Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and Entity Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Trading Symbol | XRF |
Entity Registrant Name | China Rapid Finance Ltd |
Entity Central Index Key | 0001346610 |
Current Fiscal Year End Date | --12-31 |
Entity Well Known Seasoned Issuer | No |
Entity Current Reporting Status | No |
Entity Voluntary Filers | No |
Entity Filer Category | Non-accelerated Filer |
Entity Shell Company | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | true |
Entity File Number | 001-38051 |
Entity Address, Address Line One | 2nd Floor, Building D |
Entity Address, Address Line Two | BenQ Plaza |
Entity Address, Address Line Three | 207 Songhong Road |
Entity Address, City or Town | Shanghai |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 200335 |
Business Contact | |
Document and Entity Information [Line Items] | |
Entity Address, Address Line One | 2nd Floor, Building D |
Entity Address, Address Line Two | BenQ Plaza |
Entity Address, Address Line Three | 207 Songhong Road |
Entity Address, City or Town | Shanghai |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 200335 |
Contact Personnel Name | Steven Foo |
City Area Code | 21 |
Local Phone Number | 6032-5999 |
Contact Personnel Email Address | IR@crfchina.com |
Class A Ordinary Shares | |
Document and Entity Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 58,973,604 |
Class B Ordinary Shares | |
Document and Entity Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 6,785,606 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 33,029 | $ 94,881 |
Restricted cash | 35,833 | 14,673 |
Loans receivable, net of allowance for loan losses US$99 thousand and US$554 thousand as of December 31, 2017 and 2018, respectively | 8,427 | 627 |
Constract asset, net | 1,373 | |
Safeguard Program asset | 7,212 | |
Receivables, prepayments and other assets | 11,898 | 14,305 |
Property equipment and software, net | 5,576 | 5,830 |
Total assets | 96,136 | 137,528 |
Liabilities: | ||
Safeguard Program payable | 17,950 | |
Accrued liabilities | 90,667 | 51,895 |
Income tax payable | 2,801 | 2,008 |
Constract liabilities | 708 | |
Deferred revenue | 1,043 | 6,637 |
Total liabilities | 95,219 | 78,490 |
Commitments and contingencies (Note 15) | ||
Shareholders’(deficit) equity | ||
Ordinary shares, US$0.0001 par value, 500,000,000 shares authorized, 64,702,673 and 65,759,210 shares issued and outstanding as of December 31, 2017 and 2018, respectively | 6 | 6 |
Additional paid-in capital | 283,888 | 281,471 |
Accumulated other comprehensive income | 201 | (743) |
Accumulated deficit | (283,178) | (221,696) |
Total shareholders’(deficit) equity | 917 | 59,038 |
Total liabilities and shareholders’ (deficit)/equity | $ 96,136 | $ 137,528 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 31, 2015 | Jul. 31, 2004 |
Statement Of Financial Position [Abstract] | |||||
Allowance for loan losses | $ 554 | $ 99 | $ 112 | ||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | |||
Ordinary shares, shares issued | 65,759,210 | 64,702,673 | 12,623,530 | ||
Ordinary shares, shares outstanding | 65,759,210 | 64,702,673 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | |||
Revenue | $ 74,900 | $ 92,777 | $ 56,983 |
Net interest income/(expense) | 555 | ||
(Provision)/Reversal for loan losses | (3,969) | 13 | |
Discretionary Payments | (4,605) | (4,576) | |
Business and related taxes and surcharges | (262) | (503) | (1,122) |
Net revenue | 66,619 | 87,711 | 55,861 |
Operating expense: | |||
Servicing expenses | (10,342) | (13,651) | (13,889) |
Sales and marketing expenses | (34,669) | (45,341) | (29,954) |
General and administrative expenses | (72,324) | (54,121) | (36,742) |
Product development expenses | (15,994) | (11,642) | (8,630) |
Total operating expenses | (133,329) | (124,755) | (89,215) |
Other income (expense): | |||
Other income (expense), net | 1,253 | 508 | (9) |
Loss before income tax expense | (65,457) | (36,536) | (33,363) |
Income tax expense | (1,072) | (113) | (3) |
Net loss | (66,529) | (36,649) | (33,366) |
Accretion on convertible redeemable preferred shares to redemption value | 0 | (2,868) | (6,377) |
Deemed dividend to Series C convertible redeemable preferred shares | (635) | ||
Net loss attributable to ordinary shareholders | (66,529) | (121,551) | (40,378) |
Net loss | (66,529) | (36,649) | (33,366) |
Foreign currency translation adjustment, net of nil tax | 944 | 170 | (1,885) |
Comprehensive loss | $ (65,585) | $ (36,479) | $ (35,251) |
Weighted average number of ordinary shares used in computing net loss per share | |||
Basic | 65,199,459 | 49,054,201 | 16,437,946 |
Diluted | 65,199,459 | 49,054,201 | 16,437,946 |
Loss per share attributable to ordinary shareholders | |||
Basic | $ (1.02) | $ (2.48) | $ (2.46) |
Diluted | $ (1.02) | $ (2.48) | $ (2.46) |
Series A Preferred Shares | |||
Other income (expense): | |||
Accretion on convertible redeemable preferred shares to redemption value | $ (96) | $ (288) | |
Series B Preferred Shares | |||
Other income (expense): | |||
Accretion on convertible redeemable preferred shares to redemption value | (540) | (1,621) | |
Series C Preferred Shares | |||
Other income (expense): | |||
Accretion on convertible redeemable preferred shares to redemption value | (2,232) | (4,468) | |
Deemed dividend to Series C convertible redeemable preferred shares | (635) | ||
Series C Preferred Shares | Upon Initial Public Offering | |||
Other income (expense): | |||
Deemed dividend to Series C convertible redeemable preferred shares | (82,034) | ||
Transaction and Service Fees | |||
Revenue: | |||
Revenue | $ 70,615 | 91,621 | 55,891 |
Other Revenue | |||
Revenue: | |||
Revenue | $ 4,285 | $ 1,156 | $ 1,092 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT - USD ($) $ in Thousands | Total | Upon Initial Public Offering | Series A Preferred Shares | Series B Preferred Shares | Series C Preferred Shares | Series A B C Preferred Stock | Ordinary Shares | Ordinary SharesSeries A B C Preferred Stock | Additional Paid-in Capital | Additional Paid-in CapitalUpon Initial Public Offering | Additional Paid-in CapitalSeries A Preferred Shares | Additional Paid-in CapitalSeries B Preferred Shares | Additional Paid-in CapitalSeries C Preferred Shares | Additional Paid-in CapitalSeries A B C Preferred Stock | Accumulated other comprehensive income/(loss) | Accumulated deficit | Accumulated deficitSeries B Preferred Shares | Accumulated deficitSeries C Preferred Shares |
Beginning Balance at Dec. 31, 2015 | $ (61,585) | $ 2 | $ 972 | $ (62,559) | ||||||||||||||
Beginning Balance, Shares at Dec. 31, 2015 | 16,266,841 | |||||||||||||||||
Share-based compensation | 1,003 | $ 1,003 | ||||||||||||||||
Vesting of incentive shares | 241,196 | |||||||||||||||||
Deemed dividend to Series C convertible redeemable preferred shares at modification of Series C convertible redeemable preferred shares | $ 635 | $ 635 | ||||||||||||||||
Accretion on convertible redeemable preferred shares to redemption value | $ (288) | $ (1,621) | (5,103) | $ (288) | $ (715) | (635) | $ (906) | $ (4,468) | ||||||||||
Foreign currency translation adjustments | (1,885) | (1,885) | ||||||||||||||||
Net profit (loss) | (33,366) | (33,366) | ||||||||||||||||
Ending Balance at Dec. 31, 2016 | (102,210) | $ 2 | (913) | (101,299) | ||||||||||||||
Ending Balance, Shares at Dec. 31, 2016 | 16,508,037 | |||||||||||||||||
Share-based compensation | 2,497 | 2,497 | ||||||||||||||||
Share-based compensation, Shares | 455,166 | |||||||||||||||||
Receipts of reserve amounts for vested incentive shares | 55 | 55 | ||||||||||||||||
Deemed dividend to Series C convertible redeemable preferred shares at modification of Series C convertible redeemable preferred shares | 82,034 | (82,034) | ||||||||||||||||
Accretion on convertible redeemable preferred shares to redemption value | $ (96) | $ (540) | $ (2,232) | $ (96) | $ (540) | $ (518) | $ (1,714) | |||||||||||
Conversion of Series A, B and C preferred shares upon Initial Public Offering | $ 141,121 | $ 3 | $ 141,118 | |||||||||||||||
Conversion of Series A, B and C preferred shares upon Initial Public Offering, Shares | 36,239,470 | |||||||||||||||||
Issuance of common shares upon Initial Public Offering | 63,020 | $ 1 | 63,019 | |||||||||||||||
Issuance of common shares upon Initial Public Offering, Shares | 11,500,000 | |||||||||||||||||
Initial Public Offering expense | $ (6,098) | $ (6,098) | ||||||||||||||||
Foreign currency translation adjustments | 170 | 170 | ||||||||||||||||
Net profit (loss) | (36,649) | (36,649) | ||||||||||||||||
Ending Balance at Dec. 31, 2017 | 59,038 | $ 6 | 281,471 | (743) | (221,696) | |||||||||||||
Ending Balance, Shares at Dec. 31, 2017 | 64,702,673 | |||||||||||||||||
Share-based compensation | 2,417 | 2,417 | ||||||||||||||||
Share-based compensation, Shares | 1,056,537 | |||||||||||||||||
Foreign currency translation adjustments | 944 | 944 | ||||||||||||||||
Adoption ASC 606 | 5,047 | 5,047 | ||||||||||||||||
Net profit (loss) | (66,529) | (66,529) | ||||||||||||||||
Ending Balance at Dec. 31, 2018 | $ 917 | $ 6 | $ 283,888 | $ 201 | $ (283,178) | |||||||||||||
Ending Balance, Shares at Dec. 31, 2018 | 65,759,210 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Cash flows from operating activities: | ||||
Net loss | $ (66,529) | $ (36,649) | $ (33,366) | |
Adjustments to reconcile net profit (loss) to net cash provided by/(used in) operating activities: | ||||
Provision for loan losses | 3,969 | (13) | ||
Depreciation | 2,071 | 2,331 | 1,381 | |
Fair value changes of investments held for trading | (33) | |||
Share-based compensation | 2,471 | 2,497 | 1,003 | |
Loss (gain) on extinguishment of convertible promissory note | 25 | (355) | ||
Change in fair value of the convertible promissory note | 626 | |||
Changes in operating assets and liabilities: | ||||
Safeguard Program assets and liabilities | [1] | (10,474) | (2,160) | 1,396 |
Investments held for trading | 2,842 | |||
Loans receivable | (3,594) | (63) | 87 | |
Receivables, prepayments and other assets | 3,783 | 2,458 | (273) | |
Accrued liabilities | 36,217 | 22,084 | 847 | |
Income tax payable | 911 | (1) | 4 | |
Deferred revenue | (5,406) | 5,790 | (104) | |
Net cash used in operating activities | (36,635) | (3,701) | (25,945) | |
Cash flows from investing activities: | ||||
Purchase of property, equipment and software | (2,097) | (2,190) | (3,087) | |
Investment in Yunnan Trust | (665) | |||
Net cash used in investing activities | (2,762) | (2,190) | (3,087) | |
Cash flows from financing activities: | ||||
Proceeds from issuance of convertible redeemable preferred shares | 22,431 | 20,389 | ||
Proceeds from initial public offering (net of underwriters' commissions of USD 5,980 thousands) | 63,020 | |||
Proceeds from exercise of incentive shares | 55 | |||
Payment of convertible redeemable preferred shares issuance costs | (1,329) | (1,813) | ||
Proceeds from issuance of convertible promissory notes | 500 | 5,426 | ||
Net cash provided by financing activities | 84,677 | 24,002 | ||
Effect of exchange rate changes on cash and cash equivalents | (1,295) | (900) | (237) | |
Net increase/(decrease) in cash and cash equivalent and restricted cash | (40,692) | 77,886 | (5,267) | |
Cash and cash equivalents at beginning of year | 109,554 | 31,668 | 36,935 | |
Cash and cash equivalents at end of year | $ 68,862 | 109,554 | 31,668 | |
Supplemental disclosure of cash flow information | ||||
Cash paid for income taxes | 675 | 7 | ||
Supplemental disclosure of non-cash operating, investing and financing activities | ||||
Accruals related to purchase of equipment and software | 144 | 109 | ||
Accretion on convertible redeemable preferred shares to redemption value | 2,868 | 6,377 | ||
Conversion of convertible promissory notes to Series C convertible redeemable preferred shares | $ 500 | 4,502 | ||
Promissory note receivable arising from issuance of Series C convertible redeemable preferred share | $ 4,000 | |||
[1] | (1)The majority of the Safeguard Program assets and liabilities (namely, restricted cash, Safeguard Program asset and Safeguard Program payable) do not flow through the Group’s cash accounts. The non-cash transactions related to the Safeguard Program that flowed directly through restricted cash for the Safeguard Program are as follows: For the Year Ended December 31, 2016 2017 2018 Increase in restricted cash for Safeguard Program 102,620 85,916 6,701 Decrease in restricted cash for Safeguard Program (101,158) (88,631) (7,653) |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement Of Cash Flows [Abstract] | |||
Underwriters' commissions on issuance of initial public offering | $ 5,980 | ||
Increase in restricted cash for Safeguard Program | $ 6,701 | 85,916 | $ 102,620 |
Decrease in restricted cash for Safeguard Program | $ (7,653) | $ (88,631) | $ (101,158) |
Organization and Principal Acti
Organization and Principal Activities | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Principal Activities | 1. Organization and principal activities China Rapid Finance Limited (the “Company”), formerly known as China Risk Finance LLC, was formed in Delaware, United States of America (the “USA”) on July 12, 2004. The Company, through its subsidiaries (collectively, the “Group”) is principally engaged in providing a consumer lending marketplace for lenders (“marketplace investors”) and borrowers in the People’s Republic of China (the “PRC” or “China”) with predictive selection technology “PST”, automated decisioning technology “ADT”, non-credit data analytic and risk-based pricing capabilities, to serve marketplace investors and borrowers both online and through a physical network of data verification centres. The Group also engages in the micro-credit lending business through one of its subsidiaries. In 2015, the Company undertook a series of reorganization transactions to redomicile its business from the USA to the Cayman Islands (the “Reorganization”). The main purpose of the Reorganization is to establish a Cayman Islands holding company in preparation for its initial public offering. On August 18, 2015 China Risk Finance LLC was converted from a Delaware limited liability company to a Cayman Islands exempted company by way of continuation, and in conjunction therewith, its name was changed to China Rapid Finance Limited. In connection with the Reorganization, all of China Risk Finance LLC’s ordinary shares were exchanged for ordinary shares of China Rapid Finance Limited with equivalent rights. The Series A, Series B and Series C preferred shares of China Risk Finance LLC were cancelled in exchange for an equivalent number of Series A, Series B and Series C preferred shares of China Rapid Finance Limited with equivalent rights and preferences before and after the Reorganization Upon the completion of the Reorganization, the Company’s shares and per share information including the basic and diluted earnings (loss) per share have been presented retrospectively as of the beginning of the earliest period presented in the consolidated financial statements. As of December 31, 2018, the Company’s principal subsidiaries are as follows: Name Percentage of ownership Date of incorporation Place of incorporation China Risk Finance LL (China) Co., Ltd. (“CRF China”) 100 % July 15, 2005 Shanghai, the PRC CRF Wealth Management Co., Ltd. (“Wealth management”) 100 % February 5, 2013 Shenzhen, the PRC Shanghai Shouhang Business Management Co., Ltd. (“Shanghai Shouhang”) 100 % July 11, 2002 Shanghai, the PRC Capital Financial Co., Ltd. (“Beijing Shouhang”) 100 % August 4, 2005 Beijing, the PRC Haidong CRF Micro-credit Co., Ltd. (“Haidong CRF Micro-credit”) 100 % (1) May 8, 2012 Qinghai, the PRC Qianhai Shuliang(Shenzhen) Technology Co., Ltd. 100 % December 8, 2016 Shenzhen, the PRC (1) CRF China holds 30% shares of Haidong CRF Micro-credit and 70% shares indirectly through nominee shareholders. Liquidity The Group’s liquidity is based on its ability to generate cash from operating activities, obtain capital financing from equity interest investors and borrow funds on favorable economic terms to fund its general operations and capital expansion needs. The Group’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan, which includes increasing revenue while controlling operating cost and expenses to generate positive operating cash flows and obtaining funds from outside sources of financing to generate positive financing cash flows. As of December 31, 2017 and 2018, the Group’s balance of cash and cash equivalents was US$94,881 thousand and US$33,029 thousand.. Based on cash flow projections from operating and financing activities and existing balance of cash and cash equivalents, management believes that there is substantial doubt as to whether existing cash and cash equivalents will be sufficient to fund its operations within one year from the date the consolidated financial statements are issued. The Company plans to continue to fund its losses from operations through cash and cash equivalents, as well as through future equity offerings, debt financings, other third party funding, and new business developments to generate profitable operations. Therefore, the accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments for the recovery and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. However, there can be no assurance that additional funds will be available when needed from any source or, if available, on terms that are acceptable to the Company. Initial public offering The Company completed its initial public offering (“IPO”) on April 28, 2017 on New York Stock Exchange (“NYSE”) and the underwriters subsequently exercised their over-allotment option on May 11, 2017. The Company issued and sold a total of 11,500,000 American Depositary Shares (“ADSs”) pursuant to these transactions. Each ADS represents one common share. The net proceeds received by the Company, after deducting commissions and offering expenses, amounted to approximately US$ 63,020 thousand. Upon the completion of the IPO, all of the Company’s outstanding preferred shares were converted into common shares immediately as of the same date. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of significant accounting policies (a) Basis of presentation The consolidated financial statements of the Group are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). (b) Principal of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, including subsidiaries held by the Group through nominee shareholders. All significant intercompany transactions and balances have been eliminated Haidong CRF Micro-credit Co. and Qianhai Shuliang (Shenzhen) Technology Co., Ltd. Due to provincial regulations on size of individual shareholding percentages, a subsidiary of the Group, Haidong CRF Micro-credit, is 30% directly owned by the Group and 70% indirectly owned through nominee shareholders, the majority of which are immediate family members of the CEO and founder of the Group. Qianhai Shuliang (Shenzhen) Technology Co., Ltd.(“QHSL”) was founded on December 8, 2016 and entered the e-commerce services industry in 2018. QHSL is 100% indirectly owned by the Company through a nominee shareholder who is an employee of the Company. Upon the formation of the two entities, the Group entered into nominee shareholding agreements with the nominee shareholders with the following key terms: • All of the capital for the formation of Haidong CRF Micro-credit and QHSL was provided by the Group; • The Group has the all rights and obligations as if it is the direct shareholder; • The nominee shareholders hold the equity interest in it on behalf of the Group; • The Group can at anytime, at its discretion, have the nominee shareholders transfer their legal interest in Haidong CRF Micro-credit to a party specifically appointed by the Group; and • The nominee shareholding agreement shall be in force until the underlying legal interest has been transferred to the Group or a party specifically appointed by the Group. The nominee shareholding agreements are legally enforceable. Yunnan Trust Loan Aid Program According to the structure of the trust, the Company is effectively absorbing losses and receiving any residual benefits of the project. Therefore, the Company concluded that XRF is the primary beneficiary and should consolidate the Program under ASC 810.. Yunnan trust Zhishan No. 107 collective fund trust plan was signed by Yunnan trust and Zhonghe Win-Win Asset Management Co., Ltd. on September 14, 2018. Converted at the average exchange rate of 6.6987 in 2018 and year end rate of 6.8632, the total fund scale of the project is US$ 11 million (RMB 74 million), and the project duration is 6 months. Out of the fund, Zhonghe contributed a junior tranche of US $3.3 million (RMB 22.2 million), and the priority fund raised by Yunnan Trust was US $7.7 million (51.8 million yuan). Zhonghe Win-Win transferred the above-mentioned junior tranche funds to Haidong Credit and Microfinance Co., Ltd. The risk loss rate of the project is estimated to be 4.9% per 2018 Q2 loss rate released on the official website. Haidong's junior piece of fund and related interest payable are offset after the consolidated statements. As of December 31, 2018, the amount of loans receivable after consolidation is equivalent to US$ 8.2 million (RMB 56.2 million), and the interest payable is equivalent to US$ 0.2 million (RMB 1.7 million) (c) Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual amounts could differ from those estimates and differences could be material. Changes in estimates are recorded in the period they are identified Significant accounting estimates reflected in the Group’s consolidated financial statements include valuation allowances for deferred tax assets, valuation of share-based awards, measurement of Safeguard Program payable, and allocation of considerations under revenue arrangements with multiple elements. (d) Foreign currency and foreign currency translation The United States dollar (“US$”) is the functional currency of the Group’s entities incorporated in Cayman Islands and Delaware, USA. The functional currency of the Group’s PRC subsidiaries is the Renminbi (“RMB”). Transactions denominated in other than the functional currencies are re-measured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currency at the prevailing rates of exchange at the balance date. The resulting exchange differences are reported in the consolidated statements of comprehensive income (loss) Assets and liabilities of the subsidiaries in PRC are translated into US$ using the exchange rate in effect at each balance sheet date. Income and expenses items of the subsidiaries in PRC are translated into US$ at the average exchange rates prevailing during the reporting period. Foreign currency translation adjustments arising from these are accumulated as a separate component of shareholders’ equity (deficit) in the consolidated financial statements. The exchange rates used for translation on December 31, 2016, 2017 and 2018 were US$1.00 = RMB6.9370, RMB6.5342 and RMB6.8632 respectively, being the index rates stipulated by the People’s Bank of China . (e) Certain risks and concentration Credit risk is one of the most significant risks for the Company’s micro-lending business. The Group records an allowance for loan losses based on its estimated probable losses against its loans receivable. Apart from the loans receivable, the Group’s financial instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash and cash equivalents, investments held for trading. As of December 31, 2017 and 2018, substantially all of the Group’s cash and cash equivalents, restricted cash and investments held for trading were held in major financial institutions located in the PRC and in the USA, which management considers to be of high credit quality. No individual customer accounted for more than 10% of net revenues for the years ended December 31, 2017 and 2018. (f) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, time deposits, and funds held in deposit accounts with banks and third-party payment companies, which are highly liquid and have original maturities of three months or less and are unrestricted as to withdrawal or use. (g) Restricted cash Restricted cash represents: (i) virtual accounts' funds held in custodian banks (h) Fair value measurement Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement The three levels of inputs that may be used to measure fair value include: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities. Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Group’s financial instruments include cash and cash equivalents, restricted cash, loans receivable, contract assets, Safeguard Program asset, receivables, prepayments and other assets, accrued liabilities and Safeguard Program payable. The carrying amounts of loans receivable, receivables, prepayments and other assets, and accrued liabilities approximate their fair values due to the short-term maturity of these instruments. The carrying amount of Safeguard Program asset/payable approximate their fair values as the interest rates applied reflect the current quoted market yield for comparable borrowings (Level 2 inputs). As of December 31, 2017 and 2018, the Group had financial instruments of US$1,514 thousand and US$445 thousand that were measured at fair value and classified as level 3 The fair value of the Group’s Level 1 financial assets are based on quoted prices in active market for identical assets. For the fair value of Level 3 financial assets, the Group considers the probable future cash collectible and takes into account of any potential unrecoverable amounts according to the contract terms in estimating its fair value. At each reporting date, the Company estimates the future cash flows and assesses whether there is any indicator of impairment.. The following table sets forth the activity of recurring fair values measurements categorized within Level 3 of the hierarchy: For the Year Ended December 31, 2016 2017 2018 Beginning — 1,514 1,514 Net addition/(disposal) of financial assets 1,514 — (1,069) Issuance of convertible promissory notes 5,426 500 — Change in fair value of convertible promissory notes (626 ) — — Settlement of conversion option of convertible promissory notes upon exercise (4,800 ) (500 ) — Ending 1,514 1,514 445 The Group did not have any instruments that were measured at fair value on a non-recurring basis as of December 31, 2017 and 2018. (i) Loans receivable, net Loans receivable represents loan amounts due from customers of the Group’s micro-credit lending business, under which the Group provides direct loans to individuals. The Group has the intent and the ability to hold such loans receivable for the foreseeable future or until maturity or payoff. Loans receivable is recorded at unpaid principal balances, net of allowance that reflects the Company’s best estimate of the amounts that will not be collected. The loans receivable portfolio mainly consists of personal loans with the term periods ranging from 7 days to 3 years. The allowance for loan losses is determined at a level believed to be reasonable to absorb probable losses inherent in the portfolio as of each balance sheet date. The allowance is provided based on an assessment performed both on an individual-loan basis and collective basis. For individual loans that are past due for a certain period of time or where there is an observable indicator of impairment, a specific allowance is provided. All other loans not already included in the individual assessment are assessed collectively depending on factors such as delinquency rate, size, and other risk characteristics of the portfolio. The Company evaluates and adjusts its allowance for loan losses on a quarterly basis or more often as necessary. The Group writes off the loans receivable and the related allowance when management determines that full repayment of a loan is not probable. The primary factor in making such determination is the potential recoverable amounts from the delinquent debtor. (j) Contract assets Contract assets represent the Group’s right to consideration in exchange for facilitation services that the Company has transferred to the customer before payment is due. The Group only recognizes contract assets to the extent that the Group believes it is probable that it will collect substantially all of the consideration to which it will be entitled to in exchange for the services transferred to the customer. Contract assets are stated at the historical carrying amount net of write-offs and allowance for doubtful accounts. The Group establishes an allowance for doubtful accounts based on estimates, historical default experience and other factors surrounding the credit risk of borrowers. The Group evaluates and adjusts its allowance for contract assets on a quarterly basis or more often as necessary. Contract assets are written off when a settlement is reached for an amount that is less than the outstanding historical balance or when the Group has determined the balance will not be collected (k) Interest receivable Interest on loans receivable, is accrued and recognized as income when earned. Accrual of interest is discontinued when reasonable doubt exists as to the full, timely collection of interest or principal (e.g. when the loans have been past due by 90 days). Subsequent recognition of income for loans in non-accrual status occurs only to the extent payment is received, subject to the management’s assessment of the collectability of the remaining interest and principal. Loans are restored to an accrual status when they are no longer delinquent and collectability of interest and principal is probable. (l) Property, equipment and software, net Property, equipment and software are recorded at cost, less accumulated depreciation and impairment. Depreciation of property, equipment and software is calculated on a straight-line basis, after consideration of expected useful lives and estimated residual values. The estimated useful lives of these assets are generally as follows: Category Estimated useful life Estimated residual value Vehicles 5 years 5% Office furniture and equipment 5 years 5% Computer and electronic equipment 3-5 years 5% Software 5 years nil Leasehold improvements Lesser of the lease terms or the estimated useful lives of the assets nil Expenditures for maintenance and repairs are expensed as incurred. Gains and losses on disposal of equipment and software is the difference between net sales proceeds and carrying amount of the relevant assets and are recognized in the consolidated statements of comprehensive income (loss) (m) Impairment of long-lived assets The Group evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amounts to the expected future undiscounted cash flows attributable to these assets. If it is determined that an asset is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the assets exceeds the expected discounted cash flows arising from those assets. No impairment of long-lived assets was recognized for the years ended December 31, 2016, 2017 and 2018. (n) Safeguard Program The Group maintains a Safeguard Program for the benefit of the borrowers and investors of lifestyle loans on its marketplace. In the event of borrowers’ default, marketplace investors may be entitled to receive unpaid interest and principal under the terms of the Safeguard Program. In general, any unpaid interest shall be paid from the Safeguard Program to an investor when the borrower does not repay as scheduled, and any outstanding principal shall be paid from the Safeguard Program to an investor if the loan remains delinquent for more than 180 days. There is no limit on the period of time in which an investor can receive payments for unpaid interest and principal from the Safeguard Program. The Safeguard Program contributions are generally not refunded even if there is no loan default At loan inception and upon subsequent loan repayments, a certain percentage of cash is collected and segregated by the Group in restricted cash accounts. For accounting purposes, at loan inception, the Group is required to record its Safeguard Program payable in accordance with ASC Topic 460, Guarantees. Subsequent to the loan’s inception, the Safeguard Program payable is measured in a combination of two components: (i) ASC Topic 460 component; and (ii) ASC Topic 450 component. The liability recorded based on ASC Topic 460 is determined on a loan by loan basis and it is reduced when the Group is released from the underlying risk, meaning when the loan is repaid by the borrower or when the lender is compensated in the event of a default. This component is a stand ready obligation which is not subject to the probable threshold used to record a contingent obligation. The other component is a contingent liability determined on a pool basis, representing the obligation to make future payments under the Safeguard Program measured using the guidance in ASC Topic 450, Contingencies A Safeguard Program asset is recognized at loan inception when the loan agreements specify the amount of future payments that will be contributed to the Safeguard Program. The Safeguard Program asset is accounted for as a financial asset and is measured at fair value at inception. The Group considers the probable future cash collectible and takes into account of any expected prepayments and potential loan defaults in estimating its fair value. At each reporting date, the Company estimates the future cash flows and assesses whether there is any indicator of impairment. If the carrying amounts of the Safeguard Program asset exceed the expected cash to be received, an impairment loss is recorded for the Safeguard Program asset not recoverable and is reported under revenue in the statements of comprehensive income. At loan inception, the Group determines the Safeguard Program contributions based on the estimated loss rate of the loans. In estimating the loss rate of the loans, the underlying risk profile and historical loss experience are taken into consideration. The Group gathers information to assess each borrower’s risk profile and assigns an application score, determined using the Group’s proprietary scoring technology, to all of its borrowers. These borrowers are then grouped into different categories based on the application score assigned for which the Group develops an estimated default rate based on actual historical loss experience of each score category. An ultimate loss rate is estimated for each loan based on this method, taking into account of any appropriate fine-tuning as necessary. The Safeguard Program liability at loan inception is determined based on the expected loss rate resulted. The Group regularly reviews the borrower’s risk profile, actual loss rate of each score category and relevant economic factors to ensure the estimation are kept up-to-date. Consequently, the contribution percentages are updated regularly to ensure that the total Safeguard Program contributions, including both upfront and subsequent contributions, are based on the estimated fair value of the probability of loss at loan inception. Such contribution percentages vary depending on the probability of losses of the loans covered by the Safeguard Program. Once the contribution percentages are determined at loan inception, no adjustment can be made subsequently. A majority of the Safeguard Program contributions are collected upfront and segregated in a designated account as restricted cash. Contributions that are collectible from subsequent repayments are less substantial. Approximately 1% to 2% of subsequent loan repayments are segregated into a restricted cash account. The Group maintains a Safeguard Program for the benefits of the borrowers and investors of lifestyle loans on its marketplace. The investors may choose whether or not they wish to opt into the program. Investors who opt into the Safeguard Program bear their own financial risk and may suffer a loss if the restricted cash balance plus the subsequent cash receipts from Safeguard Program asset are exhausted. The Safeguard Program is payable on a first-loss basis. Payouts from the Safeguard Program are made to investors in the order of default date until the restricted cash balance goes to nil, even though there may still be investors covered by the Safeguard Program. Taking into account of the available funds in the Safeguard Program and all future Safeguard Program contributions from existing loans, as of December 31, 2017 and 2018, the maximum potential amount, as determined under ASC Topic 460, payable to the lenders participating in the Safeguard Program in relation to the existing loans is estimated to be US$20,038 thousand and nil respectively. The approximate term of the Safeguard Program was 22 months, 20 months as of December 31, 2016, 2017. We stopped the Safeguard Program in Feburary 2018. A summary of the Group’s Safeguard Program payable movement activities is presented below: For the Year Ended December 31, 2016 2017 2018 (US$’000) (US$’000) (US$’000) Opening balance 18,555 19,511 17,950 Liability arising from new business 80,264 65,971 — Net payouts during the year (82,293 ) (71,541 ) (17,950 ) Release on expiration (9,564 ) (12,594 ) — Contingent liability 13,805 16,175 — Foreign exchange gains (1,256 ) 428 — Ending balance 19,511 17,950 — In July 2017, the local financial regulator issued a Notice of Special Rectification regarding Internet Finance, or the Notice, which required us to modify certain aspects of our operations. The Notice stated that the Company’s Safeguard Program did not comply with the restriction on provision of “credit enhancement service”. In response to this, effective February 2018, we ceased operating and providing our Safeguard Program (o) Revenue recognition On January 1, 2018, the Company adopted the revenue recognition standard using the modified retrospective transition method to those contracts which were not completed as of January 1, 2018. Results for periods beginning after January 1, 2018 are presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with historic accounting under ASC Topic 605. Upon initial adoption, the Group recognized the cumulative effect of initially applying the revenue standard as an increase of approximately US$5 million (RMB33 million) Consistent with the criteria of ASC 606 “Revenue from Contracts with Customers”, the Group recognizes revenue by applying the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to performance obligations in the contract; and (v) recognize revenue when (or as) performance obligations are satisfied. Revenue recognition policies for each type of services under ASC Topic 606 are discussed as follows: Marketplace lending services—Lifestyle loans The Group generates transaction and service fees by providing marketplace lending services to the users of its lending marketplace. The Group’s services consist of: a) matching marketplace investors to potential qualified borrowers and facilitating the execution of loan agreements between the parties (referred to as “loan matching”); b) providing repayment processing services for the marketplace investors over the loan term, including following up on late repayments (referred to as “loan repayment services”); and, c) management of the Safeguard Program. The Group determined that it is not the legal lender and legal borrower in the loan origination and repayment process. Accordingly, the Group does not record loans receivable and payable arising from the loans between the marketplace investors and the borrowers. The Group has determined that the marketplace lending transactions contain the following multiple elements: loan matching; loan repayment services and the Safeguard Program. The Group has determined that both marketplace investors and borrowers are its customers. It receives payments from borrowers at loan inception and from marketplace investors over the term of the loan. In the case of loans for which investors have opted into the Safeguard Program, a portion of the amount received on such loan from both the marketplace investors and borrowers is allocated to the Safeguard Program in accordance with ASC Topic 460, Guarantees . Transaction revenue is recognized for loan matching from borrowers at loan inception. Revenue earned from investors for loan matching and loan repayment services is recognized over the term of the loan as cash is received. Revenue from management of the Safeguard Program is recognized ratably over the term of the loan. Marketplace lending services—Consumption loans The Group, through Haidong CRF Micro-credit, launched Consumption loans at the beginning of 2015. These are short-term loans that are made through the technology mobile platform with terms generally less than three months and loan principal generally of up to RMB506 (approximately US$74). The Group’s services consist of: a) matching marketplace investors to potential qualified borrowers and facilitating the execution of loan agreements between the parties (referred to as “loan matching”); b) providing repayment processing services for the marketplace investors over the loan term, including following up on late repayments (referred to as “loan repayment services”). The Group determined that it is not the legal lender or borrower in the loan origination and repayment process. Accordingly, the Group does not record loans receivable and payable arising from the loan between the marketplace investor and the borrower. The Group has determined that the Consumption loan transactions contain the following two elements: loan matching and loan repayment services, both of which are provided to the marketplace investor, who is considered the Group’s customer for Consumption loans. Although the Group provides loan matching service at loan inception and repayment service when the loan is due, the collection of both service fees is contingent upon actual repayments from the borrowers. Accordingly, the Group recognizes service fees relating to Consumption loans upon repayment by the borrowers. Starting from December 2017, the Group changed its servicing model and agreement terms for consumption loans. In addition to loan matching and loan repayment services, the Group also provides credit assessment service to borrowers. The credit assessment services are provided before any loan is granted to the borrower, the fees collected for the credit assessment services is recognized throughout the designated period for which the assessment result is valid. While although the Group provides loan matching service at loan inception and repayment service when the loan is due, the collection of both service fees is contingent upon actual repayments from the borrowers. Accordingly, the Group recognizes service fees relating to Consumption loans upon repayment by the borrowers. The following table summarizes the Group’s transaction and service fees (net of customer acquisition incentive) recognized for lifestyle loans and consumption loans during the year ended December 31, 2016, 2017 and 2018: For the Year Ended December 31, 2016 2017 2018 US$’000 US$’000 US$’000 Lifestyle loans 54,962 46,752 47,722 Consumption loans (net of customer acquisition incentive) 929 44,869 22,893 Transaction and service fees, net 55,891 91,621 70,615 Incentives to investors In order to incentivize investors, the Group provides incentives to marketplace investors, who commit a certain amount of money to the consumption loan program for a period of time, which is determined based on the total number of first time borrowers for each period. Such cash incentives are accrued as they are earned by the marketplace investors and are accounted for as a reduction of revenue in accordance with ASC subtopic 605-50. When recording these incentives as a reduction in revenue results in negative revenue for a marketplace investor on a cumulative basis, the cumulative shortfall is re-characterized as an expense in accordance with ASC 605-50-45-9 given the inherent uncertainties with the consumption loan program which may not result in sufficient probable future revenue to the Group to recover such shortfall. Gross billings on transaction and service fee is defined as transaction and service fee billed to customers, inclusive of related value added tax, before deduction of customer acquisition incentives For the Year Ended December 31, 2016 2017 2018 US$’000 US$’000 US$’000 Gross billings on transaction and service fee —Lifestyle loans 58,138 49,772 68,163 —Consumption loans 9,763 87,410 52,819 Total 67,901 137,182 120,982 Customer acquisition incentive —deducted from Consumption loan revenue 8,364 38,081 14,583 —recognized in Sales and marketing expenses 673 — — —deducted from Lifestyle loans revenue — — 28,936 Total 9,037 38,081 43,519 Micro-credit lending business The Group recognizes interest income on loans using the effective interest method over the loan period. Interest income is not recorded when reasonable doubt exists as to the full, timely collection of interest or principal. Interest income is included in other revenue in the consolidated statements of comprehensive income (loss). Contract balances Contract assets represent the Group’s right to consideration in exchange for facilitation and post-facilitation service that the Company has transferred to the customer before payment is due. Contract liabilities represent the Group’s obligation to transfer facilitation and post-facilitation service to the customer due to received payment. The timing of revenue recognition, scheduled payments, and cash collections results in contract assets and contract liability (p) Discretionary Payments Due to the sudden regulatory change and adverse market impact, in order to ensure sustainability of the business and minimize any liquidity risk, the Company made certain discretionary payments to compensate the investors who invested in the trust plan program based on negotiated terms between relevant parties even though contractually the Company is not obligated. These payments were subject to mutual negotiations and do not represent a guarantee liability. These payments, which amounted to nil, US$4.6 million and US$4.6 million, for the years ended December 31, 2016, 2017 and 2018, were recorded as a reduction of revenue.. (q) Servicing expense Servicing expenses are expensed as incurred and consists primarily of salaries and benefits for the staff of the Group’s data verification centers, which perform credit assessment and account management services. (r) Sales and marketing expenses Sales and marketing expenses consist primarily of salaries and benefits, advertising and marketing promotion expenses, customer acquisition incentive payments in excess of cumulative revenue generated from a customer, and other expenses incurred by the Group’s sales and marketing personnel. Advertising expenses were US$1,460 thousand, US$828 thousand and US$ 1,303 thousand for the years ended December 31, 2016, 2017 and 2018 respectively. (s) General and administrative expenses General and administrative expenses consist primarily of salaries and benefits (including share-based compensation) for general management, finance, administrative personnel , rental, professional service fees, and other expenses. (t) Product development expenses Product development expenses include expenses incurred by the Group to facilitate the loan matching business, to gather historical data and borrowing behaviors, as well as to maintain, monitor and manage the Group’s transaction and service platform. The Group recognizes website, software and mobile applications development costs in accordance with ASC 350-50 “Website development costs” and ASC 350-40 “Software — internal use software” respectively. The Group expenses all costs that are incurred in connection with the planning and implementation phases of development and costs that are associated with repair or maintenance of the existing websites and mobile applications or the development of software or mobile applications for internal use and websites content. (u) Share-based compensation Share-based payment transactions with employees are measured based on the grant date fair value of the equity instrument issued and recognized as compensation expense net of a forfeiture rate on a straight-line basis, over the requisite service period, with a corresponding amount reflected in additional paid-in capital. The amount of accumulated compensation costs recognized at any date is at least equal to the portion of the grant date fair value of the vested awards at that date. The estimate forfeiture rate will be adjusted over the requisite service period to the extent that actual forfeiture rat |
