Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2023 shares | |
Document And Entity Information | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2023 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-36363 |
Entity Registrant Name | TCTM Kids IT Education Inc. |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | 6/F, No. 1 Andingmenwai Street, Litchi Tower |
Entity Address, Address Line Two | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Postal Zip Code | 100011 |
Entity Address, Country | CN |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Document Financial Statement Error Correction [Flag] | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Amendment Flag | false |
Entity Central Index Key | 0001592560 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | FY |
Auditor Name | Marcum Asia CPAs LLP |
Auditor Firm ID | 5395 |
Auditor Location | Beijing China |
Business Contact | |
Document And Entity Information | |
Entity Address, Address Line One | 6/F, No. 1 Andingmenwai Street, Litchi Tower |
Entity Address, Address Line Two | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Postal Zip Code | 100011 |
Entity Address, Country | CN |
Contact Personnel Name | Xiaobo Shao |
Contact Personnel Email Address | shaoxiaobo@tedu.cn |
Ordinary Shares | |
Document And Entity Information | |
Entity Common Stock, Shares Outstanding | 53,962,196 |
Class A ordinary shares | |
Document And Entity Information | |
Title of 12(b) Security | Class A ordinary shares |
Security Exchange Name | NASDAQ |
Entity Common Stock, Shares Outstanding | 46,756,137 |
No Trading Symbol Flag | true |
ADS | |
Document And Entity Information | |
Title of 12(b) Security | American Depositary Shares |
Trading Symbol | TCTM |
Security Exchange Name | NASDAQ |
Entity Common Stock, Shares Outstanding | 11,105,190 |
Class B ordinary shares | |
Document And Entity Information | |
Entity Common Stock, Shares Outstanding | 7,206,059 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
Current assets: | |||
Cash and cash equivalents | ¥ 220,689 | $ 31,083 | ¥ 198,529 |
Time deposits | 300 | 42 | |
Restricted cash | 6,575 | 926 | |
Amounts due from related parties | ¥ 44 | $ 6 | ¥ 92 |
Other Receivable, after Allowance for Credit Loss, Current, Related Party, Type [Extensible Enumeration] | Related Party [Member] | Related Party [Member] | Related Party [Member] |
Prepaid expenses and other current assets, net | ¥ 57,385 | $ 8,083 | ¥ 38,656 |
Current assets of discontinued operations held for sale | 275,603 | 38,818 | 430,276 |
Total current assets | 560,596 | 78,958 | 667,553 |
Time deposits-non current | 104 | ||
Amounts due from related parties-non current | ¥ 732 | $ 103 | ¥ 701 |
Other Receivable, after Allowance for Credit Loss, Noncurrent, Related Party, Type [Extensible Enumeration] | Related Party [Member] | Related Party [Member] | Related Party [Member] |
Property and equipment, net | ¥ 66,064 | $ 9,305 | ¥ 77,996 |
Intangible assets, net | 5,287 | 745 | 7,030 |
Right-of-use assets | 237,059 | 33,389 | 248,704 |
Goodwill | 49,416 | 6,960 | 49,416 |
Long-term investments | 41,860 | 5,896 | 46,183 |
Deferred income tax assets | 28,476 | 4,011 | 18,632 |
Other non-current assets | 28,753 | 4,050 | 34,395 |
Non-current assets of discontinued operations held for sale | 186,786 | ||
Total assets | 1,018,243 | 143,417 | 1,337,500 |
Current liabilities: | |||
Short-term bank loans | 30,000 | ||
Accounts payable | 4,988 | 704 | 5,259 |
Operating lease liabilities-current | 111,840 | 15,752 | 148,583 |
Income taxes payable | 6,105 | 860 | 4,281 |
Deferred revenue- current | 1,210,536 | 170,500 | 1,314,877 |
Accrued expenses and other current liabilities | 517,096 | 72,831 | 416,911 |
Current liabilities of discontinued operations held for sale | 560,791 | 78,986 | 737,035 |
Total current liabilities | 2,411,356 | 339,633 | 2,656,946 |
Operating lease liabilities-non current | 107,804 | 15,184 | 109,111 |
Other non-current liabilities | 433 | 61 | 750 |
Non-current liabilities of discontinued operations held for sale | 77,374 | ||
Total liabilities | 2,519,593 | 354,878 | 2,844,181 |
Commitments and contingencies | |||
Deficit: | |||
Additional paid-in capital | 1,360,901 | 191,679 | 1,363,845 |
Accumulated other comprehensive income | 48,216 | 6,791 | 49,664 |
Accumulated deficit | (2,427,992) | (341,976) | (2,436,918) |
Total deficit attributable to the shareholders of TCTM Kids IT Education Inc. | (1,497,783) | (210,959) | (1,499,894) |
Non-controlling interest | (3,567) | (502) | (6,787) |
Total deficit | (1,501,350) | (211,461) | (1,506,681) |
Total liabilities and deficit | 1,018,243 | 143,417 | 1,337,500 |
Class A ordinary shares | |||
Deficit: | |||
Ordinary shares | 364 | 51 | 359 |
Treasury shares (10,608,950 and 11,105,190 Class A ordinary shares as of December 31, 2022 and 2023, at cost) | (479,346) | (67,514) | (476,918) |
Class B ordinary shares | |||
Deficit: | |||
Ordinary shares | ¥ 74 | $ 10 | ¥ 74 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Class A ordinary shares | ||
Ordinary shares | ||
Ordinary shares, par value | $ 0.001 | $ 0.001 |
Authorized | 860,000,000 | 860,000,000 |
Issued | 57,861,327 | 57,176,842 |
Outstanding | 46,756,137 | 46,567,892 |
Treasury shares | 11,105,190 | 10,608,950 |
Class B ordinary shares | ||
Ordinary shares | ||
Ordinary shares, par value | $ 0.001 | $ 0.001 |
Authorized | 40,000,000 | 40,000,000 |
Issued | 7,206,059 | 7,206,059 |
Outstanding | 7,206,059 | 7,206,059 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) ¥ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) ¥ / shares shares | Dec. 31, 2021 CNY (¥) ¥ / shares shares | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME | ||||
Net revenues | ¥ 1,375,192 | $ 193,692 | ¥ 1,399,844 | ¥ 1,236,273 |
Cost of revenues | (750,840) | (105,754) | (728,416) | (795,669) |
Gross profit | 624,352 | 87,938 | 671,428 | 440,604 |
Selling and marketing expenses | (268,399) | (37,803) | (280,093) | (437,487) |
General and administrative expenses | (330,848) | (46,599) | (397,440) | (359,453) |
Research and development expenses | (11,654) | (1,641) | (20,248) | (40,311) |
Operating (loss) income | 13,451 | 1,895 | (26,353) | (396,647) |
Interest income, net | 1,089 | 153 | 1,962 | 2,611 |
Other income, net | 723 | 102 | 8,150 | 1,466 |
Foreign currency exchange loss, net | (901) | (127) | (325) | (267) |
(Loss) income before income taxes | 14,362 | 2,023 | (16,566) | (392,837) |
Income tax (expense) benefit | 7,972 | 1,123 | 14,504 | (116,451) |
Net (loss) income from continuing operations | 22,334 | 3,146 | (2,062) | (509,288) |
Income (loss) before income taxes from discontinued operation | (5,431) | (765) | 122,633 | 31,114 |
Income tax benefit (expense) | (6,549) | (922) | (35,338) | 2,394 |
Net income (loss) from discontinued operation | (11,980) | (1,687) | 87,295 | 33,508 |
Net (loss) income | 10,354 | 1,459 | 85,233 | (475,780) |
Less: Net (loss) income attributable to non-controlling interests from continuing operations | 1,428 | 201 | 1,713 | (1,233) |
Net (loss) income attributable to Class A and Class B ordinary shareholders | ¥ 8,926 | $ 1,258 | ¥ 83,520 | ¥ (474,547) |
Weighted average number of ordinary shares used in computing basic (loss) income per share | 53,873,945 | 53,873,945 | 54,657,222 | 56,260,925 |
Weighted average number of ordinary shares used in computing diluted (loss) income per share | 55,334,574 | 55,334,574 | 57,730,672 | 57,630,365 |
Basic (loss) income per ADS attributable to ordinary shareholder from continuing operations | (per share) | ¥ 1.94 | $ 0.27 | ¥ (0.35) | ¥ (45.15) |
Diluted (loss) income per ADS attributable to ordinary shareholder from continuing operations | (per share) | 1.89 | 0.27 | (0.35) | (45.15) |
Basic income (loss) per ADS attributable to ordinary shareholder from discontinued operation | (per share) | (1.11) | (0.16) | 7.99 | 2.98 |
Diluted income (loss) per ADS attributable to ordinary shareholder from discontinued operation | (per share) | ¥ (1.11) | $ (0.16) | ¥ 7.56 | ¥ 2.91 |
Foreign currency translation adjustment | ¥ (1,448) | $ (204) | ¥ 965 | ¥ (421) |
Comprehensive (loss) income | 8,906 | 1,255 | 86,198 | (476,201) |
Less: Comprehensive (loss) income attributable to non-controlling interests | 1,428 | 201 | 1,713 | (1,233) |
Comprehensive (loss) income attributable to Class A and Class B ordinary shareholders | ¥ 7,478 | $ 1,054 | ¥ 84,485 | ¥ (474,968) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parenthetical) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Share-based compensation expense | ¥ (2,743) | $ (386) | ¥ (11,384) | ¥ (14,113) |
Cost of revenues | ||||
Share-based compensation expense | (19) | (3) | (244) | (18) |
Selling and marketing expenses | ||||
Share-based compensation expense | (24) | (3) | (227) | (206) |
General and administrative expenses | ||||
Share-based compensation expense | (2,551) | (359) | (10,179) | (13,514) |
Research and development expenses | ||||
Share-based compensation expense | ¥ (149) | $ (21) | ¥ (734) | ¥ (375) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT ¥ in Thousands, $ in Thousands | Ordinary Shares Class A ordinary shares CNY (¥) shares | Ordinary Shares Class B ordinary shares CNY (¥) shares | Treasury Shares CNY (¥) | Additional Paid-in Capital CNY (¥) | Accumulated Other Comprehensive Income (Loss) CNY (¥) | Accumulated deficit CNY (¥) | Non- controlling Interest CNY (¥) | CNY (¥) | USD ($) |
Balance at Dec. 31, 2020 | ¥ 349 | ¥ 74 | ¥ (459,815) | ¥ 1,324,161 | ¥ 49,120 | ¥ (2,045,891) | ¥ (7,267) | ¥ (1,139,269) | |
Balance (In shares) at Dec. 31, 2020 | shares | 55,546,254 | 7,206,059 | |||||||
Net (loss) income | (474,547) | (1,233) | (475,780) | ||||||
Issuance of Class A ordinary shares upon exercise of share options and vesting of non-vested shares | ¥ 6 | 3,941 | 3,947 | ||||||
Issuance of Class A ordinary shares upon exercise of share options and vesting of non-vested shares (In shares) | shares | 1,046,903 | ||||||||
Foreign currency translation adjustment | (421) | (421) | |||||||
Share-based compensation | 19,103 | 19,103 | |||||||
Balance at Dec. 31, 2021 | ¥ 355 | ¥ 74 | (459,815) | 1,347,205 | 48,699 | (2,520,438) | (8,500) | (1,592,420) | |
Balance (In shares) at Dec. 31, 2021 | shares | 56,593,157 | 7,206,059 | |||||||
Net (loss) income | 83,520 | 1,713 | 85,233 | ||||||
Issuance of Class A ordinary shares upon exercise of share options and vesting of non-vested shares | ¥ 4 | 103 | 107 | ||||||
Issuance of Class A ordinary shares upon exercise of share options and vesting of non-vested shares (In shares) | shares | 583,685 | ||||||||
