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
(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
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:
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) | |
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 |
||||||||||||||
| Restricted cash |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Short-term investments |
4 | |||||||||||||
| Accounts receivable, net |
||||||||||||||
| Prepayments and other current assets |
||||||||||||||
| Amounts due from related parties |
12 | |||||||||||||
| |
|
|
|
|
|
|||||||||
| Total current assets |
||||||||||||||
| |
|
|
|
|
|
|||||||||
| Non-current assets: |
||||||||||||||
| Property and equipment, net |
||||||||||||||
| Intangible assets, net |
||||||||||||||
| Long-term investments |
||||||||||||||
| Right-of-use |
||||||||||||||
| Goodwill |
||||||||||||||
| Deferred tax assets |
||||||||||||||
| Other non-current assets |
5 | |||||||||||||
| |
|
|
|
|
|
|||||||||
| Total non-current assets |
||||||||||||||
| |
|
|
|
|
|
|||||||||
| Total assets |
||||||||||||||
| |
|
|
|
|
|
|||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY: |
||||||||||||||
| Current liabilities |
||||||||||||||
| Accounts payable |
||||||||||||||
| Short-term lease liabilities |
||||||||||||||
| Accrued expenses and other current liabilities |
6 | |||||||||||||
| Short-term debt |
7 | |||||||||||||
| Amounts due to related parties |
12 | |||||||||||||
| |
|
|
|
|
|
|||||||||
| Total current liabilities |
||||||||||||||
| |
|
|
|
|
|
|||||||||
| Non-current liabilities non-current liabilities of the consolidated VIE without recourse to the primary beneficiary of RMB: |
||||||||||||||
| Deferred tax liabilities |
||||||||||||||
| Long-term debt |
7 | |||||||||||||
| Long-term lease liabilities |
||||||||||||||
| Other non-current liabilities |
||||||||||||||
| |
|
|
|
|
|
|||||||||
| Total non-current liabilities |
||||||||||||||
| |
|
|
|
|
|
|||||||||
| Total liabilities |
||||||||||||||
| |
|
|
|
|
|
|||||||||
| 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$ |
||||||||||||||||
Additional paid-in capital |
||||||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||||||
Total Quhuo Limited shareholders’ equity |
||||||||||||||||
Non-controlling interests |
||||||||||||||||
Total shareholders’ equity |
||||||||||||||||
Total liabilities and shareholders’ equity |
||||||||||||||||
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 | |||||||||||||||
Cost of revenues |
( |
) | ( |
) | ( |
) | ||||||||||
General and administrative |
( |
) | ( |
) | ( |
) | ||||||||||
Research and development |
( |
) | ( |
) | ( |
) | ||||||||||
Gain/(loss) on disposal of assets, net |
( |
) | ( |
) | ||||||||||||
Operating loss |
( |
) |
( |
) |
( |
) | ||||||||||
Interest income |
||||||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ||||||||||
Other income, net |
||||||||||||||||
Foreign exchange loss |
( |
) | ( |
) | ( |
) | ||||||||||
Income (loss) before income tax |
( |
) |
( |
) | ||||||||||||
Income tax expense |
( |
) | ( |
) | ( |
) | ||||||||||
Net loss |
( |
) |
( |
) |
( |
) | ||||||||||
Net loss attributable to non-controlling interests |
||||||||||||||||
Net loss attributable to ordinary shareholders of Quhuo Limited |
( |
) |
( |
) |
( |
) | ||||||||||
Loss per share: |
||||||||||||||||
Basic |
10 | ( |
) | ( |
) | ( |
) | |||||||||
Diluted |
( |
) | ( |
) | ( |
) | ||||||||||
Shares used in loss per share computation: |
||||||||||||||||
Basic |
10 | |||||||||||||||
Diluted |
||||||||||||||||
Net loss |
( |
) |
( |
) |
( |
) | ||||||||||
Other comprehensive loss: |
||||||||||||||||
Foreign currency translation adjustment: |
( |
) |
( |
) |
( |
) | ||||||||||
Unrealized gain/(loss) on available-for-sale investments, net of tax |
— |
( |
) |
( |
) | |||||||||||
Comprehensive loss |
( |
) |
( |
) |
( |
) | ||||||||||
Comprehensive loss attributable to non-controlling interests |
||||||||||||||||
Comprehensive loss attributable to ordinary shareholders of Quhuo Limited |
( |
) |
( |
) |
( |
) | ||||||||||
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$”),
except for number of shares and per share data)
Ordinary Shares Outstanding |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive loss |
Quhuo Limited shareholders’ (Deficit)/Equity |