Loans Receivables, Net
Loans Receivables, Net | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Loans Receivable, Net | 3. Loans receivable, net Loans receivable consist of the following: As of December 31, 2017 2018 US$’000 US$’000 Personal loans 726 8,981 Allowance for loan losses Individually assessed (98 ) (114 ) Collectively assessed (1 ) (440 ) Allowance for loan losses (99 ) (554 ) Loans receivable, net 627 8,427 This balance represents loans related to the micro-credit lending business of the Group. These loans are primarily micro loans made to individual customers with an original term up to three years and do not have collateral. The interest rates of these loans ranged between 15.6%~17.9%, 15.6%~17.9% and 15%~36% for the years ended December 31, 2016, 2017 and 2018, respectively. Allowance on loan losses are estimated on a quarterly basis or more often as necessary based on the historical rate of defaults, the aging of the existing receivables and other relevant factors. The Group did not sell any loans receivable during the years ended December 31, 2017 and 2018. The activity in the allowance for loan losses for the years ended December 31, 2017 and 2018 consisted of the following: For the year ended December 31, 2017 2018 US$’000 US$’000 Beginning balance 112 99 Provisions — 455 Release of allowance related to loans receivable sold or expired (13 ) — Ending balance 99 554 The following table represents the aging of loans as of December 31, 2017 and 2018 (US$’000): 1- 89 days past due 90- 179 days past due 180- 365 days past due Over 1 year past due Total past due Current Total loans December 31, 2017 42 23 150 13 228 498 726 December 31, 2018 40 2 12 185 239 8,742 8,981 Loans receivable amounting to US$186 thousand and US$199 thousand as of December 31, 2017 and 2018, respectively, were in non-accrual status. No loan receivable that has been past due for more than 90 days has interest income being accrued. |
Receivables, Prepayments and Ot
Receivables, Prepayments and Other Assets | 12 Months Ended |
Dec. 31, 2018 | |
Receivables Prepayments And Other Assets [Abstract] | |
Receivables, Prepayments and Other Assets | 4. Receivables, prepayments and other assets Receivables, prepayments and other assets consist of the following: As of December 31, 2017 2018 US$’000 US$’000 Prepayments and deposits ( 1) 7,270 6,621 Funds held by third party payment companies ( 2) 4,821 1,083 Employee advances 1,338 822 Accounts receivable 354 2,732 Loans receivable due from employees ( 3) 101 — Others 421 640 14,305 11,898 (1) Prepayments and deposits includes deposit placed with third party companies in the amount of US$ 445 thousand. The deposit placed with third party companies refers to amounts the Group expect to recover from third party companies according to the terms of service agreement. The deposit is measured at fair value at inception. The Group considers the probable future cash collectible according to the terms of the service agreement in estimating its fair value. (2) The Group has accounts with third party payment companies to facilitate the transfer of loan funds between to marketplace investors and borrowers for its marketplace lending service. The balance of funds held by third party payment companies mainly includes (i) funds received from borrowers but not yet transferred to accounts of marketplace investors due to the settlement time lag. The settlement time lag is generally less than 5 days; (ii) funds held on behalf of predictive selection technology loans marketplace investors. (3) The Company provided loans to the employees in good standing (meeting certain criteria that including service period, past performance rating, etc.) with a monthly repayment plan to meet their personal needs for purchasing property for themselves. As of December 31, 2017 and 2018, these loans carry monthly interest up to 1.5%. In 2018 the Company ceased providing loans to employees. |
Property, Equipment and Softwar
Property, Equipment and Software, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property, Equipment and Software, Net | 5. Property, equipment and software, net Property, equipment and software, net consist of the following: As of December 31, 2017 2018 US$’000 US$’000 Computer and electronic equipment 5,310 6,243 Leasehold improvements 3,209 3,830 Vehicle 2,085 1,384 Software 1,230 1,593 Office furniture and equipment 574 810 Total 12,408 13,860 Less: Accumulated depreciation (6,578 ) (8,284) Property, equipment and software, net 5,830 5,576 Depreciation expenses for the years ended December 31, 2016, 2017 and 2018 was US$1,381 thousand, US$2,331 thousand and US$1,706 thousand, respectively. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefits | 6. Employee benefits Full-time employees of the Group in the PRC are entitled to welfare benefits including pension, work-related injury benefits, maternity insurance, medical insurance, unemployment benefit and housing fund plans through a PRC government-mandated defined contribution plan. Chinese labor regulations require that the Group makes contributions to the government for these benefits based on certain percentages of employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the contributions. The Group recorded employee benefit expenses related to this defined contribution plan US$5,150 thousand, US$6,342 thousand and US$6,627 thousand for the years ended December 31, 2016, 2017 and 2018, respectively. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities | 7. Accrued liabilities Accrued liabilities consist of the following: As of December 31, 2017 2018 US$’000 US$’000 Customer acquisition incentive payables 18,216 16,021 Funds payable to marketplace customers ( 1) 10,313 48,407 Other tax payable 8,316 10,812 Payroll and related liabilities 5,622 2,836 Discretionary payments 3,299 — Deferred depository bank incentive 1,954 1,609 Accrued operating expense 2,634 7,197 Borrowing from employees — 2,996 Professional service fee accruals 1,017 492 Issuance cost accruals 56 — Others 468 297 51,895 90,667 (1) The balance of payable mainly includes (i) funds received from borrowers but not yet transferred to accounts of marketplace investors due to the settlement time lag. The settlement time lag is generally less than 5 days; (ii) funds held on behalf of predictive selection technology loans marketplace investors. |
Other Income (Expense), Net
Other Income (Expense), Net | 12 Months Ended |
Dec. 31, 2018 | |
Other Income And Expenses [Abstract] | |
Other Income (Expense), Net | 8. Other income (expense), net Other income (expense), net consists of the following: For the Year Ended December 31, 2016 2017 2018 US$’000 US$’000 US$’000 Government grants 560 — 726 Fair value changes of financial instrument 33 — — Interest income 29 31 347 Foreign exchange loss (246 ) 52 317 Loss of convertible promissory notes (271 ) (25 ) — Depository bank incentive — 368 1 Others (114 ) 82 (138) (9 ) 508 1,253 |
Taxation
Taxation | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Taxation | 9. Taxation Cayman Islands Under the current laws of the Cayman Islands, the Group is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed. USA China Risk Finance LLC (before the our Reorganization) and its subsidiaries China Capital Finance LLC and HML China LLC, which were established in the United States, are fiscally transparent for U.S. federal income tax and state income tax purposes and therefore not subject to tax. In August 2015, China Risk Finance LLC was converted from a Delaware limited liability company to a Cayman Islands exempted company by way of continuation. PRC In accordance with the Enterprise Income Tax Law (“EIT Law”), Foreign Investment Enterprises (“FIEs”) and domestic companies are subject to Enterprise Income Tax (“EIT”) at a uniform rate of 25%. The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The Implementing Rules of the EIT Law define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” Based on a review of surrounding facts and circumstances, the Group does not believe that it is likely that its entities registered outside of the PRC should be considered as resident enterprises for the PRC tax purposes . The EIT Law also imposes a withholding income tax of 10% on dividends distributed by a FIE to its immediate holding company outside of the PRC, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with the PRC that provides for a different withholding arrangement. The Cayman Islands, where the Company incorporated, does not have such tax treaty with the PRC. In accordance with accounting guidance, all undistributed earnings are presumed to be transferred to the parent company and are subject to the withholding taxes. The presumption may be overcome if the Company has sufficient evidence to demonstrate that the undistributed dividends will be re-invested and the remittance of the dividends will be postponed indefinitely. The Company did not record any dividend withholding tax, as it does not have any retained earnings for any of the periods presented. Reconciliation of the differences between statutory tax rate and the effective tax rate The following table sets forth reconciliation between the statutory EIT rate and the effective tax rate: For the Year Ended December 31, 2016 2017 2018 US$’000 US$’000 Loss before income tax expenses (33,363 ) (36,536 ) (65,457 ) Income tax at statutory rates in the PRC (8,341 ) 25% (9,134 ) 25% (16,364 ) 25 % Non-deductible expenses 2,336 (7%) 1,763 (5%) 4,173 (6%) Different tax rates in other jurisdictions 471 (1%) 2,661 (7%) 6,278 (9%) Change in valuation allowance 5,537 (17%) 4,823 (13%) 6,985 (10%) Income tax expense/Effective tax rate 3 (0%) 113 (0%) 1,072 0% Deferred tax assets The following table sets forth the significant components of the deferred tax assets: As of December 31, 2017 2018 US$’000 US$’000 Deferred tax assets: Accruals for payroll and other costs 446 2,514 Allowance for loan losses 25 139 Net operating loss carry forwards 17,585 22,470 Deferred revenue and other temporary difference 343 261 Subtotal 18,399 25,384 Less: valuation allowance (18,399 ) (25,384) Total deferred tax assets, net — — Deferred tax liabilities: Fair value changes of investments held for trading — — Total deferred tax liabilities — — Net deferred tax assets — — Movement of valuation allowance For the Year Ended December 31, 2016 2017 2018 US$’000 US$’000 US$’000 Balance at beginning of the year 8,030 13,567 18,399 Current year addition 5,537 4,832 6,985 Current year reversal — — — Balance at end of the year 13,567 18,399 25,384 The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be more likely than not realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses and forecasts of future profitability. These assumptions require significant judgment and the forecasts of future taxable income are consistent with the plans and estimates the Group is using to manage the underlying businesses. Valuation allowances are established for deferred tax assets based on a more likely than not threshold. The Group’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carry forward periods provided for in the tax law. The Group has provided a full valuation allowance for the net deferred tax assets as of December 31, 2016, 2017 and 2018, respectively, as management is not able to conclude that the future realization of those net operating loss carry forwards and other deferred tax assets are more likely than not. As of December 31, 2018, the Group had net operating tax loss carry forwards amounted to US$111,130 thousand which will expire from 2019 to 2022 if not used. Uncertain tax positions The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2017 and 2018, the Group did not have any significant unrecognized uncertain tax positions. |
Ordinary Shares
Ordinary Shares | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Ordinary shares | 10. Ordinary shares In July 2004, China Risk Finance LLC was formed as a limited liability company in Delaware, USA with issuance of 12,623,530 ordinary shares at nil par value. In connection with the Group’s Reorganization completed in August 2015, all of China Risk Finance LLC’s ordinary shares and preferred shares were exchanged for equal amounts of ordinary shares and preferred shares of China Rapid Finance Limited with equivalent rights and preferences. The par value for each ordinary share and preferred share of China Rapid Finance Limited is US$0.0001. Upon the completion of the Initial Public Offering on April 28, 2017, the Group's ordinary shares were divided into Class A ordinary shares and Class B ordinary shares, the authorized share capital of the Company upon IPO consisted of 450,000,000 Class A ordinary shares and 50,000,000 Class B ordinary shares. All outstanding ordinary shares, preferred shares and incentive shares held by Zhengyu (Zane) Wang, Gary Wang and Andrew Mason will be automatically converted into Class B ordinary shares. All remaining outstanding ordinary shares, preferred shares and incentive shares will be automatically converted into Class A ordinary shares. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Holders of Class A ordinary shares are entitled to one vote per share, while holders of Class B ordinary shares are entitled to ten votes per share, voting together as one class on all matters subject to a shareholders' vote. The par value of ordinary shares and preferred shares and related disclosure have been recast to reflect the US$0.0001 par value for all periods presented in the consolidated financial statements. As of December 31, 2017 and 2018, the Company has 64,702,673 shares (including 58,217,067 Class A shares and 6,485,606 Class B shares) outstanding and 65,759,210 shares (including 58,973,604 Class A shares and 6,785,606 Class B shares) outstanding, respectively. |
Convertible Promissory Notes
Convertible Promissory Notes | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes | 11. Convertible promissory notes On February 20, 2015, the Company issued convertible promissory notes in the aggregated principal amount of US$2,500,000 to a third party investor with non-compounding interest at 12% per annum, maturing six months after the issuance date (the “Initial Notes”). From February 21, 2015 through June 25, 2015, the Company issued convertible promissory notes in the aggregate principal amount of US$30,300,000 to several third party investors with non-compounding interest at 8% per annum, maturing one year after their respective issuance dates (the “Subsequent Notes”). The Initial Notes and Subsequent Notes are collectively referred to as the 2015 Notes Under the agreement, following the closing of the Company’s Series C convertible redeemable preferred shares (the “Series C Shares”) placement, the holders of 2015 Notes may (i) convert the outstanding principal plus accrued interest of the 2015 Notes into the Company’s Series C Shares or (ii) redeem them for cash in the amount of the outstanding principal plus accrued interest of the 2015 Notes. Alternatively, the 2015 Notes will automatically convert into the ordinary shares of the Company upon completion of a Qualified Public Offering as discussed in Note 12 of these consolidated financial statements. For the Initial Notes, conversion will be made at the conversion price of 94% of the Series C Shares issuance price or 94% of the Qualified Public Offering issuance price as applicable, respectively. For the Subsequent Notes, conversion will be made at the conversion price of 90% of the Series C Shares issuance price or 90% of the Qualified Public Offering issuance price as applicable, respectively. The conversion option was bifurcated from the host contract and accounted for separately as a derivative and measured at fair value On July 1, 2015, following the Company’s placement of Series C Shares, the conversion option into Series C Shares was exercised by holders of the Subsequent Notes, resulting in an extinguishment loss of US$2,232 thousand. The Initial Note, including interest, was redeemed by its holder for US$2,660 thousand on August 31, 2015. From April 2016 through May 2016, the Company issued unsecured convertible promissory notes to several investors in the aggregated principal amount of US$2,176,413 to several investors (the “2016 Notes”). The outstanding principal balance of the 2016 Notes shall be deemed to have borne interest at an annual rate of 15% (but in no event less than 5%) for the period from the date of issuance to the date before the Preferred Share Conversion, Qualified Offering Conversion or Automatic Conversion (as defined below), as the case may be an annual rate of 15%; provided, however, that such rate shall be no less than 5%. The 2016 Notes may be repaid with no penalty at any time at the election of the Company. Upon repayment in full of all outstanding principal, and all accrued and unpaid interest thereon, this 2016 Note shall be cancelled. Upon the closing of subsequent private placement of the Company’s Series C Shares, the 2016 Notes will automatically convert into Series C Shares or any subsequent series of preferred shares (a “Preferred Share Conversion”). Preferred Share Conversion will be made at a conversion price equal of the preferred Share issuance price. If following the Preferred Share Conversion but prior to 1 year anniversary of the 2016 Notes, the Company completes a closing of a private placement of additional preferred shares (“Additional Preferred Shares”) with preference or rights superior to those the preferred shares issued in the Preferred Share Conversion, the holders shall be entitled to converted the preferred shares it received up on the Preferred Share Conversion into such number of Additional Preferred Shares that the holders would have received had the 2016 Notes converted into Additional Preferred Shares upon the closing of the private placement of the Additional Preferred Shares. Alternatively, the outstanding principal plus accrued interest of the 2016 Notes will automatically convert into Series C Shares immediately before a Qualified Public Offering (a “Qualified Offering Conversion”) and Qualified Offering Conversions will be made at the price per share of US$26.64. If no Preferred Share Conversion or Qualified Offering conversion occurs on 1 year anniversary of the date of 2016 Notes, the outstanding principal plus accrued interest the 2016 Notes shall automatically convert into Series Shares at a price per share of US$26.64. (an “Automatic Conversion”). The Company’s 2016 Notes were automatically converted into the Company’s Series C shares upon a subsequent private placement of the Company’s Series C Shares on August 5, 2016. From November 14, 2016 through November 21, 2016, the Company issued additional unsecured convertible promissory notes to several investors in the aggregated principal amount of US$3,249,000 (the “2016 Batch II Notes”). The 2016 Batch II Notes have the same contractual terms as that of aforemenionted 2016 Notes (except for issuance date), and are measured initially and subsequently at fair value. The Company’s 2016 Batch II Notes were automatically converted into the Company’s Series C shares upon a subsequent private placement of the Company’s Series C Shares on December 6, 2016. In March 2017, the Company issued an additional unsecured convertible promissory note to one investor in the principal amount of US$500 thousand (the “2017 Note”). The 2017 Note automatically converted into the Company’s Series C shares upon a subsequent private placement of the Company’s Series C convertible redeemable preferred shares on March 30, 2017. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Shares | 12 Months Ended |