Foreign currency translation adjustment | 965 | 965 | |||||||
Share-based compensation | 16,537 | 16,537 | |||||||
Treasury shares | (17,103) | (17,103) | |||||||
Balance at Dec. 31, 2022 | ¥ 359 | ¥ 74 | (476,918) | 1,363,845 | 49,664 | (2,436,918) | (6,787) | (1,506,681) | |
Balance (In shares) at Dec. 31, 2022 | shares | 57,176,842 | 7,206,059 | |||||||
Net (loss) income | 8,926 | 1,428 | 10,354 | $ 1,459 | |||||
Issuance of Class A ordinary shares upon exercise of share options and vesting of non-vested shares | ¥ 5 | 222 | 227 | ||||||
Issuance of Class A ordinary shares upon exercise of share options and vesting of non-vested shares (In shares) | shares | 684,485 | ||||||||
Foreign currency translation adjustment | (1,448) | (1,448) | (204) | ||||||
Share-based compensation | 3,887 | 3,887 | |||||||
Acquisition of noncontrolling interest | (7,053) | 1,792 | (5,261) | ||||||
Treasury shares | (2,428) | (2,428) | |||||||
Balance at Dec. 31, 2023 | ¥ 364 | ¥ 74 | ¥ (479,346) | ¥ 1,360,901 | ¥ 48,216 | ¥ (2,427,992) | ¥ (3,567) | ¥ (1,501,350) | $ (211,461) |
Balance (In shares) at Dec. 31, 2023 | shares | 57,861,327 | 7,206,059 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Operating activities: | ||||
Net (loss) income from operations | ¥ 10,354 | $ 1,459 | ¥ 85,233 | ¥ (475,780) |
Less: net income/(loss) from discontinuing operations | (11,980) | (1,687) | 87,295 | 33,508 |
Net (loss)/income from continuing operations | 22,334 | 3,146 | (2,062) | (509,288) |
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities of continuing operations: | ||||
Depreciation and amortization | 46,880 | 6,603 | 67,704 | 71,550 |
Amortization of operating lease right-of-use asset | 121,299 | 17,085 | 136,875 | 149,744 |
Bad debt provision | 378 | |||
Loss on disposal of property and equipment | 1,306 | 184 | 636 | 934 |
Deferred income tax expense | (9,844) | (1,386) | (18,300) | 115,788 |
Share based compensation expense | 2,743 | 386 | 11,384 | 14,113 |
Investment (income) loss | 4,315 | 608 | (2,572) | (1,375) |
Foreign currency exchange loss, net | 901 | 127 | 325 | 267 |
Changes in operating assets and liabilities: | ||||
Amounts due from related parties | 29 | 4 | 45 | (708) |
Prepaid expenses and other current assets | (18,850) | (2,654) | 7,770 | 3,559 |
Other non-current assets | 1,962 | 276 | 13,751 | (3,330) |
Accounts payable | (531) | (75) | 1,083 | (283) |
Amounts due to related parties | (2) | (81) | ||
Income taxes payable | 1,824 | 257 | 3,796 | 486 |
Deferred revenue | (104,341) | (14,696) | (109,339) | 77,015 |
Accrued expenses and other current liabilities | 99,463 | 14,009 | 32,529 | 157,290 |
Operating lease liabilities | (147,705) | (20,804) | (142,636) | (145,929) |
Other non-current liabilities | (317) | (45) | (319) | (315) |
Net cash (used in)/provided by operating activities from continuing operations | 21,468 | 3,025 | 1,046 | (70,563) |
Net cash provided by/ (used in) operating activities from discontinued operation | (140,403) | (19,775) | (28,574) | 79,173 |
Net cash provided by/ (used in) operating activities | (118,935) | (16,750) | (27,528) | 8,610 |
Investing activities: | ||||
Purchase of property and equipment and intangible assets | (34,709) | (4,889) | (29,401) | (46,910) |
Proceeds from disposal of property and equipment | 457 | 64 | 583 | 954 |
Proceeds from disposal of long-term investments | 8 | 1 | ||
Purchase of time deposits | (300) | (42) | (2) | |
Net cash (used in)/provided by investing activities from continuing operations | (34,544) | (4,866) | (28,818) | (45,958) |
Net cash provided by investing activities from discontinued operation | 106,592 | 15,013 | 6,109 | 79,651 |
Net cash provided by/ (used in) investing activities | 72,048 | 10,147 | (22,709) | 33,693 |
Financing activities: | ||||
Proceeds from bank borrowing | 30,000 | 30,000 | ||
Repayment of bank borrowings | (30,000) | (4,225) | (30,000) | (10,710) |
Issuance of Class A ordinary shares in connection with exercise of share options | 227 | 32 | 107 | 3,947 |
Prepayments of acquire noncontrolling interests | (1,580) | (223) | (7,109) | |
Repurchase of treasury shares | (2,428) | (342) | (17,103) | |
Net cash provided by/ (used in) financing activities from continuing operations | (33,781) | (4,758) | (24,105) | 23,237 |
Net cash provided by/ (used in) financing activities from discontinued operation | (2,000) | (283) | 22,000 | |
Net cash provided by/ (used in) financing activities | (35,781) | (5,041) | (2,105) | 23,237 |
Changes in cash, cash equivalents and restricted cash | (82,668) | (11,644) | (52,342) | 65,540 |
Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash | (1,447) | (203) | 2,288 | (67) |
Net change in cash, cash equivalents and restricted cash | (84,115) | (11,847) | (50,054) | 65,473 |
Cash, cash equivalents and restricted cash at the beginning of the year | 373,967 | 52,672 | 424,021 | 358,548 |
Cash and cash equivalents | 279,757 | 356,237 | 423,766 | |
Restricted cash | 10,095 | 17,730 | 255 | |
Cash, cash equivalents and restricted cash at the end of the year | 289,852 | 40,825 | 373,967 | 424,021 |
Supplemental disclosure of cash flow information from continuing operations: | ||||
Income taxes paid | 229 | 32 | 45 | |
Interest paid | 626 | 88 | 1,340 | 463 |
Non-cash investing and financing activities from continuing operations: | ||||
Accrual for purchase of equipment | 3,986 | 561 | 3,727 | 6,064 |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | ¥ 132,001 | $ 18,592 | ¥ 80,403 | ¥ 144,601 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS 2 ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
Less: Cash, cash equivalents and restricted cash of discontinued operations | ¥ 62,588 | $ 8,815 | ¥ 175,438 | ¥ 301,204 |
Cash, cash equivalents and restricted cash at the end of the year from continuing operations | ¥ 227,264 | $ 32,010 | ¥ 198,529 | ¥ 122,817 |
DESCRIPTION OF BUSINESS, ORGANI
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | 12 Months Ended |
Dec. 31, 2023 | |
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (a) Description of business TCTM Kids IT Education Inc. (“TCTM”, formerly known as Tarena International, Inc.), through its wholly-owned subsidiaries and consolidated variable interest entities or VIEs (collectively referred to hereinafter as the “Company”), is principally engaged in providing IT-focused supplementary STEM education service (“IT-focused Supplementary STEM Education”) for students aged between three and eighteen. The Company is also engaged mainly in providing professional education services (“IT Professional Education”) including professional information technology (“IT”) training courses and non-IT training courses. All of the Company’s operations are located in the PRC with nearly all of its customers located in the PRC. The Company cooperated with universities and colleges in mainland China to offer joint-major degree programs and related peripheral services to colleges and students (the “Target Business”) in accordance with the higher education reform policies of each province. On April 28, 2023, the Company entered into agreements to dispose of the controlling interest in the Company’s university and college joint academic programs and related peripheral services to colleges and students, to a consortium (the “2023 April Disposal”). Mr. Shaoyun Han, the founder and chairman of the Company, is member of the investor consortium and has a minority interest in Target Business. On December 24, 2023, the Company entered into an equity transfer agreement to dispose of its equity interests in the professional education business to a buyer consortium led by Tarena Weishang Technology (Hainan) Co., Ltd (the “Divestiture”). The net transfer consideration, based on third party independent appraiser, for the Disposal amounted to RMB 1 and RMB 1 in exchange of the equity interest of Tarena Technologies and Tarena Hangzhou in cash, respectively. Ms. Lijuan Han, sister of the Company’s founder and chairman Mr. Shaoyun Han, is a member of the buyer consortium and has an interest in the Divestiture. The Divestiture had been consummated at the end of March 2024. Upon consummation of the divestiture of the professional education business, the Company has no ownership interest in professional education business. The Company deconsolidated the financial statements of professional education business from its consolidated financial statements since March 31, 2024. The Divestiture represents a strategic shift and has a major impact on the Company’s result of operations. Accordingly, assets, liabilities, results of operations, and cash flows related to professional education business have been reflected in the accompanying consolidated financial statements as discontinued operation for all periods presented. The consolidated balance sheets as of December 31, 2022 and 2023, consolidated statements of comprehensive (loss) income and consolidated statements of cash flows for the years ended December 31, 2021, 2022 and 2023 have been adjusted to reflect this change (See Note 3). On January 10, 2024, the Company changed its ticker symbol from “TEDU” to “TCTM”. On February 20, 2024, TCTM held an Extraordinary General Meeting of Shareholders in Beijing where the Company adopted a special resolution to approve the name change of the holding Company from “ Tarena International, Inc. ” to “ TCTM Kids IT Education Inc. ” The name change took effect on February 21, 2024. 