Form 6-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
Form
6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE
13a-16
OR
15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month
of
December 2021
Commission File Number
001- 39354
 
 
Quhuo Limited
(Exact name of registrant as specified in its charter)
 
 
3rd Floor, Block D, Tonghui Building
No. 1132 Huihe South Street, Chaoyang District
Beijing, People’s Republic of China
(+86-10)
5338 4963
(Address of principal executive office)
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form
20-F
or Form
40-F.
Form
20-F  
☒ Form
40-F  
Indicate by check mark if the registrant is submitting the Form
6-K
in paper as permitted by Regulation
S-T
Rule 101(b)(1):  ☐
Note
: Regulation
S-T
Rule 101(b)(1) only permits the submission in paper of a Form
6-K
if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form
6-K
in paper as permitted by Regulation
S-T
Rule 101(b)(7):  ☐
Note:
Regulation
S-T
Rule 101(b)(7) only permits the submission in paper of a Form
6-K
if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form
6-K
submission or other Commission filing on EDGAR.
 
 
 

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
        Quhuo Limited
       
Date:December
21
, 2021
      By:  
/s/ Leslie Yu
            Name: Leslie Yu
            Title: Chairman and Chief Executive Officer

EXHIBIT INDEX
 
Exhibit

Number
  
Description
   
99.1    Unaudited Condensed Consolidated Interim Financial Statements
   
99.2    Management’s Discussion and Analysis of Financial Condition and Results of Operations
   
101.INS    Inline XBRL Instance Document-this instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document
   
101.SCH    Inline XBRL Taxonomy Extension Schema Document
   
101.CAL    Inline XBRL Taxonomy Extension Calculation Linkbase Document
   
101.DEF    Inline XBRL Taxonomy Extension Definition Linkbase Document
   
101.LAB    Inline XBRL Taxonomy Extension Label Linkbase Document
   
101.PRE    Inline XBRL Taxonomy Extension Presentation Linkbase Document
   
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)
EX-99.1
Exhibit 99.1
QUHUO LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
    
Notes
  
As of
December 31,
2020
    
As of September 30, 2021
 
                           
         
RMB
    
RMB
    
US$
 
                
(Unaudited)
    
(Unaudited)
 
ASSETS:
                               
Current assets:
                               
Cash
          97,807        57,187        8,875  
Restricted cash
 
 
 
 
5,948
 
 
 
2,314
 
 
 
359
 
Short-term investments
   4      201,578        197,594        30,666  
Accounts receivable, net
          381,248        468,159        72,657  
Prepayments and other current assets
          45,462        70,549        10,949  
Amounts due from related parties
   12      2,940                      
         
 
 
    
 
 
    
 
 
 
Total current assets
       
 
734,983
 
  
 
795,803
 
  
 
123,506
 
         
 
 
    
 
 
    
 
 
 
Non-current
assets:
                               
Property and equipment, net
          23,390        16,144        2,506  
Intangible assets, net
          111,990        129,382        20,080  
Long-term investments
          1,065        6,105        947  
Right-of-use
assets, net
          32,534        8,302        1,288  
Goodwill
          118,724        118,724        18,426  
Deferred tax assets
        2,370        14,548        2,258  
Other
non-current
assets
   5      105,501        142,168        22,064  
         
 
 
    
 
 
    
 
 
 
Total
non-current
assets
       
 
395,574
 
  
 
435,373
 
  
 
67,569
 
         
 
 
    
 
 
    
 
 
 
Total assets
       
 
1,130,557
 
  
 
1,231,176
 
  
 
191,075
 
         
 
 
    
 
 
    
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
                               
Current liabilities
(including current liabilities of the consolidated VIE without recourse to the primary beneficiary of RMB462,536 and RMB616,314 (US$95,651) as of December 31, 2020 and September 30,2021, respectively):
                               
Accounts payable
          268,939        303,965        47,175  
Short-term lease liabilities
          17,707        5,339        829  
Accrued expenses and other current liabilities
   6      105,744        149,176        23,150  
Short-term debt
   7      73,837        140,574        21,817  
Amounts due to related parties
   12                18,887        2,931  
         
 
 
    
 
 
    
 
 
 
Total current liabilities
       
 
466,227
 
  
 
617,941
 
  
 
95,902
 
         
 
 
    
 
 
    
 
 
 
Non-current
liabilities
(including
non-current
liabilities of the consolidated VIE without recourse to the primary beneficiary of RMB61,499 and RMB51,111 (US$7,932) as of December 31, 2020 and September 30,2021, respectively)
:
                               
Deferred tax liabilities
        727                      
Long-term debt
   7      5,135        420        65  
Long-term lease liabilities
          14,623        1,695        263  
Other
non-current
liabilities
          41,014        48,996        7,604  
         
 
 
    
 
 
    
 
 
 
Total
non-current
liabilities
          61,499        51,111        7,932  
         
 
 
    
 
 
    