Non-controlling interests |
Total shareholders’ (Deficit)/Equity |
||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
||||||||||||||||||||||||||
Balance as of January 1, 2020 |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||
Issuance of ordinary shares in connection with initial public offering, net of offering cost |
— | — | — | |||||||||||||||||||||||||||||
Conversion of redeemable convertible preferred shares |
— | — | — | |||||||||||||||||||||||||||||
Non-controlling interest recognized from business combination |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | |||||||||||||||||||||||||||
Balance as of September 30, 2020 |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Balance as of January 1, 2021 |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||
Non-controlling interest recognized from business combination |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Exercise of share options |
— | — | — | — | ||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | |||||||||||||||||||||||||||
Balance as of September 30, 2021 |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Balance as of September 30, 2021 in US$ |
— | ( |
) |
( |
) |
|||||||||||||||||||||||||||
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 |
( |
) | ( |
) | ( |
) | ||||||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||||||||||
| Depreciation |
||||||||||||||||
| Amortization |
||||||||||||||||
| Deferred income taxes |
( |
) | ( |
) | ||||||||||||
| Share-based compensation |
8 | |||||||||||||||
| Gain on disposals of intangible assets |
( |
) | ( |
) | ( |
) | ||||||||||
| Net loss on disposal of property and equipment |
— | |||||||||||||||
| Changes in fair value of short-term investment |
( |
) | ||||||||||||||
| Others |
( |
) | ( |
) | ||||||||||||
| Changes in operating assets and liabilities: |
||||||||||||||||
| Amounts due from related parties |
||||||||||||||||
| Amounts due to related parties |
— | |||||||||||||||
| Accounts receivable |
( |
) | ( |
) | ( |
) | ||||||||||
| Prepayments and other current assets |
( |
) | ( |
) | ( |
) | ||||||||||
| Other non-current assets |
( |
) | ( |
) | ||||||||||||
| Accounts payable |
( |
) | ||||||||||||||
| Accrued expenses and other current liabilities |
||||||||||||||||
| Income taxes payable |
||||||||||||||||
| Lease liabilities |
( |
) | ( |
) | ( |
) | ||||||||||
| Other non-current liabilities |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|||||||||||
| Net cash provided by (used in) operating activities |
( |
) |
( |
) | ||||||||||||
| |
|
|
|
|
|
|||||||||||
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 |
( |
) | ( |
) | ( |
) | ||||||||||
| Proceeds from sales of short-term investments |
||||||||||||||||
| Acquisition of business, net of cash acquired |
( |
) | ( |
) | ( |
) | ||||||||||
| Purchase of property and equipment |
( |
) | ( |
) | ( |
) | ||||||||||
| Acquisition of intangible assets |
( |
) | ( |
) | ( |
) | ||||||||||
| Proceeds from disposals of intangible assets |
||||||||||||||||
| Others |
( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|||||||||||
| Net cash used in investing activities |
( |
) |
( |
) |
( |
) | ||||||||||
| |
|
|
|
|
|
|||||||||||
| Cash flows from financing activities |
||||||||||||||||
| Proceeds from short-term loans |
||||||||||||||||
| Repayments of short-term loans |
( |
) | ( |
) | ( |
) | ||||||||||
| Proceeds from initial public offering |
— | — | ||||||||||||||
| Repayments of long-term debt |
( |
) | ( |
) | ( |
) | ||||||||||
| Payments for IPO expenditures |
( |
) | — | — | ||||||||||||
| |
|
|
|
|
|
|||||||||||
| Net cash provided by financing activities |
||||||||||||||||
| |
|
|
|
|
|
|||||||||||
| Effect of exchange rate changes on cash |
||||||||||||||||
| Net increase in cash |
( |
) |
( |
) | ||||||||||||
| Cash and restricted cash, at the beginning of the period |
||||||||||||||||
| |
|
|
|
|
|
|||||||||||
| Cash and restricted cash, at the end of the period |
||||||||||||||||
| |
|
|
|
|
|
|||||||||||
| Supplement disclosure of cash flow information: |
||||||||||||||||
| Non-cash option exercise proceeds |
— | |||||||||||||||
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 operational solutions to
end-to-end
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 (“ASC 810”).
