and marketing expenses 935 853 892 128 General and administrative expenses 258 268 290 42 Research and development expenses 268 252 327 47 1,461 1,373 1,509 217 |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets, Net | |
Intangible Assets, Net | 8. Intangible assets consist of the following: As of December 31, 2018 2019 RMB RMB US$ At cost: Purchased software 3,243 4,210 605 3,243 4,210 605 Less: accumulated amortization (1,109) (2,650) (381) Intangible assets, net 2,134 1,560 224 For the years ended December 31, 2017, 2018 and 2019, the Company recorded amortization expenses of RMB27, RMB1,065 and RMB 1,541 (US$221), respectively. The intangible assets are amortized using the straight-line method, which is the Company’s best estimate of how these assets will be economically consumed over their respective estimated useful lives of 3 years. The annual estimated amortization expenses for the intangible assets for each of the next five years are as follows: RMB US$ For the years ending December 31, 2020 1,079 155 2021 404 58 2022 77 11 2023 and thereafter — — 1,560 224 |
Short-term Borrowings
Short-term Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Short-term Borrowings | |
Short-term Borrowings | 9. Short-term borrowings represented RMB denominated borrowings obtained from financial institutions with repayment terms of less than three months. These borrowings outstanding as of December 31, 2018 and December 31, 2019 bore weighted average interest rates of 10.00% per annum and 10.00% per annum and were secured by other receivables of RMB1,000 and nil, respectively. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses and Other Liabilities | |
Accrued Expenses and Other Liabilities | 10. The components of accrued expenses and other liabilities are as follows: As of December 31, 2018 2019 RMB RMB US$ Payroll and welfare payables 18,236 18,226 2,618 VAT and other tax payables 1,741 46,465 6,675 Accrued expenses 778 17,499 2,514 Deposits from customers 771 7,005 1,006 Logistic fee payables 3,183 4,172 599 Others — 9,659 1,387 24,709 103,026 14,799 |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2019 | |
Revenues | |
Revenues | 11. The following table presents a disaggregation of revenue from contracts with customers based on different service lines, for the years ended December 31, 2017, 2018 and 2019. All revenues are generated within the same reportable segment: For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Chemical trading – direct sales model 4,199,661 9,045,458 13,167,719 1,891,424 Chemical trading – market place model 972 4,387 26,513 3,808 Online membership service 1,274 3,421 10,650 1,530 Financial service — — 917 132 Others — — 1,516 218 4,201,907 9,053,266 13,207,315 1,897,112 Revenue recognized that was included in the deferred revenue balance at the beginning of the period was RMB148,108, RMB44,843 and RMB153,467 (US$22,044) for the years ended December 31, 2017, 2018 and 2019, respectively. The following table reflects the changes in unbilled receivables and contract liabilities as of December 31, 2018 and 2019: As of December 31, 2018 2019 RMB RMB US$ Unbilled receivables 12,813 62,529 8,982 Deferred revenue 153,467 107,181 15,396 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | 12. Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain arising in the Cayman Islands. Additionally, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed. Hong Kong MKD HK is incorporated in Hong Kong and is subject to Hong Kong profits tax rate of 16.5% on its activities conducted in Hong Kong. Additionally, upon payments of dividends by the Company to its shareholders, no HK withholding tax will be imposed. PRC The Company’s subsidiaries and VIEs in the PRC are subject to the statutory rate of 25%, in accordance with the Enterprise Income Tax law (the ''EIT Law''), which was effective since January 1, 2008, except for the following entities eligible for preferential tax rates. In October 2016, Shanghai MOLBASE qualified as High and New Technology Enterprise (“HNTE”) and was eligible for 15% preferential tax rate effective for three consecutive years. Shanghai MOLBASE reapplied for HNTE certificate in 2019 and the approval was obtained on January 10, 2020 with a retroactive effect from 2019 to 2021. In 2018 and 2019, Shanghai MOUHUA was qualified for small and micro-sized enterprise (“SME”) and became eligible for both the 50% reduction of taxable income and the reduced EIT rate of 20%. Accordingly, for the years ended December 31, 2018 and 2019, Shanghai MOHUA enjoyed 50% reduction of taxable income and the reduced EIT rate of 20%. Dividends, interests, rent or royalties payable by the Company’s PRC subsidiaries to non-PRC resident enterprises, and proceeds from any such non-resident enterprise investor’s disposition of assets (after deducting the net value of such assets) shall be subject to 10% withholding tax, unless the respective non-PRC resident enterprise’s jurisdiction of incorporation has a tax treaty or arrangements with China that provides for a reduced withholding tax rate or an exemption from withholding tax. The Company’s loss before income tax consisted of: For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Non-PRC — (124,022) (49,214) (7,068) PRC (107,807) (130,617) (143,869) (20,666) (107,807) (254,639) (193,083) (27,734) The current and deferred portions of income tax expenses included in the consolidated statements of comprehensive loss were as follows: For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Current — — 465 67 Deferred — — — — Income tax expenses — — 465 67 The reconciliations of the income tax expenses for the years ended December 31, 2017, 2018 and 2019 were as follows: For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Loss before income tax expense (107,807) (254,639) (193,083) (27,734) PRC statutory tax rate 25 % 25 % 25 % 25 % Income tax benefits at PRC statutory tax rate of 25% (26,952) (63,660) (48,271) (6,933) Additional deduction of research and development expenses — — (1,202) (173) Effect of different tax rates in different jurisdictions — 31,006 12,303 1,767 Preferential rate (4) 1,137 — — Statutory income/(expense) 1,432 (1,547) (3,569) (513) Non-deductible expenses 710 1,138 4,595 660 Current and deferred tax rate differences 145 (1,313) — — Change in valuation allowance 24,669 33,239 36,609 5,259 Income tax expenses — — 465 67 The significant components of the Company’s deferred tax assets were as follows: As of December 31, 2018 2019 RMB RMB US$ Non-current deferred tax assets Allowance for doubtful debt 787 9,442 1,356 Impairment of a long-term investment 363 — — Advertising expense 471 41 6 Additional social insurance 1,224 1,086 156 Accrued expense and other current liability — 1,907 274 Tax losses 11,062 38,040 5,464 Less: valuation allowance (13,907) (50,516) (7,256) Deferred tax assets, net — — — The Company operates through subsidiaries, VIEs and the subsidiary of the VIE and valuation allowance is considered for each of the entities on an individual basis. The Company recorded valuation allowance against deferred tax assets of those entities that were in a three-year cumulative financial loss and are not forecasting profits in the near future as of December 31, 2018 and 2019. In making such determination, the Company also evaluated a variety of factors including the Company’s operating history, accumulated deficit, existence of taxable temporary differences and reversal periods. As of December 31, 2019, the Company had taxable losses of RMB164,184 (US$23,584) derived from entities in the PRC, which can be carried forward per tax regulation to offset future net profit for income tax purposes. The PRC taxable loss will expire from December 31, 2020 to 2028 if not utilized. The Company plans to indefinitely reinvest the undistributed earnings of its subsidiaries, the VIEs and the subsidiary of the VIE located in the PRC. As of December 31, 2019, the total amount of undistributed earnings from these entities was nil and no withholding tax has been accrued. Unrecognized Tax Benefits As of December 31, 2018 and 2019, the Company had unrecognized tax benefit of nil and RMB3,006 (US$432), respectively, all of which were presented on a net basis against the deferred tax assets related to tax loss carry forwards on the consolidated balance sheets and of which, full valuation allowance would have been recorded. The unrecognized tax benefit was mainly related to income of the Company not properly recorded. It is possible that the amount of unrecognized benefits will further change in the next 12 months; however, an estimate of the range of the possible change cannot be made at this moment. As of December 31, 2018 and 2019, there were nil and RMB2,965 (US$426) of unrecognized tax benefits that, if ultimately recognized, would affect the annual effective tax rate excluding the relating impact on valuation allowance. A reconciliation of the beginning and ending amounts of unrecognized tax benefits was as follows: For the years ended December 31, 2018 2019 RMB RMB US$ Balance at the beginning of year — — — Additions based on tax positions related to the current year — 2,252 324 Additions related to prior year tax position — 1,092 157 Decreases related to prior year tax position — (338) (49) Balance at the end of year — 3,006 432 For the years ended December 31, 2017, 2018 and 2019, no interest expense was accrued in relation to the unrecognized tax benefits. Accumulated interest expenses recorded in unrecognized tax benefits were nil and nil as of December 31, 2018 and 2019, respectively. As of December 31, 2019, the tax years ended December 31, 2014 through 2019 for the PRC subsidiaries remain open for statutory examination by the PRC tax authorities. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions | |
Related Party Transactions | 13. Related parties Name Relationship with the Company Chang Dongliang Founder and principal shareholder of the parent company MOLBASE Inc. Parent company MOLBASE (HK) Limited Entity under common control of the parent company MOLBASE (Shanghai) Biotechnology Co., Ltd. Entity under common control of the parent company Shanghai MOYU Biotechnology Co., Ltd. Entity under common control of the parent company MOXIN Commercial Factoring (Shenzhen) Co., Ltd. Entity under common control of the parent company ShaanXi Molbase Logistic Management Co., Ltd. Entity under common control of the parent company The Company had the following significant related party transactions: For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Services provided MOLBASE (Shanghai) Biotechnology Co., Ltd. — — 9,968 1,432 Purchase of goods MOLBASE (Shanghai) Biotechnology Co., Ltd. — — 30,891 4,437 Purchase of services ShaanXi Molbase Logistic Management Co., Ltd. — — 999 143 Repayment of consideration MOLBASE (Shanghai) Biotechnology Co., Ltd. — — 104,190 14,966 Guarantee provided on loans for (1) MOLBASE (Shanghai) Biotechnology Co., Ltd. — — 50,505 7,255 Loans from MOLBASE (HK) Limited — 20,875 74,607 10,717 MOLBASE Inc. — — 14,274 2,050 Loans to ShaanXi Molbase Logistic Management Co., Ltd. — — 794 114 (1) In 2019, the Company provided guarantees of RMB50,505 (US$7,255) for MOLBASE (Shanghai) Biotechnology Co., Ltd.’s bank borrowings, which were all due in 2020. The Company had the following related party balances as of December 31, 2018 and 2019: As of December 31, 2018 2019 RMB RMB US$ Amounts due from related parties: Current: ShaanXi Molbase Logistic Management Co., Ltd. — 794 114 MOXIN Commercial Factoring (Shenzhen) Co., Ltd. 20 20 3 Shanghai MOYU Biotechnology Co., Ltd. 7 7 1 Chang Dongliang 6 7 1 MOLBASE Inc. 2,224 — — MOLBASE (HK) Limited 109 — — 828 119 Amounts due to related parties: Current: MOLBASE (HK) Limited (1) 21,550 77,520 11,135 MOLBASE (Shanghai) Biotechnology Co., Ltd. (3) — 60,533 8,695 MOLBASE Inc. (2) 4,461 5,905 848 Chang Dongliang 1,833 — — 27,844 143,958 20,678 Non-current: MOLBASE (HK) Limited (1) — 18,528 2,661 MOLBASE Inc. (2) — 10,605 1,523 MOLBASE (Shanghai) Biotechnology Co., Ltd. 177,776 2,487 358 Chang Dongliang — 1,833 263 177,776 33,453 4,805 (1) As of December 31, 2018 and 2019, amounts due to MOLBASE (HK) Limited represented the cash funding support to the Company for its operations. These balances were unsecured and interest-free . As of December 31, 2019, the due dates for the loans of RMB42,178 (US$6,059) and RMB18,528 (US$2,661) were December 31, 2020 and 2021, respectively, while other balances have no fixed terms of repayment. (2) As of December 31, 2018 and 2019, amounts due to MOLBASE Inc. represented the cash funding support to the Company for its operations. These balances were unsecured and interest-free. As of December 31, 2019, the due dates for the loans of RMB4,461 (US$641) and RMB10,605 (US$1,523) were December 31, 2020 and 2021, respectively, while other balances have no fixed terms of repayment. (3) As of December 31, 2018 and 2019, amounts due to MOLBASE (Shanghai) Biotechnology Co., Ltd. represented funds provided by Shanghai Biotech to the Company for its operations. Prior to the Reorganization, Shanghai Biotech obtained various short-term and long-term loans from banks to develop the chemical e-commerce business. Upon the Reorganization, the amounts due to Shanghai Biotech will be due in 18 months subsequent to the Reorganization. On June 28, 2019, the Company signed a supplemental agreement with Shanghai Biotech to extend the payment due date from 18 months to 24 months subsequent to the Reorganization. |
Share Capital
Share Capital | 12 Months Ended |
Dec. 31, 2019 | |
Share Capital | |
Share Capital | 14. The Company historically operated its business through its subsidiaries, VIEs and the subsidiary of the VIE. The Company, through a series of transactions which are accounted for as a reorganization of entities under common control, became the ultimate parent entity of these subsidiaries, VIEs and the subsidiary of the VIE on December 21, 2018. Accordingly, these consolidated financial statements reflect the historical operations of the Company as if the current organization structure had been in existence throughout the periods presented. On February 28, 2018, the Company issued 310,627,024 ordinary shares with par value of US$0.00005 to MOLBASE Inc. in connection with the incorporation of the Company (Note 1). As of December 31, 2019, 1,000,000,000 ordinary shares were authorized (December 31, 2018: 1,000,000,000) and 310,627,024 ordinary shares were outstanding (December 31, 2018: 310,627,024). The Company did not pay or declare any dividends on ordinary shares in the years ended December 31, 2017, 2018 and 2019. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Loss Per Share | |