 
 
 
Total liabilities
       
 
527,726
 
  
 
669,052
 
  
 
103,834
 
         
 
 
    
 
 
    
 
 
 
Commitments and contingencies
   11                     

QUHUO LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
    
Notes
    
As of
December 31,
2020
   
As of September 30, 2021
 
                           
           
RMB
   
RMB
   
US$
 
                 
(Unaudited)
   
(Unaudited)
 
Shareholders’ equity:
                                 
Ordinary shares (US$0.0001 par value; 300,000,000 Class A ordinary shares authorized and 46,097,880 shares issued as of December 31, 2020 and September 30, 2021; 36,595,330 and 37,989,949 shares outstanding as of December 31, 2020 and September 30, 2021, respectively; 6,296,630 Class B ordinary shares authorized, issued and outstanding as of December 31, 2020 and September 30, 2021, respectively; 193,703,370 shares (undesignated) authorized, nil shares (undesignated) issued and outstanding as of December 31, 2020 and September 30, 2021, respectively)
              36       36       6  
Additional
paid-in
capital
              1,779,923       1,842,521       285,955  
Accumulated deficit
              (1,208,827     (1,295,382     (201,040
Accumulated other comprehensive loss
              ( 14,843     ( 16,931     ( 2,628
             
 
 
   
 
 
   
 
 
 
Total Quhuo Limited shareholders’ equity
              556,289       530,244       82,293  
             
 
 
   
 
 
   
 
 
 
Non-controlling
interests
              46,542       31,880       4,948  
             
 
 
   
 
 
   
 
 
 
Total shareholders’ equity
              602,831       562,124       87,241  
             
 
 
   
 
 
   
 
 
 
Total liabilities and shareholders’ equity
              1,130,557       1,231,176       191,075  
             
 
 
   
 
 
   
 
 
 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

QUHUO LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
           
Nine Months Ended September 30,
 
    
Notes
    
2020
   
2021
   
2021
 
           
RMB
   
RMB
   
US$
 
           
(Unaudited)
   
(Unaudited)
   
(Unaudited)
 
Revenues
     3        1,709,739       2,943,811       456,872  
Cost of revenues
              (1,557,338     (2,843,907     (441,367
General and administrative
              (160,215     (185,085     (28,725
Research and development
              (8,346     (15,509     (2,407
Gain/(loss) on disposal of assets, net
              2,600       (4,162     (646
             
 
 
   
 
 
   
 
 
 
Operating loss
           
 
(13,560
 
 
(104,852
 
 
(16,273
             
 
 
   
 
 
   
 
 
 
Interest income
              625       529       82  
Interest expense
              (6,963     (4,900     (760
Other income, net
              39,058       11,829       1,836  
Foreign exchange loss
              (1,502     (48     (7
             
 
 
   
 
 
   
 
 
 
Income (loss) before income tax
           
 
17,658
 
 
 
(97,442
 
 
(15,122
Income tax expense
            (30,258     (3,049     (473
             
 
 
   
 
 
   
 
 
 
Net loss
           
 
(12,600
 
 
(100,491
 
 
(15,595
             
 
 
   
 
 
   
 
 
 
Net loss attributable to
non-controlling
interests
              4,052       13,936       2,163  
             
 
 
   
 
 
   
 
 
 
Net loss attributable to ordinary shareholders of Quhuo Limited
           
 
(8,548
 
 
(86,555
 
 
(13,432
             
 
 
   
 
 
   
 
 
 
Loss per share:
                                 
Basic
     10        (0.37     (1.98     (0.31
Diluted
              (0.37     (1.98     (0.31
Shares used in loss per share computation:
                                 
Basic
     10        23,358,747       43,709,910       43,709,910  
Diluted
              23,358,747       43,709,910       43,709,910  
Net loss
           
 
(12,600
 
 
(100,491
 
 
(15,595
Other comprehensive loss:
                                 
Foreign currency translation adjustment:
           
 
(7,282
 
 
(2,003
 
 
(311
Unrealized gain/(loss) on
available-for-sale
investments, net of tax
           
 
—  
 
 
 
(85
 
 
(13
)
Comprehensive loss
           
 
(19,882
 
 
(102,579
 
 
(15,919
Comprehensive loss attributable to
non-controlling
interests
              4,052       13,936       2,163  
             
 
 
   
 
 
   
 
 
 
Comprehensive loss attributable to ordinary shareholders of Quhuo Limited
           
 
(15,830
 
 
(88,643
 
 
(13,756
             
 
 
   
 
 
   
 
 
 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

QUHUO LIMITED
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ (DEFICIT) / EQUITY
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
    
Ordinary Shares
Outstanding
    
Additional
paid-in

capital
    
Accumulated
deficit
   
Accumulated

other
comprehensive
loss
   
Quhuo Limited
shareholders’
(Deficit)/Equity
   
Non-controlling

interests
   
Total
shareholders’
(Deficit)/Equity
 
    
 