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
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 |
||||||||||||
| Restricted cash |
||||||||||||
| Short-term investments |
||||||||||||
| Accounts receivable |
||||||||||||
| Prepayments and other current assets |
||||||||||||
| Amounts due from related parties |
||||||||||||
| |
|
|
|
|
|
|||||||
| Total current assets |
||||||||||||
| |
|
|
|
|
|
|||||||
| Non-current assets: |
||||||||||||
| Property and equipment, net |
||||||||||||
| Intangible assets, net |
||||||||||||
| Long-term investments |
||||||||||||
| Operating lease right-of-use |
||||||||||||
| Goodwill |
||||||||||||
| Deferred tax assets |
||||||||||||
| Other non-current assets |
||||||||||||
| |
|
|
|
|
|
|||||||
| Total non-current assets |
||||||||||||
| |
|
|
|
|
|
|||||||
| Total assets |
||||||||||||
| |
|
|
|
|
|
|||||||
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 |
||||||||||||
Accrued expenses and other current liabilities |
||||||||||||
Short-term debt |
||||||||||||
Short-term lease liabilities |
||||||||||||
Amounts due to related parties |
||||||||||||
Total current liabilities |
||||||||||||
Non-current liabilities: |
||||||||||||
Deferred tax liabilities |
||||||||||||
Long-term debt |
||||||||||||
Long-term lease liabilities |
||||||||||||
Other non-current liabilities |
||||||||||||
Total non-current liabilities |
||||||||||||
Total liabilities |
||||||||||||
The VIE’s net asset balance was RMB428,351 and RMB391,422 (US$60,747
)
as of December 31, 2020 and Se
ptember 30, 2021, respectively.The table sets forth the results of operations and cash flows of the VIE included in the Company’s consolidated statements of comprehensive loss and cash flows for the nine months ended September 30, 2020 and 2021, respectively:
Nine Months Ended September 30, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Revenue |
||||||||||||
Net loss |
( |
) |
( |
) |
( |
) | ||||||
Net cash provided by (used in) operating activities |
( |
) |
( |
) | ||||||||
Net cash used in investing activities |
( |
) |
( |
) |
( |
) | ||||||
Net cash provided by financing activities |
||||||||||||
Effect of exchange rate changes on cash |
||||||||||||
Net (decrease) increase in cash |
( |
) |
( |
) |
( |
) | ||||||
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$”),
except for number of shares and per share data)
2. |
Summary of Significant Accounting Policies (continued) |
Fair value measurements
Financial instruments of the Company primarily include cash, short-term investments, accounts receivable, other receivables, accounts payable and accrued liabilities, other receivables, amounts due from and due to related parties, long-term investments, deposits, equity consideration payable, contingent consideration payable, short-term debt, long-term debt and redeemable convertible preferred shares. The Company applies ASC 820, (‘‘ASC 820’’), in measuring fair value. ASC 820 defines fair value, establishes a framework for measuring fair value and requires disclosures to be provided on fair value measurement. The short-term investments are measured at fair value. The redeemable convertible preferred shares were initially recorded at fair value as of the issuance date. Equity method investments have no quoted market prices and it is not practicable to estimate their fair value without incurring excessive costs. The carrying amounts of the remaining financial instruments, except for long-term debt and deposits, approximate their fair values because of their short-term maturities.