Loss Per Share | 15. The following table sets forth the computation of basic and diluted loss per share for the following periods: For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Numerator: Net loss attributable to ordinary shareholders (107,807) (254,639) (193,548) (27,801) Denominator: Weighted-average number of ordinary shares outstanding - basic and diluted 310,627,024 310,627,024 310,627,024 310,627,024 Loss per share - basic and diluted (0.35) (0.82) (0.62) (0.09) |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-Based Compensation | |
Share-Based Compensation | 16. On November 27, 2018, the Board of Directors of the Company approved the 2018 Share Plan (the “Plan”) for the purpose of providing incentives and rewards to employees and executives. According to the Plan, 48,676,179 ordinary shares have been reserved to be issued to any qualified employees, directors and officers. Upon the approval of the Plan on November 27, 2018, the Company granted 41,108,821 options to employees at a pre-determined exercise price and reached mutual understanding of the terms and conditions. In 2019, the Company granted 1,996,516 options with the same terms and conditions. The options granted have expiration periods ranging from 7 to 10 years from the grant date and are subject to immediate vesting upon the grant date or under a graded vesting schedule over 1 to 4 years. Vested shares can be exercised by the employee at any time. A summary of the employee equity award activity under the 2018 Plan is stated below: Weighted- Weighted- average Weighted- average remaining Aggregate Number of average grant-date contractual intrinsic options exercise price fair value term value US$ US$ Years US$ Outstanding, December 31, 2018 41,108,821 0.43 0.71 22,199 Granted 1,996,516 0.80 — — — Exercised — — — — — Forfeited (3,593,282) 0.79 — — — Outstanding, December 31, 2019 39,512,055 0.42 0.75 172,436 Vested and expected to vest at December 31, 2019 39,512,055 0.42 0.75 172,436 Exercisable at December 31, 2019 29,850,733 0.29 0.78 133,981 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the fair value of the underlying stock at each reporting date, for those awards that have an exercise price below the estimated fair value of the Company’s shares. As of December 31, 2019, the Company had options outstanding to purchase an aggregate of 39,512,055 shares with an exercise price below the estimated fair value of the Company’s shares, resulting in an aggregate intrinsic value of RMB 1,200,465 (US$172,436). Total intrinsic value of options exercised for the years ended December 31, 2018 and 2019 was nil and nil, respectively. The total fair value of options vested during the years ended December 31, 2018 and 2019 was RMB201,913 and RMB207,524 (US$29,809), respectively. Fair value of employee share options The fair value of share options was determined using the binomial option valuation model, with the assistance from an independent third-party valuation firm. The binomial model requires the input of highly subjective assumptions, including the expected share price volatility and the suboptimal early exercise factor. The risk-free rate for periods within the contractual life of the options is based on the market yield of U.S. Treasury Bonds in effect at the time of grant. For expected volatilities, the Company has made reference to historical volatilities of several comparable companies. The suboptimal early exercise factor was estimated based on the Company’s expectation of exercise behavior of the grantees. The estimated fair value of the ordinary shares at the grant date, was determined with the assistance from an independent third-party valuation firm. The Company’s management is ultimately responsible for the determination of the estimated fair value of its ordinary shares. The assumptions used to estimate the fair value of the share options granted to employees are as follows: 2018 2019 Risk-free interest rate 2.93%~3.06 % 1.95%~1.96 % Expected volatility 55.46%~ 58.33 % 56.21%~56.25 % Suboptimal early exercise multiple 2.2 and 2.8 2.8 Expected post-vesting forfeiture rate % 5.0 % Fair value per ordinary share US$0.97 US$1.83 The aggregate fair value of the outstanding options at the grant date was determined to be RMB207,524 (US$29,809) and such amount is recognized as compensation expense using the accelerated method for all share options granted. As of December 31, 2019, there was RMB35,843 (US$5,149) of unrecognized share-based compensation cost, related to unvested options which is expected to be recognized over a weighted-average period of 0.73 years. Total unrecognized compensation cost may be adjusted for future changes when actual forfeitures incurred. The Company recognized share-based compensation expense for the years ended December 31, 2017, 2018 and 2019 as follows: For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Sales and marketing expenses — 7,942 6,860 985 General and administrative expenses — 109,956 28,773 4,133 Research and development expenses — 6,124 3,359 483 Total — 124,022 38,992 5,601 |
Restricted Net Assets
Restricted Net Assets | 12 Months Ended |
Dec. 31, 2019 | |
Restricted Net Assets | |
Restricted Net Assets | 17. The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries, the VIEs and subsidiary of the VIE. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries, the VIEs and subsidiary of the VIE only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s subsidiaries, the VIEs and subsidiary of the VIE. In accordance with the PRC Regulations on Enterprises with Foreign Investment and the articles of association of the Company’s PRC subsidiaries, a foreign-invested enterprise established in the PRC is required to provide certain statutory reserves, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A foreign-invested enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve fund until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors for all foreign-invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. The WFOE was established as a foreign-invested enterprise and, therefore, is subject to the above mandated restrictions on distributable profits. For the years ended December 31, 2018 and 2019, WFOE did not have after-tax profit and therefore no statutory reserves have been allocated. Foreign exchange and other regulations in the PRC may further restrict the Company’s subsidiaries, VIEs and the subsidiary of VIE from transferring funds to the Company in the form of dividends, loans and advances. Amounts restricted include paid-in capital and statutory reserves of the Company’s PRC subsidiaries and the equity of the VIEs, and the subsidiary of the VIE as determined pursuant to PRC generally accepted accounting principles. As of December 31, 2018, and 2019, restricted net assets of the Company’s PRC subsidiaries, the VIEs and the subsidiary of the VIE were RMB73 and RMB61,199 (US$8,791), respectively. |
Mainland China Employee Contrib
Mainland China Employee Contribution Plan | 12 Months Ended |
Dec. 31, 2019 | |
Mainland China Employee Contribution Plan | |
Mainland China Employee Contribution Plan | 18. As stipulated by the regulations of the PRC, full-time employees of the Company are entitled to various government statutory employee benefit plans, including medical insurance, maternity insurance, workplace injury insurance, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The Company is required to make contributions to the plan based on certain percentages of employees’ salaries. The total expenses the Company incurred for the plan were RMB13,284, RMB18,414 and RMB26,229 (US$3,768) for the years ended December 31, 2017, 2018 and 2019, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | 19. Leases are classified as operating leases or finance leases in accordance with ASC 842. The Company do not assume renewals in our determination of the lease term unless the renewals are reasonably certain to be exercised at lease commencement. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of December 31, 2019, the weighted average remaining lease term was 0.91 years and weighted average discount rate was 7.8% for the Company’s operating leases. Operating lease cost for the year ended December 31, 2019 was RMB2,930 (US$421). Short-term lease cost and variable lease cost was nil for the year ended December 31, 2019. Future lease payments under operating leases as of December 31, 2019 are as follows: Operating Leases RMB US$ 2020 3,272 470 2021 and thereafter — — Total undiscounted cash flows 3,272 470 Less imputed interest (192) (28) Total lease liabilities balance 3,080 442 Supplemental cash flow information related to operating leases is as follows: For the year ended December 31, 2019 RMB US$ Cash paid for amounts included in the measurement of lease liabilities: Cash payments for operating leases 1,620 233 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 20. As of December 31, 2019, the Company has the following commitments to purchase certain chemical products: RMB US$ 2020 106,535 15,302 2021 and thereafter — — 106,535 15,302 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events | |
Subsequent Events | 21. On December 30, 2019, the Company announced the pricing of its Initial Public Offering (“IPO”) of 11,500,000 American Depositary Shares (“ADS”), each ADS representing three of its Class A ordinary shares, at a price of US$5.38 per ADS for a total offering size of approximately US$61,870. The Company subsequently commenced trading on the Nasdaq Stock Market under the symbol “MKD”. AMTD Global Markets Limited, Fosun Hani Securities Limited and Boustead Securities, LLC acted as joint bookrunners of the offering and as the representatives of the underwriters. The closing date of the IPO was January 2, 2020.On January 6, 2020, the Company purchased a US$58,400 note (the “Note”) issued by a third party, L. R. Capital Property Investment Limited. The Note matures in December 2023 and bears interest at 6% per annum, on an annual and non-compounded basis, payable in full at the maturity date. The Note may be redeemed in part or in full at the request of the Company. US$8,000 of the note was redeemed by the Company on June 16, 2020. Beginning in January 2020, the emergence and wide spread of the novel Coronavirus (“COVID-19”) has resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities in China and elsewhere. Substantially all of the Company’s revenue and workforce are concentrated in China. Consequently, the COVID-19 outbreak may adversely affect the Company’s business operations, financial condition and operating results for 2020, including but not limited to negative impact to the Company’s total revenues, slower collection of accounts receivable and additional allowance for doubtful accounts. Because of the uncertainties surrounding the COVID-19 outbreak, the extent of the business disruption and the related financial impact cannot be reasonably estimated at this time. |
Parent Company Only Condensed F
Parent Company Only Condensed Financial Information | 12 Months Ended |
Dec. 31, 2019 | |
Parent Company Only Condensed Financial Information | |
Parent Company Only Condensed Financial Information | 22. Parent Company Only Condensed Financial Information Condensed balance sheets As of December 31, 2018 2019 RMB RMB US$ ASSETS Current Assets Cash and cash equivalents — 446 64 Prepayments and other current assets — 56,293 8,086 Total current assets — 56,739 8,150 Total Assets — 56,739 8,150 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current Liabilities Accrued expenses and other liabilities — 17,499 2,154 Amounts due to related parties — 36,126 5,189 Total current liabilities — 53,625 7,703 Non-current Liabilities Amounts due to related parties — 12,822 1,842 Loss in excess of investments in subsidiaries, the VIEs and subsidiary of the VIE 61,625 206,789 29,703 Total non-current liabilities 61,625 219,611 31,545 Total Liabilities 61,625 273,236 39,248 Shareholders’ deficit Ordinary shares (par value of US$0.00005 per share; 1,000,000,000 shares authorized; 310,627,024 shares issued and outstanding as of December 31, 2018 and 2019, respectively) 98 98 14 Additional paid-in capital 498,626 537,618 77,223 Accumulated other comprehensive loss — (316) (45) Accumulated deficit (560,349) (753,897) (108,290) Total shareholders’ deficit (61,625) (216,497) (31,098) TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT — 56,739 8,150 Condensed statements of comprehensive loss For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Sales and marketing expenses — (7,942) (6,860) (986) General and administrative expenses — (109,956) (38,428) (5,519) Research and development expenses — (6,124) (3,359) (482) Total operating expenses — (124,022) (48,647) (6,987) Operating loss — (124,022) (48,647) (6,987) Foreign exchange income — — 262 38 Share of losses from subsidiaries, the VIEs and subsidiary of the VIE (107,807) (130,617) (145,163) (20,852) Loss before income tax (107,807) (254,639) (193,548) (27,801) Income tax expenses — — — — Net loss (107,807) (254,639) (193,548) (27,801) Other comprehensive loss, net of tax of nil Foreign currency translation difference, net of tax of nil — — 316 45 Comprehensive loss (107,807) (254,639) (193,232) (27,756) Condensed statements of cash flows For the years ended December 31 2017 2018 2019 RMB RMB RMB US$ Net cash used in operating activities — — (9,709) (1,395) Net cash generated from investing activities — — — — Net cash generated from financing activities — — 10,155 1,459 Net increase in cash, cash equivalents and restricted cash — — 446 64 Cash, cash equivalents and restricted cash at beginning of year — — — — Cash, cash equivalents and restricted cash at end of year — — 446 64 Basis of presentation Condensed financial information is used for the presentation of the Company, or the parent company. The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company's consolidated financial statements except that the parent company used the equity method to account for investment in its subsidiaries, the VIEs and subsidiary of the VIE. The parent company records its investment in its subsidiaries, the VIEs and subsidiary of the VIE under the equity method of accounting as prescribed in ASC 323, Investments-Equity Method and Joint Ventures . Such investments are presented on the condensed balance sheets as "Loss in excess of investments in subsidiaries, the VIEs and subsidiary of the VIE" and their respective profit or loss as "Share of losses from subsidiaries, the VIEs and subsidiary of the VIE" on the condensed statements of comprehensive loss. Equity method accounting ceases when the carrying amount of the investment, including any additional financial support, in subsidiaries, the VIEs and subsidiary of the VIE is reduced to zero unless the parent company has guaranteed obligations of the subsidiaries, the VIEs and subsidiary of the VIE or is otherwise committed to provide further financial support. If the subsidiaries, the VIEs and the subsidiary of the VIE subsequently report net income, the parent company shall resume applying the equity method only after its share of that net income equals the share of net losses not recognized during the period the equity method was suspended. The parent company's condensed financial statements should be read in conjunction with the Company's consolidated financial statements. |