Dec. 31, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Convertible Preferred Shares | 12. Redeemable convertible preferred shares From November 2005 through December 2005, the Company issued 4,912,934 shares of Series A convertible redeemable preferred shares (the “Series A Shares”) for US$0.73276 per share for cash of US$3,600 thousand and incurred issuance cost of US$117 thousand. From December 2006 through May 2008, the Company issued 14,084,239 shares of Series B convertible redeemable preferred shares (the “Series B Shares”) for US$1.43854 per share for cash of US$20,261 thousand and incurred issuance cost of US$1,144 thousand. From July 2015 through December 2015, the Company issued 1,728,989 shares of Series C convertible redeemable preferred shares (the “Series C shares”) for US$26.64 per share for cash of US$11,920 thousand, and the conversion of US$30,731 thousand Subsequent Notes previously issued at a conversion price per share of US$23.98. In connection with the offering of the Series C Shares, the Company incurred issuance costs of US$1,243 thousand. On August 5, 2016, the Company issued additional 750,751 shares of Series C redeemable convertible preferred shares to Dr. Zhengyu (Zane) Wang at a price per share of US$26.64 in exchange for a promissory note with an aggregate principal amount of US$20,000 thousand. On November 10, 2016, Dr. Zhengyu (Zane) Wang transferred such Series C redeemable convertible preferred shares to an investor in exchange for the RMB equivalent of US$20,000 thousand. On November 11, 2016, the Company received US$16,000 thousand out of total US$20,000 thousand consideration for this issuance of Series C redeemable convertible preferred shares. The remaining US$4,000 thousand was received in February 2017. The promissory note was cancelled upon full payment of the total principal amount. From November through December 2016, the Company issued additional 156,521 shares of Series C convertible redeemable preferred shares for US$26.64 per share for cash of US$4,170 thousand. In connection with the offering of the Series C Shares, the Company incurred issuance costs of US$672 thousand. On March 30, 2017, the Company issued additional 569,858 shares of Series C convertible redeemable preferred shares for US$26.64 per share for cash of US$15,181 thousand to certain investors. From April 11, 2017 to April 12, 2017, the Company issued and sold 121,998 Series C redeemable convertible preferred shares to six investors at a price of $26.64 per share for total consideration of US$3,250 thousand. The Series A, B and C shares are collectively referred to as the Preferred Shares. Conversion Each Preferred Share may be converted at any time into ordinary shares at the option of the preferred shares holders at the then applicable conversion price. The initial conversion ratio is 1:1, subject to adjustment in the event of (i) share splits, share combinations, share dividends or distribution, other dividends, recapitalizations and similar events, or (ii) issuance of ordinary shares (excluding certain events such as issuance of ordinary shares pursuant to a public offering) at a price per share less than the conversion price in effect on the date of or immediately prior to such issuance. The Preferred Shares shall be automatically converted into ordinary shares immediately prior to the consummation of a public offering of the Company’s shares wherein the price paid by the public for each share shall be at least US$26.64 per share and net proceeds are at least US$50,000 thousand immediately following the public offering (the “Qualified Public Offering”). The Group determined that there were no beneficial conversion features identified for any of the Preferred Shares during any of the periods. In making this determination, the Company compared the fair value of the ordinary shares into which the Preferred Shares are convertible with the respective effective conversion price at the issuance date. In all instances, the effective conversion price was greater than the fair value of the ordinary shares. To the extent a conversion price adjustment occurs, as described above, the Group will revaluate whether or not a beneficial conversion feature should be recognized. Dividends The holders of Preferred Shares are entitled to receive cumulative dividends prior and in preference to any payment of any dividend on the holders of Ordinary Shares at a rate of 8% of original issuance price per share per annum (the “Priority Return”). After payment of such preferential dividends on Preferred Shares during any year, any further dividends or distribution distributed during such year shall be declared and paid ratably on the outstanding Preferred Shares (on an as converted to common stock basis) and the ordinary shares. Upon conversion, any declared or accrued but unpaid dividends will be converted into ordinary shares at the same applicable conversion price. Voting Each Preferred Share has voting rights equivalent to the number of ordinary shares to which it is convertible at the record date. The holders of the Preferred Shares also have certain veto rights including, but not limited to, amendment or waiver of any provision of the Company’s article of association in a manner that adversely alters or changes the rights, preferences, powers, privileges or restriction of Preferred Shares, dividend declaration and distribution on ordinary shares, appointment or removal of senior management. Liquidation A liquidation event includes, unless waived by the Preferred Shareholders, (i) any liquidation, dissolution or winding-up of the Company, (ii) any merger or consolidation of the Company or any other transactions as a result of which shareholders of the Company immediately prior to such transaction will cease to own a majority of the equity securities or voting power of the surviving entity immediately following, (iii) sale of all or substantially all of the assets of the Company. The holders of Preferred Shares have preference over holders of ordinary shares with respect to payment of dividends and distribution of assets upon voluntary or involuntary liquidation of the Company. Upon liquidation, Series C Shares shall rank senior to Series B Shares, Series B Shares shall rank senior to Series A Shares, and Series A Shares shall rank senior to ordinary shares. The holders of Series C Shares shall receive the higher of: (a) the sum of (i) 100% of the original issue price and (ii) all unpaid Priority Return of Series C Shares with respect thereto (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions) per Series C Shares then held by such holder, and (b) Series C Shares’ pro rata share of all amounts being distributed if such Series C Share had been converted into ordinary shares pursuant of relevant provisions of the Company’s article of association hereof immediately prior to the defined liquidation event (the “Series C Liquidation Value”). The holders of Series B Shares shall receive the higher of: (a) the sum of (i) 100% of the original issue price and (ii) all unpaid Priority Return of Series B Shares with respect thereto (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions) per Series B Shares then held by such holder, and (b) Series B Shares’ pro rata share of all amounts being distributed if such Series B Share had been converted into ordinary shares pursuant of relevant provisions of the Company’s article of association hereof immediately prior to the defined liquidation event (the “Series B Liquidation Value”). The holders of Series A Shares shall receive the higher of: (a) the sum of (i) 100% of the original issue price and (ii) all unpaid Priority Return of Series A Shares with respect thereto (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions) per Series A Shares then held by such holder, and (b) Series A Shares’ pro rata share of all amounts being distributed if such Series A Share had been converted into ordinary shares pursuant of relevant provisions of the Company’s article of association hereof immediately prior to the defined liquidation event (the “Series A Liquidation Value”). The liquidation preference described above ceased to exist upon the completion of the Company’s initial public offering on April 28, 2017. Redemption At any time on or after October 17, 2013, for Series A Shares and Series B Shares, if requested by a majority holders of the respective series of Preferred Shares then outstanding, the Company shall redeem all of the respective outstanding Preferred Shares in that series. The redemption prices of Series A Shares and B Shares are equal to the Series B Liquidation Value and Series A Liquidation Value calculated as of the closing date for such redemption, respectively. At any time on or after July 1, 2020, if requested by a majority holders of Series C Shares then outstanding, the Company shall redeem all of the outstanding Series C Shares. The redemption prices of Series C Shares are equal to the Series C Liquidation Value calculated as of the closing date for such redemption. In addition, no other class or series of capital stock shall be redeemable prior and in preference to the Series C Shares without the written consent of a majority holders of Series C Shares. Accounting of Preferred Shares The Company classified the Preferred Shares as mezzanine equity because they were redeemable at the holders’ option any time after a certain date and were contingently redeemable upon the occurrence of certain liquidation event outside of the Company’s control. The Preferred Shares are recorded initially at fair value, net of issuance costs. Since the Preferred Shares becomes redeemable at the option of the holder at any time after a specified date, the Company recorded accretion on the Preferred Shares to the redemption value using the effective interest rate method from the issuance dates to the earliest redemption dates as set forth in the original issuance. While all Preferred Shares are automatically converted upon a Qualified Public Offering, the effectiveness of a Qualified Public Offering is not within the control of the Company and is not deemed probable to occur for accounting purposes until the effective date of the Qualified Public Offering. As such, the Company continued to recognize accretion of the Preferred Shares during 2016, 2017 and 2018. The accretion of Preferred Shares was US$6,377 thousand US$2,868 thousand and nil for the years ended December 31, 2016, 2017 and 2018, respectively. Modification of Series C Shares The Company’s Series C Shares were modified on July 18, 2016 as a result of the Company’s negotiations with holders of redeemable convertible preferred shares. Prior to the modification, upon the occurrence of a Qualified Public Offering, Series C shares shall automatically be converted into such number of ordinary shares as is equal to the number of ordinary shares determined by dividing: (i) the Series C Shares original issue price thereof by (ii) the Series C Shares conversion price in effect at the time of conversion. After the modification, upon the occurrence of a Qualified Public Offering, Series C shares shall automatically be converted into such number of ordinary shares as is equal to the number of ordinary shares determined by dividing: (i) the Series C Shares original issue price thereof by (ii) the lesser of (a) the Series C Shares conversion price in effect at the time of conversion, and (b) the Series C Liquidation Conversion Price. And Series C Liquidation Conversion Price means the price per ordinary shares upon the Qualified Public Offering multiplied by the quotient of (i) the Series C Shares original issue price divided by (ii) the Series C original issue price plus such Series C Shares’ Priority Return as described above. The Company evaluated the modifications and concluded that they represented modifications, rather than extinguishment, of the Series C Shares, which resulted in a transfer of value from ordinary shareholders and Series A Shares and Series B shares holders to Series C Shares holders. On the date of the modification, the Company assessed the total fair value of the Series A, B and C Shares immediately before and after the change of the terms with the assistance from an independent third-party appraiser. The Company is ultimately responsible for the determination of such fair value. The combined change in fair values of the Series A, B and C Shares immediately before and after the modification was US$634,801. This decrease in fair value of the ordinary share of US$634,801 is, in substance, a transfer of wealth mostly from the ordinary shareholders to the holders of Series C Shares, and therefore are recorded as deemed dividend to the holders of Series C Shares. Initial Public Offering Upon the completion of the Company’s IPO on April 28, 2017, Series A and B convertible redeemable preferred shares were converted into Class A ordinary shares on a one-to-one basis, while 3,569,957 shares of Series C convertible redeemable preferred shares were converted into 17,242,297 shares of Class A ordinary shares. Concurrently, US$ 82,034,040 was recorded as deemed dividends to the Series C preferred shareholders. The Company’s convertible redeemable preferred shares activities for the years ended December 31, 2016, 2017 and 2018 are summarized below: Series A Shares Series B Shares Series C Shares Number of shares Amount Number of shares Amount Number of shares Amount US$’000 US$’000 US$’000 Balance as of January 1, 2016 4,912,934 6,508 14,084,239 33,511 1,728,989 44,931 Issuance of Series C convertible redeemable preferred shares, net of issuance costs — — — — 1,129,405 28,891 Receivable for issuance of Series C convertible redeemable preferred shares — — — — — (4,000 ) Accretion on convertible redeemable preferred shares to redemption value — 288 — 1,621 — 4,468 Balance as of December 31, 2016 4,912,934 6,796 14,084,239 35,132 2,858,394 74,290 Issuance of Series C convertible redeemable preferred shares, net of issuance costs — — — — 711,563 18,035 Receivable for issuance of Series C convertible redeemable preferred shares — — — — — 4,000 Accretion on convertible redeemable preferred shares to redemption value — 96 — 540 — 2,232 Deemed dividend to preferred shareholders upon IPO — — — — 13,672,340 82,034 Converted to ordinary shares upon IPO (4,912,934 ) (6,892 ) (14,084,239 ) (35,672 ) (17,242,297 ) (180,591 ) Balance as of December 31, 2017 — — — — — — |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | 13. Share-based compensation In 2007, the Company adopted the Incentive Share Plan and subsequently the Company adopted the 2016 Equity Incentive Plan (together the “Share-based Plans”) under which the Company provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares to the employees, directors and consultants of the Company who render services to the Group. As of December 31, 2018, the Company’s total approved ordinary shares available for grants under the 2016 Equity Incentive plan was 9,499,144. A summary of the incentive shares and stock options activities under the Company’s Share-based Plans in the year of 2017 and the year of 2018 is presented below: Number of incentive shares Number of stock options Weighted average grant-date fair value (US$) Non-vested incentive shares and stock options as of December 31, 2016 1,976,300 1,860,437 2.8575 Granted — — — Vested (455,166 ) (386,317 ) 2.2052 Forfeited (53,000 ) (42,500 ) 3.4318 Non-vested incentive shares and stock options as of December 31, 2017 1,468,134 1,431,620 3.0279 Granted — 210,000 3.0401 Vested (619,234 ) (463,942 ) 2.7252 Forfeited (167,650 ) (411,875 ) 3.9901 Non-vested incentive shares and stock options as of December 31, 2018 681,250 765,803 3.0453 Share-based compensation expense for incentive shares is recorded on a straight-line basis over the requisite service period, which is three to five years from the date of the grant. The weighted average exercise price of the stock options granted in 2018 was US$2.73. As of December 31, 2017 and 2018, the aggregate intrinsic value of these stock options granted was nil.The Company recognized share-based compensation expense for incentive shares and stock options of US$1,003 thousand, US$2,497 thousand and US$2,417 thousand thousand as “general and administrative expenses” in the consolidated statements of comprehensive loss for the year ended December 31, 2016, 2017 and 2018, respectively. As of December 31, 2017 and 2018, there were US$6,532 thousand and US$3,337 thousand in total unrecognized compensation expense related to incentive shares and stock options respectively, which is expected to be recognized over a weighted-average period of 0.96 and 0.9 years, respectively. |
Loss per Share
Loss per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Loss per Share | 14. Loss per share Basic and diluted net loss per share for each of the years presented are calculated as follows: For the Year Ended December 31, 2016 2017 2018 US$ US$ US$ (in thousands, except per share data) Net loss: (33,366 ) (36,649 ) (66,529 ) Accretion on Series A preferred shares redemption value (288 ) (96 ) — Accretion on Series B preferred shares redemption value (1,621 ) (540 ) — Accretion on Series C preferred shares redemption value (4,468 ) (2,232 ) — Deemed dividend to Series C convertible redeemable preferred shares at modification of Series C convertible redeemable preferred shares (635 ) — — Deemed dividend to Series C convertible redeemable preferred shares upon Initial Public Offering — (82,034 ) — Net loss attributable to ordinary shareholders (40,378 ) (121,551 ) (66,529 ) Numerator: Net loss attributable to ordinary shareholders—basic and diluted (40,378 ) (121,551 ) (66,529 ) Denominator: Weighted average number of ordinary shares outstanding—basic and diluted 16,437,946 49,054,201 65,199,459 Loss per share attributable to ordinary shareholders —basic and diluted (2.46 ) (2.48 ) (1.02 ) Basic loss per share is computed using the weighted average number of ordinary shares outstanding during the period. Diluted loss per share is computed using the weighted average number of ordinary shares and dilutive ordinary share equivalents outstanding during the period. The Group’s convertible redeemable preferred shares were participating securities because they had contractual rights to share in the profits but not losses of the Group. For the year of 2017 and 2018, the two-class method was not used in computing basic and diluted loss per share as the Group was in a net loss position. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. Commitments and contingencies (a) Operating lease The Group has entered into non-cancellable operating leases covering various facilities. Future minimum lease payments under these non-cancellable leases as follows: Payments due by period Total Less than 1 year 1-3 years Over 3 years Operating lease obligations (US$’000) 4,673 3,672 1,001 — The Group recorded rental expense of US$6,715 thousand, US$6,050 thousand and US$5,731 thousand in the consolidated statements of comprehensive income (loss) during the years ended December 31, 2016, 2017 and 2018, respectively. (b) Capital and other commitments The Group did not have significant capital and other commitments, long-term obligations, or guarantees other than those relating to the Safeguard Program, as of December 31, 2017 and 2018. (c) Contingencies The Group is subject to legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Group does not anticipate that the final outcome arising out of any such matter will have a material adverse effect on our consolidated business, financial position, cash flows or results of operations taken as a whole. As of December 31, 2018, the Group is not a party to any material legal or administrative proceedings. |
Statutory Reserves and Restrict
Statutory Reserves and Restricted Net Assets | 12 Months Ended |
Dec. 31, 2018 | |
Statutory Reserves And Restricted Net Assets [Abstract] | |
Statutory Reserves and Restricted Net Assets | 16. Statutory reserves and restricted net assets Pursuant to laws applicable to entities incorporated in the PRC, the Group’s subsidiaries in the PRC must make appropriations from after-tax profit to non-distributable reserve funds. These reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion fund and (iii) a staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires an annual appropriation of 10% of after tax profit (as determined under accounting principles generally accepted in the PRC at each year-end) until the accumulative amount of such reserve fund reaches 50% of a company’s registered capital; the other fund appropriations are at the subsidiaries’ discretion. These reserve funds can only be used for specific purposes of enterprise expansion and staff bonus and welfare and are not distributable as cash dividends. During the years ended December 31, 2016, 2017 and 2018, no appropriations to the statutory reserve, enterprise expansion fund and staff welfare and bonus fund have been made by the Group. In addition, due to restrictions on the distribution of share capital from the Group’s PRC subsidiaries and also as a result of these entities’ unreserved accumulated losses, total restrictions placed on the distribution of the Group’s PRC subsidiaries’ net assets was US$ 9.5 million as of December 31, 2018. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent events Commencing April 15, 2019, the Group stopped facilitating new loans on the platform, and started to transition its business to provide financial technology, marketing services to institutional lenders. On April 30, 2019, the Company filed a Form 12b-25 with the SEC to extend the deadline for the timely filing of the Annual Report. The Company was unable to file the Annual Report by the extended deadline of May 15, 2019, and was therefore not in compliance with the continued listing requirements under the timely filing criteria established in Section 802.01E of the New York Stock Exchange (“NYSE”) Listed Company Manual. On May 16, 2019, the Company received a notice from the NYSE, notifying the Company that it was not in compliance with the requirements for continued listing. On November 2, 2019, the Company received a notice from the NYSE, notifying it that the NYSE agreed to accept the Company’s business transition plan, and continue the listing of the Company for the 18 months starting from June 5, 2019. On June 17, 2019, the Company entered into a cooperation agreement (the “Cooperation Agreement”) with Hongkong Outjoy Education Technology Co., Ltd. (“OET”) to form a new operating subsidiary of the Company (the “Project Company”). As of the date of this report, the business of the Project Company is in early stages and there are no material impacts on the financial statements of the Company. On June 24, 2019, in connection with the Cooperation Agreement, by and between the Company and OET, the Company entered into that certain Warrant to Purchase Class A ordinary shares of the Company (the “Warrant”) with Tianjin Baidayi Management Consulting Limited (“TBMCL”). The Warrant gives TBMCL, in its capacity as administrator of certain limited partnerships comprised of existing lenders on the Company’s marketplace lending platform, the right to purchase up to 66,402,480 Class A ordinary shares of the Company upon the achievement of certain EBITA milestones by the Project Company which is a wholly owned subsidiary of the Company. No Warrant was exercised as of the date of this report. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | (a) Basis of presentation The consolidated financial statements of the Group are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Principles of Consolidation | (b) Principal of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, including subsidiaries held by the Group through nominee shareholders. All significant intercompany transactions and balances have been eliminated Haidong CRF Micro-credit Co. and Qianhai Shuliang (Shenzhen) Technology Co., Ltd. Due to provincial regulations on size of individual shareholding percentages, a subsidiary of the Group, Haidong CRF Micro-credit, is 30% directly owned by the Group and 70% indirectly owned through nominee shareholders, the majority of which are immediate family members of the CEO and founder of the Group. Qianhai Shuliang (Shenzhen) Technology Co., Ltd.(“QHSL”) was founded on December 8, 2016 and entered the e-commerce services industry in 2018. QHSL is 100% indirectly owned by the Company through a nominee shareholder who is an employee of the Company. Upon the formation of the two entities, the Group entered into nominee shareholding agreements with the nominee shareholders with the following key terms: • All of the capital for the formation of Haidong CRF Micro-credit and QHSL was provided by the Group; • The Group has the all rights and obligations as if it is the direct shareholder; • The nominee shareholders hold the equity interest in it on behalf of the Group; • The Group can at anytime, at its discretion, have the nominee shareholders transfer their legal interest in Haidong CRF Micro-credit to a party specifically appointed by the Group; and • The nominee shareholding agreement shall be in force until the underlying legal interest has been transferred to the Group or a party specifically appointed by the Group. The nominee shareholding agreements are legally enforceable. Yunnan Trust Loan Aid Program According to the structure of the trust, the Company is effectively absorbing losses and receiving any residual benefits of the project. Therefore, the Company concluded that XRF is the primary beneficiary and should consolidate the Program under ASC 810.. Yunnan trust Zhishan No. 107 collective fund trust plan was signed by Yunnan trust and Zhonghe Win-Win Asset Management Co., Ltd. on September 14, 2018. Converted at the average exchange rate of 6.6987 in 2018 and year end rate of 6.8632, the total fund scale of the project is US$ 11 million (RMB 74 million), and the project duration is 6 months. Out of the fund, Zhonghe contributed a junior tranche of US $3.3 million (RMB 22.2 million), and the priority fund raised by Yunnan Trust was US $7.7 million (51.8 million yuan). Zhonghe Win-Win transferred the above-mentioned junior tranche funds to Haidong Credit and Microfinance Co., Ltd. The risk loss rate of the project is estimated to be 4.9% per 2018 Q2 loss rate released on the official website. Haidong's junior piece of fund and related interest payable are offset after the consolidated statements. As of December 31, 2018, the amount of loans receivable after consolidation is equivalent to US$ 8.2 million (RMB 56.2 million), and the interest payable is equivalent to US$ 0.2 million (RMB 1.7 million) |