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (b) Organization TCTM is a holding company that was incorporated in the Cayman Islands on October 8, 2003 by Mr. Shaoyun Han (“Mr. Han”), the founder and former chief executive officer of the Company, and five other individuals. TCTM is the parent company of a number of wholly-owned subsidiaries that are engaged in the provision of educational products and services. The Company’s education services in certain locations of the PRC were previously conducted through Beijing Tarena Jinqiao Technology Co., Ltd. (“Beijing Tarena”) and Beijing Tongcheng Shidai Jinqiao Technology Co., Ltd. (“Beijing Tongcheng”), and their subsidiaries, in order to comply with laws and regulations of mainland China which restricted foreign investments in companies that were engaged in education products and services. Pursuant to the VIE Agreement as described below, TCTM has effective financial control over Beijing Tarena, Beijing Tongcheng and their initial capital funding were provided by Tarena Technologies Inc., (a wholly-owned subsidiary of TCTM) or “Tarena Tech”, formerly known as Beijing Tarena Technology Co., Ltd.) and Tongcheng Shidai Technology Inc., (a wholly-owned subsidiary of TCTM) or “Tongcheng Shidai”, formerly known as Tongcheng Shidai Technology Co., Ltd.). The recognized and unrecognized revenue-producing assets that were held by Beijing Tarena, Beijing Tongcheng and their subsidiaries primarily consists of property and equipment, operating leases for the learning premises, ICP license, www.tmooc.cn website and assembled workforce in those learning centers. All of the equity interests of Beijing Tarena are legally held by Mr. Han and Mr. Jianguang Li (“Mr. Li”), a director of TCTM. Both individuals are nominee equity holders of Beijing Tarena and holding their equity interests on behalf of TCTM. Through a series of contractual agreements and arrangements (the “VIE Agreement”), among TCTM, Tarena Tech, Beijing Tarena and its nominee equity holders, the nominee equity holders of Beijing Tarena have granted all their legal rights including voting rights and disposition rights of their equity interests in Beijing Tarena to TCTM. The nominee equity holders of Beijing Tarena do not participate significantly in income and loss and do not have the power to direct the activities of Beijing Tarena that most significantly impact its economic performance. Accordingly, Beijing Tarena and its subsidiaries are considered as VIEs. Meanwhile, all of the equity interests of Beijing Tongcheng are legally held by Mr. Han and Mr. Jing Li, a manager of TCTM. Both individuals are nominee equity holders of Beijing Tongcheng and holding their equity interests on behalf of TCTM. Through a series of contractual agreements and arrangements (the “VIE Agreement”), among TCTM, Tongcheng Shidai, Beijing Tongcheng and its nominee equity holders, the nominee equity holders of Beijing Tongcheng have granted all their legal rights including voting rights and disposition rights of their equity interests in Beijing Tongcheng to TCTM. The nominee equity holders of Beijing Tongcheng do not participate significantly in income and loss and do not have the power to direct the activities of Beijing Tongcheng that most significantly impact its economic performance. Accordingly, Beijing Tongcheng and its subsidiaries are considered as VIEs. In accordance with Accounting Standards Codification (“ASC”) 810-10-25-38A, TCTM has a controlling financial interest in Beijing Tarena and Beijing Tongcheng because TCTM has (i) the power to direct activities of Beijing Tarena and Beijing Tongcheng that most significantly impact the economic performance of Beijing Tarena and Beijing Tongcheng; and (ii) the obligation to absorb the expected losses and the right to receive expected residual return of Beijing Tarena and Beijing Tongcheng that could potentially be significant to Beijing Tarena and Beijing Tongcheng. Thus, TCTM is the primary beneficiary of the Beijing Tarena and Beijing Tongcheng. 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (b) Organization (Continued) Under the terms of the VIE Agreement, TCTM has (i) the right to receive economic benefits that could potentially be significant to Beijing Tarena and Beijing Tongcheng in the form of service fees under the exclusive business cooperation agreements; (ii) the right to receive all dividends declared by Beijing Tarena and Beijing Tongcheng, and the right to all undistributed earnings of Beijing Tarena and Beijing Tongcheng; and (iii) the right to receive the residual benefits of Beijing Tarena and Beijing Tongcheng through their exclusive option to acquire 100% of the equity interests in Beijing Tarena and Beijing Tongcheng, to the extent permitted under laws of mainland China. Accordingly, TCTM is the primary beneficiary of Beijing Tarena and Beijing Tongcheng, and the financial statements of Beijing Tarena, Beijing Tongcheng and their subsidiaries are consolidated in TCTM’s consolidated financial statements. Under the terms of the VIE Agreement, Beijing Tarena and Beijing Tongcheng’s nominee equity holders have no rights to the net assets nor have the obligations to fund the deficit, and such rights and obligations have been vested to TCTM. All of the equity (net assets) and net income of Beijing Tarena and Beijing Tongcheng are attributed to TCTM. The key terms of the VIE Agreement are as follows: Loan Agreements: Meanwhile, Tongcheng Shidai provided RMB5,000 loans in aggregate to Beijing Tongcheng’s nominee equity holders for the sole purpose of their contribution of Beijing Tongcheng’s registered capital. The nominee equity holders of Beijing Tongcheng can only repay the loans by transferring all of their legal equity interest in Beijing Tongcheng to the Tongcheng Shidai or its designated representatives pursuant to the exclusive option agreements. The loans shall be interest-free, unless the transfer price exceeds the principal of the loans when each nominee equity holder of Beijing Tongcheng transfers his equity interests in Beijing Tongcheng to TCTM or its designated representatives. Such excess over the principal of the loan shall be deemed as the interest of the loans to the extent permitted under the law of mainland China. The initial term of the loans, which will be expired in 2032, can be extended with the written notice of both the Tongcheng Shidai and Beijing Tongcheng before expiration. Exclusive Option Agreements: 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (b) Organization (Continued) Meanwhile, each of the nominee equity holders irrevocably granted the Tongcheng Shidai or its designated representatives an exclusive option to purchase, to the extent permitted under law of mainland China, all or part of his equity interests in Beijing Tongcheng. In addition, Tongcheng Shidai has the option to acquire the equity interests of Beijing Tongcheng for a specified price equal to the loan provided by the Tongcheng Shidai to the nominee equity holders. If the lowest price permitted under law of mainland China is higher than the above price, the lowest price permitted under law of mainland China shall apply. Without the Tongcheng Shidai’s prior written consent, the nominee equity holders shall not sell, transfer, mortgage, or otherwise dispose any equity interests in Beijing Tongcheng. These agreements will remain effective until all equity interests held in Beijing Tongcheng by the nominee equity holders are transferred or assigned to the Tongcheng Shidai or its designated representatives. Exclusive Business Cooperation Agreement: Meanwhile, Tongcheng Shidai has the exclusive right to provide comprehensive technical support, consulting services and other services to Beijing Tongcheng agree to accept all the consultation and services provided by Tongcheng Shidai. Without Tongcheng Shidai’s prior written consent, Beijing Tongcheng is prohibited establish similar corporation relationship with any third party to provide any of the services under this agreement. In addition, Tongcheng Shidai has exclusive and proprietary ownership, rights and interests in any and all intellectual properties arising out of or created during the performance of this agreement. Beijing Tongcheng agrees to pay a monthly service fee to Tongcheng Shidai at an amount determined solely by Tongcheng Shidai after taking into account factors including the complexity and difficulty of the services provided, title of and time consumed by Tongcheng Shidai employees providing services to Beijing Tongcheng, the value of services provided, the market price of the same type of services and the operating conditions of Beijing Tongcheng. The term of the agreement will remain effective unless Tongcheng Shidai terminates the agreement in writing or a relevant governmental authority rejects the renewal applications by Beijing Tongcheng or Tongcheng Shidai to renew its respective business license upon expiration. Beijing Tongcheng is not permitted to terminate this agreement in any event unless required by applicable laws. Power of Attorney: 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (b) Organization (Continued) Meanwhile, each nominee equity holder of Beijing Tongcheng appointed Tongcheng Shidai as the attorney-in-fact to act on all matters pertaining to Beijing Tongcheng and to exercise all of their rights as an equity holder of Beijing Tongcheng, including but not limited to attend shareholders’ meetings, vote on their behalf on all matters of Beijing Tongcheng requiring shareholders’ approval under laws and regulations of mainland China and the articles of association of Beijing Tongcheng, designate and appoint directors and senior management members. Tongcheng Shidai may authorize or assign its rights under this appointment to any other person or entity at its sole discretion without prior notice to the nominee equity holders of Beijing Tongcheng. Each power of attorney will remain effective until the nominee equity holder ceases to hold any equity interest in Beijing Tongcheng. Equity Interest Pledge Agreements: TCTM relies on the VIE Agreement to operate and control the Beijing Tarena and Beijing Tongcheng. However, these contractual arrangements may not be as effective as direct equity ownership in providing TCTM with control over Beijing Tarena and Beijing Tongcheng. Any failure by Beijing Tarena and Beijing Tongcheng or the nominee equity holders to perform their obligations under the VIE Agreement would have a material adverse effect on the consolidated financial position and consolidated financial performance of the Company. All the VIE Agreement is governed by law of mainland China and provide for the resolution of disputes through arbitration in the PRC. Accordingly, these agreements would be interpreted in accordance with law of mainland China and any disputes would be resolved in accordance with PRC legal procedures. The legal system in the PRC is not as developed as some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit TCTM’s ability to enforce these contractual arrangements. In addition, if the legal structure and the VIE Agreement was found to be in violation of any existing or future laws and regulations of mainland China, TCTM may be subject to fines or other legal or administrative sanctions. 