    
RMB
    
RMB
    
RMB
   
RMB
   
RMB
   
RMB
   
RMB
 
Balance as of January 1, 2020
  
 
14,972,760
 
  
 
17
 
  
 
434,151
 
  
 
(1,212,257
 
 
(1,231
 
 
(779,320
    2,871    
 
(776,449
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Net loss
     —          —          —          (8,548     —         (8,548     (4,052     (12,600
Other comprehensive loss
     —          —          —          —         (7,282     (7,282     —         (7,282
Issuance of ordinary shares in connection with initial public offering, net of offering cost
     3,788,100        2        234,163        —         —         234,165       —         234,165  
Conversion of redeemable convertible preferred shares
     24,131,100        17        1,030,984        —         —         1,031,001       —         1,031,001  
Non-controlling
interest recognized from business combination
     —          —          —          —         —         —         7,686       7,686  
Share-based compensation
     —          —          74,627        —         —         74,627       —         74,627  
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance as of September 30, 2020
  
 
42,891,960
 
  
 
36
 
  
 
1,773,925
 
  
 
(1,220,805
 
 
(8,513
 
 
544,643
 
 
 
6,505
 
 
 
551,148
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance as of January 1, 2021
     42,891,960     
 
36
 
  
 
1,779,923
 
  
 
(1,208,827
 
 
(14,843
 
 
556,289
 
 
 
46,542
 
 
 
602,831
 
Net loss
     —          —          —          (86,555           (86,555     (13,936     (100,491
Other comprehensive loss
     —          —          —                (2,088     (2,088           (2,088
Non-controlling
interest recognized from business combination
     —          —          —          —         —         —         (726     (726
Exercise of share options
     1,394,619        —          3,210        —         —         3,210       —         3,210  
Share-based compensation
     —          —          59,388        —         —         59,388       —         59,388  
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance as of September 30, 2021
  
 
44,286,579
 
  
 
36
 
  
 
1,842,521
 
  
 
(1,295,382
 
 
(16,931
 
 
530,244
 
 
 
31,880
 
 
 
562,124
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance as of September 30, 2021 in US$
     —       
 
6
 
  
 
285,955
 
  
 
(201,040
 
 
(2,628
 
 
82,293
 
 
 
4,948
 
 
 
87,241
 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

QUHUO LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
           
Nine Months Ended September 30,
 
    
Notes
    
2020
   
2021
   
2021
 
 
           
RMB
   
RMB
   
US$
 
Cash flows from operating activities
                                 
Net loss
              (12,600     (100,491     (15,595
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
                                 
Depreciation
              4,778       3,956       614  
Amortization
              9,889       14,872       2,308  
Deferred income taxes
              757       (12,906     (2,003
Share-based compensation
     8        74,627       59,388       9,217  
Gain on disposals of
intangible
assets
              (2,597     (8,312     (1,290
Net loss on disposal of property and equipment
              —         12,476       1,936  
Changes in fair value of short-term investment
              (26,467     2,572       399  
Others
              9       (69     (11
Changes in operating assets and liabilities:
                                 
Amounts due from related parties
              18,166       2,940       456  
Amounts due to related parties
              —         18,887       2,931  
Accounts receivable
              (23,554     (87,109     (13,519
Prepayments and other current assets
              (2,155 )     (12,231     (1,898
Other
non-current
assets
              179       (42,393     (6,579
Accounts payable
              (37,704     35,398       5,494  
Accrued expenses and other current liabilities
              3,900       48,354       7,504  
Income taxes payable
              20,090       154       24  
Lease liabilities
              (766 )     (239     (37
Other
non-current
liabilities
              (928     7,982       1,239  
             
 
 
   
 
 
   
 
 
 
Net cash provided by (used in) operating activities
           
 
25,624
 
 
 
(56,771
 
 
(8,810
             
 
 
   
 
 
   
 
 
 

QUHUO LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
           
Nine Months Ended September 30,
 
    
Notes
    
2020
   
2021
   
2021
 
 
           
RMB
   
RMB
   
US$
 
Cash flows from investing activities
                                 
Purchase of short-term investments
              (2,487,883     (2,458,427     (381,542
Proceeds from sales of short-term investments
              2,295,773       2,459,838       381,761  
Acquisition of business, net of cash acquired
              (6,499     (4,327     (672
Purchase of property and equipment
              (2,122     (9,557     (1,483
Acquisition of intangible assets
              (39,792     (37,634     (5,841
Proceeds from disposals of intangible assets
              8,187       7,451       1,156  
Others
              650       (6,600     (1,024
             
 
 
   
 
 
   
 
 
 
Net cash used in investing activities
           
 
(231,686
 
 
(49,256
 
 
(7,645
             
 
 
   
 
 
   
 
 