Use of Estimates | (c) Use of estimates The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual amounts could differ from those estimates and differences could be material. Changes in estimates are recorded in the period they are identified Significant accounting estimates reflected in the Group’s consolidated financial statements include valuation allowances for deferred tax assets, valuation of share-based awards, measurement of Safeguard Program payable, and allocation of considerations under revenue arrangements with multiple elements. |
Foreign Currency and Foreign Currency Translation | (d) Foreign currency and foreign currency translation The United States dollar (“US$”) is the functional currency of the Group’s entities incorporated in Cayman Islands and Delaware, USA. The functional currency of the Group’s PRC subsidiaries is the Renminbi (“RMB”). Transactions denominated in other than the functional currencies are re-measured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currency at the prevailing rates of exchange at the balance date. The resulting exchange differences are reported in the consolidated statements of comprehensive income (loss) Assets and liabilities of the subsidiaries in PRC are translated into US$ using the exchange rate in effect at each balance sheet date. Income and expenses items of the subsidiaries in PRC are translated into US$ at the average exchange rates prevailing during the reporting period. Foreign currency translation adjustments arising from these are accumulated as a separate component of shareholders’ equity (deficit) in the consolidated financial statements. The exchange rates used for translation on December 31, 2016, 2017 and 2018 were US$1.00 = RMB6.9370, RMB6.5342 and RMB6.8632 respectively, being the index rates stipulated by the People’s Bank of China . |
Certain Risks and Concentration | (e) Certain risks and concentration Credit risk is one of the most significant risks for the Company’s micro-lending business. The Group records an allowance for loan losses based on its estimated probable losses against its loans receivable. Apart from the loans receivable, the Group’s financial instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash and cash equivalents, investments held for trading. As of December 31, 2017 and 2018, substantially all of the Group’s cash and cash equivalents, restricted cash and investments held for trading were held in major financial institutions located in the PRC and in the USA, which management considers to be of high credit quality. No individual customer accounted for more than 10% of net revenues for the years ended December 31, 2017 and 2018. |
Cash and Cash Equivalents | (f) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, time deposits, and funds held in deposit accounts with banks and third-party payment companies, which are highly liquid and have original maturities of three months or less and are unrestricted as to withdrawal or use. |
Restricted Cash | (g) Restricted cash Restricted cash represents: (i) virtual accounts' funds held in custodian banks |
Fair Value Measurement | (h) Fair value measurement Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement The three levels of inputs that may be used to measure fair value include: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities. Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Group’s financial instruments include cash and cash equivalents, restricted cash, loans receivable, contract assets, Safeguard Program asset, receivables, prepayments and other assets, accrued liabilities and Safeguard Program payable. The carrying amounts of loans receivable, receivables, prepayments and other assets, and accrued liabilities approximate their fair values due to the short-term maturity of these instruments. The carrying amount of Safeguard Program asset/payable approximate their fair values as the interest rates applied reflect the current quoted market yield for comparable borrowings (Level 2 inputs). As of December 31, 2017 and 2018, the Group had financial instruments of US$1,514 thousand and US$445 thousand that were measured at fair value and classified as level 3 The fair value of the Group’s Level 1 financial assets are based on quoted prices in active market for identical assets. For the fair value of Level 3 financial assets, the Group considers the probable future cash collectible and takes into account of any potential unrecoverable amounts according to the contract terms in estimating its fair value. At each reporting date, the Company estimates the future cash flows and assesses whether there is any indicator of impairment.. The following table sets forth the activity of recurring fair values measurements categorized within Level 3 of the hierarchy: For the Year Ended December 31, 2016 2017 2018 Beginning — 1,514 1,514 Net addition/(disposal) of financial assets 1,514 — (1,069) Issuance of convertible promissory notes 5,426 500 — Change in fair value of convertible promissory notes (626 ) — — Settlement of conversion option of convertible promissory notes upon exercise (4,800 ) (500 ) — Ending 1,514 1,514 445 The Group did not have any instruments that were measured at fair value on a non-recurring basis as of December 31, 2017 and 2018. |
Loans Receivable, Net | (i) Loans receivable, net Loans receivable represents loan amounts due from customers of the Group’s micro-credit lending business, under which the Group provides direct loans to individuals. The Group has the intent and the ability to hold such loans receivable for the foreseeable future or until maturity or payoff. Loans receivable is recorded at unpaid principal balances, net of allowance that reflects the Company’s best estimate of the amounts that will not be collected. The loans receivable portfolio mainly consists of personal loans with the term periods ranging from 7 days to 3 years. The allowance for loan losses is determined at a level believed to be reasonable to absorb probable losses inherent in the portfolio as of each balance sheet date. The allowance is provided based on an assessment performed both on an individual-loan basis and collective basis. For individual loans that are past due for a certain period of time or where there is an observable indicator of impairment, a specific allowance is provided. All other loans not already included in the individual assessment are assessed collectively depending on factors such as delinquency rate, size, and other risk characteristics of the portfolio. The Company evaluates and adjusts its allowance for loan losses on a quarterly basis or more often as necessary. The Group writes off the loans receivable and the related allowance when management determines that full repayment of a loan is not probable. The primary factor in making such determination is the potential recoverable amounts from the delinquent debtor. |
Contract Assets | (j) Contract assets Contract assets represent the Group’s right to consideration in exchange for facilitation services that the Company has transferred to the customer before payment is due. The Group only recognizes contract assets to the extent that the Group believes it is probable that it will collect substantially all of the consideration to which it will be entitled to in exchange for the services transferred to the customer. Contract assets are stated at the historical carrying amount net of write-offs and allowance for doubtful accounts. The Group establishes an allowance for doubtful accounts based on estimates, historical default experience and other factors surrounding the credit risk of borrowers. The Group evaluates and adjusts its allowance for contract assets on a quarterly basis or more often as necessary. Contract assets are written off when a settlement is reached for an amount that is less than the outstanding historical balance or when the Group has determined the balance will not be collected |
Interest Receivable | (k) Interest receivable Interest on loans receivable, is accrued and recognized as income when earned. Accrual of interest is discontinued when reasonable doubt exists as to the full, timely collection of interest or principal (e.g. when the loans have been past due by 90 days). Subsequent recognition of income for loans in non-accrual status occurs only to the extent payment is received, subject to the management’s assessment of the collectability of the remaining interest and principal. Loans are restored to an accrual status when they are no longer delinquent and collectability of interest and principal is probable. |
Property, Equipment and Software, Net | (l) Property, equipment and software, net Property, equipment and software are recorded at cost, less accumulated depreciation and impairment. Depreciation of property, equipment and software is calculated on a straight-line basis, after consideration of expected useful lives and estimated residual values. The estimated useful lives of these assets are generally as follows: Category Estimated useful life Estimated residual value Vehicles 5 years 5% Office furniture and equipment 5 years 5% Computer and electronic equipment 3-5 years 5% Software 5 years nil Leasehold improvements Lesser of the lease terms or the estimated useful lives of the assets nil Expenditures for maintenance and repairs are expensed as incurred. Gains and losses on disposal of equipment and software is the difference between net sales proceeds and carrying amount of the relevant assets and are recognized in the consolidated statements of comprehensive income (loss) |
Impairment of Long-lived Assets | (m) Impairment of long-lived assets The Group evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amounts to the expected future undiscounted cash flows attributable to these assets. If it is determined that an asset is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the assets exceeds the expected discounted cash flows arising from those assets. No impairment of long-lived assets was recognized for the years ended December 31, 2016, 2017 and 2018. |
Safeguard Program | (n) Safeguard Program The Group maintains a Safeguard Program for the benefit of the borrowers and investors of lifestyle loans on its marketplace. In the event of borrowers’ default, marketplace investors may be entitled to receive unpaid interest and principal under the terms of the Safeguard Program. In general, any unpaid interest shall be paid from the Safeguard Program to an investor when the borrower does not repay as scheduled, and any outstanding principal shall be paid from the Safeguard Program to an investor if the loan remains delinquent for more than 180 days. There is no limit on the period of time in which an investor can receive payments for unpaid interest and principal from the Safeguard Program. The Safeguard Program contributions are generally not refunded even if there is no loan default At loan inception and upon subsequent loan repayments, a certain percentage of cash is collected and segregated by the Group in restricted cash accounts. For accounting purposes, at loan inception, the Group is required to record its Safeguard Program payable in accordance with ASC Topic 460, Guarantees. Subsequent to the loan’s inception, the Safeguard Program payable is measured in a combination of two components: (i) ASC Topic 460 component; and (ii) ASC Topic 450 component. The liability recorded based on ASC Topic 460 is determined on a loan by loan basis and it is reduced when the Group is released from the underlying risk, meaning when the loan is repaid by the borrower or when the lender is compensated in the event of a default. This component is a stand ready obligation which is not subject to the probable threshold used to record a contingent obligation. The other component is a contingent liability determined on a pool basis, representing the obligation to make future payments under the Safeguard Program measured using the guidance in ASC Topic 450, Contingencies A Safeguard Program asset is recognized at loan inception when the loan agreements specify the amount of future payments that will be contributed to the Safeguard Program. The Safeguard Program asset is accounted for as a financial asset and is measured at fair value at inception. The Group considers the probable future cash collectible and takes into account of any expected prepayments and potential loan defaults in estimating its fair value. At each reporting date, the Company estimates the future cash flows and assesses whether there is any indicator of impairment. If the carrying amounts of the Safeguard Program asset exceed the expected cash to be received, an impairment loss is recorded for the Safeguard Program asset not recoverable and is reported under revenue in the statements of comprehensive income. At loan inception, the Group determines the Safeguard Program contributions based on the estimated loss rate of the loans. In estimating the loss rate of the loans, the underlying risk profile and historical loss experience are taken into consideration. The Group gathers information to assess each borrower’s risk profile and assigns an application score, determined using the Group’s proprietary scoring technology, to all of its borrowers. These borrowers are then grouped into different categories based on the application score assigned for which the Group develops an estimated default rate based on actual historical loss experience of each score category. An ultimate loss rate is estimated for each loan based on this method, taking into account of any appropriate fine-tuning as necessary. The Safeguard Program liability at loan inception is determined based on the expected loss rate resulted. The Group regularly reviews the borrower’s risk profile, actual loss rate of each score category and relevant economic factors to ensure the estimation are kept up-to-date. Consequently, the contribution percentages are updated regularly to ensure that the total Safeguard Program contributions, including both upfront and subsequent contributions, are based on the estimated fair value of the probability of loss at loan inception. Such contribution percentages vary depending on the probability of losses of the loans covered by the Safeguard Program. Once the contribution percentages are determined at loan inception, no adjustment can be made subsequently. A majority of the Safeguard Program contributions are collected upfront and segregated in a designated account as restricted cash. Contributions that are collectible from subsequent repayments are less substantial. Approximately 1% to 2% of subsequent loan repayments are segregated into a restricted cash account. The Group maintains a Safeguard Program for the benefits of the borrowers and investors of lifestyle loans on its marketplace. The investors may choose whether or not they wish to opt into the program. Investors who opt into the Safeguard Program bear their own financial risk and may suffer a loss if the restricted cash balance plus the subsequent cash receipts from Safeguard Program asset are exhausted. The Safeguard Program is payable on a first-loss basis. Payouts from the Safeguard Program are made to investors in the order of default date until the restricted cash balance goes to nil, even though there may still be investors covered by the Safeguard Program. Taking into account of the available funds in the Safeguard Program and all future Safeguard Program contributions from existing loans, as of December 31, 2017 and 2018, the maximum potential amount, as determined under ASC Topic 460, payable to the lenders participating in the Safeguard Program in relation to the existing loans is estimated to be US$20,038 thousand and nil respectively. The approximate term of the Safeguard Program was 22 months, 20 months as of December 31, 2016, 2017. We stopped the Safeguard Program in Feburary 2018. A summary of the Group’s Safeguard Program payable movement activities is presented below: For the Year Ended December 31, 2016 2017 2018 (US$’000) (US$’000) (US$’000) Opening balance 18,555 19,511 17,950 Liability arising from new business 80,264 65,971 — Net payouts during the year (82,293 ) (71,541 ) (17,950 ) Release on expiration (9,564 ) (12,594 ) — Contingent liability 13,805 16,175 — Foreign exchange gains (1,256 ) 428 — Ending balance 19,511 17,950 — In July 2017, the local financial regulator issued a Notice of Special Rectification regarding Internet Finance, or the Notice, which required us to modify certain aspects of our operations. The Notice stated that the Company’s Safeguard Program did not comply with the restriction on provision of “credit enhancement service”. In response to this, effective February 2018, we ceased operating and providing our Safeguard Program |
Revenue Recognition | (o) Revenue recognition On January 1, 2018, the Company adopted the revenue recognition standard using the modified retrospective transition method to those contracts which were not completed as of January 1, 2018. Results for periods beginning after January 1, 2018 are presented under ASC Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with historic accounting under ASC Topic 605. Upon initial adoption, the Group recognized the cumulative effect of initially applying the revenue standard as an increase of approximately US$5 million (RMB33 million) Consistent with the criteria of ASC 606 “Revenue from Contracts with Customers”, the Group recognizes revenue by applying the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to performance obligations in the contract; and (v) recognize revenue when (or as) performance obligations are satisfied. Revenue recognition policies for each type of services under ASC Topic 606 are discussed as follows: Marketplace lending services—Lifestyle loans The Group generates transaction and service fees by providing marketplace lending services to the users of its lending marketplace. The Group’s services consist of: a) matching marketplace investors to potential qualified borrowers and facilitating the execution of loan agreements between the parties (referred to as “loan matching”); b) providing repayment processing services for the marketplace investors over the loan term, including following up on late repayments (referred to as “loan repayment services”); and, c) management of the Safeguard Program. The Group determined that it is not the legal lender and legal borrower in the loan origination and repayment process. Accordingly, the Group does not record loans receivable and payable arising from the loans between the marketplace investors and the borrowers. The Group has determined that the marketplace lending transactions contain the following multiple elements: loan matching; loan repayment services and the Safeguard Program. The Group has determined that both marketplace investors and borrowers are its customers. It receives payments from borrowers at loan inception and from marketplace investors over the term of the loan. In the case of loans for which investors have opted into the Safeguard Program, a portion of the amount received on such loan from both the marketplace investors and borrowers is allocated to the Safeguard Program in accordance with ASC Topic 460, Guarantees . Transaction revenue is recognized for loan matching from borrowers at loan inception. Revenue earned from investors for loan matching and loan repayment services is recognized over the term of the loan as cash is received. Revenue from management of the Safeguard Program is recognized ratably over the term of the loan. Marketplace lending services—Consumption loans The Group, through Haidong CRF Micro-credit, launched Consumption loans at the beginning of 2015. These are short-term loans that are made through the technology mobile platform with terms generally less than three months and loan principal generally of up to RMB506 (approximately US$74). The Group’s services consist of: a) matching marketplace investors to potential qualified borrowers and facilitating the execution of loan agreements between the parties (referred to as “loan matching”); b) providing repayment processing services for the marketplace investors over the loan term, including following up on late repayments (referred to as “loan repayment services”). The Group determined that it is not the legal lender or borrower in the loan origination and repayment process. Accordingly, the Group does not record loans receivable and payable arising from the loan between the marketplace investor and the borrower. The Group has determined that the Consumption loan transactions contain the following two elements: loan matching and loan repayment services, both of which are provided to the marketplace investor, who is considered the Group’s customer for Consumption loans. Although the Group provides loan matching service at loan inception and repayment service when the loan is due, the collection of both service fees is contingent upon actual repayments from the borrowers. Accordingly, the Group recognizes service fees relating to Consumption loans upon repayment by the borrowers. Starting from December 2017, the Group changed its servicing model and agreement terms for consumption loans. In addition to loan matching and loan repayment services, the Group also provides credit assessment service to borrowers. The credit assessment services are provided before any loan is granted to the borrower, the fees collected for the credit assessment services is recognized throughout the designated period for which the assessment result is valid. While although the Group provides loan matching service at loan inception and repayment service when the loan is due, the collection of both service fees is contingent upon actual repayments from the borrowers. Accordingly, the Group recognizes service fees relating to Consumption loans upon repayment by the borrowers. The following table summarizes the Group’s transaction and service fees (net of customer acquisition incentive) recognized for lifestyle loans and consumption loans during the year ended December 31, 2016, 2017 and 2018: For the Year Ended December 31, 2016 2017 2018 US$’000 US$’000 US$’000 Lifestyle loans 54,962 46,752 47,722 Consumption loans (net of customer acquisition incentive) 929 44,869 22,893 Transaction and service fees, net 55,891 91,621 70,615 Incentives to investors In order to incentivize investors, the Group provides incentives to marketplace investors, who commit a certain amount of money to the consumption loan program for a period of time, which is determined based on the total number of first time borrowers for each period. Such cash incentives are accrued as they are earned by the marketplace investors and are accounted for as a reduction of revenue in accordance with ASC subtopic 605-50. When recording these incentives as a reduction in revenue results in negative revenue for a marketplace investor on a cumulative basis, the cumulative shortfall is re-characterized as an expense in accordance with ASC 605-50-45-9 given the inherent uncertainties with the consumption loan program which may not result in sufficient probable future revenue to the Group to recover such shortfall. Gross billings on transaction and service fee is defined as transaction and service fee billed to customers, inclusive of related value added tax, before deduction of customer acquisition incentives For the Year Ended December 31, 2016 2017 2018 US$’000 US$’000 US$’000 Gross billings on transaction and service fee —Lifestyle loans 58,138 49,772 68,163 —Consumption loans 9,763 87,410 52,819 Total 67,901 137,182 120,982 Customer acquisition incentive —deducted from Consumption loan revenue 8,364 38,081 14,583 —recognized in Sales and marketing expenses 673 — — —deducted from Lifestyle loans revenue — — 28,936 Total 9,037 38,081 43,519 Micro-credit lending business The Group recognizes interest income on loans using the effective interest method over the loan period. Interest income is not recorded when reasonable doubt exists as to the full, timely collection of interest or principal. Interest income is included in other revenue in the consolidated statements of comprehensive income (loss). Contract balances Contract assets represent the Group’s right to consideration in exchange for facilitation and post-facilitation service that the Company has transferred to the customer before payment is due. Contract liabilities represent the Group’s obligation to transfer facilitation and post-facilitation service to the customer due to received payment. The timing of revenue recognition, scheduled payments, and cash collections results in contract assets and contract liability |