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 | (a) The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). The Company experienced a net loss of RMB193,548 (US$27,801) and negative cash flows from operating activities of RMB95,821 (US$13,764) for the year ended December 31, 2019. As of December 31, 2019, the Company had current liabilities exceeded its current asset by RMB188,929 (US$27,138). The management believes the Company has the ability to fulfill its financial obligations and will continue as a going concern considering a) subsequent events as disclosed in Note 21 that the cash inflows from Initial Public Offering with a total offering size of approximately US$61,870, though in January 2020, the Company purchased a US$58,400 note (the “Note”) issued by a third party, L. R. Capital Property Investment Limited. The Note matures in December 2023 and bears interest at 6% per annum, on an annual and non-compounded basis, payable in full at the maturity date. The Note may be redeemed in part or in full at the request of the Company. US$8,000 of the note was redeemed by the Company in June 2020, and b) supplemental agreements signed with related parties subsequently to extend the maturity of loans, with total amount of RMB143,958 (US$20,678), from December 31, 2020 to December 31, 2021. As a result, it is appropriate for the consolidated financial statements to be prepared on a going concern basis. |
Principles of consolidation | (b) The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and the subsidiary of the VIE. All significant inter-company transactions and balances between the Company, its subsidiaries, the VIEs and subsidiary of the VIE have been eliminated upon consolidation. |
Use of estimates | (c) The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and revenues and expenses during the reporting periods. Significant accounting estimates reflected in the Company’s consolidated financial statements include, but not limited to, estimating variable consideration, the useful lives of long-lived assets and intangible assets, determining the provision for accounts receivable and prepayments, determining the provision for inventories, impairment assessment for long-term investment and long-lived assets, accounting for share-based compensation, valuation allowance for deferred tax assets, measurement of right-of-use assets and lease liabilities. Changes in facts and circumstances may result in revised estimates. Actual results could materially differ from those estimates. |
Foreign currency | (d) The functional currency of the Company and its Hong Kong subsidiary is the United States dollars (“US$”). The Company’s PRC subsidiaries, the VIEs and the subsidiary of the VIE determined their functional currency to be the Chinese Renminbi (“RMB”). The determination of functional currency is based on the criteria of ASC 830 , Foreign Currency Matters ("ASC 830") . The Company uses the RMB as its reporting currency. The financial statements of the Company and its Hong Kong subsidiary are translated from the functional currency to the reporting currency, RMB. Monetary assets and liabilities of the subsidiaries are translated into RMB using the exchange rate in effect at each balance sheet date. Income and expense items are translated at the average exchange rate prevailing during the fiscal year. Translation gains and losses are accumulated in other comprehensive loss, as a component of shareholders’ deficit in the consolidated financial statements. Transactions denominated in other than the functional currencies are remeasured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Financial assets and liabilities denominated in other than the functional currency are re-measured into the functional currency at the exchange rates prevailing at the balance sheet date. The foreign exchange differences are recorded in the consolidated statements of comprehensive loss. |
Convenience translation | (e) Amounts in US$ are presented for the convenience of the readers and are translated at the noon buying rate of US$1.00 to RMB6.9618 on December 31, 2019 as published on the website of the United States Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at such rate. |
Cash and cash equivalents | (f) Cash and cash equivalents consist of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. The Company considers all highly liquid investments that are readily convertible to known amounts of cash and with original maturities from the date of purchase of three months or less to be cash equivalents. |
Restricted cash | (g) Restricted cash mainly represents cash held in escrow as security for financial service and related party’s credit facilities. The Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , effective January 1, 2017 retrospectively and presented restricted cash within the ending cash, cash equivalents, and restricted cash balance on the Company’s consolidated statements of cash flows for the periods presented. |
Accounts receivable and allowance for doubtful debt | (h) Accounts receivable are carried at net realizable value. An allowance for doubtful debt is recorded in the period when loss is probable based on an assessment of specific evidence indicating troubled collection, historical experience, accounts aging and other factors. An accounts receivable is written off when it is deemed uncollectible. |
Inventories | (i) Inventories of the Company are chemical products. Inventories are stated at the lower of cost or net realizable value. Costs of inventory are determined using the weighted average method. Adjustments to reduce the cost of inventories are made, if required, for decreases in sales prices, obsolescence or similar reductions in the estimated net realizable value. |
Property and equipment | (j) Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets as follows: Category Estimated useful life Office equipment 1~3 years Leasehold improvements 5 years Repair and maintenance costs are charged to expenses as incurred. |
Intangible assets | (k) Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets with finite useful lives are amortized using a straight-line method. The amortization method reflects the estimated pattern in which the economic benefits of the respective intangible assets are to be consumed. Intangible assets have estimated economic lives from the date of purchase as follows: Category Estimated economic life Purchased software 3 years The Company does not have any indefinite-lived intangible assets. |
Long-term investment | (l) The Company’s long-term investment represents an equity method investment. Investments in equity investees represent investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC 323‑10, Investments-Equity Method and Joint Ventures : Overall . Under the equity method, the Company initially records its investment at cost and prospectively recognizes its proportionate share of each equity investee’s net profit or loss into its consolidated statements of comprehensive loss. The difference between the cost of the equity investee and the amount of the underlying equity in the net assets of the equity investee is recognized as equity method goodwill included in equity method investment on the consolidated balance sheets. The Company evaluates its equity method investment for impairment under ASC 323‑10. An impairment loss on the equity method investment is recognized in the consolidated statements of comprehensive loss when the decline in value is determined to be other-than-temporary. |
Impairment of long-lived assets | (m) The Company evaluates its long-lived assets or asset group, including intangible assets with finite lives, for impairment whenever events or changes in circumstances, such as a significant adverse change to market conditions that will impact the future use of the assets, indicate that the carrying amount of an asset or a group of long-lived assets may not be recoverable. When these events occur, the Company evaluates for impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available for the long-lived assets. No impairment loss was recognized for the years ended December 31, 2017, 2018 and 2019. |
Fair value measurements of financial instruments | (n) The Company’s financial instruments include cash and cash equivalents, restricted cash, accounts receivable, notes receivable, unbilled receivables, amounts due from related parties, other receivables, accounts payable, other payables, amounts due to related parties, and short-term borrowings. Other than the non-current amounts due to related parties, the carrying values of these financial instruments approximate to their fair values due to their short-term maturities, which are categorized in level 1. The Company applies ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), in measuring fair value. ASC 820 defines fair value, establishes a framework for measuring fair value and requires disclosures to be provided on fair value measurement. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: · Level 1—Observable inputs that reflect quoted prices in active markets for identical assets or liabilities. · Level 2—Include other inputs that are directly or indirectly observable in the marketplace. · Level 3—Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. The Company had no financial assets and liabilities measured and recorded at fair value on a non-recurring basis as of December 31, 2018 and 2019. The fair values of the Company’s non-current amounts due to related parties for disclosure purpose were RMB165,822 and RMB30,488 (US$4,379) as of December 31, 2018 and 2019, respectively, determined based on the discounted cash flow model using the market interest rates, which are level 2 significant other observable inputs. |
Revenue recognition | (o) Effective January 1, 2017, the Company elected to early adopt the requirements of Accounting Standards Update (ASU) 2014-09, Revenue from contracts with Customers (“ASC 606”) using the full retrospective method. The Company’s revenues are primarily derived from sales of chemical products through direct sales model, provision of matching service through marketplace model, provision of online membership services and provision of financial service. Revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services under ASC 606. Chemical trading – direct sales model The Company sells chemical products to customers through an online platform or sales representatives. Sales contracts are entered into with each individual customer. The Company is the principal under the chemical direct sales model as the Company controls the chemical products with the ability to direct the use of, and obtain substantially all the remaining benefits from the chemical products before they are sold to its customers. The Company has a single performance obligation to sell chemical products to the buyers. The Company estimates the amount of variable consideration including sales return using the expected value method and includes variable consideration in the transaction price to the extent that it is probable that a significant reversal will not occur. Revenue for chemical trading under direct sales model is recognized at a point in time when the single performance obligation is satisfied when the chemical products are delivered to the customer. Chemical trading – marketplace model The Company matches product suppliers and platform buyers through its vendor-supplier matching recommendation system. The Company charges a commission fee to either the buyer or seller, depending on which party requests the matching services based on the commission agreements signed. The Company has a single performance obligation to provide the matching service. As the Company is a service provider and does not control the goods prior to transfer to the end customer, the Company recognizes commission fee as an agent on a net basis. The Company considers both the buyer and end customer to be its customers in the transaction. The Company estimates the amount of variable consideration including payment contingent on product delivery to platform buyer using the most likely amount method and includes in the transaction price to the extent that it is probable that a significant reversal will not occur. Revenue for chemical trading under marketplace model is recognized at a point in time when the performance obligation is satisfied upon the completion of the matching service. Online membership service The Company