 
Cash flows from financing activities
                                 
Proceeds from short-term loans
              121,000       135,000       20,952  
Repayments of short-term loans
              (132,000     (66,000     (10,243
Proceeds from initial public offering
              244,161       —         —    
Repayments of long-term debt
              (5,989     (7,303     (1,133
Payments for IPO expenditures
              (9,377     —         —    
             
 
 
   
 
 
   
 
 
 
Net cash provided by financing activities
           
 
217,795
 
 
 
61,697
 
 
 
9,576
 
             
 
 
   
 
 
   
 
 
 
Effect of exchange rate changes on cash
              163       77       11  
Net increase in cash
           
 
11,896
 
 
 
(44,253
 
 
(6,868
Cash
 and restricted cash, 
at the beginning of the period
              126,779       103,754       16,102  
             
 
 
   
 
 
   
 
 
 
Cash
 and restricted cash, at 
the end of the period
           
 
138,675
 
 
 
59,501
 
 
 
9,234
 
             
 
 
   
 
 
   
 
 
 
Supplement disclosure of cash flow information:
                                 
Non-cash
option exercise proceeds
              —         3,210       498  
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

QUHUO LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
1.
Organization, Consolidation and Principal Activities
Quhuo Limited (the “Company”, and where appropriate, the term “Company” also refers to its subsidiaries, variable interest entity, and subsidiaries of the variable interest entity as a whole) is an exempt company incorporated in the Cayman Islands with limited liability under the laws of the Cayman Islands on June 13, 2019. The Company, through its subsidiaries, variable interest entity, and subsidiaries of the variable interest entity, are principally engaged in providing
end-to-end
operational solutions to
on-demand
consumer service businesses in industries, including food delivery, bike-sharing and ride-hailing in the People’s Republic of China (the “PRC”). The Company does not conduct any substantive operations of its own.
The Company commenced operations through Beijing Quhuo Technology Co., Ltd. in 2012. In preparation of its initial public offering (“IPO”) in the United States, the Company underwent a series of restructuring in 2019 (the “Restructuring”) in order to establish the Company as the parent company and Beijing Quhuo Technology Co., Ltd. (“Beijing Quhuo” or the “VIE”) as the variable interest entity of the Company. On June 14, 2019, the Company incorporated a wholly-owned subsidiary, Quhuo Investment Limited (“Quhuo BVI”) in the British Virgin Islands (“BVI”). On June 17, 2019, the Company incorporated another wholly-owned subsidiary, Quhuo Technology Investment (Hong Kong) Limited (“Quhuo HK”) in Hong Kong. On July 31, 2019, the Company incorporated a wholly-owned subsidiary, Beijing Quhuo Information Technology Co., Ltd. (“WFOE”) in the PRC.
As PRC laws and regulations prohibit and restrict foreign ownership of internet value-added businesses, the Company operates its business primarily through the VIE and the subsidiaries of the VIE. The Company, through the WFOE, entered into power of attorney agreements and an exclusive call option agreement with the nominee shareholders of the VIE, that gave the WFOE the power to direct the activities that most significantly affect the economic performance of the VIE and to acquire the equity interests in the VIE when permitted by the PRC laws, respectively. Certain exclusive agreements were entered into with the VIE through the WFOE, which obligate the WFOE to absorb a majority of the risk of loss from the VIE’s activities and entitle the WFOE to receive a majority of its residual returns. In addition, the WFOE entered into an equity interest pledge agreement for equity interests in the VIE held by the nominee shareholders of the VIE. The Company also agreed to provide unlimited financial support to the VIE for its operations.

QUHUO LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
1.
Organization, Consolidation and Principal Activities (continued)
 
Despite the lack of technical majority ownership, the Company has effective control of the VIE through the VIE Agreements and a parent-subsidiary relationship exists between the Company and the VIE. Through the VIE Agreements, the shareholders of the VIE effectively assigned all of their voting rights underlying their equity interest in the VIE to the Company. In addition, through the other exclusive agreements, which consist of exclusive call option agreement, exclusive business cooperation agreement, and equity interest pledge agreement, the Company, through its wholly-owned subsidiaries in the PRC, have the right to receive economic benefits from the VIE that could be potentially significant to the VIE. Lastly, through the financial support undertaking letter, the Company has the obligation to absorb losses of
the
VIE that could potentially be significant to the VIE. Therefore, the Company is considered the primary beneficiary of the VIE and consolidates the VIE and its consolidated subsidiaries as required by SEC Regulation
S-X
Rule
3A-02
and Accounting Standard Codification (“ASC”) Topic 810,
Consolidation: Overall
(“ASC 810”).
As of September 30, 2021, RMB271,867 of accounts receivable and RMB15,016 of property and equipment of the VIE were pledged or collateralized. Creditors of the VIE have no recourse to the general credit of the Company, who is the primary beneficiary of the VIE, through its 100% controlled subsidiary WFOE. The Company did not provide any financial or other support to the VIE other than what is obligated by the agreements described above. The following table sets forth the assets and liabilities of the VIE’s included in the Company’s consolidated balance sheets:
 