Discretionary Payment | (p) Discretionary Payments Due to the sudden regulatory change and adverse market impact, in order to ensure sustainability of the business and minimize any liquidity risk, the Company made certain discretionary payments to compensate the investors who invested in the trust plan program based on negotiated terms between relevant parties even though contractually the Company is not obligated. These payments were subject to mutual negotiations and do not represent a guarantee liability. These payments, which amounted to nil, US$4.6 million and US$4.6 million, for the years ended December 31, 2016, 2017 and 2018, were recorded as a reduction of revenue.. |
Servicing Expense | (q) Servicing expense Servicing expenses are expensed as incurred and consists primarily of salaries and benefits for the staff of the Group’s data verification centers, which perform credit assessment and account management services. |
Sales and Marketing Expenses | (r) Sales and marketing expenses Sales and marketing expenses consist primarily of salaries and benefits, advertising and marketing promotion expenses, customer acquisition incentive payments in excess of cumulative revenue generated from a customer, and other expenses incurred by the Group’s sales and marketing personnel. Advertising expenses were US$1,460 thousand, US$828 thousand and US$ 1,303 thousand for the years ended December 31, 2016, 2017 and 2018 respectively. |
General and Administrative Expenses | (s) General and administrative expenses General and administrative expenses consist primarily of salaries and benefits (including share-based compensation) for general management, finance, administrative personnel , rental, professional service fees, and other expenses. |
Product Development Expenses | (t) Product development expenses Product development expenses include expenses incurred by the Group to facilitate the loan matching business, to gather historical data and borrowing behaviors, as well as to maintain, monitor and manage the Group’s transaction and service platform. The Group recognizes website, software and mobile applications development costs in accordance with ASC 350-50 “Website development costs” and ASC 350-40 “Software — internal use software” respectively. The Group expenses all costs that are incurred in connection with the planning and implementation phases of development and costs that are associated with repair or maintenance of the existing websites and mobile applications or the development of software or mobile applications for internal use and websites content. |
Share-based Compensation | (u) Share-based compensation Share-based payment transactions with employees are measured based on the grant date fair value of the equity instrument issued and recognized as compensation expense net of a forfeiture rate on a straight-line basis, over the requisite service period, with a corresponding amount reflected in additional paid-in capital. The amount of accumulated compensation costs recognized at any date is at least equal to the portion of the grant date fair value of the vested awards at that date. The estimate forfeiture rate will be adjusted over the requisite service period to the extent that actual forfeiture rate differs, or is expected to differ, from such estimates. Changes in estimated forfeiture rate are recognized through a cumulative catch-up adjustment in the period of change. |
Leases | (v) Leases A lease for which substantially all the benefits and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the Group are currently classified as operating leases. When a lease contains rent holidays, the Group records the total expenses on a straight-line basis over the lease term. |
Government Grants | (w) Government grants From time to time, the Group receives government grants in the PRC from various levels of local governments which are granted for general corporate purposes and to support its ongoing operations in the region. The grants are determined at the discretion of the relevant government authority and there are no restrictions on the use of the funds. Accordingly, the government grants are recorded as other income in the consolidated statement of comprehensive income (loss) in the period the subsidy is received. |
Taxation | (x) Taxation Current income taxes are provided on the basis of net profit (loss) for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, net operating loss carry forwards and credits. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in which temporary differences are expected to be reversed or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in the statement of comprehensive income (loss) in the period of the enactment of the change. The Group considers positive and negative evidence when determining whether a portion or all of its deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carry-forward periods, its experience with tax attributes expiring unused, and its tax planning strategies. The ultimate realization of deferred tax assets is dependent upon its ability to generate sufficient future taxable income within the carry-forward periods provided for in the tax law and during the periods in which the temporary differences become deductible. When assessing the realization of deferred tax assets, the Group has considered possible sources of taxable income including (i) future reversals of existing taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carry-forwards, (iii) future taxable income arising from implementing tax planning strategies, and (iv) specific known trend of profits expected to be reflected within the industry. The Group recognizes a tax benefit associated with an uncertain tax position when, in its judgment, it is more likely than not that the position will be sustained upon examination by a taxing authority. For a tax position that meets the more-likely-than-not recognition threshold, the Group initially and subsequently measures the tax benefit as the largest amount that the Group judges to have a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. The Group’s liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments are recognized entirely in the period in which they are identified. The Group’s effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by management. The Group classifies interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. |
Loss Per Share | (y) Loss per share Basic loss per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights. Net loss is not allocated to other participating securities if based on their contractual terms they are not obligated to share in the losses. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of shares issuable upon the conversion of the preferred shares using the if-converted method, and vesting of incentive shares using the treasury stock method. 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 | (z) Segment reporting The Group’s chief operating decision maker, the Chief Executive Officer, reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole and hence, the Group has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. The Group’s long-lived assets are substantially all located in the PRC and substantially all of the Group’s revenues are derived from within the PRC. Therefore, no geographical segments are presented |
Recently Issued Accounting Standards | (aa) Recently issued accounting standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), to clarify the principles of recognizing revenue and create common revenue recognition guidance between U.S. GAAP and International Financial Reporting Standards (“IFRS”). An entity has the option to apply the provisions of ASU 2014-09 either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this standard recognized at the date of initial application. ASU 2014-09 is effective for fiscal years and interim periods within those years beginning after December 15, 2017, and early adoption is permitted but not earlier than the original effective date of December 15, 2016. The most significant aspect of our evaluation of Topic 606 relates to ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This implementation guidance discusses principal versus agent considerations and gross versus net revenue reporting, including specific indicators to assist in the determination of whether we control a specified good or service before it is transferred to the customer. The Group adopted this new revenue standard effective on January 1, 2018 by applying the modified transition method. The Group has reached conclusions on all key accounting assessments related to the new standard. The impact on Lifestyle loan business is immaterial; the impact for Consumption loan is US$ 5 million. In January 2016, the FASB issued ASU 2016-01, Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The new guidance will impact the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the FASB clarified the need for a valuation allowance on deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The accounting for other financial instruments, such as loans, investments in debt securities, and financial liabilities not under the fair value option is largely unchanged. The standard is effective for public business entities for annual periods (and interim periods within those annual periods) beginning after December 15, 2017. The Group adopted this new standard effective on January 1, 2018. The adoption of ASU 2016-01 did not have a material impact on the Group’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. ASU 2016-02 is effective for fiscal years and interim periods within those years beginning after December 15, 2018. Early adoption is permitted. The Group is currently evaluating the impact ASU 2016-02 will have on the Group’s consolidated financial statements. In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which will be effective January 1, 2020. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a Group recognizes an allowance based on the estimate of expected credit loss. The Group is currently evaluating the impact of this guidance on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 provides guidance for targeted changes with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. ASU 2016-15 is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. The Group adopted this new standard effective on January 1, 2018. The adoption of ASU 2016-15 did not have a material impact on the Group’s consolidated financial statements.. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230) (“ASU 2016-18”). This ASU affects all entities that have restricted cash or restricted cash equivalents and are required to present a statement of cash flows under Topic 230. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This update will become effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2017, and early adoption is permitted in any interim or annual period. The adoption of ASU 2016-18 did not have a material impact on the Group’s consolidated financial statements. In January 2017, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for interim and annual periods beginning after December 15, 2017 and should be applied prospectively on or after the effective date. The Group adopted this guidance on January 1, 2018 using retrospective method to all periods presented in the consolidated statement of cash flows. Upon adoption the restricted cash balances are now included within beginning and ending cash, cash equivalents and restricted cash in the Group’s consolidated statements of cash flows. The adjustments to the cash flow statements for the years ended at December 31, 2016 and 2017 are as follows: For the Year Ended December 31, Before adjustments After adjustments 2016 2017 2016 2017 US$ in thousands Safeguard Program assets and liabilities 601 (4,148) 1,396 (2,160) Net cash used in operating activities (26,740) (5,689) (25,945) (3,701) Net increase/(decrease) in cash, cash equivalent and restricted cash (6,062) 75,898 (5,267) 77,886 Cash, cash equivalent and restricted cash at beginning of year 25,045 18,983 36,935 31,668 Cash, cash equivalent and restricted cash at end of year 18,983 94,881 31,668 109,554 In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock compensation (Topic 718): Scope of modification accounting” to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. ASU 2017-09 is effective prospectively for all companies for annual periods beginning on or after December 15, 2017, and early adoption is permitted. The Group adopted this new standard effective on January 1, 2018. The adoption of ASU 2017-09 did not have a material impact on the Group’s 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” which modifies the disclosure requirements on fair value measurements in Topic 820 Fair Value Measurement. It also requires to add disclosures relating to changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. ASU 2018-13 is effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. The Group is currently evaluating the impact of this guidance on its consolidated financial statements. |
Organization and Principal Ac_2
Organization and Principal Activities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Principal Subsidiaries | As of December 31, 2018, the Company’s principal subsidiaries are as follows: Name Percentage of ownership Date of incorporation Place of incorporation China Risk Finance LL (China) Co., Ltd. (“CRF China”) 100 % July 15, 2005 Shanghai, the PRC CRF Wealth Management Co., Ltd. (“Wealth management”) 100 % February 5, 2013 Shenzhen, the PRC Shanghai Shouhang Business Management Co., Ltd. (“Shanghai Shouhang”) 100 % July 11, 2002 Shanghai, the PRC Capital Financial Co., Ltd. (“Beijing Shouhang”) 100 % August 4, 2005 Beijing, the PRC Haidong CRF Micro-credit Co., Ltd. (“Haidong CRF Micro-credit”) 100 % (1) May 8, 2012 Qinghai, the PRC Qianhai Shuliang(Shenzhen) Technology Co., Ltd. 100 % December 8, 2016 Shenzhen, the PRC (1) CRF China holds 30% shares of Haidong CRF Micro-credit and 70% shares indirectly through nominee shareholders. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Recurring Fair Values Measurements Categorized within Level 3 | The following table sets forth the activity of recurring fair values measurements categorized within Level 3 of the hierarchy: For the Year Ended December 31, 2016 2017 2018 Beginning — 1,514 1,514 Net addition/(disposal) of financial assets 1,514 — (1,069) Issuance of convertible promissory notes 5,426 500 — Change in fair value of convertible promissory notes (626 ) — — Settlement of conversion option of convertible promissory notes upon exercise (4,800 ) (500 ) — Ending 1,514 1,514 445 |
Schedule of Estimated Useful Life and Residual Values | Property, equipment and software are recorded at cost, less accumulated depreciation and impairment. Depreciation of property, equipment and software is calculated on a straight-line basis, after consideration of expected useful lives and estimated residual values. The estimated useful lives of these assets are generally as follows: Category Estimated useful life Estimated residual value Vehicles 5 years 5% Office furniture and equipment 5 years 5% Computer and electronic equipment 3-5 years 5% Software 5 years nil Leasehold improvements Lesser of the lease terms or the estimated useful lives of the assets nil |
Summary of the Group's Safeguard Program Payable Movement Activities | A summary of the Group’s Safeguard Program payable movement activities is presented below: For the Year Ended December 31, 2016 2017 2018 (US$’000) (US$’000) (US$’000) Opening balance 18,555 19,511 17,950 Liability arising from new business 80,264 65,971 — Net payouts during the year (82,293 ) (71,541 ) (17,950 ) Release on expiration (9,564 ) (12,594 ) — Contingent liability 13,805 16,175 — Foreign exchange gains (1,256 ) 428 — Ending balance 19,511 17,950 — |
Summarizes the Group's Transaction and Service Fees | The following table summarizes the Group’s transaction and service fees (net of customer acquisition incentive) recognized for lifestyle loans and consumption loans during the year ended December 31, 2016, 2017 and 2018: For the Year Ended December 31, 2016 2017 2018 US$’000 US$’000 US$’000 Lifestyle loans 54,962 46,752 47,722 Consumption loans (net of customer acquisition incentive) 929 44,869 22,893 Transaction and service fees, net 55,891 91,621 70,615 |
Summary of Gross Billings on Transaction and Service Fee Inclusive of Related Value Added Tax, Before Deduction of Customer Acquisition Incentives | Gross billings on transaction and service fee is defined as transaction and service fee billed to customers, inclusive of related value added tax, before deduction of customer acquisition incentives For the Year Ended December 31, 2016 2017 2018 US$’000 US$’000 US$’000 Gross billings on transaction and service fee —Lifestyle loans 58,138 49,772 68,163 —Consumption loans 9,763 87,410 52,819 Total 67,901 137,182 120,982 Customer acquisition incentive —deducted from Consumption loan revenue 8,364 38,081 14,583 —recognized in Sales and marketing expenses 673 — — —deducted from Lifestyle loans revenue — — 28,936 Total 9,037 38,081 43,519 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | For the Year Ended December 31, Before adjustments After adjustments 2016 2017 2016 2017 US$ in thousands Safeguard Program assets and liabilities 601 (4,148) 1,396 (2,160) Net cash used in operating activities (26,740) (5,689) (25,945) (3,701) Net increase/(decrease) in cash, cash equivalent and restricted cash (6,062) 75,898 (5,267) 77,886 Cash, cash equivalent and restricted cash at beginning of year 25,045 18,983 36,935 31,668 Cash, cash equivalent and restricted cash at end of year 18,983 94,881 31,668 109,554 |
Loans Receivables, Net (Tables)
Loans Receivables, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Loans Receivable | Loans receivable consist of the following: As of December 31, 2017 2018 US$’000 US$’000 Personal loans 726 8,981 Allowance for loan losses Individually assessed (98 ) (114 ) Collectively assessed (1 ) (440 ) Allowance for loan losses (99 ) (554 ) Loans receivable, net 627 8,427 |
Schedule of Activity in Allowance for Loan Losses | The activity in the allowance for loan losses for the years ended December 31, 2017 and 2018 consisted of the following: For the year ended December 31, 2017 2018 US$’000 US$’000 Beginning balance 112 99 Provisions — 455 Release of allowance related to loans receivable sold or expired (13 ) — Ending balance 99 554 |
Summary of Aging of Loans | The following table represents the aging of loans as of December 31, 2017 and 2018 (US$’000): 1- 89 days past due 90- 179 days past due 180- 365 days past due Over 1 year past due Total past due Current Total loans December 31, 2017 42 23 150 13 228 498 726 December 31, 2018 40 2 12 185 239 8,742 8,981 |
Receivables, Prepayments and _2
Receivables, Prepayments and Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables Prepayments And Other Assets [Abstract] | |
Summary of Receivables, Prepayments and Other Assets | Receivables, prepayments and other assets consist of the following: As of December 31, 2017 2018 US$’000 US$’000 Prepayments and deposits ( 1) 7,270 6,621 Funds held by third party payment companies ( 2) 4,821 1,083 Employee advances 1,338 822 Accounts receivable 354 2,732 Loans receivable due from employees ( 3) 101 — Others 421 640 14,305 11,898 |
Property, Equipment and Softw_2
Property, Equipment and Software, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property, Equipment and Software, Net | Property, equipment and software, net consist of the following: As of December 31, 2017 2018 US$’000 US$’000 Computer and electronic equipment 5,310 6,243 Leasehold improvements 3,209 3,830 Vehicle 2,085 1,384 Software 1,230 1,593 Office furniture and equipment 574 810 Total 12,408 13,860 Less: Accumulated depreciation (6,578 ) (8,284) Property, equipment and software, net 5,830 5,576 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables And Accruals [Abstract] | |
Components of Accrued Liabilities | Accrued liabilities consist of the following: As of December 31, 2017 2018 US$’000 US$’000 Customer acquisition incentive payables 18,216 16,021 Funds payable to marketplace customers ( 1) 10,313 48,407 Other tax payable 8,316 10,812 Payroll and related liabilities 5,622 2,836 Discretionary payments 3,299 — Deferred depository bank incentive 1,954 1,609 Accrued operating expense 2,634 7,197 Borrowing from employees — 2,996 Professional service fee accruals 1,017 492 Issuance cost accruals 56 — Others 468 297 51,895 90,667 (1) The balance of payable mainly includes (i) funds received from borrowers but not yet transferred to accounts of marketplace investors due to the settlement time lag. The settlement time lag is generally less than 5 days; (ii) funds held on behalf of predictive selection technology loans marketplace investors. |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income And Expenses [Abstract] | |