provides access to the users who subscribed for its online membership service to upload their product information on its online platform for promotion purpose and to attend the online trainings and marketing activities organized by the Company during the membership period. The Company typically charges a fixed fee over the membership period. The Company has a single performance obligation to stand ready to perform the membership services during the membership period. As the users simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs, revenue for online membership service is recognized ratably over the contract period. Prior to July 2019, for certain transactions under the direct sales model and marketplace model, the Company provides guarantee on the customers’ loan repayments to certain financial institutions. The guarantees are within the scope of ASC 460, Guarantees, which is accounted for at fair value at inception. The Company first allocates the fair value of the guarantee obligation from the total transaction price and allocates the remaining transaction price to the performance obligation under ASC 606. Subsequently, the Company amortizes the guarantee obligation into revenue outside the scope of ASC 606 as the Company is released from risk under the guarantee. The Company subsequently accounts for the contingent loss arising from the arrangement in accordance with ASC 450, Contingencies. Financial service Starting from July 2019, the Company enters into financial service contracts with its suppliers, customers, and financing providers, including banks and non-bank financial institutions, to facilitate lending arrangements between the financing providers and the customers and suppliers who use the Company’s online platforms. In addition to the loan facilitation service, the Company provides a guarantee to the financing providers on the loan repayments. The guarantees are within the scope of ASC 460, Guarantees. The Company typically charges its customers and suppliers a fixed fee based on a percentage of the loan amount for the facilitation service and the guarantee. The Company first allocates the transaction price to the guarantee obligation at fair value and allocates the remaining transaction price to the facilitation service under ASC 606. The Company recognizes revenue generated from the facilitation service when the Company successfully matches the customers or suppliers with the financing providers. The Company amortizes the guarantee obligation into revenue outside the scope of ASC 606 as the Company is released from risk under the guarantee. The Company subsequently accounts for the contingent loss arising from the guarantee arrangement in accordance with ASC 450, Contingencies. The transaction price allocated to guarantee obligation and the subsequent contingent loss were historically immaterial for the years ended December 31, 2017, 2018 and 2019. The maximum potential undiscounted future payments which the Company would be required to make under its guarantee obligation were RMB16,782, RMB26,433 and RMB39,773 (US$5,713) as of December 31, 2017, 2018 and 2019, respectively. When the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, and the right to consideration is conditioned only on the passage of time, the Company recognizes an unbilled receivable on the consolidated balance sheets. Contract assets, which arise when revenue is recognized prior to invoicing and the right to the amount due from customers is conditioned on something other than the passage of time, such as the completion of a related performance obligation, were nil as of December 31, 2018 and 2019. When a customer pays consideration before the Company transfers goods or services, the Company records its obligation as a contract liability, which is classified as deferred revenue. |
Cost of revenues | (p) Cost of revenue consists primarily of cost of chemical products sold. |
Shipping and other handling costs | (q) Shipping and other handling costs are expensed as incurred and are included in sales and marketing expenses, which amounted to RMB11,802, RMB12,565 and RMB13,945 (US$2,003) for the years ended December 31, 2017, 2018 and 2019, respectively. |
Research and development expenses | (r) Research and development expenses consist primarily of personnel-related expenses and rental expenses incurred for the development of, enhancement to, and maintenance of the Company’s technology infrastructure to support its business operations. Research and development costs are expensed as incurred unless such costs qualify for capitalization as software development costs. In order to qualify for capitalization, (i) the preliminary project should be completed, (ii) management has committed to funding the project and it is probable that the project will be completed and the software will be used to perform the function intended, and (iii) it will result in significant additional functionality in the Company’s services. The amount of costs qualifying for capitalization has been immaterial during the periods presented, and as a result, all development costs were expensed as incurred. |
Leases | (s) The Company adopted ASU No. 2016-02, Leases (Topic 842 ), (“ASU 842”) from January 1, 2019 using the modified retrospective method and chose to apply the new standard as of the effective date and did not restate the comparable periods. The Company has elected the package of practical expedients, which allows the Company not to reassess (i) whether any expired or existing contracts as of the adoption date are or contain a lease, (ii) lease classification for any expired or existing leases as of the adoption date and (iii) initial direct costs for any existing leases as of the adoption date. The Company also elected the short-term lease exemption for all contracts with lease terms of 12 months or less. The Company determines if an arrangement is a lease or contains a lease at the inception. For operating leases, the Company recognizes a right-of-use asset (“ROU asset”) and a lease liability based on the present value of the lease payments over the lease term in the consolidated balance sheets at the lease commencement date. For finance leases, assets are included in property and equipment in the consolidated balance sheets. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s leases often include options to extend and lease terms include such extended terms when the Company is reasonably certain to exercise those options. Lease terms also include periods covered by options to terminate the leases when the Company is reasonably certain not to exercise those options. Upon adoption on January 1, 2019, the Company recognized total lease liabilities (including current and non-current) of RMB4,567 (US$656), with corresponding ROU assets of RMB4,706 (US$676), based on the present value of the remaining minimum rental payments under existing operating leases. The difference between the lease liabilities and ROU assets represented the prepaid rent balances of RMB139 (US$20). There is no impact of adoption on the Company’s opening retained earnings and current period net loss. |
Government grants | (t) Government grants are provided by the relevant PRC municipal government authorities to subsidize the cost of certain research and development projects. The amount of such government grants are determined solely at the discretion of the relevant government authorities. The government grants of non-operating nature with no further conditions to be met are recorded as non-operating income in “Other income, net” when received. The government subsidies with certain operating conditions are recorded as liabilities when received and will be recorded as operating income when the conditions are met. For the years ended December 31, 2017, 2018 and 2019, government grants in the amounts of RMB698, RMB1,886 and RMB1,699 (US$244) were recognized as other income in the consolidated statements of comprehensive loss. |
Income taxes | (u) The Company follows the liability method of accounting for income taxes in accordance with ASC 740 Accounting for Income Taxes (“ASC 740”) , to account for uncertainty in income taxes . Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portions, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate. The Company evaluates its uncertain tax positions using the provisions of ASC 740, which prescribes a recognition threshold that a tax position is required to meet before being recognized in the consolidated financial statements. The Company recognizes in the consolidated financial statements the benefit of a tax position which is “more likely than not” to be sustained under examination based solely on the technical merits of the position assuming a review by tax authorities having all relevant information. Tax positions that meet the recognition threshold are measured using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. It is the Company’s policy to recognize interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense. |
Share-Based Compensation | (v) Share-Based Compensation The Company applies ASC 718, Compensation – Stock Compensation (“ASC 718”), to account for its employee share-based payments. In accordance with ASC 718, the Company determines whether an award should be classified and accounted for as a liability award or an equity award. All of the Company’s share-based awards to employees were classified as equity awards and are recognized in the consolidated financial statements based on their grant date fair values. For awards with only service conditions, the Company has elected to recognize compensation expense using the accelerated method for the awards that have a graded vesting schedule. The Company adopted Accounting Standard Update (“ASU”) ASU 2016‑09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting and elected to account for forfeitures as they occur. The Company, with the assistance of an independent third-party valuation firm, determined the fair value of the stock options granted to employees. The binominal option pricing model was applied in determining the estimated fair value of the options granted to employees. |
Comprehensive income (loss) | (w) Comprehensive income (loss) is defined as the changes in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive Income, requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the periods presented, the Company’s comprehensive loss includes only net loss and is presented in the consolidated statements of comprehensive loss. |
Loss per share | (x) In accordance with ASC 260, Earnings per Share , basic loss per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of unrestricted ordinary shares outstanding during the year. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such shares would be anti-dilutive. |
Segment reporting | (y) The Company’s Chief Executive Officer as the chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole. In accordance with ASC 280, Segment Reporting , the Company has only one reportable segment. As the Company generates substantially all its revenues in the PRC and all of the Company’s long-lived assets are substantially located in the PRC, no geographical segments are presented. |
Advertising expense | (z) Advertising costs are expensed as incurred in accordance with ASC 720‑35, Other Expense-Advertising Costs . The Company recognized advertising costs of RMB2,945, RMB25,324 and RMB10,693 (US$1,536) for the years ended December 31, 2017, 2018 and 2019, respectively. |
Value added taxes ("VAT"), business related tax and surcharges | (aa) The Company is subject to VAT at the rate of 17%, 16%, 13%, 6%, 5% or 3%, depending on whether the entity is a general taxpayer or small-scale taxpayer, and related surcharges on revenue generated from providing services. VAT is reported as a deduction to revenue when incurred and amounted to RMB713,676, RMB1,466,302 and RMB1,798,899 (US$258,396) for the years ended December 31, 2017, 2018 and 2019, respectively. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in accrued expenses and other current liabilities on the consolidated balance sheets. The Company is also subject to certain government surcharges on the VAT payable in the PRC, which is recorded as cost of revenues. |
Deferred initial public offering ("IPO") costs | (bb) Direct and incremental costs incurred by the Company attributable to its proposed IPO of ordinary shares in the U.S. is deferred and recorded as deferred IPO costs in the consolidated balance sheets and will be charged against the gross proceeds received from such offering. |
Commitments and contingencies | (cc) The Company records liabilities for contingencies when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company's financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. |
Comparatives | (dd) Certain items reported in the prior year’s consolidated financial statements have been reclassified to conform with the current year’s presentation. |
Recent accounting pronouncements | (ee) Recent accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. The standard will replace “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. The standard is effective for public business entities for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted. The Company does not currently anticipate the adoption of this ASU to have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework- Changes to the Disclosure Requirements for Fair Value Measurement . The update eliminates, modifies, and adds certain disclosure requirements for fair value measurements. This update is effective in fiscal years, including interim periods, beginning after December 15, 2019, and early adoption is permitted. The added disclosure requirements and the modified disclosure on the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented. All other changes to disclosure requirements in this update should be applied retrospectively to all periods presented upon their effective date. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . This update simplifies the accounting for income taxes as part of the FASB’s overall initiative to reduce complexity in accounting standards. The amendments include removal of certain exceptions to the general principles of ASC 740, Income taxes, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The update is effective in fiscal years beginning after December 15, 2020, and interim periods therein, and early adoption is permitted. Certain amendments in this update should be applied retrospectively or modified retrospectively, all other amendments should be applied prospectively. The Company does not expect the impact of this guidance to have a material impact on the Company’s consolidated financial statements. |