    
As of December 31,
    
As of September 30,
 
    
2020
    
2021
    
2021
 
 
    
RMB
    
RMB
    
US$
 
ASSETS:
                          
Current assets:
                          
Cash
     93,007        53,156        8,250  
Restricted cash
     401        2,314        359  
Short-term investments
     34,634        36,591        5,679  
Accounts receivable
     381,248        468,159        72,657  
Prepayments and other current assets
     44,662        64,347        9,986  
Amounts due from related parties
     2,940                      
    
 
 
    
 
 
    
 
 
 
Total current assets
  
 
556,892
 
  
 
624,567
 
  
 
96,931
 
    
 
 
    
 
 
    
 
 
 
Non-current
assets:
                          
Property and equipment, net
     23,310        15,829        2,457  
Intangible assets, net
     111,990        129,382        20,080  
Long-term investments
     1,065        6,105        947  
Operating lease
right-of-use
assets, net
     32,534        8,302        1,288  
Goodwill
     118,724        118,724        18,426  
Deferred tax assets
     2,370        13,794        2,141  
Other
non-current
assets
     105,501        142,144        22,060  
    
 
 
    
 
 
    
 
 
 
Total
non-current
assets
  
 
395,494
 
  
 
434,280
 
  
 
67,399
 
    
 
 
    
 
 
    
 
 
 
Total assets
  
 
952,386
 
  
 
1,058,847
 
  
 
164,330
 
    
 
 
    
 
 
    
 
 
 

QUHUO LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
1.
Organization, Consolidation and Principal Activities (continued)
 
 
    
As of December 31,
    
As of September 30,
 
    
2020
    
2021
    
2021
 
 
    
RMB
    
RMB
    
US$
 
LIABILITIES:
                          
Current liabilities:
                          
Accounts payable
     268,939        303,965        47,175  
Accrued expenses and other current liabilities
     102,053        147,549        22,899  
Short-term debt
     73,837        140,574        21,817  
Short-term lease liabilities
     17,707        5,339        829  
Amounts due to related parties
              18,887        2,931  
    
 
 
    
 
 
    
 
 
 
Total current liabilities
  
 
462,536
 
  
 
616,314
 
  
 
95,651
 
    
 
 
    
 
 
    
 
 
 
Non-current
liabilities:
                          
Deferred tax liabilities
     727                      
Long-term debt
     5,135        420        65  
Long-term lease liabilities
     14,623        1,695        263  
Other
non-current
liabilities
     41,014        48,996        7,604  
    
 
 
    
 
 
    
 
 
 
Total
non-current
liabilities
  
 
61,499
 
  
 
51,111
 
  
 
7,932
 
    
 
 
    
 
 
    
 
 
 
Total liabilities
  
 
524,035
 
  
 
667,425
 
  
 
103,583
 
    
 
 
    
 
 
    
 
 
 
The VIE’s net asset balance was RMB428,351 and RMB391,422 (US$60,747
)
as of December 31, 2020 and S
e
ptember 30, 2021, respectively.

The table sets forth the results of operations and cash flows of the VIE included in the Company’s consolidated statements of comprehensive loss and cash flows for the nine months ended September 30, 2020 and 2021, respectively:
 
 
  
Nine Months Ended September 30,
 
 
  
2020
 
  
2021
 
  
2021
 
 
  
RMB
 
  
RMB
 
  
US$
 
Revenue
  
 
1,709,739
 
  
 
2,943,811
 
  
 
456,872
 
Net loss
  
 
(27,388
  
 
(73,706
  
 
(11,439
Net cash provided by (used in) operating activities
  
 
34,949
 
  
 
(28,121
  
 
(4,365
Net cash used in investing activities
  
 
(102,393
  
 
(47,603
  
 
(7,387
Net cash provided by financing activities
  
 
65,936
 
  
 
37,698
 
  
 
5,850
 
Effect of exchange rate changes on cash
  
 
324
 
  
 
88
 
  
 
14
 
Net (decrease) increase in cash
  
 
(1,184
  
 
(37,938
  
 
(5,888

QUHUO LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
2.
Summary of Significant Accounting Policies
Basis of presentation
The accompanying unaudited interim condensed consolidat
e
d financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information using accounting policies that are consistent with those used in the preparation of the Company’s audited consolidated financial statements for the year ended December 31, 2020. Accordingly, these unaudited interim condensed consolidated financial statements do not include all information and footnotes required by U.S. GAAP for annual financial statements.
In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the financial position, operating results and cash flows of the Company for each of the periods presented. The results of operations for the nine months ended September 30, 2021 are not necessarily indicative of results to be expected for any other interim period or for the full year of 2021. The consolidated balance sheet as of December 31, 2020 was derived from the audited consolidated financial statements at that date but does not include all of the disclosures required by U.S. GAAP for annual financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2020.
Principles of consolidation
The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIE and the subsidiaries of the VIE. All significant inter-company transactions and balances have been eliminated upon consolidation.
Use of estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in the Company’s consolidated financial statements include, but are not limited to, allowance for doubtful accounts for accounts receivable, fair value of short-term investment, useful lives of property, equipment and intangible assets, incremental borrowing rate (“IBR”) applied in lease liabilities, impairment of long-lived assets, goodwill and long-term investments, purchase price allocation and fair value of contingent consideration with respect to business combinations, valuation allowance for deferred tax assets, the grant date fair value of share-based payment awards and fair value of intangible assets acquired associated with
non-monetary
transactions. Management bases the estimates on historical experience and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could materially differ from those estimates.
Convenience translation
Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB6.4434 on September 30, 2021 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate.