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (b) Organization (Continued) In the opinion of management, based on the legal opinion obtained from the Company’s PRC legal counsel, the above contractual arrangements are legally binding and enforceable and do not violate current laws and regulations of mainland China. However, there are uncertainties regarding the interpretation and application of existing and future laws and regulations of mainland China. Accordingly, TCTM cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to its opinion. If the current ownership structure of the Company and the VIE Agreement is found to be in violation of any existing or future laws and regulations of mainland China, the PRC government could: ● revoke the business and operating licenses of Tarena Tech and Tongcheng Shidai, their subsidiaries, Beijing Tarena and Beijing Tongcheng; ● discontinue or restrict the conduct of any transactions between Tarena Tech and Tongcheng Shidai, their subsidiaries, Beijing Tarena and Beijing Tongcheng; ● impose fines, confiscate the income from Beijing Tarena and Beijing Tongcheng, or impose other requirements with which the Company may not be able to comply; ● require TCTM to restructure its ownership structure or operations, including terminating the contractual arrangements with Beijing Tarena and Beijing Tongcheng, and deregistering the equity pledges of Beijing Tarena and Beijing Tongcheng; and ● restrict or prohibit the use of the proceeds of future offering to finance the Company’s business and operations in the PRC. If the imposition of any of these government actions causes TCTM to lose its right to direct the activities of Beijing Tarena and Beijing Tongcheng or their rights to receive substantially all the economic benefits and residual returns from Beijing Tarena, Beijing Tongcheng and TCTM is not able to restructure its ownership structure and operations in a satisfactory manner, TCTM would no longer be able to consolidate the financial results of Beijing Tarena, Beijing Tongcheng and their subsidiaries. In the opinion of management, the likelihood of deconsolidation of the Beijing Tarena, Beijing Tongcheng and their subsidiaries is remote based on current facts and circumstances. The equity interests of Beijing Tarena are legally held by Mr. Han and Mr. Li as nominee equity holders on behalf of the Company. Mr. Han and Mr. Li are also directors of TCTM. Mr. Han and Mr. Li each holds 62.7% and 0.4% of the total voting rights of TCTM as of December 31, 2023, respectively, assuming the exercise of all outstanding options held by Mr. Han and Mr. Li as of such date. Meanwhile, Mr. Han held 70% voting power and was the ultimate controlling shareholder of Beijing Tongcheng and he held 69.0% and 62.7% voting power in TCTM on December 31, 2022 and 2023, respectively. The Company cannot assure that when conflicts of interest arise, either of the nominee equity holders will act in the best interests of the Company or such conflicts will be resolved in the Company’s favor. Currently, the Company does not have any arrangements to address potential conflicts of interest between the nominee equity holders and the Company, except that TCTM could exercise the purchase option under the exclusive option agreements with the nominee equity holders to request them to transfer all of their equity ownership in Beijing Tarena and Beijing Tongcheng to a PRC entity or individual designated by TCTM. The Company relies on the nominee equity holders, who are both TCTM’s directors and who owe a fiduciary duty to TCTM, to comply with the terms and conditions of the contractual arrangements. Such fiduciary duty requires directors to act in good faith and in the best interests of TCTM and not to use their positions for personal gains. If the Company cannot resolve any conflict of interest or dispute between the Company and the nominee equity holders of Beijing Tarena and Beijing Tongcheng, the Company would have to rely on legal proceedings, which could result in disruption of the Company’s business and subject the Company to substantial uncertainty as to the outcome of any such legal proceedings. The Company’s involvement with Beijing Tarena and Beijing Tongcheng under the VIE Agreement affected the Company’s consolidated financial position, results of operations and cash flows as indicated below. 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (b) Organization (Continued) The assets and liabilities of Beijing Tarena, Beijing Tongcheng and their subsidiaries that were included in the accompanying consolidated financial statements as of December 31, 2022 and 2023 are as follows: December 31, 2022 2023 RMB RMB Cash and cash equivalents 16,031 2,520 Amounts due from TCTM and its wholly-owned subsidiaries 120,746 104,642 Prepaid expenses and other current assets 1,191 62,550 Current assets of discontinued operations held for sale 9,127 36,779 Total current assets 147,095 206,491 Property and equipment, net 1,977 2,052 Long term investments 27,000 34,852 Right-of-use assets 8,405 9,209 Other non-current assets 322 258 Non-current assets of discontinued operations held for sale 1,690 — Total assets 186,489 252,862 Accounts payable 42 2,713 Deferred revenue-current 70,284 114,975 Operating lease liabilities-current 4,124 4,440 Income taxes payable 12 79 Accrued expenses and other current liabilities 59,729 30,762 Amounts due to TCTM and its wholly-owned subsidiaries 7,631 23,676 Current liabilities of discontinued operations held for sale 72,267 100,392 Total current liabilities 214,089 277,037 Operating lease liabilities-non current 4,176 4,252 Non-current liabilities of discontinued operations held for sale 257 — Total liabilities 218,522 281,289 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (b) Organization (Continued) The financial performance and cash flows of Beijing Tarena, Beijing Tongcheng and their subsidiaries that were included in the accompanying consolidated financial statements before elimination of intercompany balances and transactions between the parent company, non-VIE subsidiaries, VIEs and VIEs’ subsidiaries for the years ended December 31, 2021, 2022 and 2023 are as follows: Year Ended December 31, 2021 2022 2023 RMB RMB RMB Net revenues 16,673 40,755 90,661 Net (loss) income from continuing operations (21,541) 8,554 (7,241) Net (loss) income from discontinued operation (17,531) (7,299) 10,847 Net (loss) income (39,072) 1,255 3,606 Net cash provided by (used in) operating activities 10,308 7,722 (17,817) Net cash provided by investing activities — 19,975 — Net cash (used in) provided by financing activities (3,437) 5,762 (7,192) All of the assets of Beijing Tarena, Beijing Tongcheng and their subsidiaries can be used only to settle obligations of Beijing Tarena, Beijing Tongcheng and their subsidiaries. None of the assets of Beijing Tarena, Beijing Tongcheng and their subsidiaries have been pledged or collateralized. The creditors of Beijing Tarena, Beijing Tongcheng and their subsidiaries do not have recourse to the general credit of TCTM and its wholly-owned subsidiaries. Assets of Beijing Tarena, Beijing Tongcheng and their subsidiaries that can be used only to settle obligations of Beijing Tarena, Beijing Tongcheng and their subsidiaries and liabilities of Beijing Tarena, Beijing Tongcheng and their subsidiaries for which creditors (or beneficial interest holders) do not have recourse to the general credit of TCTM and its wholly owned subsidiaries have been presented parenthetically alongside each balance sheet caption on the face of the consolidated balance sheets. During the periods presented, TCTM and its wholly-owned subsidiaries provided financial support to Beijing Tarena and Beijing Tongcheng that it was not previously contractually required to provide in the form of advances. To the extent Beijing Tarena and Beijing Tongcheng requires financial support, pursuant to the exclusive business cooperation agreement, Tarena Tech and Tongcheng Shidai may, at its option and to the extent permitted under the laws of mainland China, provide such support to Beijing Tarena and Beijing Tongcheng through loans to Beijing Tarena and Beijing Tongcheng’s nominee equity holders or entrustment loans to Beijing Tarena and Beijing Tongcheng. (c) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). All amounts in the accompanying consolidated financial statements and notes are expressed in Renminbi (“RMB”). Amounts in United States dollars (“US$”) are presented solely for the convenience of readers and use an exchange rate of US$1.00 = RMB7.0999, representing the exchange rate as set forth in the H.10 statistical release of the U.S. Federal Reserve Board as of December 29, 2023. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. 1 DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (CONTINUED) (d) Comparability and Reclassification Adjustment The Company has reclassified certain comparative balances in the consolidated balance sheet as of December 31, 2022, and certain comparative amounts in the consolidated statements of comprehensive income (loss) for the years ended December 31, 2021, 2022 to conform to the current year’s presentation. The assets and liabilities of the discontinued operation have been classified as assets of discontinued operations held for sale and liabilities of discontinued operations held for sale in the consolidated balance sheets as of December 31, 2022 and 2023. The results of discontinued operation for the years ended December 31, 2021, 2022 and 2023 have been reflected separately in the consolidated statements of comprehensive (loss) income as single line items for all periods presented in accordance with U.S. GAAP. Cash flows from discontinued operation of the three categories for the years ended December 31, 2021, 2022 and 2023 were separately presented in the consolidated statements of cash flows for all periods presented in accordance with U.S. GAAP. (e) Significant concentrations and risks Revenue concentration A substantial portion of the Company’s total net revenues from continuing operation were generated from Childhood & adolescent Robotics Programming, Childhood & adolescent Computer Programming courses. The percentages of the Company’s total net revenues from Childhood & adolescent Robotics Programming, Childhood & adolescent Computer Programming courses are as follows: Year Ended December 31, 2021 2022 2023 Childhood & adolescent Robotics Programming 30.3 % 49.2 % 46.4 % Childhood & adolescent Computer Programming 39.8 % 34.2 % 24.1 % Total net revenues from continuing operation 70.1 % 83.4 % 70.5 % The Company expects net revenues from these two training courses to continue to represent a majority portion of its total net revenues in the future. Negative factors that adversely affect net revenues generated by these two training courses will have a material adverse effect on the Company’s business, financial condition and results of operations. There were no other courses that represented net revenues greater than 10% of total net revenues from continuing operation. Geographic concentration The percentages of the Company’s total net revenues generated from continuing operations in Beijing are 11.2%, 10.6% and 17.5% for the years ended December 31, 2021, 2022 and 2023, respectively. The Company expects revenues derived from its business operations in Beijing to continue to be greater than 10% of total net revenues in the future. Negative factors that adversely affect its business operations in Beijing will have a material adverse effect on the Company’s business, financial condition and results of operations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Principles of consolidation The consolidated financial statements include the financial statements of TCTM, its wholly-owned subsidiaries, and VIEs which TCTM is the primary beneficiary. Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All significant intercompany balances and transactions have been eliminated upon consolidation. (b) 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 reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include goodwill impairment and long-term investments, the allowance for credit losses of amounts due from related parties, prepaid expenses and other current assets and other non-current assets, the realizability of deferred income tax assets, the accruals for other contingencies, the useful lives of property and equipment and the recoverability of the carrying amounts of property and equipment and right-of-use assets. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. (c) Discontinued operation A discontinued operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operation if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria to be classified as held-for-sale; (2) the component of an entity or group of components of an entity is disposed of by sale; (3) the component of an entity or group of components of an entity is disposed of other than by sale. For any component classified as held for sale or disposed of by sale or other than by sale that qualify for presentation as a discontinued operation in the period, the Company has reclassified certain comparative balances in the consolidated balance sheet as of December 31, 2022 and certain comparative amounts in the consolidated statements of operations for the years ended December 31, 2021 and 2022 to conform to the current year’s presentation. The results of discontinued operations for the years ended December 31, 2022, and 2021 have been reflected separately in the consolidated statement of operations as a single line item for all periods presented in accordance with U.S. GAAP. Cash flows from discontinued operations of the three categories for the years ended December 31, 2022 and 2021 were separately presented in the consolidated statements of cash flows for all periods presented in accordance with U.S. GAAP. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (d) Foreign currency The functional currency of TCTM and Tarena Hong Kong Limited (“Tarena HK”) is the USD. The functional currency of Techarena Canada Inc. is the Canadian Dollar (“CAD”). The functional currency of Taiwan Tarena Counseling Software Co., Ltd. is the Taiwan New Dollar (“TWD”). The functional currency of TCTM’s PRC subsidiaries, consolidated VIEs, and the subsidiaries of the VIE is the RMB. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rate at the balance sheet date. The resulting exchange differences are recorded in foreign currency exchange loss in the consolidated statements of comprehensive loss. Assets and liabilities of entities with functional currencies other than RMB are translated into RMB using the exchange rate on the balance sheet date. Revenues and expenses are translated into RMB at average rates prevailing during the reporting period. The resulting foreign currency translation adjustment are recorded in accumulated other comprehensive loss within shareholders’ equity. Since the RMB is not a fully convertible currency, all foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC. (e) Cash, cash equivalents, restricted cash and time deposits Cash consists of cash in bank and deposits placed in third party payment processors of Alipay, Wechat wallet and Baidu wallet, which are unrestricted as to withdrawal. Time deposits, which mature within one year as of the balance sheet date, represent interest-bearing certificates of deposit with an initial term of greater than three months when purchased. Time deposits which mature over one year as of the balance sheet date are included in non-current assets. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) Cash, cash equivalents, restricted cash and time deposits (Continued) As of December 31, 2023, restricted cash was the cash deposits in the escrow account as required by the local education committee. Cash, cash equivalents, time deposits and restricted cash maintained generated from continuing operations at financial institutions consist of the following: December 31, 2022 2023 RMB RMB RMB denominated bank deposits with financial institutions in the PRC 195,774 220,864 US dollar denominated bank deposits with financial institutions in the PRC 354 360 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) 574 4,519 HK dollar denominated bank deposits with financial institutions in HK SAR 37 48 RMB denominated bank deposits with a financial institution in HK SAR 797 114 US dollar denominated bank deposits with a financial institution in the U.S. 251 255 USD denominated bank deposits with a financial institution in Canada — 2 CAD denominated bank deposits with financial institutions in HK SAR 2 — CAD denominated bank deposits with a financial institution in Canada 844 1,402 Total 198,633 227,564 To limit exposure to credit risk relating to bank deposits, the Company primarily places bank deposits only with large financial institutions in the PRC, HK SAR, Canada and the U.S. (f) Prepaid expenses and other current assets Prepaid expenses and other current assets primarily represent prepaid deposits, advance to suppliers, inventories, prepaid rental expenses and so on. Prepaid expenses and other current assets which are due over one year as of the balance sheet date are presented as other non-current assets. The Company maintains an allowance for credit losses for the part that is not expected to be recovered. In establishing the allowance, management considers overdue employee loan upon the use of the Current Expected Credit Loss Model (“CECL Model”) in accordance with ASC Topic 326. Prepaid expenses and other current assets that are deemed to be uncollectible are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. There is a time lag between when the Company estimates a portion of or the entire account balances to be uncollectible and when a write off of the account balances is taken. The Company takes a write off of the account balances when the Company can demonstrate all means of collection on the outstanding balances have been exhausted. (g) Property and equipment Property and equipment are recorded at cost. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets. The estimated useful life of property and equipment is as follows: Furniture 5 years Office equipment 3 Leasehold improvements Shorter of the lease term or the estimated useful life of the assets 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (g) Property and equipment (Continued) Ordinary maintenance and repairs are charged to expenses as incurred, while replacements and betterments are capitalized. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value of the item disposed of and proceeds realized thereon. Property and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of a long-lived asset or asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment loss is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell, and are no longer depreciated. No impairment of long-lived assets was recognized for any of the years presented. (h) Goodwill In January 2017, the FASB issued ASU 2017-04, simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment by eliminating Step two from the goodwill impairment test. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, versus determining an implied fair value in Step two to measure the impairment loss. The Company adopted this guidance on a prospective basis on January 1, 2020 with no material impact on its consolidated financial statements and related disclosures as a result of adopting the new standard. The Company assess goodwill for impairment on annual basis in accordance with ASC 350-20, Intangibles – Goodwill and Other: Goodwill Quantitative goodwill impairment test is used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired. If the fair value of the reporting unit is less than its carrying amount, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company performs the annual goodwill impairment assessment using qualitative impairment test on December 31, 2023 and no impairment recorded for the years ended 2023. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i) Long-term investments ● Equity investments without readily determinable fair values Equity investments without readily determinable fair values are measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes in accordance with ASC Topic 321, Investments – Equity Securities. ● Equity method investments For an investee company over which the Company has the ability to exercise significant influence, but does not have a controlling interest, the Company accounted for those using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of the investee between 20% and 50%. Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity investment is recognized in the consolidated statements of comprehensive (loss) income; and the Company’s share of post-acquisition movements in equity is recognized in equity in the consolidated balance sheets. Unrealized gains on transactions between the Company and an entity in which it has recorded an equity investment are eliminated to the extent of the Company’s interest in the entity. To the extent of the Company’s interest in the investment, unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. When the Company’s share of losses in an entity in which it has recorded an equity investment equal or exceeds the Company’s interest in the entity, it does not recognize further losses, unless it has incurred obligations or made payments on behalf of the equity investee. The Company evaluates the equity method investments for impairment. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. (j) Revenue recognition The Company evaluated and recognized revenue based on the five steps set forth in ASC 606 by: ● identifying the contract(s) with the customer; ● identifying the performance obligations in the contract; ● determining the transaction price; ● allocating the transaction price to performance obligations in the contract; and ● recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a customer (i.e., “transfer of control”). These criteria as they relate to each of the following major revenue generating activities are described below. Revenue is presented net of value added taxes (“VAT”) at rates ranging between 1% and 13%, and surcharges. VAT to be collected from customers, net of VAT paid for purchases, is recorded as a liability in the consolidated balance sheets until it is paid to the tax authorities. Tuition revenue The Company provides IT related training courses to IT-focused supplementary STEM education services. The contract of tuition service is accounted for as a single performance obligation which is satisfied proportionately over the service period. Tuition fees are recognized as revenue proportionately as the training courses are delivered, with unearned portion of tuition fees being recorded as deferred revenue. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (j) Revenue recognition (Continued) Refunds are provided to students if they withdraw from classes, and usually only those unearned portions of the fee which is available will be refunded. A refund liability represents the amounts of consideration received but are not expected to be entitled to earn, and thus are not included in the transaction price because these amounts are expected to be eventually refunded to students. The Company determines the transaction price to be earned by estimating the refund liability based on historical refund ratio on a portfolio basis using the expected value method. Reclassification was made from deferred revenue to refund liabilities, which was recorded under accrued expenses and other current liabilities. Certification service revenue The Company provides certification service to students who complete the training course and enroll for the exams. The Company is responsible for the certification service, including organization, proctoring and grading of exams, and providing the certificates to students. All certificates are issued by third parties to the students who pass the exam. The Company is the principal to end customers. The Company acts as the principal in providing the certificate service to the students and recognizes revenue on gross basis because the Company is able to determine the price, acts as the main obligor in the arrangement, and, is responsible for fulfilling the services ordered by the students. Cash received before the students receive the certificates is recorded as deferred revenue. Each contract of certification service is accounted for as a single performance obligation which is satisfied at a point in time. The performance obligation is satisfied when the certificates are provided to the students and the consideration are received, then the received consideration is recognized as certification service revenue. Net revenues from continuing operations recognized under ASC Topic 606 for the years ended December 31, 2021, 2022 and 2023 consist of the following: Year Ended December 31, 2021 2022 2023 RMB RMB RMB Tuition fee 1,223,760 1,384,602 1,372,460 Certification service fee 4,184 13,158 3,482 Others 11,594 4,993 2,885 Business taxes and surcharges (3,265) (2,909) (3,635) Total net revenues 1,236,273 1,399,844 1,375,192 Year Ended December 31, 2021 2022 2023 RMB RMB RMB Timing of revenue recognition Services transferred at a point in time 15,736 18,113 6,350 Services transferred over time 1,220,537 1,381,731 1,368,842 Total net revenues 1,236,273 1,399,844 1,375,192 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (j) Revenue recognition (Continued) Contract liability The Company does not have amounts of contract assets since the Company transfers the promised services to customers and have the billing right or after the customers pay consideration. The contract liabilities consist of deferred revenue, which represent the Company has received consideration but has not satisfied the related performance obligations. The revenue recognized from continuing operations for years ended December 31, 2022 and 2023 that was previously included in the deferred revenue balances as of December 31, 2021 and December 31, 2022 was RMB989,572 and RMB902,011, respectively. The Company’s deferred revenue from continuing operations amounted to RMB1,314,877 and RMB1,210,536 as of December 31, 2022 and 2023, respectively. The Company has selected to apply the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations in contracts that have an original expected length of one year or less. (k) Cost of revenues Cost of revenues consists of payroll and employee benefits, rent expenses of learning centers, depreciation relating to property and equipment used for operating the learning centers, and other operating costs that are directly attributed to the provision of training services. (l) Selling and marketing expenses Selling and marketing expenses are expensed as incurred. Selling and marketing expenses primarily consist of compensation expenses relating to personnel involved in selling and marketing, including enrollment advisors and university cooperation representatives based at learning centers, advertising expenses relating to marketing activities, and, to a lesser extent, rental expenses relating to selling and marketing functions. Among them, advertising costs were RMB77,948, RMB42,015 and RMB43,480 for the years ended December 31, 2021, 2022 and 2023, respectively. (m) Operating leases The Company adopted Accounting Standards Update (“ASU”) 2016-02 Leases (“ASC 842”) as of January 1, 2019, using the non-comparative transition option pursuant to ASU 2018-11. Therefore, the Company has not restated comparative period financial information for the effects of ASC 842, and will not make the new required lease disclosures for comparative periods beginning before January 1, 2019. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things (i) allowed the Company to carry forward the historical lease classification; (ii) did not require the Company to reassess whether any expired or existing contracts are or contain leases; (iii) did not require the Company to reassess initial direct costs for any existing leases. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (m) Operating leases (Continued) The Company identifies lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. For all operating leases except for short-term leases, the Company recognizes operating right-of-use assets and operating lease liabilities. Leases with an initial term of 12 months or less are short-term lease and not recognized as right-of-use assets and lease liabilities on the consolidated balance sheet. The Company recognizes lease expense for short-term leases on a straight-line basis over the lease term. The operating lease liabilities are recognized based on the present value of the lease payments not yet paid, discounted using the Company’s incremental borrowing rate over a similar term of the lease payments at lease commencement. Some of the Company’s lease agreements contain renewal options; however, the Company do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that the Company is reasonably certain of renewing the lease at inception or when a triggering event occurs. The right-of-use assets consist of the amount of the measurement of the lease liabilities and any prepaid lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. (n) Government grant Government grant is recognized when there is reasonable assurance that the Company will comply with the conditions attached to it and the grant will be received. Government grant for the purpose of giving immediate financial support to the Company with no future related costs or obligation is recognized in the Company’s consolidated statements of comprehensive (loss) income when the grant becomes receivable. Government grants of RMB1,293, RMB5,303 and RMB724 were recognized and included in other income for the years ended December 31, 2021, 2022 and 2023, respectively. (o) Research and development costs Research and development costs are expensed as incurred. Research and development expenses primarily consist of a portion of the personnel costs of instructors as determined based on the amount of time that they devote to research and development-related activities, as well as the personnel costs of software engineers. Research and development expenses were RMB40,311, RMB20,248 and RMB11,654 for the years ended December 31, 2021, 2022 and 2023, respectively. (p) Employee benefits Pursuant to relevant PRC regulations, the Company is required to make contributions to various defined contribution plans organized by municipal and provincial PRC governments. The contributions are made for each PRC employee at rates ranging from 16.3% to 26.5% on a standard salary base as determined by local social security bureau. Contributions to the defined contribution plans are charged to the consolidated statements of comprehensive (loss) income when the related service is provided. For the years ended December 31, 2021, 2022 and 2023, the costs of the Company’s obligations to the defined contribution plans for employees from continuing and discontinued operation amounted to RMB133,012, RMB133,013, and RMB119,548, respectively. The Company has no other obligation for the payment of employee benefits associated with these plans beyond the contributions described above. (q) Income taxes The Company follows the asset and liability method in accounting for income taxes in accordance to ASC Topic 740 “Taxation” (“ASC 740”), Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (q) Income taxes (Continued) The Company adopted ASC 740 to account for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. The Company recognizes in the consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained upon examination, based on the technical merits of the position. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company has elected to classify interest and penalties related to an unrecognized tax benefits, if and when required, as part of income tax expense in the consolidated statements of comprehensive loss. For the year ended December 31, 2023, there were no uncertain tax positions and the Company does not expect that the position of unrecognized tax benefits will materially change within the next twelve months. In accordance with PRC Tax Administration Law on the Levying and Collection of Taxes, the PRC authorities generally have up to five years to assess underpaid tax plus penalties and interest for PRC entities’ tax filings. In case of tax evasion, which is not clearly defined in the law, there is no limitation on the tax years open for investigation. Accordingly, the PRC entities remain subject to examination by the tax authorities based on above. (r) Share based compensation The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the cost over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, net of estimated forfeitures, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. Forfeiture rates are estimated based on historical of employee turnover rates. (s) Commitments and contingencies In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, and non-income tax matters. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, is disclosed. 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (t) (Loss) Earnings per share Basic (loss) earnings per Class A and Class B ordinary share is computed by dividing net (loss) earnings attributable to TCTM’s Class A and Class B ordinary shareholders by the weighted average number of Class A and Class B ordinary shares outstanding during the year using the two-class method. Under the two-class method, net (loss) earnings attributable to TCTM’s Class A and Class B ordinary shareholders is allocated between Class A and Class B ordinary shares and other participating securities, if any, based on participating rights in undistributed loss. Diluted (loss) earnings per share is calculated by dividing net (loss) earnings attributable to TCTM’s Class A and Class B ordinary shareholders as adjusted for the effect of dilutive Class A and Class B ordinary share equivalents, if any, by the weighted average number of Class A and Class B ordinary and dilutive Class A and Class B ordinary share equivalents outstanding during the year. Class A and Class B ordinary share equivalents include the Class A and Class B ordinary shares issuable upon the exercise of the outstanding share options (using the treasury stock method). Potential dilutive securities are not included in the calculation of diluted (loss) earnings per Class A and Class B ordinary share if the impact is anti-dilutive. If there is a loss from continuing operations, diluted earnings per share (“EPS”) would be computed in the same manner as basic EPS is computed, even if an entity has net income after adjusting for a discontinued operation or an extraordinary item. (u) Segment reporting The Company uses the management approach in determining its operating segments. The management approach considers the internal reporting used by the Company’s chief operating decision maker (“CODM”). The Company’s CODM has been identified as the CEO who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of the Company. Management has determined that the Company has two operating segments, which is the IT Professional Education segment and IT-focused Supplementary STEM Education Services segment. As described in Note 3, on December 24, 2023, the Company entered into an equity transfer agreement to dispose of its equity interests in the professional education business. As a result of the Divestiture, the Company has realigned its corporate and management reporting structure to focus solely on its IT-focused Supplementary STEM Education Services business. Upon the completion of the Divestiture, the Company reorganized its business to become a single reportable segment: (1) IT-focused Supplementary STEM Education Services. This segment structure reflects the financial information and reports used by the Company’s management, specifically its Chief Operating Decision Maker (“CODM”), to make decisions regarding the Company’s business, including resource allocations and performance assessments. All assets and continuing operations of the Company are physically located or domiciled in the PRC. Consequently, no geographic information is presented. (v) Fair value measurements The Company applies the provisions of ASC Topic 820, Fair Value Measurements and Disclosures, 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (v) Fair value measurements (Continued) ASC Topic 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs whe |
DISCONTINUED OPERATION
DISCONTINUED OPERATION | 12 Months Ended |
Dec. 31, 2023 | |
DISCONTINUED OPERATION | |
DISCONTINUED OPERATION | 3 DISCONTINUED OPERATION Divestiture of professional education business On December 24, 2023, the Company entered into an equity transfer agreement to dispose of its equity interests in the professional education business (Note 1). Upon the consummation of the Divestiture on March 31, 2024, the Company lost its control over the professional education business while the primary focus has shifted to providing IT-focused supplementary STEM education services. The Divestiture represented a strategic shift that had a major effect on the Company’s operations and financial results. And the professional education business met the criteria to be classified as held-for sale as of December 31, 2023 and was accounted for as discontinued operation. Accordingly, assets, liabilities, results of operations, and cash flows related to professional education business have been reflected in the accompanying consolidated financial statements as discontinued operation for all periods presented. As of December 31, 2023, all assets and liabilities of the professional education business are presented as current in the Consolidated Balance Sheet as the Divestiture has completed within one year. 3 DISCONTINUED OPERATION (CONTINUED) Divestiture of professional education business (Continued) The assets and liabilities are included in the captions “Current assets of discontinued operations held for sale”, “Non-current assets of discontinued operations held for sale”, “Current liabilities of discontinued operations held for sale” and “Non-current liabilities of discontinued operations held for sale”, in the accompanying balance sheets at December 31, 2022 and 2023 and consist of the following: December 31, 2022 2023 RMB RMB Cash and cash equivalents 157,708 59,068 Time deposits 6,277 — Restricted cash 17,730 3,520 Accounts receivable, net of allowance for credit losses-current 68,733 12,472 Amounts due from related parties 606 313 Assets held-for-sale 106,539 — Prepaid expenses and others current assets 72,683 64,250 Time deposits-non current 124 120 Accounts receivable, net of allowance for credit losses-non-current 182 — Property and equipment, net 44,838 34,991 Intangible assets, net 512 148 Right-of-use assets 101,797 49,671 Goodwill 3,366 3,366 Long-term investments — 11,859 Deferred income tax assets 21,495 18,848 Other non-current assets, net 14,472 16,977 Total assets of discontinued operations held for sale 617,062 275,603 Balance sheet classification: Current assets of discontinued operations held for sale 430,276 275,603 Non-current assets of discontinued operations held for sale 186,786 — Total assets of discontinued operations held for sale 617,062 275,603 Short-term bank loans 22,000 20,000 Accounts payable 1,071 116 Amounts due to related parties 87 3,596 Operating lease liabilities-current 49,386 21,872 Income taxes payable 104,153 106,944 Deferred revenue-current 373,733 265,132 Accrued expenses and other current liabilities 186,605 107,127 Deferred revenue-non current 14,051 7,363 Operating lease liabilities-non-current 59,625 25,130 Other non-current liabilities 3,698 3,511 Total liabilities of discontinued operations held for sale 814,409 560,791 Balance sheet classification: Current liabilities of discontinued operations held for sale 737,035 560,791 Non-current liabilities of discontinued operations held for sale 77,374 — Total liabilities of discontinued operations held for sale 814,409 560,791 3 DISCONTINUED OPERATION (CONTINUED) Divestiture of professional education business (Continued) The condensed cash flows of professional education business were as follows for the years ended December 31, 2021, 2022 and 2023, are included in the consolidated statements of cash flows of the Company as cash flow from discontinued operation: Year Ended December 31, 2021 2022 2023 RMB RMB RMB Net cash provided by/(used in) operating activities 79,173 (28,574) (140,403) Net cash provided by investing activities 79,651 6,109 106,592 Net cash provided by/(used in) financing activities — 22,000 (2,000) Professional education business results of operations for the years ended December 31, 2021, 2022 and 2023, shown in the table below, are included in the consolidated comprehensive (loss) income as “net income (loss) from the discontinued operation” for those respective periods, after intercompany eliminations, as applicable. Year Ended December 31, 2021 2022 2023 RMB RMB RMB Net revenues 1,150,247 1,068,230 624,586 Cost of revenues (405,750) (327,627) (226,214) Gross profit 744,497 740,603 398,372 Selling and marketing expenses (440,643) (362,844) (252,192) General and administrative expenses (210,532) (206,588) (149,828) Research and development expenses (65,787) (51,780) (28,434) Operating income (loss) 27,535 119,391 (32,082) Interest(expense) income, net (276) 738 185 Income (loss) from discontinued operation 27,259 120,129 (31,897) Gain on disposal of subsidiary (Note b) — — 26,797 Other income 4,106 3,133 64 Foreign currency exchange loss, net (251) (629) (395) Income/(loss) before income taxes 31,114 122,633 (5,431) Income tax benefit (expense) 2,394 (35,338) (6,549) Net income (loss) from discontinued operation 33,508 87,295 (11,980) The significant accounting policy of discontinued operation, except those disclosed in Note 2 are summarized as below. a. Revenue recognition The Company evaluated and recognized revenue based on the five steps set forth in ASC 606 by: ● identifying the contract(s) with the customer; ● identifying the performance obligations in the contract; ● determining the transaction price; ● allocating the transaction price to performance obligations in the contract; and ● recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a customer (i.e., “transfer of control”). 