Organization (Tables)
Organization (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization | |
Schedule of Company's subsidiaries, VIEs and subsidiary of VIE | As of December 31, 2019, the Company’s significant subsidiaries, VIEs and subsidiary of the VIE are as follows: Percentage of Date of Place of ownership by the Entity incorporation incorporation Company Principal activities Direct Indirect Subsidiaries: Molecular Data (HK) Limited (“MKD HK”) 14 March, 2018 Hong Kong 100 % — Investment holding Shanghai MOHUA Information Technology Co., Ltd. (“Shanghai MOHUA”) 27 July, 2018 PRC 100 % — E-commerce platform Shanghai MOKAI Biotechnology Co., Ltd. (“Shanghai MOKAI”) 11 December, 2018 PRC 100 % — Chemical trading Shanghai MOCHUANG Biotechnology Co., Ltd. (“Shanghai MOCHUANG”) 11 December, 2018 PRC 100 % — Chemical trading VIEs: Shanghai MOLBASE Technology Co., Ltd. (“Shanghai MOLBASE”) 26 January, 2014 PRC — 100 % E-commerce platform Jiaxing MOLBASE Information Technology Co., Ltd. (“Jiaxing MOLBASE”) 21 March, 2013 PRC — 100 % Chemical trading Subsidiary of the VIE: ShaanXi MOLBASE Biotechnology Co., Ltd. (“ShaanXi MOLBASE”) 29 August, 2017 PRC — 100 % Chemical trading |
Schedule of assets and liabilities of the VIEs and subsidiary of the VIE included in the Company's consolidated balance sheets | As of December 31, 2018 2019 RMB RMB US$ ASSETS Current Assets Cash and cash equivalents — 446 64 Prepayments and other current assets — 56,293 8,086 Total current assets — 56,739 8,150 Total Assets — 56,739 8,150 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current Liabilities Accrued expenses and other liabilities — 17,499 2,154 Amounts due to related parties — 36,126 5,189 Total current liabilities — 53,625 7,703 Non-current Liabilities Amounts due to related parties — 12,822 1,842 Loss in excess of investments in subsidiaries, the VIEs and subsidiary of the VIE 61,625 206,789 29,703 Total non-current liabilities 61,625 219,611 31,545 Total Liabilities 61,625 273,236 39,248 Shareholders’ deficit Ordinary shares (par value of US$0.00005 per share; 1,000,000,000 shares authorized; 310,627,024 shares issued and outstanding as of December 31, 2018 and 2019, respectively) 98 98 14 Additional paid-in capital 498,626 537,618 77,223 Accumulated other comprehensive loss — (316) (45) Accumulated deficit (560,349) (753,897) (108,290) Total shareholders’ deficit (61,625) (216,497) (31,098) TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT — 56,739 8,150 |
Schedule of results of operations and cash flows of the VIEs and subsidiary of the VIE | For the years ended December 31 2017 2018 2019 RMB RMB RMB US$ Net cash used in operating activities — — (9,709) (1,395) Net cash generated from investing activities — — — — Net cash generated from financing activities — — 10,155 1,459 Net increase in cash, cash equivalents and restricted cash — — 446 64 Cash, cash equivalents and restricted cash at beginning of year — — — — Cash, cash equivalents and restricted cash at end of year — — 446 64 |
VIEs and subsidiary of the VIE | |
Organization | |
Schedule of assets and liabilities of the VIEs and subsidiary of the VIE included in the Company's consolidated balance sheets | As of December 31, 2018 2019 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 1,250 3,382 486 Restricted cash — 4,148 596 Accounts receivable, net 7,322 11,774 1,691 Unbilled receivables 2,925 41,211 5,920 Notes receivable 1,085 107,404 15,428 Inventories, net — 725 104 Prepayments and other current assets 83,759 132,152 18,982 Amounts due from related parties 5,307 95,651 13,739 Total current assets 101,648 396,447 56,946 Non-current assets: Property and equipment, net 411 1,049 151 Intangible assets, net 5 1,560 224 Right-of-use assets, net — 3,219 462 Total non-current assets 416 5,828 837 Total assets 102,064 402,275 57,783 Current liabilities: Short-term borrowings 82 — — Accounts payable 4,352 185,188 26,601 Accrued expenses and other liabilities 18,458 65,443 9,400 Income taxes payable — 387 56 Deferred revenue 43,860 68,662 9,863 Current portion of lease liabilities — 3,080 442 Amounts due to related parties 118,691 261,980 37,631 Total current liabilities 185,443 584,740 83,993 Non-current liabilities: Amounts due to related parties — 4,320 621 Deferred government grants 30 — — Total non-current liabilities 30 4,320 621 Total liabilities 185,473 589,060 84,614 |
Schedule of results of operations and cash flows of the VIEs and subsidiary of the VIE | For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Net revenues 210,807 2,187,683 10,208,796 1,466,402 Net loss (19,532) (19,451) (103,375) (14,850) Net cash used in operating activities (18,747) (48,944) (47,912) (6,882) Net cash used in investing activities (1,734) (99) (3,535) (508) Net cash generated from financing activities 21,211 49,135 57,727 8,292 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Summary of estimated useful lives of property and equipment | Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets as follows: Category Estimated useful life Office equipment 1~3 years Leasehold improvements 5 years |
Summary of estimated economic lives of intangible assets from the date of purchase | Intangible assets have estimated economic lives from the date of purchase as follows: Category Estimated economic life Purchased software 3 years |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounts Receivable, Net | |
Schedule of accounts receivable, net | As of December 31, 2018 2019 RMB RMB US$ Accounts receivable 56,493 40,464 5,813 Allowance for doubtful accounts (15,763) (20,040) (2,879) Total accounts receivable, net 40,730 20,424 2,934 |
Schedule of analysis of the allowance for doubtful accounts | As of December 31, 2018 2019 RMB RMB US$ Balance at beginning of the year 21,192 15,763 2,264 Provision 6,827 8,487 1,220 Reversal (7,057) (4,210) (605) Write-off (5,199) — — Balance at end of the year 15,763 20,040 2,879 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventories, Net | |
Summary of inventories | As of December 31, 2018 2019 RMB RMB US$ Chemical products 7,256 4,351 625 Provision for obsolete stock — — — Total 7,256 4,351 625 |
Prepayments and Other Current_2
Prepayments and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepayments and Other Current Assets | |
Schedule of prepayments and other current assets | As of December 31, 2018 2019 RMB RMB US$ Prepayments to suppliers, net 290,060 156,958 22,545 Capitalized listing expenses — 35,261 5,065 Prepaid expenses 1,653 21,436 3,079 Other receivables, net 3,755 3,195 459 VAT recoverable 517 — — Total 295,985 216,850 31,148 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment, Net | |
Schedule of property and equipment | As of December 31, 2018 2019 RMB RMB US$ At cost: Office equipment 3,693 4,133 594 Leasehold improvements 2,282 2,695 387 5,975 6,828 981 Less: accumulated depreciation (4,213) (5,722) (822) Property and equipment, net 1,762 1,106 159 |
Schedule of depreciation expenses | For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Sales and marketing expenses 935 853 892 128 General and administrative expenses 258 268 290 42 Research and development expenses 268 252 327 47 1,461 1,373 1,509 217 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible Assets, Net | |
Schedule of intangible assets, net | As of December 31, 2018 2019 RMB RMB US$ At cost: Purchased software 3,243 4,210 605 3,243 4,210 605 Less: accumulated amortization (1,109) (2,650) (381) Intangible assets, net 2,134 1,560 224 |
Schedule of annual estimated amortization expenses for intangible assets | RMB US$ For the years ending December 31, 2020 1,079 155 2021 404 58 2022 77 11 2023 and thereafter — — 1,560 224 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses and Other Liabilities | |
Schedule of accrued expenses and other liabilities | As of December 31, 2018 2019 RMB RMB US$ Payroll and welfare payables 18,236 18,226 2,618 VAT and other tax payables 1,741 46,465 6,675 Accrued expenses 778 17,499 2,514 Deposits from customers 771 7,005 1,006 Logistic fee payables 3,183 4,172 599 Others — 9,659 1,387 24,709 103,026 14,799 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenues | |
Schedule of disaggregation of revenue from contracts with customers | For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Chemical trading – direct sales model 4,199,661 9,045,458 13,167,719 1,891,424 Chemical trading – market place model 972 4,387 26,513 3,808 Online membership service 1,274 3,421 10,650 1,530 Financial service — — 917 132 Others — — 1,516 218 4,201,907 9,053,266 13,207,315 1,897,112 |
Schedule of changes in unbilled receivables and contract liabilities | As of December 31, 2018 2019 RMB RMB US$ Unbilled receivables 12,813 62,529 8,982 Deferred revenue 153,467 107,181 15,396 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of loss before income tax | For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Non-PRC — (124,022) (49,214) (7,068) PRC (107,807) (130,617) (143,869) (20,666) (107,807) (254,639) (193,083) (27,734) |
Schedule of income tax expenses | For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Current — — 465 67 Deferred — — — — Income tax expenses — — 465 67 |
Schedule of reconciliations of the income tax expenses | For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Loss before income tax expense (107,807) (254,639) (193,083) (27,734) PRC statutory tax rate 25 % 25 % 25 % 25 % Income tax benefits at PRC statutory tax rate of 25% (26,952) (63,660) (48,271) (6,933) Additional deduction of research and development expenses — — (1,202) (173) Effect of different tax rates in different jurisdictions — 31,006 12,303 1,767 Preferential rate (4) 1,137 — — Statutory income/(expense) 1,432 (1,547) (3,569) (513) Non-deductible expenses 710 1,138 4,595 660 Current and deferred tax rate differences 145 (1,313) — — Change in valuation allowance 24,669 33,239 36,609 5,259 Income tax expenses — — 465 67 |
Schedule of components of the Company's deferred tax assets | As of December 31, 2018 2019 RMB RMB US$ Non-current deferred tax assets Allowance for doubtful debt 787 9,442 1,356 Impairment of a long-term investment 363 — — Advertising expense 471 41 6 Additional social insurance 1,224 1,086 156 Accrued expense and other current liability — 1,907 274 Tax losses 11,062 38,040 5,464 Less: valuation allowance (13,907) (50,516) (7,256) Deferred tax assets, net — — — |
Schedule of reconciliation of unrecognized tax benefit | For the years ended December 31, 2018 2019 RMB RMB US$ Balance at the beginning of year — — — Additions based on tax positions related to the current year — 2,252 324 Additions related to prior year tax position — 1,092 157 Decreases related to prior year tax position — (338) (49) Balance at the end of year — 3,006 432 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions | |
Schedule of related party | Name Relationship with the Company Chang Dongliang Founder and principal shareholder of the parent company MOLBASE Inc. Parent company MOLBASE (HK) Limited Entity under common control of the parent company MOLBASE (Shanghai) Biotechnology Co., Ltd. Entity under common control of the parent company Shanghai MOYU Biotechnology Co., Ltd. Entity under common control of the parent company MOXIN Commercial Factoring (Shenzhen) Co., Ltd. Entity under common control of the parent company ShaanXi Molbase Logistic Management Co., Ltd. Entity under common control of the parent company |
Schedule of significant related party transactions | For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Services provided MOLBASE (Shanghai) Biotechnology Co., Ltd. — — 9,968 1,432 Purchase of goods MOLBASE (Shanghai) Biotechnology Co., Ltd. — — 30,891 4,437 Purchase of services ShaanXi Molbase Logistic Management Co., Ltd. — — 999 143 Repayment of consideration MOLBASE (Shanghai) Biotechnology Co., Ltd. — — 104,190 14,966 Guarantee provided on loans for (1) MOLBASE (Shanghai) Biotechnology Co., Ltd. — — 50,505 7,255 Loans from MOLBASE (HK) Limited — 20,875 74,607 10,717 MOLBASE Inc. — — 14,274 2,050 Loans to ShaanXi Molbase Logistic Management Co., Ltd. — — 794 114 (1) In 2019, the Company provided guarantees of RMB50,505 (US$7,255) for MOLBASE (Shanghai) Biotechnology Co., Ltd.’s bank borrowings, which were all due in 2020. The Company had the following related party balances as of December 31, 2018 and 2019: As of December 31, 2018 2019 RMB RMB US$ Amounts due from related parties: Current: ShaanXi Molbase Logistic Management Co., Ltd. — 794 114 MOXIN Commercial Factoring (Shenzhen) Co., Ltd. 20 20 3 Shanghai MOYU Biotechnology Co., Ltd. 7 7 1 Chang Dongliang 6 7 1 MOLBASE Inc. 2,224 — — MOLBASE (HK) Limited 109 — — 828 119 Amounts due to related parties: Current: MOLBASE (HK) Limited (1) 21,550 77,520 11,135 MOLBASE (Shanghai) Biotechnology Co., Ltd. (3) — 60,533 8,695 MOLBASE Inc. (2) 4,461 5,905 848 Chang Dongliang 1,833 — — 27,844 143,958 20,678 Non-current: MOLBASE (HK) Limited (1) — 18,528 2,661 MOLBASE Inc. (2) — 10,605 1,523 MOLBASE (Shanghai) Biotechnology Co., Ltd. 177,776 2,487 358 Chang Dongliang — 1,833 263 177,776 33,453 4,805 (1) As of December 31, 2018 and 2019, amounts due to MOLBASE (HK) Limited represented the cash funding support to the Company for its operations. These balances were unsecured and interest-free . As of December 31, 2019, the due dates for the loans of RMB42,178 (US$6,059) and RMB18,528 (US$2,661) were December 31, 2020 and 2021, respectively, while other balances have no fixed terms of repayment. (2) As of December 31, 2018 and 2019, amounts due to MOLBASE Inc. represented the cash funding support to the Company for its operations. These balances were unsecured and interest-free. As of December 31, 2019, the due dates for the loans of RMB4,461 (US$641) and RMB10,605 (US$1,523) were December 31, 2020 and 2021, respectively, while other balances have no fixed terms of repayment. (3) As of December 31, 2018 and 2019, amounts due to MOLBASE (Shanghai) Biotechnology Co., Ltd. represented funds provided by Shanghai Biotech to the Company for its operations. Prior to the Reorganization, Shanghai Biotech obtained various short-term and long-term loans from banks to develop the chemical e-commerce business. Upon the Reorganization, the amounts due to Shanghai Biotech will be due in 18 months subsequent to the Reorganization. On June 28, 2019, the Company signed a supplemental agreement with Shanghai Biotech to extend the payment due date from 18 months to 24 months subsequent to the Reorganization. |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Loss Per Share | |