Schedule of Other Income (Expense), Net | Other income (expense), net consists of the following: For the Year Ended December 31, 2016 2017 2018 US$’000 US$’000 US$’000 Government grants 560 — 726 Fair value changes of financial instrument 33 — — Interest income 29 31 347 Foreign exchange loss (246 ) 52 317 Loss of convertible promissory notes (271 ) (25 ) — Depository bank incentive — 368 1 Others (114 ) 82 (138) (9 ) 508 1,253 |
Taxation (Tables)
Taxation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Summary of Reconciliation of Difference Between Statutory EIT Rate and Effective Tax Rate | The following table sets forth reconciliation between the statutory EIT rate and the effective tax rate: For the Year Ended December 31, 2016 2017 2018 US$’000 US$’000 Loss before income tax expenses (33,363 ) (36,536 ) (65,457 ) Income tax at statutory rates in the PRC (8,341 ) 25% (9,134 ) 25% (16,364 ) 25 % Non-deductible expenses 2,336 (7%) 1,763 (5%) 4,173 (6%) Different tax rates in other jurisdictions 471 (1%) 2,661 (7%) 6,278 (9%) Change in valuation allowance 5,537 (17%) 4,823 (13%) 6,985 (10%) Income tax expense/Effective tax rate 3 (0%) 113 (0%) 1,072 0% |
Summary of Significant Components of Deferred Tax Assets | The following table sets forth the significant components of the deferred tax assets: As of December 31, 2017 2018 US$’000 US$’000 Deferred tax assets: Accruals for payroll and other costs 446 2,514 Allowance for loan losses 25 139 Net operating loss carry forwards 17,585 22,470 Deferred revenue and other temporary difference 343 261 Subtotal 18,399 25,384 Less: valuation allowance (18,399 ) (25,384) Total deferred tax assets, net — — Deferred tax liabilities: Fair value changes of investments held for trading — — Total deferred tax liabilities — — Net deferred tax assets — — |
Summary of Movement of Valuation Allowance | Movement of valuation allowance For the Year Ended December 31, 2016 2017 2018 US$’000 US$’000 US$’000 Balance at beginning of the year 8,030 13,567 18,399 Current year addition 5,537 4,832 6,985 Current year reversal — — — Balance at end of the year 13,567 18,399 25,384 |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Shares (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Convertible Redeemable Preferred Shares Activities | The Company’s convertible redeemable preferred shares activities for the years ended December 31, 2016, 2017 and 2018 are summarized below: Series A Shares Series B Shares Series C Shares Number of shares Amount Number of shares Amount Number of shares Amount US$’000 US$’000 US$’000 Balance as of January 1, 2016 4,912,934 6,508 14,084,239 33,511 1,728,989 44,931 Issuance of Series C convertible redeemable preferred shares, net of issuance costs — — — — 1,129,405 28,891 Receivable for issuance of Series C convertible redeemable preferred shares — — — — — (4,000 ) Accretion on convertible redeemable preferred shares to redemption value — 288 — 1,621 — 4,468 Balance as of December 31, 2016 4,912,934 6,796 14,084,239 35,132 2,858,394 74,290 Issuance of Series C convertible redeemable preferred shares, net of issuance costs — — — — 711,563 18,035 Receivable for issuance of Series C convertible redeemable preferred shares — — — — — 4,000 Accretion on convertible redeemable preferred shares to redemption value — 96 — 540 — 2,232 Deemed dividend to preferred shareholders upon IPO — — — — 13,672,340 82,034 Converted to ordinary shares upon IPO (4,912,934 ) (6,892 ) (14,084,239 ) (35,672 ) (17,242,297 ) (180,591 ) Balance as of December 31, 2017 — — — — — — |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Incentive Shares and Stock Option Shares Activities | A summary of the incentive shares and stock options activities under the Company’s Share-based Plans in the year of 2017 and the year of 2018 is presented below: Number of incentive shares Number of stock options Weighted average grant-date fair value (US$) Non-vested incentive shares and stock options as of December 31, 2016 1,976,300 1,860,437 2.8575 Granted — — — Vested (455,166 ) (386,317 ) 2.2052 Forfeited (53,000 ) (42,500 ) 3.4318 Non-vested incentive shares and stock options as of December 31, 2017 1,468,134 1,431,620 3.0279 Granted — 210,000 3.0401 Vested (619,234 ) (463,942 ) 2.7252 Forfeited (167,650 ) (411,875 ) 3.9901 Non-vested incentive shares and stock options as of December 31, 2018 681,250 765,803 3.0453 |
Loss per Share (Tables)
Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss per Share | Basic and diluted net loss per share for each of the years presented are calculated as follows: For the Year Ended December 31, 2016 2017 2018 US$ US$ US$ (in thousands, except per share data) Net loss: (33,366 ) (36,649 ) (66,529 ) Accretion on Series A preferred shares redemption value (288 ) (96 ) — Accretion on Series B preferred shares redemption value (1,621 ) (540 ) — Accretion on Series C preferred shares redemption value (4,468 ) (2,232 ) — Deemed dividend to Series C convertible redeemable preferred shares at modification of Series C convertible redeemable preferred shares (635 ) — — Deemed dividend to Series C convertible redeemable preferred shares upon Initial Public Offering — (82,034 ) — Net loss attributable to ordinary shareholders (40,378 ) (121,551 ) (66,529 ) Numerator: Net loss attributable to ordinary shareholders—basic and diluted (40,378 ) (121,551 ) (66,529 ) Denominator: Weighted average number of ordinary shares outstanding—basic and diluted 16,437,946 49,054,201 65,199,459 Loss per share attributable to ordinary shareholders —basic and diluted (2.46 ) (2.48 ) (1.02 ) |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases | The Group has entered into non-cancellable operating leases covering various facilities. Future minimum lease payments under these non-cancellable leases as follows: Payments due by period Total Less than 1 year 1-3 years Over 3 years Operating lease obligations (US$’000) 4,673 3,672 1,001 — |
Organization and Principal Ac_3
Organization and Principal Activities - Additional Information (Details) $ in Thousands | May 11, 2017 | Apr. 28, 2017USD ($)shares | Aug. 18, 2015 | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Organization And Principal Activities [Line Items] | ||||||
Formation date | Jul. 12, 2004 | |||||
Place of incorporation | Delaware, United States of America (the “USA”) | |||||
Reorganization date | Aug. 18, 2015 | |||||
Exchange of ordinary shares as part of reorganization, description | In connection with the Reorganization, all of China Risk Finance LLC’s ordinary shares were exchanged for ordinary shares of China Rapid Finance Limited with equivalent rights. The Series A, Series B and Series C preferred shares of China Risk Finance LLC were cancelled in exchange for an equivalent number of Series A, Series B and Series C preferred shares of China Rapid Finance Limited with equivalent rights and preferences before and after the Reorganization | |||||
Accumulated losses from operations | $ 283,178 | $ 221,696 | $ 101,299 | |||
Net cash used in operating activities | 36,635 | 3,701 | $ 25,945 | |||
Cash and cash equivalents | $ 33,029 | 94,881 | ||||
Net proceeds after deducting commissions and offering expenses | $ 63,020 | $ 63,020 | ||||
Upon Initial Public Offering | ||||||
Organization And Principal Activities [Line Items] | ||||||
Initial public offering, date | Apr. 28, 2017 | |||||
Over-allotment option, exercise date | May 11, 2017 | |||||
Ratio of common shares to ADSs | 1 | |||||
Preferred shares conversion, description | Upon the completion of the IPO, all of the Company’s outstanding preferred shares were converted into common shares immediately as of the same date. | |||||
Ordinary Shares | Upon Initial Public Offering | ||||||
Organization And Principal Activities [Line Items] | ||||||
Number of shares issued and sold | shares | 11,500,000 |
Organization and Principal Ac_4
Organization and Principal Activities - Principal Subsidiaries (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Organization And Principal Activities [Line Items] | |
Date of incorporation | Jul. 12, 2004 |
Place of incorporation | Delaware, United States of America (the “USA”) |
China Risk Finance LL (China) Co., Ltd. (“CRF China”) | |
Organization And Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | Jul. 15, 2005 |
Place of incorporation | Shanghai, the PRC |
CRF Wealth Management Co., Ltd. (“Wealth management”) | |
Organization And Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | Feb. 5, 2013 |
Place of incorporation | Shenzhen, the PRC |
Shanghai Shouhang Business Management Co., Ltd. (“Shanghai Shouhang”) | |
Organization And Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | Jul. 11, 2002 |
Place of incorporation | Shanghai, the PRC |
Capital Financial Co., Ltd. (“Beijing Shouhang”) | |
Organization And Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | Aug. 4, 2005 |
Place of incorporation | Beijing, the PRC |
Haidong CRF Micro-credit Co., Ltd. (“Haidong CRF Micro-credit”) | |
Organization And Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | May 8, 2012 |
Place of incorporation | Qinghai, the PRC |
Qianhai Shuliang (Shenzhen) Technology Co., Ltd. | |
Organization And Principal Activities [Line Items] | |
Percentage of ownership | 100.00% |
Date of incorporation | Dec. 8, 2016 |
Place of incorporation | Shenzhen, the PRC |
Organization and Principal Ac_5
Organization and Principal Activities - Principal Subsidiaries (Parenthetical) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Haidong CRF Micro-credit Co., Ltd. (“Haidong CRF Micro-credit”) | |
Organization And Principal Activities [Line Items] | |
Percentage of ownership | 30.00% |
Nominee Shareholders | |
Organization And Principal Activities [Line Items] | |
Ownership interest by nominee shareholders | 70.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | Sep. 14, 2018USD ($) | Sep. 14, 2018CNY (¥) | Jan. 01, 2018USD ($) | Jan. 01, 2018CNY (¥) | Dec. 31, 2018USD ($)CustomerSegment$ / ¥ | Dec. 31, 2018CNY (¥)CustomerSegment | Dec. 31, 2017USD ($)Customer$ / ¥ | Dec. 31, 2016USD ($)$ / ¥ | Dec. 31, 2018CNY (¥)$ / ¥ |
Summary Of Accounting Policies [Line Items] | |||||||||
Exchange rates used for translation | $ / ¥ | 6.8632 | 6.5342 | 6.9370 | 6.8632 | |||||
Number of customers accounted for more than 10% of net revenues | Customer | 0 | 0 | 0 | ||||||
Assets measured at fair value | $ 445,000 | $ 1,514,000 | $ 1,514,000 | ||||||
Impairment of long-lived assets | 0 | 0 | 0 | ||||||
Cumulative effect of retained earnings, net of tax | $ 5,000,000 | ¥ 33,000,000 | 5,047,000 | ||||||
Discretionary payment | 4,605,000 | 4,576,000 | |||||||
Advertising expense | $ 1,303,000 | 828,000 | $ 1,460,000 | ||||||
Number of reportable segments | Segment | 1 | 1 | |||||||
Accounting Standards Update 2016-08 | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Consumption loan | $ 5,000,000 | ||||||||
Safeguard Program | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Minimum loan delinquent period | 180 days | 180 days | |||||||
Maximum potential amount payable to lenders | $ 20,038,000 | ||||||||
Guarantor obligations, term | 22 months, 20 months as of December 31, 2016, 2017. | 22 months, 20 months as of December 31, 2016, 2017. | |||||||
Guarantor obligation period | 20 months | 22 months | |||||||
Minimum [Member] | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Loans receivable portfolio, personal loans term | 7 days | 7 days | |||||||
Minimum [Member] | Safeguard Program | Repayments Rate | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Percentage of subsequent loan repayments | 1 | 1 | |||||||
Maximum | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Loans receivable portfolio, personal loans term | 3 years | 3 years | |||||||
Maximum | Consumption Loans | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Short-term loans period | 3 months | 3 months | |||||||
Loan principal amount | $ 74 | ¥ 506 | |||||||
Maximum | Safeguard Program | Repayments Rate | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Percentage of subsequent loan repayments | 2 | 2 | |||||||
Fair Value Measurements Non-recurring | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Assets measured at fair value | $ 0 | $ 0 | |||||||
Fair Value, Inputs, Level 3 | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Fair value classified amount | 445,000 | $ 1,514,000 | |||||||
Yunnan Trust Loan Aid Program | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Converted average exchange rate | 6.6987 | 6.6987 | |||||||
Converted average exchange year end rate | 6.8632 | 6.8632 | |||||||
Amount of fund raised | $ 11,000,000 | ¥ 74,000,000 | |||||||
Estimated risk loss rate | 4.90% | 4.90% | |||||||
Amount of loans receivable after consolidation | 8,200,000 | ¥ 56,200,000 | |||||||
Amount of interest payable after consolidation | $ 200,000 | ¥ 1,700,000 | |||||||
Zhonghe win win Asset Management Co., Ltd | Yunnan Trust Loan Aid Program | Junior Tranche | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Amount of fund raised | $ 3,300,000 | ¥ 22,200,000 | |||||||
Yunnan Trust | Yunnan Trust Loan Aid Program | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Amount of fund raised | $ 7,700,000 | ¥ 51,800,000 | |||||||
Haidong CRF Micro-credit Co., Ltd. (“Haidong CRF Micro-credit”) | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Direct owned percentage | 30.00% | 30.00% | |||||||
Indirect owned percentage | 70.00% | 70.00% | |||||||
Percentage of ownership | 100.00% | 100.00% | |||||||
Qianhai Shuliang (Shenzhen) Technology Co., Ltd. | |||||||||
Summary Of Accounting Policies [Line Items] | |||||||||
Percentage of ownership | 100.00% | 100.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Recurring Fair Values Measurements Categorized within Level 3 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Beginning Balance | $ 1,514 | $ 1,514 | |
Net addition/(disposal) of financial assets | (1,069) | $ 1,514 | |
Issuance of convertible promissory notes | 500 | 5,426 | |
Change in fair value of convertible promissory notes | (626) | ||
Settlement of conversion option of convertible promissory notes upon exercise | (500) | (4,800) | |
Ending Balance | $ 445 | $ 1,514 | $ 1,514 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Estimated Useful Life and Residual Values (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Vehicles | |
Property Plant And Equipment [Line Items] | |
Estimated useful life | 5 years |
Estimated residual value | 5.00% |
Office Furniture and Equipment | |
Property Plant And Equipment [Line Items] | |
Estimated useful life | 5 years |
Estimated residual value | 5.00% |
Computer and Electronic Equipment | |
Property Plant And Equipment [Line Items] | |
Estimated residual value | 5.00% |
Computer and Electronic Equipment | Minimum [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful life | 3 years |
Computer and Electronic Equipment | Maximum | |
Property Plant And Equipment [Line Items] | |
Estimated useful life | 5 years |
Software | |
Property Plant And Equipment [Line Items] | |
Estimated useful life | 5 years |
Leasehold Improvements | |
Property Plant And Equipment [Line Items] | |
Estimated useful life | Lesser of the lease terms or the estimated useful lives of the assets |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of the Group's Safeguard Program Payable Movement Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary Of Accounting Policies [Line Items] | |||
Safeguard program payable, Opening balance | $ 17,950 | ||
Safeguard program payable, ending balance | $ 17,950 | ||
Safeguard Program | |||
Summary Of Accounting Policies [Line Items] | |||
Safeguard program payable, Opening balance | 17,950 | 19,511 | $ 18,555 |
Liability arising from new business | 65,971 | 80,264 | |
Net payouts during the year | $ (17,950) | (71,541) | (82,293) |
Release on expiration | (12,594) | (9,564) | |
Contingent liability | 16,175 | 13,805 | |
Foreign exchange gains | 428 | (1,256) | |
Safeguard program payable, ending balance | $ 17,950 | $ 19,511 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Summarizes the Group's Transaction and Service Fees (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary Of Accounting Policies [Line Items] | |||
Transaction and service fees, net | $ 70,615 | $ 91,621 | $ 55,891 |
Lifestyle Loans | |||
Summary Of Accounting Policies [Line Items] | |||
Transaction and service fees, net | 47,722 | 46,752 | 54,962 |
Consumption Loans (Net of Customer Acquisition Incentive) | |||
Summary Of Accounting Policies [Line Items] | |||
Transaction and service fees, net | $ 22,893 | $ 44,869 | $ 929 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Summary of Gross Billings on Transaction and Service Fee Inclusive of Related Value Added Tax, Before Deduction of Customer Acquisition Incentives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary Of Accounting Policies [Line Items] | |||
Transaction and service fee, Gross | $ 120,982 | $ 137,182 | $ 67,901 |
Customer acquisition incentive | 43,519 | 38,081 | 9,037 |
Sales and Marketing Expenses | |||
Summary Of Accounting Policies [Line Items] | |||
Customer acquisition incentive | 673 | ||
Lifestyle Loans | |||
Summary Of Accounting Policies [Line Items] | |||
Transaction and service fee, Gross | 68,163 | 49,772 | 58,138 |
Consumption Loans | |||
Summary Of Accounting Policies [Line Items] | |||
Transaction and service fee, Gross | 52,819 | 87,410 | 9,763 |
Consumption Loan Revenue | |||
Summary Of Accounting Policies [Line Items] | |||
Customer acquisition incentive | 14,583 | $ 38,081 | $ 8,364 |
Lifestyle Loans Revenue | |||
Summary Of Accounting Policies [Line Items] | |||
Customer acquisition incentive | $ 28,936 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Schedule of New Accounting Pronouncements and Changes in Accounting Principles (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Safeguard Program assets and liabilities | [1] | $ (10,474) | $ (2,160) | $ 1,396 |
Net cash used in operating activities | (36,635) | (3,701) | (25,945) | |
Net increase/(decrease) in cash, cash equivalent and restricted cash | (40,692) | 77,886 | (5,267) | |
Cash and cash equivalents at beginning of year | 109,554 | 31,668 | 36,935 | |
Cash and cash equivalents at end of year | 68,862 | 109,554 | 31,668 | |
Before Adjustments | ||||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Safeguard Program assets and liabilities | (4,148) | 601 | ||
Net cash used in operating activities | (5,689) | (26,740) | ||
Net increase/(decrease) in cash, cash equivalent and restricted cash | 75,898 | (6,062) | ||
Cash and cash equivalents at beginning of year | $ 94,881 | 18,983 | 25,045 | |
Cash and cash equivalents at end of year | $ 94,881 | $ 18,983 | ||
[1] | (1)The majority of the Safeguard Program assets and liabilities (namely, restricted cash, Safeguard Program asset and Safeguard Program payable) do not flow through the Group’s cash accounts. The non-cash transactions related to the Safeguard Program that flowed directly through restricted cash for the Safeguard Program are as follows: For the Year Ended December 31, 2016 2017 2018 Increase in restricted cash for Safeguard Program 102,620 85,916 6,701 Decrease in restricted cash for Safeguard Program (101,158) (88,631) (7,653) |
Loans Receivable, Net - Summary
Loans Receivable, Net - Summary of Loans Receivable (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable Allowance For Credit Losses [Line Items] | |||
Personal loans | $ 8,981 | $ 726 | |
Allowance for loan losses | |||
Allowance for loan losses | (554) | (99) | $ (112) |
Loans receivable, net | 8,427 | 627 | |
Personal Loans | |||
Financing Receivable Allowance For Credit Losses [Line Items] | |||
Personal loans | 8,981 | 726 | |
Allowance for loan losses | |||
Individually assessed | (114) | (98) | |
Collectively assessed | (440) | (1) | |
Allowance for loan losses | (554) | (99) | |
Loans receivable, net | $ 8,427 | $ 627 |
Loans Receivable, Net - Additio
Loans Receivable, Net - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts Notes And Loans Receivable [Line Items] | |||
Loan receivable term | 90 days | ||
Loan receivable, nonaccrual status | $ 199,000 | $ 186,000 | |
Loans receivable past due more than 90 days and interest income being accrued | $ 0 | ||
Micro Loans | Uncollateralized | Maximum | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Loan receivable term | 3 years | ||
Interest rates of loans | 36.00% | 17.90% | 17.90% |
Micro Loans | Uncollateralized | Minimum [Member] | |||
Accounts Notes And Loans Receivable [Line Items] | |||
Interest rates of loans | 15.00% | 15.60% | 15.60% |
Loans Receivable, Net - Schedul
Loans Receivable, Net - Schedule of Activity in Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance For Loan And Lease Losses Roll Forward | ||
Beginning balance | $ 99 | $ 112 |
Provisions | 455 | |
Release of allowance related to loans receivable sold or expired | (13) | |
Ending balance | $ 554 | $ 99 |
Loans Receivable, Net - Summa_2
Loans Receivable, Net - Summary of Aging of Loans (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total past due | $ 239 | $ 228 |
Current | 8,742 | 498 |
Total loans | 8,981 | 726 |
1-89 Days Past Due | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total past due | 40 | 42 |
90-179 Days Past Due | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total past due | 2 | 23 |
180-365 Days Past Due | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total past due | 12 | 150 |
Over 1 Year Past Due | ||
Financing Receivable Recorded Investment Past Due [Line Items] | ||
Total past due | $ 185 | $ 13 |
Receivables, Prepayments and _3
Receivables, Prepayments and Other Assets - Summary of Receivables, Prepayments and Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Receivables Prepayments And Other Assets [Abstract] | ||
Prepayments and deposits | $ 6,621 | $ 7,270 |
Funds held by third party payment companies | 1,083 | 4,821 |
Employee advances | 822 | 1,338 |
Accounts receivable | 2,732 | 354 |
Loans receivable due from employees | 101 | |
Others | 640 | 421 |
Receivables prepayments and other assets | $ 11,898 | $ 14,305 |
Receivables, Prepayments and _4
Receivables, Prepayments and Other Assets - Summary of Receivables, Prepayments and Other Assets (Parenthetical) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Receivables Prepayments and Other Assets [Line Items] | ||
Prepayments and deposits | $ 6,621 | $ 7,270 |
Maximum | ||
Receivables Prepayments and Other Assets [Line Items] | ||
Settlement time lag period | 5 days | |
Employees loans carry monthly interest percentage | 1.50% | 1.50% |
Third Party Companies | ||
Receivables Prepayments and Other Assets [Line Items] | ||
Prepayments and deposits | $ 445 |
Property, Equipment and Softw_3
Property, Equipment and Software, Net - Schedule of Property, Equipment and Software, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Total | $ 13,860 | $ 12,408 |
Less: Accumulated depreciation | (8,284) | (6,578) |
Property, equipment and software, net | 5,576 | 5,830 |
Computer and Electronic Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total | 6,243 | 5,310 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Total | 3,830 | 3,209 |
Vehicle | ||
Property Plant And Equipment [Line Items] | ||
Total | 1,384 | 2,085 |
Software | ||
Property Plant And Equipment [Line Items] | ||
Total | 1,593 | 1,230 |
Office Furniture and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total | $ 810 | $ 574 |
Property, Equipment and Softw_4
Property, Equipment and Software, Net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |||