QUHUO LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
2.
Summary of Significant Accounting Policies (continued)
 
Fair value measurements
Financial instruments of the Company primarily include cash, short-term investments, accounts receivable, other receivables, accounts payable and accrued liabilities, other receivables, amounts due from and due to related parties, long-term investments, deposits, equity consideration payable, contingent consideration payable, short-term debt, long-term debt and redeemable convertible preferred shares. 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. The short-term investments are measured at fair value. The redeemable convertible preferred shares were initially recorded at fair value as of the issuance date. Equity method investments have no quoted market prices and it is not practicable to estimate their fair value without incurring excessive costs. The carrying amounts of the remaining financial instruments, except for long-term debt and deposits, approximate their fair values because of their short-term maturities.
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 (unadjusted) for identical assets or liabilities in active markets.
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.

QUHUO LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
2.
Summary of Significant Accounting Policies (continued)
 
The Company’s financial assets and liabilities measured at fair value are summarized below:
 
           
Fair value measurement or disclosure

at September 30, 2021 using
        
    
Total fair
value at

September

30, 2021
    
Quoted prices in

active market for

identical assets

(Level 1)
    
Significant other

observable
inputs

(Level 2)
    
Significant

unobservable

inputs

(Level 3)
    
Total gains

(losses) for the

nine months

ended September

30, 2021
 
    
(Unaudited)
RMB
    
(Unaudited)
RMB
    
(Unaudited)
RMB
    
(Unaudited)
RMB
    
(Unaudited)
RMB
 
Assets
              
Short-term investments, commercial bank deposits - recurring
     36,820        —          36,820        —          —    
Short-term investments, alternative investment fund
(1)
     160,774        —          —          —          (2,572
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Total
  
 
197,594
 
  
 
—  
 
  
 
36,820
 
  
 
—  
 
  
 
(2,572
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Liabilities
              
Payables for contingent consideration
     19,252        —          —          19,252        —    
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Total
  
 
19,252
 
  
 
—  
 
  
 
—  
 
  
 
19,252
 
  
 
—  
 
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
           
Fair value measurement or disclosure

at December 31, 2020 using
        
    
Total fair
value at

December 31,
2020
    
Quoted prices in

active market for

identical assets

(Level 1)
    
Significant other

observable
inputs

(Level 2)
    
Significant

unobservable

inputs

(Level 3)
    
Total gains

(losses) for the

nine months

ended September

30, 2020
 
    
RMB
    
RMB
    
RMB
    
RMB
    
RMB
 
Assets
              
Short-term investments, commercial bank deposits - recurring
     36,197        —          36,197        —          —    
Short-term investments, alternative investment fund
(1)
     165,381        —          —          —          26,467  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Total
  
 
201,578
 
  
 
—  
 
  
 
36,197
 
  
 
—  
 
  
 
26,467
 
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Liabilities
              
Purchase consideration payables
     19,252        —          —          19,252        —    
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
Total
  
 
19,252
 
  
 
—  
 
  
 
—  
 
  
 
19,252
 
  
 
—  
 
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
 
(1)
Investments are measured at fair value using NAV as a practical expedient. These investments have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the consolidated statements of balance sheets.
The Company did not transfer any assets or liabilities in or out of Level 3 during the nine months ended September 30, 2020 and 2021, respectively.

QUHUO LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
3.
Revenues
The following table presents the Company’s revenues disaggregated by revenue category. All revenues were generated in the PRC.
 
    
Nine Months Ended September 30,
 
    
2020
    
2021
    
2021
 
    
RMB
    
RMB
    
US$
 
On-demand
food delivery solution services
     1,689,295        2,804,657        435,275  
Mobility service solutions
     16,390        77,312        11,999  
Housekeeping solutions and other services
     3,080        56,639        8,790  
Others
     974        5,203        808  
    
 
 
    
 
 
    
 
 
 
Total revenues
  
 
1,709,739
 
  
 
2,943,811
 
  
 
456,872
 
    
 
 
    
 
 
    
 
 
 
 
4.
Short-term Investments
The Company’s short-term investments included investment
s
in commercial bank deposits at floating rates with original maturities of one year or less, but greater than three months, and investment in
an
alternative investment fund. The following is a summary of the Company’s short-term investments:
 