Schedule of basic and diluted loss per share | For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Numerator: Net loss attributable to ordinary shareholders (107,807) (254,639) (193,548) (27,801) Denominator: Weighted-average number of ordinary shares outstanding - basic and diluted 310,627,024 310,627,024 310,627,024 310,627,024 Loss per share - basic and diluted (0.35) (0.82) (0.62) (0.09) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-Based Compensation | |
Schedule of equity award activity | A summary of the employee equity award activity under the 2018 Plan is stated below: Weighted- Weighted- average Weighted- average remaining Aggregate Number of average grant-date contractual intrinsic options exercise price fair value term value US$ US$ Years US$ Outstanding, December 31, 2018 41,108,821 0.43 0.71 22,199 Granted 1,996,516 0.80 — — — Exercised — — — — — Forfeited (3,593,282) 0.79 — — — Outstanding, December 31, 2019 39,512,055 0.42 0.75 172,436 Vested and expected to vest at December 31, 2019 39,512,055 0.42 0.75 172,436 Exercisable at December 31, 2019 29,850,733 0.29 0.78 133,981 |
Schedule of assumptions used to estimate the fair value | The assumptions used to estimate the fair value of the share options granted to employees are as follows: 2018 2019 Risk-free interest rate 2.93%~3.06 % 1.95%~1.96 % Expected volatility 55.46%~ 58.33 % 56.21%~56.25 % Suboptimal early exercise multiple 2.2 and 2.8 2.8 Expected post-vesting forfeiture rate % 5.0 % Fair value per ordinary share US$0.97 US$1.83 |
Schedule of share-based compensation expense | For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Sales and marketing expenses — 7,942 6,860 985 General and administrative expenses — 109,956 28,773 4,133 Research and development expenses — 6,124 3,359 483 Total — 124,022 38,992 5,601 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of future lease payments under operating leases | Future lease payments under operating leases as of December 31, 2019 are as follows: Operating Leases RMB US$ 2020 3,272 470 2021 and thereafter — — Total undiscounted cash flows 3,272 470 Less imputed interest (192) (28) Total lease liabilities balance 3,080 442 |
Supplemental cash flow information related to operating leases | For the year ended December 31, 2019 RMB US$ Cash paid for amounts included in the measurement of lease liabilities: Cash payments for operating leases 1,620 233 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Schedule of commitments to purchase certain chemical products | As of December 31, 2019, the Company has the following commitments to purchase certain chemical products: RMB US$ 2020 106,535 15,302 2021 and thereafter — — 106,535 15,302 |
Parent Company Only Condensed_2
Parent Company Only Condensed Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Parent Company Only Condensed Financial Information | |
Schedule of Condensed balance sheets of Parent Company | As of December 31, 2018 2019 RMB RMB US$ ASSETS Current Assets Cash and cash equivalents — 446 64 Prepayments and other current assets — 56,293 8,086 Total current assets — 56,739 8,150 Total Assets — 56,739 8,150 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current Liabilities Accrued expenses and other liabilities — 17,499 2,154 Amounts due to related parties — 36,126 5,189 Total current liabilities — 53,625 7,703 Non-current Liabilities Amounts due to related parties — 12,822 1,842 Loss in excess of investments in subsidiaries, the VIEs and subsidiary of the VIE 61,625 206,789 29,703 Total non-current liabilities 61,625 219,611 31,545 Total Liabilities 61,625 273,236 39,248 Shareholders’ deficit Ordinary shares (par value of US$0.00005 per share; 1,000,000,000 shares authorized; 310,627,024 shares issued and outstanding as of December 31, 2018 and 2019, respectively) 98 98 14 Additional paid-in capital 498,626 537,618 77,223 Accumulated other comprehensive loss — (316) (45) Accumulated deficit (560,349) (753,897) (108,290) Total shareholders’ deficit (61,625) (216,497) (31,098) TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT — 56,739 8,150 |
Schedule of Condensed statements of comprehensive loss of Parent Company | For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Sales and marketing expenses — (7,942) (6,860) (986) General and administrative expenses — (109,956) (38,428) (5,519) Research and development expenses — (6,124) (3,359) (482) Total operating expenses — (124,022) (48,647) (6,987) Operating loss — (124,022) (48,647) (6,987) Foreign exchange income — — 262 38 Share of losses from subsidiaries, the VIEs and subsidiary of the VIE (107,807) (130,617) (145,163) (20,852) Loss before income tax (107,807) (254,639) (193,548) (27,801) Income tax expenses — — — — Net loss (107,807) (254,639) (193,548) (27,801) Other comprehensive loss, net of tax of nil Foreign currency translation difference, net of tax of nil — — 316 45 Comprehensive loss (107,807) (254,639) (193,232) (27,756) |
Schedule of Condensed statements of cash flows of Parent Company | For the years ended December 31 2017 2018 2019 RMB RMB RMB US$ Net cash used in operating activities — — (9,709) (1,395) Net cash generated from investing activities — — — — Net cash generated from financing activities — — 10,155 1,459 Net increase in cash, cash equivalents and restricted cash — — 446 64 Cash, cash equivalents and restricted cash at beginning of year — — — — Cash, cash equivalents and restricted cash at end of year — — 446 64 |
Organization - VIEs and subsidi
Organization - VIEs and subsidiary of VIE (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Shanghai MOLBASE | |
Entity Information [Line Items] | |
Percentage of ownership in VIE | 100.00% |
Jiaxing MOLBASE | |
Entity Information [Line Items] | |
Percentage of ownership in VIE | 100.00% |
ShaanXi MOLBASE | |
Entity Information [Line Items] | |
Percentage of ownership in subsidiary of VIE | $ 100 |
MKD HK | |
Entity Information [Line Items] | |
Percentage of ownership in subsidiary | 100.00% |
Shanghai MOHUA | |
Entity Information [Line Items] | |
Percentage of ownership in subsidiary | 100.00% |
Term of exclusive technical support and service agreements | P10Y |
Shanghai MOKAI | |
Entity Information [Line Items] | |
Percentage of ownership in subsidiary | 100.00% |
Shanghai MOCHUANG | |
Entity Information [Line Items] | |
Percentage of ownership in subsidiary | 100.00% |
Organization - Consolidated bal
Organization - Consolidated balance sheets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Current assets: | ||||
Cash and cash equivalents | $ 2,177 | ¥ 15,156 | ¥ 6,477 | ¥ 38,522 |
Restricted cash | 6,107 | 42,518 | ¥ 67,500 | |
Accounts receivable, net | 2,934 | 20,424 | 40,730 | |
Unbilled receivables | 8,982 | 62,529 | 12,813 | |
Notes receivable | 17,837 | 124,176 | 2,075 | |
Inventories, net | 625 | 4,351 | 7,256 | |
Prepayments and other current assets | 31,148 | 216,850 | 295,985 | |
Loans to | 119 | 828 | 2,366 | |
Total current assets | 69,929 | 486,832 | 367,702 | |
Non-current assets: | ||||
Property and equipment, net | 159 | 1,106 | 1,762 | |
Intangible assets, net | 224 | 1,560 | 2,134 | |
Right-of-use assets, net | 462 | 3,219 | ||
Total non-current assets | 845 | 5,885 | 3,896 | |
Total Assets | 70,774 | 492,717 | 371,598 | |
Current liabilities: | ||||
Short-term borrowings | 1,975 | 13,749 | 82 | |
Accounts payable | 43,721 | 304,380 | 49,315 | |
Accrued expenses and other liabilities | 14,799 | 103,026 | 24,709 | |
Income taxes payable | 56 | 387 | ||
Deferred revenue | 15,396 | 107,181 | 153,467 | |
Current portion of lease liabilities | 442 | 3,080 | ||
Amounts due to related parties | 20,678 | 143,958 | 27,844 | |
Total current liabilities | 97,067 | 675,761 | 255,417 | |
Non-current liabilities: | ||||
Amounts due to related parties | 4,805 | 33,453 | 177,776 | |
Deferred government grants | 30 | |||
Total non-current liabilities | 4,805 | 33,453 | 177,806 | |
Total Liabilities | 101,872 | 709,214 | 433,223 | |
VIEs and subsidiary of the VIE | ||||
Current assets: | ||||
Cash and cash equivalents | 486 | 3,382 | 1,250 | |
Restricted cash | 596 | 4,148 | ||
Accounts receivable, net | 1,691 | 11,774 | 7,322 | |
Unbilled receivables | 5,920 | 41,211 | 2,925 | |
Notes receivable | 15,428 | 107,404 | 1,085 | |
Inventories, net | 104 | 725 | ||
Prepayments and other current assets | 18,982 | 132,152 | 83,759 | |
Loans to | 13,739 | 95,651 | 5,307 | |
Total current assets | 56,946 | 396,447 | 101,648 | |
Non-current assets: | ||||
Property and equipment, net | 151 | 1,049 | 411 | |
Intangible assets, net | 224 | 1,560 | 5 | |
Right-of-use assets, net | 462 | 3,219 | ||
Total non-current assets | 837 | 5,828 | 416 | |
Total Assets | 57,783 | 402,275 | 102,064 | |
Current liabilities: | ||||
Short-term borrowings | 82 | |||
Accounts payable | 26,601 | 185,188 | 4,352 | |
Accrued expenses and other liabilities | 9,400 | 65,443 | 18,458 | |
Income taxes payable | 56 | 387 | ||
Deferred revenue | 9,863 | 68,662 | 43,860 | |
Current portion of lease liabilities | 442 | 3,080 | ||
Amounts due to related parties | 37,631 | 261,980 | 118,691 | |
Total current liabilities | 83,993 | 584,740 | 185,443 | |
Non-current liabilities: | ||||
Amounts due to related parties | 621 | 4,320 | ||
Deferred government grants | 30 | |||
Total non-current liabilities | 621 | 4,320 | 30 | |
Total Liabilities | $ 84,614 | ¥ 589,060 | ¥ 185,473 |
Organization - Operation and ca
Organization - Operation and cash flows (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Variable Interest Entity [Line Items] | ||||
Net revenues | $ 1,897,112 | ¥ 13,207,315 | ¥ 9,053,266 | ¥ 4,201,907 |
Net loss | (27,801) | (193,548) | (254,639) | (107,807) |
Net cash used in operating activities | (13,764) | (95,821) | (134,636) | (186,703) |
Net cash used in investing activities | (262) | (1,820) | (2,242) | (3,982) |
Net cash generated from financing activities | 21,460 | 149,399 | 37,333 | 262,849 |
VIEs and subsidiary of the VIE | ||||
Variable Interest Entity [Line Items] | ||||
Net revenues | 1,466,402 | 10,208,796 | 2,187,683 | 210,807 |
Net loss | (14,850) | (103,375) | (19,451) | (19,532) |
Net cash used in operating activities | (6,882) | (47,912) | (48,944) | (18,747) |
Net cash used in investing activities | (508) | (3,535) | (99) | (1,734) |
Net cash generated from financing activities | $ 8,292 | ¥ 57,727 | ¥ 49,135 | ¥ 21,211 |
Organization (Details)
Organization (Details) - VIEs and subsidiary of the VIE ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Variable Interest Entity [Line Items] | |||
Pledge or collateralization of the assets | $ 596 | ¥ 4,148 | ¥ 0 |
Net liabilities | $ 26,831 | ¥ 186,784 | ¥ 83,409 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - (Details) ¥ in Thousands, $ in Thousands | Jun. 16, 2020USD ($) | Dec. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jan. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2022USD ($) | Dec. 31, 2021CNY (¥) | Jan. 06, 2020USD ($) | Dec. 31, 2019CNY (¥) |
Net loss | $ 27,801 | ¥ 193,548 | ¥ 254,639 | ¥ 107,807 | ||||||||
Cash flows from operating activities | 13,764 | ¥ 95,821 | ¥ 134,636 | ¥ 186,703 | ||||||||
Liabilities exceeded its current asset | $ 27,138 | ¥ 188,929,000 | ||||||||||
Loan Amount For Which Maturity Period Increased | $ 20,678 | ¥ 143,958 | ||||||||||
ADS | IPO | ||||||||||||
Total offering size | $ 61,870 | |||||||||||
Subsequent Event [Member] | ADS | IPO | ||||||||||||
Total offering size | $ 61,870 | |||||||||||
L. R. Capital Property Investment Limited | Subsequent Event [Member] | ||||||||||||
Debt Securities, Available-for-sale | $ 58,400 | $ 58,400 | ||||||||||
bears interest | 6.00% | 6.00% | ||||||||||
Amount of Notes Redeemed | $ 8,000 | $ 8,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Convenience translation (Details) | Dec. 31, 2019¥ / $ |
Convenience translation | |
Translation rate (CNY/USD) | 6.9618 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Estimated useful life of property and equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Leasehold Improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Minimum | Office equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 1 year |
Maximum | Office equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Estimated economic life of intangible assets (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated economic life | 3 years |
Purchased software | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated economic life | 3 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Impairment of long-lived assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Impairment of long-lived assets | |||
Impairment loss | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Fair value measurements of financial instruments (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Non-current amounts due to related parties | $ 4,805 | ¥ 33,453 | ¥ 177,776 |
Non-recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Financial assets and liabilities | 0 | 0 | |
Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Non-current amounts due to related parties | $ 4,379 | ¥ 30,488 | ¥ 165,822 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Revenue recognition (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Revenue recognition | ||||