Fair Value Measurements and Disclosures
ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level
1-Observable
inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level
2-Include
other inputs that are directly or indirectly observable in the marketplace. Level
3-Unobservable
inputs which are supported by little or no market activity. QUHUO LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”),
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 |
— | — | — | |||||||||||||||||
Short-term investments, alternative investment fund (1) |
— | — | — | ( |
) | |||||||||||||||
Total |
— |
— |
( |
) | ||||||||||||||||
Liabilities |
||||||||||||||||||||
Payables for contingent consideration |
— | — | — | |||||||||||||||||
Total |
— |
— |
— |
|||||||||||||||||
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 |
— | — | — | |||||||||||||||||
Short-term investments, alternative investment fund (1) |
— | — | — | |||||||||||||||||
Total |
— |
— |
||||||||||||||||||
Liabilities |
||||||||||||||||||||
Purchase consideration payables |
— | — | — | |||||||||||||||||
Total |
— |
— |
— |
|||||||||||||||||
| (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 |
||||||||||||
Mobility service solutions |
||||||||||||
Housekeeping solutions and other services |
||||||||||||
Others |
||||||||||||
Total revenues |
||||||||||||
4. |
Short-term Investments |
The Company’s short-term investments included investmentThe following is a summary of the Company’s short-term investments:
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. As of December 31, |
As of September 30, |
|||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Commercial banks deposits |
||||||||||||
Investment in fund |
||||||||||||
Total short-term investments |
||||||||||||
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 gain26,467 and
s
of RMBunrealized 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 |
||||||||||||
Prepayments |
||||||||||||
Other receivables |
||||||||||||
Total other non-current assets |
||||||||||||
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 |
||||||||||||
Income tax payables |
||||||||||||
Other tax payables |
||||||||||||
Salary and welfare payables |
||||||||||||
Deposits received from ride-hailing drivers |
||||||||||||
Purchase consideration payable |
||||||||||||
Others |
||||||||||||
Total |
||||||||||||
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 |
||||||||||||||||||
SPD Silicon Valley Bank |
||||||||||||||||||
Agricultural Bank of China |
— | — | ||||||||||||||||
Long-term debt, current portion |
||||||||||||||||||
Total |
||||||||||||||||||
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$”),
except for number of shares and per share data)
7. |
Debt (Continued) |
In November 2020, the Company entered into a banking facility agreement with SPD Silicon Valley Bank, pursuant to which the Company is entitled to borrow RMB70,000 with a floating interest rate benchmarked to 30,000 , RMB 30,000 and RMB 10,000 in November 2020, January 2021 and April 2021 The loan is intended for general working capital purposes and is secured by certain accounts receivables of the Company.
one-year
lending rate of PBOC. The Company drew down RMB, respectively.
Long-term debt
The following table presents the Company’s long-term debt as of December 31, 2020 and September 30, 2021:
Annual interest rates |
Term |
As of December 31, 2020 |
As of September 30, 2021 |
|||||||||||||||
RMB |
RMB |
US$ |
||||||||||||||||
Long-term debt, current portion |
||||||||||||||||||
Long-term debt, non-current portion |
||||||||||||||||||
Total |
||||||||||||||||||
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. 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.
All
options vest over 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 |
( |
) | ( |
) | ( |
) | ||||||
Denominator: |
||||||||||||
Weighted average number of shares outstanding |
||||||||||||
Loss per share - basic and diluted |
( |
) |
( |
) |
( |
) | ||||||
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 othe
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$”),
except for number of shares and per share data)
12. |
Related Party Transactions |
Names of the related parties |
Relationship with the Company | |
| Hainan Huiliu Tianxia Network Technology Co., Ltd.(“Hainan Huiliu”) | ||
| Ningbo Nuannuan Network Technology Co., Ltd. (“Ningbo Nuannuan”) |
Amounts due from/due to related parties as of December 31, 2020 and September 30, 2021 were as follows:
As of December 31, |
As of September 30, |
|||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
Amounts due from a related party |
||||||||||||
Ningbo Nuannuan |
||||||||||||