    
As of December 31,
    
As of September 30,
 
    
2020
    
2021
    
2021
 
    
RMB
    
RMB
    
US$
 
Commercial banks deposits
     36,197        36,820        5,714  
Investment in fund
     165,381        160,774        24,952  
    
 
 
    
 
 
    
 
 
 
Total short-term investments
  
 
201,578
 
  
 
197,594
 
  
 
30,666
 
    
 
 
    
 
 
    
 
 
 
For the nine months ended September 30, 2020 and 2021, the Group recognized other income related to its commercial banks deposits of RMB3,193 and RMB3,183 (US$494), respectively, in the consolidated statements of comprehensive loss.
In July 2020, the Group purchased participating shares of an alternative investment fund, which is measured using the NAV practical expedient. The Group recognized unrealized gain
s
of RMB26,467 and
unrealized losses
of RMB
 
2,572 (US$399)
from the
fair value change of the investment as other income, net in the consolidated statements of comprehensive loss for the nine-months ended September 30, 2020 and 2021, respectively.

QUHUO LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
5.
Other
Non-current
Assets
Other
non-current
assets consisted of the following:
 
    
As of December 31,
    
As of September 30,
 
    
2020
    
2021
    
2021
 
    
RMB
    
RMB
    
US$
 
Rental and industry customer deposits
     86,306        103,626        16,083  
Prepayments
     18,469        38,312        5,946  
Other receivables
     726        230        35  
    
 
 
    
 
 
    
 
 
 
Total other
non-current
assets
  
 
105,501
 
  
 
142,168
 
  
 
22,064
 
    
 
 
    
 
 
    
 
 
 
 
6.
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
 
    
As of December 31,
    
As of September 30,
 
    
2020
    
2021
    
2021
 
    
RMB
    
RMB
    
US$
 
Amounts due to third-parties
     26,645        26,733        4,149  
Income tax payables
     12,292        12,446        1,932  
Other tax payables
     5,099        51,128        7,935  
Salary and welfare payables
     18,497        25,818        4,007  
Deposits received from ride-hailing drivers
     13,165        6,762        1,049  
Purchase consideration payable
     23,580        19,252        2,988  
Others
     6,466        7,037        1,090  
    
 
 
    
 
 
    
 
 
 
Total
  
 
105,744
 
  
 
149,176
 
  
 
23,150
 
    
 
 
    
 
 
    
 
 
 
 
7.
Debt
Short-term Debt
The following table presents the Company’s outstanding short-term debt as of December 31, 2020 and September 30 2021:
 
    
Annual
interest rates
  
Term
    
As of
December 31, 2020
    
As of
September 30, 2021
 
                
RMB
    
RMB
    
US$
 
Short-term loans
                                        
East West Bank
   4.75% -5.50%      1 year        35,000        65,000        10,088  
SPD Silicon Valley Bank
   4.85% - 6.00%(Floating)      1 year        30,000        70,000        10,864  
Agricultural Bank of China
   4.85%      1 year        1,000        —          —    
Long-term debt, current portion
   8.45% - 14.86%      3 years        7,837        5,574        865  
                  
 
 
    
 
 
    
 
 
 
Total
                
 
73,837
 
  
 
140,574
 
  
 
21,817
 
                  
 
 
    
 
 
    
 
 
 
In July 2020, the Company entered into a banking facility agreement with East West Bank, pursuant to which the Company is entitled to borrow RMB65,000 with an interest rate of 5.00%. The Company drew down RMB25,000, RMB10,000 and RMB 30,000 July 2020, August 2020 and May 2021
,
respectively.
The loan is intended for general working capital purposes
and is secured
by certain accounts receivables of the Company.

QUHUO LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
7.
Debt (Continued)
 
In November 2020, the Company entered into a banking facility agreement with SPD Silicon Valley Bank, pursuant to which the Company is entitled to borrow RMB70,000 with a floating interest rate benchmarked to
one-year
lending rate of PBOC. The Company drew down RMB
 
30,000, RMB
 
30,000 and RMB
 
10,000
 
in November 2020, January 2021 and April 2021
, respectively.
The loan is intended for general working capital purposes and is secured by certain accounts receivables of the Company.
Long-term debt
The following table presents the Company’s long-term debt as of December 31, 2020 and September 30, 2021:
 
    
Annual
interest rates
  
Term
    
As of
December 31, 2020
    
As of
September 30, 2021
 
                
RMB
    
RMB
    
US$
 
Long-term debt, current portion
   8.45% - 14.86%      3 years        7,837        5,574        865  
Long-term debt,
non-current
portion
   8.45% - 14.86%      3 years        5,135        420        65  
                  
 
 
    
 
 
    
 
 
 
Total
                
 
12,972
 
  
 
5,994
 
  
 
930
 
                  
 
 
    
 
 
    
 
 
 
The weighted average interest rate for all the outstanding borrowings was approximately 5.70% and 5.17% as of December 31, 2020 and September 30, 2021 respectively.
 