Maximum potential undiscounted future payments which the entity would be required to make under guarantee obligation | $ 5,713 | ¥ 39,773 | ¥ 26,433 | ¥ 16,782 |
Performance obligation | ¥ 0 | ¥ 0 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Shipping and other handling costs (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Disaggregation of Revenue [Line Items] | ||||
Sales and marketing expenses | $ 15,636 | ¥ 108,858 | ¥ 103,293 | ¥ 64,962 |
Shipping and other handling costs | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales and marketing expenses | $ 2,003 | ¥ 13,945 | ¥ 12,565 | ¥ 11,802 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Leases (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Jan. 01, 2019USD ($) | Jan. 01, 2019CNY (¥) | |
Leases | ||||
Package of practical expedients | true | |||
Lease liabilities | $ 442 | ¥ 3,080 | ||
Right-of-use assets, net | $ 462 | ¥ 3,219 | ||
ASU 2016-02 | ||||
Leases | ||||
Lease liabilities | $ 656 | ¥ 4,567 | ||
Right-of-use assets, net | 676 | 4,706 | ||
Prepaid rent balance | $ 20 | ¥ 139 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Government grants (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Other income | ||||
Government grants | $ 244 | ¥ 1,699 | ¥ 1,886 | ¥ 698 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Segment reporting, advertising expense and VAT (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)segment | Dec. 31, 2019CNY (¥)segment | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Segment reporting | ||||
Number of reportable segment | 1 | 1 | ||
Advertising expense | ||||
Advertising costs | $ 1,536 | ¥ 10,693 | ¥ 25,324 | ¥ 2,945 |
Value added taxes ("VAT"), business related tax and surcharges | ||||
VAT rate one | 17.00% | 17.00% | ||
VAT rate two | 16.00% | 16.00% | ||
VAT rate three | 13.00% | 13.00% | ||
VAT rate four | 6.00% | 6.00% | ||
VAT rate five | 5.00% | 5.00% | ||
VAT rate six | 3.00% | 3.00% | ||
VAT amount | $ 258,396 | ¥ 1,798,899 | ¥ 1,466,302 | ¥ 713,676 |
Concentration of Risks (Details
Concentration of Risks (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Exchange rate concentration | Foreign currency | |||
Concentration Risk [Line Items] | |||
Appreciation(Depreciation) of the RMB against US$ (as a percent) | 1.60% | 5.00% | (5.80%) |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Accounts Receivable, Net | |||||
Accounts receivable | $ 5,813 | ¥ 40,464 | ¥ 56,493 | ||
Allowance for doubtful accounts | (2,879) | (20,040) | $ (2,264) | (15,763) | ¥ (21,192) |
Total accounts receivable, net | $ 2,934 | ¥ 20,424 | ¥ 40,730 |
Accounts Receivable, Net - Allo
Accounts Receivable, Net - Allowance for doubtful accounts (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Accounts Receivable, Net | |||
Balance at beginning of the year | $ 2,264 | ¥ 15,763 | ¥ 21,192 |
Provision | 1,220 | (8,487) | 6,827 |
Reversal | (605) | (4,210) | (7,057) |
Write-off | (5,199) | ||
Balance at end of the year | $ 2,879 | ¥ 20,040 | ¥ 15,763 |
Inventories, Net (Details)
Inventories, Net (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Chemical products | $ 625 | ¥ 4,351 | ¥ 7,256 |
Total | $ 625 | 4,351 | 7,256 |
Inventories pledged | 0 | 1,000 | |
Inventories | |||
Inventories pledged | ¥ 0 | ¥ 0 |
Prepayments and Other Current_3
Prepayments and Other Current Assets (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2019CNY (¥) | |
Prepayments and Other Current Assets | ||||
Prepayments to suppliers, net | $ 22,545 | ¥ 290,060 | ¥ 156,958 | |
Capitalized listing expenses | 5,065 | 35,261 | ||
Prepaid expenses | 3,079 | 1,653 | 21,436 | |
Other receivables, net | 459 | 3,755 | 3,195 | |
VAT recoverable | 517 | |||
Total | 31,148 | 295,985 | ¥ 216,850 | |
Allowance of doubtful accounts for prepayments to suppliers and other receivables | $ 597 | ¥ 41,569 | ¥ 13,988 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Property and Equipment, Net | |||
Property and equipment, gross | $ 981 | ¥ 6,828 | ¥ 5,975 |
Less: accumulated depreciation | (822) | (5,722) | (4,213) |
Property and equipment, net | 159 | 1,106 | 1,762 |
Office equipment | |||
Property and Equipment, Net | |||
Property and equipment, gross | 594 | 4,133 | 3,693 |
Leasehold Improvements | |||
Property and Equipment, Net | |||
Property and equipment, gross | $ 387 | ¥ 2,695 | ¥ 2,282 |
Property and Equipment, Net - D
Property and Equipment, Net - Depreciation (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 217 | ¥ 1,509 | ¥ 1,373 | ¥ 1,461 |
Sales and marketing expenses | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation | 128 | 892 | 853 | 935 |
General and administrative expenses | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation | 42 | 290 | 268 | 258 |
Research and development expenses | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 47 | ¥ 327 | ¥ 252 | ¥ 268 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | $ 605 | ¥ 4,210 | ¥ 3,243 |
Less: accumulated amortization | (381) | (2,650) | (1,109) |
Intangible assets, net | 224 | 1,560 | 2,134 |
Purchased software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets, gross | $ 605 | ¥ 4,210 | ¥ 3,243 |
Intangible Assets, Net - Amorti
Intangible Assets, Net - Amortization expenses (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
Intangible Assets, Net | |||||
Amortization expenses | $ 221 | ¥ 1,541 | ¥ 1,065 | ¥ 27 | |
Useful life | 3 years | 3 years | |||
Annual estimated amortization expenses for the intangible assets for each of the next three years | |||||
2020 | $ 155 | ¥ 1,079 | |||
2021 | 58 | 404 | |||
2022 | 11 | 77 | |||
Intangible assets, net | $ 224 | ¥ 2,134 | ¥ 1,560 |
Short-term Borrowings (Details)
Short-term Borrowings (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Short-term Borrowings | ||
Weighted average interest rate | 10.00% | 10.00% |
Collateral amount of short term borrowings by other receivables | ¥ 0 | ¥ 1,000 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Accrued Expenses and Other Liabilities | |||
Payroll and welfare payables | $ 2,618 | ¥ 18,226 | ¥ 18,236 |
VAT and other tax payables | 6,675 | 46,465 | 1,741 |
Accrued expenses | 2,514 | 17,499 | 778 |
Deposits from customers | 1,006 | 7,005 | 771 |
Logistic fee payables | 599 | 4,172 | 3,183 |
Others | 1,387 | 9,659 | |
Total | $ 14,799 | ¥ 103,026 | ¥ 24,709 |
Revenues - Disaggregation of re
Revenues - Disaggregation of revenue (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
Disaggregation of Revenue [Line Items] | |||||
Net revenues | $ 1,897,112 | ¥ 13,207,315 | ¥ 9,053,266 | ¥ 4,201,907 | |
Revenue recognized that was included in deferred revenue | 22,044 | 153,467 | 44,843 | 148,108 | |
Unbilled receivables | 8,982 | 12,813 | ¥ 62,529 | ||
Deferred revenue | 15,396 | 153,467 | ¥ 107,181 | ||
Chemical trading | Direct sales model | |||||
Disaggregation of Revenue [Line Items] | |||||
Net revenues | 1,891,424 | 13,167,719 | 9,045,458 | 4,199,661 | |
Chemical trading | Market place model | |||||
Disaggregation of Revenue [Line Items] | |||||
Net revenues | 3,808 | 26,513 | 4,387 | 972 | |
Online membership service | |||||
Disaggregation of Revenue [Line Items] | |||||
Net revenues | 1,530 | 10,650 | ¥ 3,421 | ¥ 1,274 | |
Financial service | |||||
Disaggregation of Revenue [Line Items] | |||||
Net revenues | 132 | 917 | |||
Others | |||||
Disaggregation of Revenue [Line Items] | |||||
Net revenues | $ 218 | ¥ 1,516 |
Income Taxes - Loss before inco
Income Taxes - Loss before income tax (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Loss before income tax | $ (27,734) | ¥ (193,083) | ¥ (254,639) | ¥ (107,807) |
PRC | ||||
Loss before income tax | (20,666) | (143,869) | (130,617) | ¥ (107,807) |
Non-PRC | ||||
Loss before income tax | $ (7,068) | ¥ (49,214) | ¥ (124,022) |
Income Taxes - Current and defe
Income Taxes - Current and deferred portions of income tax expenses (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Income Taxes | ||||
Current | $ 67 | ¥ 465 | ||
Income tax expenses | $ 67 | ¥ 465 | ¥ 0 | ¥ 0 |
Income Taxes - Reconciliations
Income Taxes - Reconciliations of the income tax expenses (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Income Taxes | ||||
Loss before income tax expense | $ (27,734) | ¥ (193,083) | ¥ (254,639) | ¥ (107,807) |
PRC statutory tax rate | 25.00% | 25.00% | 25.00% | 25.00% |
Income tax benefits at PRC statutory tax rate of 25 % | $ (6,933) | ¥ (48,271) | ¥ (63,660) | ¥ (26,952) |
Additional deduction of research and development expenses | (173) | (1,202) | ||
Effect of different tax rates in different jurisdictions | 1,767 | 12,303 | 31,006 | |
Preferential rate | 1,137 | (4) | ||
Statutory income/(expense) | (513) | (3,569) | (1,547) | 1,432 |
Non-deductible expenses | 660 | 4,595 | 1,138 | 710 |
Current and deferred tax rate differences | (1,313) | 145 | ||
Change in valuation allowance | 5,259 | 36,609 | 33,239 | 24,669 |
Income tax expenses | $ 67 | ¥ 465 | ¥ 0 | ¥ 0 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Non-current deferred tax assets | |||
Allowance for doubtful debt | $ 1,356 | ¥ 9,442 | ¥ 787 |
Impairment of a long-term investment | 363 | ||
Advertising expense | 6 | 41 | 471 |
Additional social insurance | 156 | 1,086 | 1,224 |
Accrued expense and other current liability | 274 | 1,907 | |
Tax losses | 5,464 | 38,040 | 11,062 |
Less: valuation allowance | $ (7,256) | ¥ (50,516) | ¥ (13,907) |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Income Taxes | ||||||
Unrecognized tax benefits | $ 432 | ¥ 3,006 | $ 432 | ¥ 3,006 | ¥ 0 | |
Unrecognized tax benefits affect the annual effective tax rate | $ 426 | 2,965 | 0 | |||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||||||
Balance at the beginning of year | 0 | |||||
Additions based on tax positions related to the current year | 324 | 2,252 | ||||
Additions related to prior year tax position | 157 | 1,092 | ||||
Decreases related to prior year tax position | (49) | (338) | ||||
Balance at the end of year | $ 432 | ¥ 3,006 | ||||
Interest expense accrued for unrecognized tax benefit | 0 | 0 | ¥ 0 | |||
Accumulated interest expenses recorded in unrecognized tax benefit | ¥ 0 | ¥ 0 |
Income Taxes (Details)
Income Taxes (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019CNY (¥) | |
Statutory rate | 25.00% | 25.00% | 25.00% | |
Withholding tax rate | 10.00% | |||
Taxable loss carryforward | $ 23,584 | ¥ 164,184 | ||
Undistributed earnings | 0 | |||
Withholding tax accrued on undistributed earnings | ¥ 0 | |||
MKD HK | ||||
Statutory rate | 16.50% | |||
Shanghai MOLBASE | ||||
Percentage of enterprise income tax. | 15.00% | 15.00% | 15.00% | |
Preferential tax rate effective period (in years) | 3 years | |||
ShaanXi MOLBASE | ||||
Eligible for reduction of taxable income | 50.00% | 50.00% | ||
Eligible for reduction of EIT | 20.00% | 20.00% | ||
Shanghai MOUHUA | ||||
Eligible for reduction of taxable income | 50.00% | 50.00% | ||
Eligible for reduction of EIT | 20.00% | 20.00% |
Related Party Transactions - Re
Related Party Transactions - Related party transactions (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Related Party Transaction [Line Items] | ||||
Loans to | $ 119 | ¥ 828 | ¥ 2,366 | |
MOLBASE (Shanghai) Biotechnology Co., Ltd. | ||||
Related Party Transaction [Line Items] | ||||
Services provided | 1,432 | ¥ 9,968 | ||
Purchase of goods or services | 4,437 | 30,891 | ||
Repayment of consideration | 14,966 | 104,190 | ||
Guarantee provided on loans for | 7,255 | 50,505 | ||
ShaanXi Molbase Logistic Management Co., Ltd | ||||
Related Party Transaction [Line Items] | ||||
Purchase of goods or services | 143 | ¥ 999 | ||
Loans to | 114 | 794 | ||
MOLBASE (HK) Limited | ||||
Related Party Transaction [Line Items] | ||||
Loans from | 10,717 | 74,607 | 20,875 | |
Loans to | 109 | |||
MOLBASE Inc | ||||
Related Party Transaction [Line Items] | ||||
Loans from | $ 2,050 | ¥ 14,274 | ||
Loans to | ¥ 2,224 |
Related Party Transactions - _2
Related Party Transactions - Related party balances (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Related Party Transaction [Line Items] | |||
Accounts due from related parties: Current | $ 119 | ¥ 828 | ¥ 2,366 |
Accounts due to related parties: Current | 20,678 | 143,958 | 27,844 |
Non-current amounts due to related parties | 4,805 | 33,453 | 177,776 |
ShaanXi Molbase Logistic Management Co., Ltd | |||
Related Party Transaction [Line Items] | |||
Accounts due from related parties: Current | 114 | 794 | |
MOXIN Commercial Factoring (Shenzhen) Co., Ltd | |||
Related Party Transaction [Line Items] | |||
Accounts due from related parties: Current | 3 | 20 | 20 |
Shanghai MOYU Biotechnology Co., Ltd | |||
Related Party Transaction [Line Items] | |||
Accounts due from related parties: Current | 1 | 7 | 7 |
Chang Dongliang | |||
Related Party Transaction [Line Items] | |||
Accounts due from related parties: Current | 1 | 7 | 6 |
Accounts due to related parties: Current | 1,833 | ||
Non-current amounts due to related parties | 263 | 1,833 | |
MOLBASE Inc | |||
Related Party Transaction [Line Items] | |||
Accounts due from related parties: Current | 2,224 | ||
Accounts due to related parties: Current | 848 | 5,905 | 4,461 |
Non-current amounts due to related parties | 1,523 | 10,605 | |
Amount due to related partys due on december 31, 2020 | 641 | 4,461 | |
Amount due to related partys due on december 31, 2021 | 1,523 | 10,605 | |
MOLBASE (HK) Limited | |||
Related Party Transaction [Line Items] | |||
Accounts due from related parties: Current | 109 | ||
Accounts due to related parties: Current | 11,135 | 77,520 | 21,550 |
Non-current amounts due to related parties | 2,661 | 18,528 | |
Amount due to related partys due on december 31, 2020 | 6,059 | 42,178 | |
Amount due to related partys due on december 31, 2021 | 2,661 | 18,528 | |
MOLBASE (Shanghai) Biotechnology Co., Ltd. | |||
Related Party Transaction [Line Items] | |||
Accounts due to related parties: Current | 8,695 | 60,533 | |
Non-current amounts due to related parties | $ 358 | ¥ 2,487 | ¥ 177,776 |
Related Party Transactions (Det
Related Party Transactions (Details) | 6 Months Ended | 18 Months Ended |
Dec. 31, 2019 | Jun. 27, 2019 | |