Depreciation | $ 1,706 | $ 2,331 | $ 1,381 |
Employee Benefits - Additional
Employee Benefits - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |||
Employee benefit expenses related to defined contribution plan | $ 6,627 | $ 6,342 | $ 5,150 |
Accrued Liabilities - Component
Accrued Liabilities - Components of Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables And Accruals [Abstract] | ||
Customer acquisition incentive payables | $ 16,021 | $ 18,216 |
Funds payable to marketplace customers | 48,407 | 10,313 |
Other tax payable | 10,812 | 8,316 |
Payroll and related liabilities | 2,836 | 5,622 |
Discretionary payments | 3,299 | |
Deferred depository bank incentive | 1,609 | 1,954 |
Accrued operating expense | 7,197 | 2,634 |
Borrowing from employees | 2,996 | |
Professional service fee accruals | 492 | 1,017 |
Issuance cost accruals | 56 | |
Others | 297 | 468 |
Accrued liabilities | $ 90,667 | $ 51,895 |
Accrued Liabilities - Compone_2
Accrued Liabilities - Components of Accrued Liabilities (Parenthetical) (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Payables And Accruals [Abstract] | |
Maximum settlement time lag for transferring amount to accounts | 5 days |
Other Income (Expense), Net - S
Other Income (Expense), Net - Schedule of Other Income (Expense), Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Nonoperating Income Expense [Abstract] | |||
Government grants | $ 726 | $ 560 | |
Fair value changes of financial instrument | 33 | ||
Interest income | 347 | $ 31 | 29 |
Foreign exchange loss | 317 | 52 | (246) |
Loss of convertible promissory notes | (25) | (271) | |
Depository bank incentive | 1 | 368 | |
Others | (138) | 82 | (114) |
Nonoperating Income (Expense) | $ 1,253 | $ 508 | $ (9) |
Taxation - Additional Informati
Taxation - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax [Line Items] | |||
Enterprise income tax, uniform rate | 25.00% | 25.00% | 25.00% |
Net operating loss carry forwards | $ 111,130 | ||
Minimum [Member] | |||
Income Tax [Line Items] | |||
Net operating tax loss carry forwards, expiration period | 2019 | ||
Maximum | |||
Income Tax [Line Items] | |||
Net operating tax loss carry forwards, expiration period | 2022 | ||
PRC Enterprise Income Tax Law | |||
Income Tax [Line Items] | |||
Enterprise income tax, uniform rate | 25.00% | ||
Withholding income tax rate on dividends distributed by foreign investment enterprise | 10.00% |
Taxation - Summary of Reconcili
Taxation - Summary of Reconciliation of Difference Between Statutory EIT Rate and Effective Tax Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Loss before income tax expenses | $ (65,457) | $ (36,536) | $ (33,363) |
Income tax at statutory rates in the PRC | (16,364) | (9,134) | (8,341) |
Non-deductible expenses | 4,173 | 1,763 | 2,336 |
Different tax rates in other jurisdictions | 6,278 | 2,661 | 471 |
Change in valuation allowance | 6,985 | 4,823 | 5,537 |
Income tax expense | $ 1,072 | $ 113 | $ 3 |
Income tax at statutory rates in the PRC, Percent | 25.00% | 25.00% | 25.00% |
Non-deductible expenses, Percent | (6.00%) | (5.00%) | (7.00%) |
Different tax rates in other jurisdictions, Percent | (9.00%) | (7.00%) | (1.00%) |
Change in valuation allowance, Percent | (10.00%) | (13.00%) | (17.00%) |
Effective tax rate | 0.00% | 0.00% | 0.00% |
Taxation - Summary of Significa
Taxation - Summary of Significant Components of Deferred Tax Assets (Details - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||||
Accruals for payroll and other costs | $ 2,514 | $ 446 | ||
Allowance for loan losses | 139 | 25 | ||
Net operating loss carry forwards | 22,470 | 17,585 | ||
Deferred revenue and other temporary difference | 261 | 343 | ||
Subtotal | 25,384 | 18,399 | ||
Less: valuation allowance | $ (25,384) | $ (18,399) | $ (13,567) | $ (8,030) |
Taxation - Summary of Movement
Taxation - Summary of Movement of Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Balance at beginning of the year | $ 18,399 | $ 13,567 | $ 8,030 |
Current year addition | 6,985 | 4,832 | 5,537 |
Balance at end of the year | $ 25,384 | $ 18,399 | $ 13,567 |
Ordinary Shares - Additional In
Ordinary Shares - Additional Information (Details) - $ / shares | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Apr. 28, 2017 | Aug. 31, 2015 | Jul. 31, 2004 | |
Class Of Stock [Line Items] | |||||
Ordinary shares, shares issued | 65,759,210 | 64,702,673 | 12,623,530 | ||
Ordinary shares issued, par value | |||||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred share par value | $ 0.0001 | ||||
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | |||
Ordinary shares, shares outstanding | 65,759,210 | 64,702,673 | |||
Class A Ordinary Shares | |||||
Class Of Stock [Line Items] | |||||
Ordinary shares, shares authorized | 450,000,000 | ||||
Ordinary shares voting rights | one vote per share | ||||
Ordinary shares, shares outstanding | 58,973,604 | 58,217,067 | |||
Class B Ordinary Shares | |||||
Class Of Stock [Line Items] | |||||
Ordinary shares, shares authorized | 50,000,000 | ||||
Ordinary shares voting rights | ten votes per share | ||||
Ordinary shares, shares outstanding | 6,785,606 | 6,485,606 |
Convertible Promissory Notes -
Convertible Promissory Notes - Additional Information (Details) | Aug. 31, 2015USD ($) | Jul. 01, 2015USD ($) | Feb. 20, 2015USD ($) | Mar. 31, 2017USD ($)Investor | Jun. 25, 2015USD ($) | Dec. 31, 2018 | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Nov. 21, 2016USD ($) | May 31, 2016USD ($)$ / shares |
Debt Instrument [Line Items] | ||||||||||
Debt Conversion, Description | For the Initial Notes, conversion will be made at the conversion price of 94% of the Series C Shares issuance price or 94% of the Qualified Public Offering issuance price as applicable, respectively. For the Subsequent Notes, conversion will be made at the conversion price of 90% of the Series C Shares issuance price or 90% of the Qualified Public Offering issuance price as applicable, respectively. | |||||||||
Loss on extinguishment of debt | $ (2,232,000) | $ (25,000) | $ 355,000 | |||||||
Debt instrument redemption of principal plus interest amount | $ 2,660,000 | |||||||||
2015 Convertible Promissory Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, aggregated principal amount | $ 2,500,000 | $ 30,300,000 | ||||||||
Debt instrument, interest rate stated percentage | 12.00% | 8.00% | ||||||||
Debt instrument, maturity period | 6 months | 1 year | ||||||||
Debt instrument conversion price percentage | 94.00% | 90.00% | ||||||||
2016 Unsecured Convertible Promissory Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, aggregated principal amount | $ 2,176,413 | |||||||||
Debt instrument, conversion price | $ / shares | $ 26.64 | |||||||||
2016 Unsecured Convertible Promissory Notes | Private Placement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible shares, converted period | Aug. 5, 2016 | |||||||||
2016 Unsecured Convertible Promissory Notes | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, interest rate stated percentage | 15.00% | |||||||||
2016 Unsecured Convertible Promissory Notes | Minimum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, interest rate stated percentage | 5.00% | |||||||||
2016 Batch II Unsecured Convertible Promissory Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, aggregated principal amount | $ 3,249,000 | |||||||||
2016 Batch II Unsecured Convertible Promissory Notes | Private Placement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible shares, converted period | Dec. 6, 2016 | |||||||||
2017 Unsecured Convertible Promissory Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, aggregated principal amount | $ 500,000 | |||||||||
Number of investors | Investor | 1 | |||||||||
2017 Unsecured Convertible Promissory Notes | Private Placement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible shares, converted period | Mar. 30, 2017 |
Redeemable Convertible Prefer_3
Redeemable Convertible Preferred Shares - Additional Information (Details) | Apr. 28, 2017USD ($)$ / sharesshares | Apr. 12, 2017USD ($)Investor$ / sharesshares | Mar. 30, 2017USD ($)$ / sharesshares | Nov. 11, 2016USD ($) | Jul. 18, 2016USD ($) | Feb. 28, 2017USD ($) | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2005USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)$ / sharesshares | May 31, 2008USD ($)$ / sharesshares | Nov. 10, 2016USD ($) | Aug. 05, 2016USD ($)$ / sharesshares |
Temporary Equity [Line Items] | |||||||||||||||
Proceeds from issuance of convertible redeemable preferred shares | $ 22,431,000 | $ 20,389,000 | |||||||||||||
Initial conversion ratio | 1 | ||||||||||||||
Net proceeds after deducting commissions and offering expenses | $ 63,020,000 | 63,020,000 | |||||||||||||
Preferred shares dividend rate, percentage of original issuance price | 8.00% | ||||||||||||||
Liquidation date, expected to complete | Apr. 28, 2017 | ||||||||||||||
Accretion of preferred shares redemption value | $ 0 | 2,868,000 | 6,377,000 | ||||||||||||
Minimum [Member] | |||||||||||||||
Temporary Equity [Line Items] | |||||||||||||||
Net proceeds after deducting commissions and offering expenses | $ 50,000,000 | ||||||||||||||
Upon Initial Public Offering | |||||||||||||||
Temporary Equity [Line Items] | |||||||||||||||
Initial public offering, completion date | Apr. 28, 2017 | ||||||||||||||
Upon Initial Public Offering | Minimum [Member] | |||||||||||||||
Temporary Equity [Line Items] | |||||||||||||||
Price paid by public for each share | $ / shares | $ 26.64 | ||||||||||||||
Series A Convertible Redeemable Preferred Stock | |||||||||||||||
Temporary Equity [Line Items] | |||||||||||||||
Preferred shares, shares issued | shares | 4,912,934 | ||||||||||||||
Preferred stock shares issued, price per share | $ / shares | $ 0.73276 | ||||||||||||||
Proceeds from issuance of convertible redeemable preferred shares | $ 3,600,000 | ||||||||||||||
Payments of stock issuance costs | $ 117,000 | ||||||||||||||
Liquidation percentage of original issue price | 100.00% | ||||||||||||||
Preferred stock, redemption term | At any time on or after October 17, 2013, for Series A Shares and Series B Shares, if requested by a majority holders of the respective series of Preferred Shares then outstanding, the Company shall redeem all of the respective outstanding Preferred Shares in that series. The redemption prices of Series A Shares and B Shares are equal to the Series B Liquidation Value and Series A Liquidation Value calculated as of the closing date for such redemption, respectively | ||||||||||||||
Preferred stock, redemption date | Oct. 17, 2013 | ||||||||||||||
Accretion of preferred shares redemption value | 96,000 | $ 288,000 | |||||||||||||
Change in fair value of convertible preferred shares | $ 634,801 | ||||||||||||||
Preferred shares, shares outstanding | shares | 4,912,934 | 4,912,934 | 4,912,934 | ||||||||||||
Series B Convertible Redeemable Preferred Stock | |||||||||||||||
Temporary Equity [Line Items] | |||||||||||||||
Preferred shares, shares issued | shares | 14,084,239 | ||||||||||||||
Preferred stock shares issued, price per share | $ / shares | $ 1.43854 | ||||||||||||||
Proceeds from issuance of convertible redeemable preferred shares | $ 20,261,000 | ||||||||||||||
Payments of stock issuance costs | $ 1,144,000 | ||||||||||||||
Liquidation percentage of original issue price | 100.00% | ||||||||||||||
Preferred stock, redemption term | At any time on or after October 17, 2013, for Series A Shares and Series B Shares, if requested by a majority holders of the respective series of Preferred Shares then outstanding, the Company shall redeem all of the respective outstanding Preferred Shares in that series. The redemption prices of Series A Shares and B Shares are equal to the Series B Liquidation Value and Series A Liquidation Value calculated as of the closing date for such redemption, respectively | ||||||||||||||
Preferred stock, redemption date | Oct. 17, 2013 | ||||||||||||||
Accretion of preferred shares redemption value | 540,000 | $ 1,621,000 | |||||||||||||
Change in fair value of convertible preferred shares | 634,801 | ||||||||||||||
Preferred shares, shares outstanding | shares | 14,084,239 | 14,084,239 | 14,084,239 | ||||||||||||
Series C Convertible Redeemable Preferred Stock | |||||||||||||||
Temporary Equity [Line Items] | |||||||||||||||
Preferred shares, shares issued | shares | 121,998 | 569,858 | 156,521 | 1,728,989 | 156,521 | ||||||||||
Preferred stock shares issued, price per share | $ / shares | $ 26.64 | $ 26.64 | $ 26.64 | $ 26.64 | $ 26.64 | ||||||||||
Proceeds from issuance of convertible redeemable preferred shares | $ 3,250,000 | $ 15,181,000 | $ 4,170,000 | $ 11,920,000 | |||||||||||
Payments of stock issuance costs | $ 672,000 | 1,243,000 | |||||||||||||
Conversion of stock, amount issued | $ 30,731,000 | ||||||||||||||
Preferred stock convertible conversion price | $ / shares | $ 23.98 | ||||||||||||||
Number of investors | Investor | 6 | ||||||||||||||
Liquidation percentage of original issue price | 100.00% | ||||||||||||||
Preferred stock, redemption term | At any time on or after July 1, 2020, if requested by a majority holders of Series C Shares then outstanding, the Company shall redeem all of the outstanding Series C Shares. The redemption prices of Series C Shares are equal to the Series C Liquidation Value calculated as of the closing date for such redemption. In addition, no other class or series of capital stock shall be redeemable prior and in preference to the Series C Shares without the written consent of a majority holders of Series C Shares | ||||||||||||||
Preferred stock, redemption date | Jul. 1, 2020 | ||||||||||||||
Accretion of preferred shares redemption value | $ 2,232,000 | $ 4,468,000 | |||||||||||||
Change in fair value of convertible preferred shares | $ 634,801 | ||||||||||||||
Preferred shares, shares outstanding | shares | 2,858,394 | 1,728,989 | 2,858,394 | ||||||||||||
Series C Convertible Redeemable Preferred Stock | Upon Initial Public Offering | |||||||||||||||
Temporary Equity [Line Items] | |||||||||||||||
Convertible preferred stock converted into ordinary shares, value | $ 82,034,040 | ||||||||||||||
Preferred shares, shares outstanding | shares | 3,569,957 | ||||||||||||||
Series C Convertible Redeemable Preferred Stock | Investor | |||||||||||||||
Temporary Equity [Line Items] | |||||||||||||||
Proceeds from issuance of convertible redeemable preferred shares | $ 16,000,000 | $ 4,000,000 | |||||||||||||
Series C Convertible Redeemable Preferred Stock | Dr. Zhengyu (Zane) | |||||||||||||||
Temporary Equity [Line Items] | |||||||||||||||
Preferred shares, shares issued | shares | 750,751 | ||||||||||||||
Preferred stock shares issued, price per share | $ / shares | $ 26.64 | ||||||||||||||
Aggregate principal amount of promissory note | $ 20,000,000 | ||||||||||||||
Preferred stock, shares exchanged value. | $ 20,000,000 | ||||||||||||||
Class A Ordinary Shares | Upon Initial Public Offering | |||||||||||||||
Temporary Equity [Line Items] | |||||||||||||||
Convertible preferred stock conversion basis | one-to-one | ||||||||||||||
Convertible preferred stock converted into ordinary shares | shares | 17,242,297 |
Redeemable Convertible Prefer_4
Redeemable Convertible Preferred Shares - Schedule of Convertible Redeemable Preferred Shares Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Temporary Equity [Line Items] | |||
Receivable for issuance of Series C convertible redeemable preferred shares | $ (4,000) | ||
Accretion of preferred shares redemption value | $ 0 | $ 2,868 | 6,377 |
Series A Convertible Redeemable Preferred Stock | |||
Temporary Equity [Line Items] | |||
Beginning Balance | $ 6,796 | $ 6,508 | |
Beginning Balance, Shares | 4,912,934 | 4,912,934 | |
Accretion of preferred shares redemption value | $ 96 | $ 288 | |
Ending Balance | $ 6,796 | ||
Ending Balance, Shares | 4,912,934 | ||
Series A Convertible Redeemable Preferred Stock | Upon Initial Public Offering | |||
Temporary Equity [Line Items] | |||
Converted to ordinary shares upon IPO | $ (6,892) | ||
Converted to ordinary shares upon IPO (shares) | (4,912,934) | ||
Series B Convertible Redeemable Preferred Stock | |||
Temporary Equity [Line Items] | |||
Beginning Balance | $ 35,132 | $ 33,511 | |
Beginning Balance, Shares | 14,084,239 | 14,084,239 | |
Accretion of preferred shares redemption value | $ 540 | $ 1,621 | |
Ending Balance | $ 35,132 | ||
Ending Balance, Shares | 14,084,239 | ||
Series B Convertible Redeemable Preferred Stock | Upon Initial Public Offering | |||
Temporary Equity [Line Items] | |||
Converted to ordinary shares upon IPO | $ (35,672) | ||
Converted to ordinary shares upon IPO (shares) | (14,084,239) | ||
Series C Convertible Redeemable Preferred Stock | |||
Temporary Equity [Line Items] | |||
Beginning Balance | $ 74,290 | $ 44,931 | |
Beginning Balance, Shares | 2,858,394 | 1,728,989 | |
Issuance of Series C convertible redeemable preferred shares, net of issuance costs | $ 18,035 | $ 28,891 | |
Issuance of Series C convertible redeemable preferred shares, net of issuance costs (shares) | 711,563 | 1,129,405 | |
Receivable for issuance of Series C convertible redeemable preferred shares | $ (4,000) | ||
Accretion of preferred shares redemption value | $ 2,232 | 4,468 | |
Ending Balance | $ 74,290 | ||
Ending Balance, Shares | 2,858,394 | ||
Receivable for issuance of Series C convertible redeemable preferred shares | 4,000 | ||
Series C Convertible Redeemable Preferred Stock | Upon Initial Public Offering | |||
Temporary Equity [Line Items] | |||
Deemed dividend to preferred shareholders upon IPO | $ 82,034 | ||
Deemed dividend to preferred shareholders upon IPO (shares) | 13,672,340 | ||
Converted to ordinary shares upon IPO | $ (180,591) | ||
Converted to ordinary shares upon IPO (shares) | (17,242,297) |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Incentive Shares | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unrecognized compensation expenses | $ 6,532 | ||
Unrecognized compensation expenses, recognition period | 11 months 15 days | ||
Incentive Shares | General and Administrative Expenses | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation expense | $ 2,417 | $ 2,497 | $ 1,003 |
Incentive Shares | Minimum [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Requisite service period | 3 years | ||
Incentive Shares | Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Requisite service period | 5 years | ||
Stock Options | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Weighted average exercise price of stock options granted | $ 2.73 | ||
Unrecognized compensation expenses | $ 3,337 | ||
Unrecognized compensation expenses, recognition period | 10 months 24 days | ||
Share-based Plans | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of ordinary shares available for grants | 9,499,144 | ||
Share-based compensation description | the Company’s total approved ordinary shares available for grants under the 2016 Equity Incentive plan was 9,499,144 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Incentive Shares and Stock Option Shares Activities (Details) - Share-based Plans - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Weighted average grant-date fair value, Beginning balance | $ 3.0279 | $ 2.8575 |
Weighted average grant-date fair value, Granted | 3.0401 | |
Weighted average grant-date fair value, Vested | 2.7252 | 2.2052 |
Weighted average grant-date fair value, Forfeited | 3.9901 | 3.4318 |
Weighted average grant-date fair value, Ending balance | $ 3.0453 | $ 3.0279 |
Incentive Shares | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of non-vested incentive shares and stock options, Beginning balance | 1,468,134 | 1,976,300 |
Number of non-vested incentive shares and stock options, Vested | (619,234) | (455,166) |
Number of non-vested incentive shares and stock options, Forfeited | (167,650) | (53,000) |
Number of non-vested incentive shares and stock options, Ending balance | 681,250 | 1,468,134 |
Stock Options | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of non-vested incentive shares and stock options, Beginning balance | 1,431,620 | 1,860,437 |
Number of non-vested incentive shares and stock options, Granted | 210,000 | |
Number of non-vested incentive shares and stock options, Vested | (463,942) | (386,317) |
Number of non-vested incentive shares and stock options, Forfeited | (411,875) | (42,500) |
Number of non-vested incentive shares and stock options, Ending balance | 765,803 | 1,431,620 |
Loss per Share - Schedule of Ba
Loss per Share - Schedule of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share Basic And Diluted [Line Items] | |||
Net loss: | $ (66,529) | $ (36,649) | $ (33,366) |
Accretion on convertible redeemable preferred shares to redemption value | 0 | (2,868) | (6,377) |
Deemed dividend to Series C convertible redeemable preferred shares | (635) | ||
Net loss attributable to ordinary shareholders | (66,529) | (121,551) | (40,378) |
Numerator: | |||
Net loss attributable to ordinary shareholders—basic and diluted | $ (66,529) | $ (121,551) | $ (40,378) |
Denominator: | |||
Weighted average number of ordinary shares outstanding—basic and diluted | 65,199,459 | 49,054,201 | 16,437,946 |
Loss per share attributable to ordinary shareholders—basic and diluted | $ (1.02) | $ (2.48) | $ (2.46) |
Series A Preferred Shares | |||
Earnings Per Share Basic And Diluted [Line Items] | |||
Accretion on convertible redeemable preferred shares to redemption value | $ (96) | $ (288) | |
Series B Preferred Shares | |||
Earnings Per Share Basic And Diluted [Line Items] | |||
Accretion on convertible redeemable preferred shares to redemption value | (540) | (1,621) | |
Series C Preferred Shares | |||
Earnings Per Share Basic And Diluted [Line Items] | |||
Accretion on convertible redeemable preferred shares to redemption value | (2,232) | (4,468) | |
Deemed dividend to Series C convertible redeemable preferred shares | $ (635) | ||
Series C Preferred Shares | Upon Initial Public Offering | |||
Earnings Per Share Basic And Diluted [Line Items] | |||
Deemed dividend to Series C convertible redeemable preferred shares | $ (82,034) |
Schedule of Commitments and Con
Schedule of Commitments and Contingencies - Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases Future Minimum Payments Due [Abstract] | |
Operating lease obligations, Total | $ 4,673 |
Operating lease obligations, Less than 1 year | 3,672 |
Operating lease obligations, 1-3 years | $ 1,001 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Operating lease rental expense | $ 5,731 | $ 6,050 | $ 6,715 |
Statutory Reserves and Restri_2
Statutory Reserves and Restricted Net Assets - Additional Information (Details) - Group - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statutory Reserves And Restricted Net Assets [Line Items] | |||
Annual appropriation percentage of after tax profit to general reserve | 10.00% | ||
Percentage of appropriation of registered capital to reserve fund | 50.00% | ||
Appropriations to statutory reserve | $ 0 | $ 0 | $ 0 |
Appropriations to enterprise expansion fund | 0 | 0 | 0 |
Appropriations to staff welfare and bonus fund | 0 | $ 0 | $ 0 |
Net restricted assets | $ 9,500,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - TBMCL - Subsequent Event | Jun. 24, 2019shares |
Subsequent Event [Line Items] | |
Maximum number of shares issuable upon exercise of warrants | 66,402,480 |
Number of warrants exercised | 0 |