8.
Share-Based Compensation
In April 2021, the Company granted 1,833,807 options under the 2017 Plan to three executives.
All
options vest over two years with 40% of the grants vesting immediately on grant date and 30% of the options vesting on the first and second anniversary of the vesting commencement date.
In May 2021, the Company cancelled 2,187,287 options previously granted on September 1, 2019 to four executives. As a result, the Company immediately recognized the remaining share-based compensation expense of RMB 10,296 (US$1,594) related to unvested share-based awards.
The Company recognized RMB74,627 and RMB59,388 (US$9,217) of share-based compensation expense in general and administrative expenses for the nine months ended September 30, 2020 and 2021, respectively.
 
9.
Income Taxes
The Company is incorporated in the Cayman Islands and conducts its primary business operations through subsidiaries and VIEs in the PRC. It also has intermediate holding companies in the BVI and Hong Kong. Under the current laws of the Cayman Islands and BVI, the Company is not subject to tax on income nor capital gains. Additionally, upon payments of dividends by the Company to its shareholders, neither Cayman Islands nor BVI will impose withholding taxes. Under the Hong Kong tax laws, subsidiaries in Hong Kong are subject to the Hong Kong corporate income tax rate at 16.5% exempting foreign-derived income, and there are no withholding taxes in Hong Kong on remittance of dividends.
The Company’s subsidiaries, VIE and VIE’s subsidiaries 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 2020, Nantong Runda qualified for the requirements of small and micro-sized enterprise, and its first one million yuan of annual taxable income was eligible for 75% reduction and the taxable income between one million yuan and three million yuan was eligible for 50% reduction. The applicable CIT rate is 20%. Hainan Quhuo, Haikou Chengtu and Hainan Xinying are enterprises registered in the Hainan free trade port and engaged in substantial business in encouraged industries and are therefore entitled to preferential tax rate of 15%. Beijing Quhuo, the VIE, meets the requirements of “high and new technology enterprise” (“HNTE”) and could enjoy the preferential tax rate of 15%. Beijing Quhuo obtained the HNTE certificate in December, 2020 and was subject to an enterprise income tax (“EIT”) rate of 15% from calendar years 2020 through 2022.
The Company recorded a provision from income taxes of RMB30,258 and RMB3,049 for the nine months ended September 30, 2020 and 2021, respectively. The income tax provision is primarily driven by nondeductible share-based compensation expenses and unbenefited losses from continuing operations. Furthermore, the Company’s effective tax rates from continuing operations were 171% and (3)% for the nine months ended September 30, 2020 and 2021, respectively. Changes in various permanent differences relative to our pre-tax income/loss from continuing operations had a favorable impact on the effective tax rate for the first nine months ended September 30, 2021 compared to the same period prior year.

QUHUO LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
10.
Loss Per Share
 
    
Nine months ended September 30,
 
    
2020
    
2021
    
2021
 
    
RMB
    
RMB
    
US$
 
Numerator:
                          
Net loss attributable to ordinary shareholders
     (8,548      (86,555      (13,432
    
 
 
    
 
 
    
 
 
 
Denominator:
                          
Weighted average number of shares outstanding
     23,358,747        43,709,910        43,709,910  
    
 
 
    
 
 
    
 
 
 
Loss per share - basic and diluted
  
 
(0.37
  
 
(1.98
  
 
(0.31
    
 
 
    
 
 
    
 
 
 
For the periods presented herein, the computation of basic loss per share using the
two-class
method is not applicable as the Company is in a net loss position and the participating securities do not have contractual rights and obligations to share in the losses of the Company. The effects of all outstanding options and oth
e
r participating securities were also excluded from the computation of diluted loss per share as their effects would be anti-dilutive during the periods.
 
11.
Commitments and Contingencies
Contingencies
In the ordinary course of business, the Company may from time to time be involved in legal proceedings and litigation relating to injuries caused by workforce and labor arbitration cases brought by disgruntled workforce, among others. The Company records a liability when the Company believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated. With respect to the Company’s outstanding legal matters, based on its current knowledge, the Company believes that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties.

QUHUO LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
except for number of shares and per share data)
 
12.
Related Party Transactions
 
Names of the related parties
 
Relationship with the Company
Hainan Huiliu Tianxia Network Technology Co., Ltd.(“Hainan Huiliu”)   Entity controlled by a principle shareholder
Ningbo Nuannuan Network Technology Co., Ltd. (“Ningbo Nuannuan”)   Entity controlled by principle shareholders
Amounts due from/due to related parties as of December 31, 2020 and September 30, 2021 were as follows:
 
    
As of December 31,
    
As of September 30,
 
    
2020
    
2021
    
2021
 
    
RMB
    
RMB
    
US$
 
Amounts due from a related party
                           
Ningbo Nuannuan