MOLBASE (Shanghai) Biotechnology Co., Ltd. | ||
Related Party Transaction [Line Items] | ||
Repayment period subsequent to reorganization | 24 months | 18 months |
Share Capital (Details)
Share Capital (Details) ¥ in Thousands | Feb. 28, 2018$ / sharesshares | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019$ / sharesshares | Dec. 31, 2018$ / sharesshares |
Common stock, par value (in dollars per share) | $ / shares | $ 0.00005 | $ 0.00005 | ||||
Ordinary shares authorize | 1,000,000,000 | 1,000,000,000 | ||||
Ordinary shares outstanding | 310,627,024 | 310,627,024 | ||||
Dividends on ordinary shares declared | ¥ | ¥ 0 | ¥ 0 | ¥ 0 | |||
MOLBASE Inc. | ||||||
Stock issued during the period | 310,627,024 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00005 |
Loss Per Share (Details)
Loss Per Share (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | |
Numerator: | ||||
Net loss attributable to ordinary shareholders | $ (27,801) | ¥ (193,548) | ¥ (254,639) | ¥ (107,807) |
Denominator: | ||||
Weighted-average number of ordinary shares outstanding - basic and diluted | 310,627,024 | 310,627,024 | 310,627,024 | 310,627,024 |
Loss per share - basic and diluted | (per share) | $ (0.09) | ¥ (0.62) | ¥ (0.82) | ¥ (0.35) |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - shares | Nov. 27, 2018 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted | 1,996,516 | |
2018 Share Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares reserved to be issued | 48,676,179 | |
Number of shares granted | 41,108,821 | |
Granted | 1,996,516 | |
2018 Share Plan | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiration period | 7 years | |
Vesting period | 1 year | |
2018 Share Plan | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiration period | 10 years | |
Vesting period | 4 years |
Share-Based Compensation - Opti
Share-Based Compensation - Option activity (Details) $ / shares in Units, ¥ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2019CNY (¥)shares | |
Number of options | |||||
Outstanding at the beginning of year | shares | 41,108,821 | 41,108,821 | |||
Granted | shares | 1,996,516 | 1,996,516 | |||
Forfeited | shares | (3,593,282) | (3,593,282) | |||
Outstanding at the end of year | shares | 39,512,055 | 39,512,055 | 41,108,821 | ||
Vested and expected to vest | shares | 39,512,055 | 39,512,055 | |||
Exercisable | shares | 29,850,733 | 29,850,733 | |||
Weighted- average exercise price | |||||
Outstanding at the beginning of year | $ 0.43 | ||||
Granted | 0.80 | ||||
Forfeited | 0.79 | ||||
Outstanding at the end of year | 0.42 | $ 0.43 | |||
Vested and expected to vest | 0.42 | ||||
Exercisable | 0.29 | ||||
Weighted- average grant-date fair value | |||||
Outstanding at the beginning of year | 0.71 | ||||
Outstanding at the end of year | $ 0.75 | $ 0.71 | |||
Vested and expected to vest | $ | $ 0.75 | ||||
Exercisable | $ | $ 0.78 | ||||
Weighted- average remaining contractual term | |||||
Outstanding at the end of year | 6 years 2 months 12 days | 6 years 2 months 12 days | 7 years 2 months 12 days | ||
Vested and expected to vest | 6 years 2 months 12 days | 6 years 2 months 12 days | |||
Exercisable | 5 years 3 months 18 days | 5 years 3 months 18 days | |||
Aggregate intrinsic Value | |||||
Outstanding | $ 172,436,000 | $ 22,199,000 | ¥ 1,200,465 | ||
Exercised | ¥ | ¥ 0 | ¥ 0 | |||
Vested and expected to vest | $ | 172,436,000 | ||||
Exercisable | $ | 133,981,000 | ||||
Fair value of options vested | $ 29,809,000 | ¥ 207,524 | ¥ 201,913 |
Share-Based Compensation - Assu
Share-Based Compensation - Assumptions (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2019CNY (¥) | Dec. 31, 2018$ / shares | Dec. 31, 2018CNY (¥) | Dec. 31, 2019CNY (¥) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Suboptimal early exercise multiple | 2.8 | 2.8 | |||
Expected post-vesting forfeiture rate | 5.00% | 5.00% | 4.90% | ||
Fair value per ordinary share | $ 1.83 | $ 0.97 | |||
Aggregate fair value of the outstanding options | $ 29,809 | ¥ 207,524 | ¥ 201,913 | ||
Unrecognized share-based compensation cost | $ 5,149 | ¥ 35,843 | |||
Weighted-average period of recognition | 8 months 23 days | 8 months 23 days | |||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Risk-free interest rate | 1.95% | 1.95% | 2.93% | ||
Expected volatility | 56.21% | 56.21% | 55.46% | ||
Suboptimal early exercise multiple | 2.2 | ||||
Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Risk-free interest rate | 1.96% | 1.96% | 3.06% | ||
Expected volatility | 56.25% | 56.25% | 58.33% | ||
Suboptimal early exercise multiple | 2.8 |
Share-Based Compensation - shar
Share-Based Compensation - share-based compensation expense (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 5,601 | ¥ 38,992 | ¥ 124,022 |
Sales and marketing expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 985 | 6,860 | 7,942 |
General and administrative expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 4,133 | 28,773 | 109,956 |
Research and development expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 483 | ¥ 3,359 | ¥ 6,124 |
Restricted Net Assets (Details)
Restricted Net Assets (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | |
Restricted assets | ||||
Percentage of annual after-tax profit which a foreign invested enterprise is required to allocate to general reserve fund | 10.00% | |||
Limit of statutory reserve fund as a percentage of registered capital, after which allocations to statutory reserve fund are no longer required | 50.00% | |||
Statutory reserves | ¥ 0 | ¥ 0 | ||
Restricted net assets | ¥ 73 | $ 8,791 | ¥ 61,199 |
Mainland China Employee Contr_2
Mainland China Employee Contribution Plan (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Mainland China Employee Contribution Plan | ||||
Expenses incurred for the PRC government-mandated multi-employer defined contribution plan | $ 3,768 | ¥ 26,229 | ¥ 18,414 | ¥ 13,284 |
Leases - Future minimum lease p
Leases - Future minimum lease payments (Details) - Dec. 31, 2019 ¥ in Thousands, $ in Thousands | USD ($) | CNY (¥) |
Leases | ||
2020 | $ 470 | ¥ 3,272 |
Total undiscounted cash flows | 470 | 3,272 |
Less imputed interest | (28) | (192) |
Total lease liabilities balance | $ 442 | ¥ 3,080 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information (Details) - 12 months ended Dec. 31, 2019 ¥ in Thousands, $ in Thousands | USD ($) | CNY (¥) |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Cash payments for operating leases | $ 233 | ¥ 1,620 |
Leases (Details)
Leases (Details) - 12 months ended Dec. 31, 2019 ¥ in Thousands, $ in Thousands | USD ($) | CNY (¥) |
Leases | ||
Lessee, Operating Lease, Existence of Residual Value Guarantee [true false] | false | false |
Weighted average remaining lease term | 10 months 28 days | 10 months 28 days |
Weighted average discount rate | 7.80% | 7.80% |
Operating lease cost | $ 421 | ¥ 2,930 |
Short-term lease cost | 0 | |
Variable lease cost | ¥ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Future minimum lease payments (Details) - Dec. 31, 2019 ¥ in Thousands, $ in Thousands | USD ($) | CNY (¥) |
Commitments and Contingencies | ||
2020 | $ 15,302 | ¥ 106,535 |
Total | $ 15,302 | ¥ 106,535 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 16, 2020 | Dec. 30, 2019 | Jun. 30, 2020 | Jan. 31, 2020 | Jan. 06, 2020 |
IPO | ADS | |||||
Subsequent Events | |||||
Number of shares in transaction | 11,500,000 | ||||
Number of common shares issued per ADS | 3 | ||||
Share price | $ 5.38 | ||||
Total offering size | $ 61,870 | ||||
Subsequent Event [Member] | IPO | ADS | |||||
Subsequent Events | |||||
Total offering size | $ 61,870 | ||||
L. R. Capital Property Investment Limited | Subsequent Event [Member] | |||||
Subsequent Events | |||||
Debt Securities, Available-for-sale | $ 58,400 | $ 58,400 | |||
bears interest | 6.00% | 6.00% | |||
Amount of Notes Redeemed | $ 8,000 | $ 8,000 |
Parent Company Only Condensed_3
Parent Company Only Condensed Financial Information - Condensed balance sheets (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018$ / shares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
Current Assets | ||||||
Cash and cash equivalents | $ 2,177 | ¥ 15,156 | ¥ 6,477 | ¥ 38,522 | ||
Prepayments and other current assets | 31,148 | 216,850 | 295,985 | |||
Total current assets | 69,929 | 486,832 | 367,702 | |||
Total Assets | 70,774 | 492,717 | 371,598 | |||
Current liabilities: | ||||||
Accrued expenses and other liabilities | 14,799 | 103,026 | 24,709 | |||
Amounts due to related parties | 20,678 | 143,958 | 27,844 | |||
Total current liabilities | 97,067 | 675,761 | 255,417 | |||
Non-current Liabilities | ||||||
Amounts due to related parties | 4,805 | 33,453 | 177,776 | |||
Total non-current liabilities | 4,805 | 33,453 | 177,806 | |||
Total Liabilities | 101,872 | 709,214 | 433,223 | |||
Shareholders' deficit | ||||||
Ordinary shares (par value of US$0.00005 per share; 1,000,000,000 shares authorized; 310,627,024 shares issued and outstanding as of December 31, 2018 and 2019, respectively) | 14 | 98 | 98 | |||
Additional paid-in capital | 77,223 | 537,618 | 498,626 | |||
Accumulated other comprehensive loss | (45) | (316) | ||||
Accumulated deficit | (108,290) | (753,897) | (560,349) | |||
Total shareholders' deficit | (31,098) | (216,497) | (61,625) | ¥ 5,901 | ¥ (65,872) | |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 70,774 | ¥ 492,717 | ¥ 371,598 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00005 | $ 0.00005 | ||||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |||
Common stock, shares issued | 310,627,024 | 310,627,024 | 310,627,024 | |||
Common stock, shares outstanding | 310,627,024 | 310,627,024 | 310,627,024 | |||
Parent Company | ||||||
Current Assets | ||||||
Cash and cash equivalents | $ 64 | ¥ 446 | ||||
Prepayments and other current assets | 8,086 | 56,293 | ||||
Total current assets | 8,150 | 56,739 | ||||
Total Assets | 8,150 | 56,739 | ||||
Current liabilities: | ||||||
Accrued expenses and other liabilities | 2,154 | 17,499 | ||||
Amounts due to related parties | 5,189 | 36,126 | ||||
Total current liabilities | 7,703 | 53,625 | ||||
Non-current Liabilities | ||||||
Amounts due to related parties | 1,842 | 12,822 | ||||
Loss in excess of investments in subsidiaries, the VIEs and subsidiary of the VIE | 29,703 | 206,789 | ¥ 61,625 | |||
Total non-current liabilities | 31,545 | 219,611 | 61,625 | |||
Total Liabilities | 39,248 | 273,236 | 61,625 | |||
Shareholders' deficit | ||||||
Ordinary shares (par value of US$0.00005 per share; 1,000,000,000 shares authorized; 310,627,024 shares issued and outstanding as of December 31, 2018 and 2019, respectively) | 14 | 98 | 98 | |||
Additional paid-in capital | 77,223 | 537,618 | 498,626 | |||
Accumulated other comprehensive loss | (45) | (316) | ||||
Accumulated deficit | (108,290) | (753,897) | (560,349) | |||
Total shareholders' deficit | (31,098) | (216,497) | ¥ (61,625) | |||
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 8,150 | ¥ 56,739 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00005 | $ 0.00005 | ||||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |||
Common stock, shares issued | 310,627,024 | 310,627,024 | 310,627,024 | |||
Common stock, shares outstanding | 310,627,024 | 310,627,024 | 310,627,024 |
Parent Company Only Condensed_4
Parent Company Only Condensed Financial Information - Condensed statements of comprehensive loss (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Condensed Statement of Income Captions [Line Items] | ||||
Sales and marketing expenses | $ (15,636) | ¥ (108,858) | ¥ (103,293) | ¥ (64,962) |
General and administrative expenses | (15,007) | (104,471) | (173,872) | (41,718) |
Research and development expenses | (6,469) | (45,038) | (36,889) | (18,608) |
Total operating expenses | (42,084) | (292,985) | (315,961) | (141,415) |
Operating loss | (27,609) | (192,212) | (235,792) | (91,181) |
Foreign exchange income | 27 | 185 | (3,033) | (552) |
Loss before income tax | (27,734) | (193,083) | (254,639) | (107,807) |
Income tax expenses | (67) | (465) | 0 | 0 |
Net loss | (27,801) | (193,548) | (254,639) | (107,807) |
Foreign currency translation adjustments, net of tax of nil | (45) | (316) | 0 | 0 |
Comprehensive loss | (27,756) | (193,232) | (254,639) | (107,807) |
Parent Company | ||||
Condensed Statement of Income Captions [Line Items] | ||||
Sales and marketing expenses | (986) | (6,860) | (7,942) | |
General and administrative expenses | (5,519) | (38,428) | (109,956) | |
Research and development expenses | (482) | (3,359) | (6,124) | |
Total operating expenses | (6,987) | (48,647) | (124,022) | |
Operating loss | (6,987) | (48,647) | (124,022) | |
Foreign exchange income | 38 | 262 | ||
Share of losses from subsidiaries, the VIEs and subsidiary of the VIE | (20,852) | (145,163) | (130,617) | (107,807) |
Loss before income tax | (27,801) | (193,548) | (254,639) | (107,807) |
Net loss | (27,801) | (193,548) | (254,639) | (107,807) |
Foreign currency translation adjustments, net of tax of nil | 45 | 316 | ||
Comprehensive loss | $ (27,756) | ¥ (193,232) | ¥ (254,639) | ¥ (107,807) |
Parent Company Only Condensed_5
Parent Company Only Condensed Financial Information - Condensed statements of cash flows (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Net cash used in operating activities | $ (13,764) | ¥ (95,821) | ¥ (134,636) | ¥ (186,703) |
Net cash generated from investing activities | (262) | (1,820) | (2,242) | (3,982) |
Net cash generated from financing activities | 21,460 | 149,399 | 37,333 | 262,849 |
Net increase/(decrease) in cash, cash equivalents and restricted cash | 7,354 | 51,197 | (99,545) | 72,164 |
Cash, cash equivalents and restricted cash at beginning of year | 930 | 6,477 | 106,022 | 33,858 |
Cash, cash equivalents and restricted cash at end of year | 8,284 | 57,674 | ¥ 6,477 | ¥ 106,022 |
Parent Company | ||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Net cash used in operating activities | (1,395) | (9,709) | ||
Net cash generated from financing activities | 1,459 | 10,155 | ||
Net increase/(decrease) in cash, cash equivalents and restricted cash | 64 | 446 | ||
Cash, cash equivalents and restricted cash at end of year | $ 64 | ¥ 446 |