3 DISCONTINUED OPERATION (CONTINUED) a. Revenue recognition (Continued) These criteria as they relate to each of the following major revenue generating activities are described below. Revenue is presented net of value added taxes (“VAT”) at rates ranging between 1% and 13%, and surcharges. VAT to be collected from customers, net of VAT paid for purchases, is recorded as a liability in the consolidated balance sheets until it is paid to the tax authorities. Tuition revenue The Company provides IT and non-IT related training courses to IT professional education. The Company also cooperate with universities and colleges in China to offer joint-major degree programs in accordance with the higher education reform policies of each province. The Company integrates its selected courses into universities and colleges’ standard undergraduate curriculum for students enrolled in such joint-major programs. Students can attend part of the courses in the Company’s established on-campus learning sites and part of the courses at the Company’s learning centers. A majority of contract of tuition service is accounted for as a single performance obligation which is satisfied proportionately over the service period. Tuition fees are recognized as revenue proportionately as the training courses are delivered, with unearned portion of tuition fees being recorded as deferred revenue. For certain students who borrow the tuition fee from financial service providers, the Company also provides a guarantee service to financial service providers whereas in the event of default, the financial service providers are entitled to receive unpaid interest and principal from the Company. Given that the Company effectively takes on all of the credit risk of the borrowers and are compensated by the tuition fees charged, the guarantee is deemed as a service and the guarantee exposure is recognized as a stand-ready obligation in accordance with ASC Topic 460, Guarantees (see accounting policy for Guarantee Liabilities). The Company first allocates the transaction price to the guarantee liabilities, if any, in accordance with ASC Topic 460, Guarantees, which requires the guarantee to be measured initially at fair value based on the stand ready obligation. Then the remaining considerations are allocated to the tuition fees consistent with the guidance in ASC 606. Certain qualified students are allowed to pay their tuition fees on installment for a period of time exceeding one year. When tuition services are sold on installment terms that exceeds one year beyond the point in time that revenue is recognized, the contract contains a significant financing component, and the consideration promised by the customer is variable. The receivable, and therefore the revenue is recorded at the present value of the payments. The difference between the present value of the receivable and the nominal or principal value of the tuition fees is recognized as interest income over the contractual repayment period using the effective interest rate method. The interest rate used to determine the present value of total amount receivable is the rate subject to management decision on the date of the transaction and it reflects the rate that the students can obtain financing of a similar nature from other sources at the date of the transaction. The Company enters into arrangements with certain students that purchase multiple services. The performance obligations identified include tuition service and practical tutoring service. The Company treats training contracts with multiple performance obligations as separate units of accounting for revenue recognition purposes and recognizes revenue during the contract period when each performance obligation is satisfied. The Company allocates the transaction price to each performance obligations based on stand-alone selling price. AI and software development revenue The Company provides AI and software development service to universities and colleges. The Company is responsible for the installation, debugging and development of AI software. 3 DISCONTINUED OPERATION (CONTINUED) a. Revenue recognition (Continued) The Company is the principal to end customers. The Company acts as the principal in providing the AI and software development service to universities and colleges and recognizes revenue on gross basis because the Company is able to determine the price, acts as the main obligor in the arrangement, and, is responsible for fulfilling the services ordered by the universities and colleges. Cash received before inspection and acceptance is recorded as deferred revenue. Each contract of AI and software development service is accounted for as a single performance obligation which is satisfied at a point in time. The performance obligation is satisfied when the AI and software development service are inspected and accepted, then AI and software development service revenue is recognized. December 31, 2021 2022 2023 RMB RMB RMB Timing of revenue recognition Services transferred over time 1,053,853 929,693 576,324 Services transferred at a point in time 96,394 138,537 48,262 Total net revenues 1,150,247 1,068,230 624,586 Net revenues recognized under ASC Topic 460 for the years ended December 31, 2021, 2022 and 2023 consist of the following: December 31, 2021 2022 2023 RMB RMB RMB Guarantee service 7,885 12,503 15,630 b. Disposal of subsidiary Gaohuiqiangxue Software (Hainan) Co.,Ltd.,(“the Gaohui group”), is a wholly-owned subsidiary of Beijing Tarena through the cooperation with universities and colleges in mainland China to offer joint-major degree programs and related peripheral services to colleges and students (the “Target Business”) in accordance with the higher education reform policies of each province. On April 28, 2023, the Company entered into agreements to dispose of its controlling interest in Target Business to a consortium led by Beijing Weike Xinneng Education Technology Ltd (“Beijing Weike”). Mr. Shaoyun Han is member of the investor consortium and has an interest in the disposal of our Target Business. Pursuant to the agreements, Beijing Weike shall invest RMB43,750 in the Gaohui group in exchange for 70% of the equity in the Beijing Tarena and Mr. Shaoyun Han shall invest RMB6,250 in the Gaohui group in exchange for 10% of the equity in the Beijing Tarena. Upon the completion of such investments on May 31, 2023, Beijing Tarena’s equity share in the Gaohui group has been diluted to 20%, Beijing Tarena lost control of Gaohui group then after. The Company engaged independent appraiser to evaluate the fair value of the Gaohui group and recognized a gain on disposal of subsidiary of RMB26,797. The Company then recognized the Gaohui group as the long-term investment and subsequent measured by equity method. 3 DISCONTINUED OPERATION (CONTINUED) c. Accounts receivable Accounts receivable primarily represent tuition fees due from students, universities and colleges and financial service providers. Accounts receivable which are due over one year as of the balance sheet date are presented as non-current assets. The unearned interest on accounts receivable which are due over one year is reported in the consolidated balance sheets as a direct deduction from the principal amount of accounts receivable. The Company maintains an allowance for credit losses for estimated losses resulting from the inability of its students, universities and colleges or financial service providers to make required payments. Accounts receivable is considered past due based on its contractual terms. In establishing the allowance, management considers historical losses, the financial condition, the accounts receivable aging, the payment patterns and the forecasted information in pooling basis upon the use of the Current Expected Credit Loss Model (“CECL Model”) in accordance with ASC Topic 326. Accounts receivable that are deemed to be uncollectible are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. There is a time lag between when the Company estimates a portion of or the entire account balances to be uncollectible and when a write off of the account balances is taken. The Company takes a write off of the account balances when the Company can demonstrate all means of collection on the outstanding balances have been exhausted. d. Guarantee liabilities For certain students who borrow the tuition fee from financial service providers, the Company provides a guarantee service to financial service providers whereas in the event of default, the financial service providers are entitled to receive unpaid interest and principal from the Company. In general, any unpaid interest and principal are paid when the borrower does not repay as scheduled. For accounting purposes, at the inception of each loan, the Company recognizes the guarantee liability in accrued expenses and other current liabilities at fair value in accordance with ASC 460-10, which incorporates the expectation of potential future payments under the guarantee and takes into both non-contingent and contingent aspects of the guarantee. Subsequent to the loan’s inception, the guarantee liability is composed 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 Company is released from the underlying risk, i.e. as the loan is repaid by the borrower or when the investor 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 guarantee liabilities are generally reduced by recording a credit to guarantee service revenue as the guarantor is released from the underlying guaranteed risk. Subsequent to initial recognition, the guarantee obligation’s release from risk has typically been recognized over the term of the guarantee using a rational amortization method. The other component is a contingent liability determined based on probable loss considering the actual historical performance and current conditions, representing the obligation to make future payouts under the guarantee liability in excess of the stand-ready liability, measured using the guidance in ASC Topic 450, loans with similar risk characteristics are pooled into cohorts. The ASC 450 contingent component is recognized as part of operating expenses. At all times the recognized liability (including the stand ready liability and contingent liability) is at least equal to the probable estimated losses of the guarantee portfolio. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | 12 Months Ended |
Dec. 31, 2023 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | 4 PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET Prepaid expenses and other current assets consist of the following: December 31, 2022 2023 RMB RMB Prepaid expenses and other current assets: Prepaid deposits (a) 13,849 16,952 Advance to suppliers 2,956 14,325 Inventories 7,181 9,363 Prepaid rental expenses 3,256 6,750 Prepaid professional fee 3,374 2,436 Prepaid advertising expenses 1,049 2,043 Prepaid value-added tax 2,836 1,594 Others 4,533 4,300 Total prepaid expenses and other current assets 39,034 57,763 Less: allowance for credit losses (378) (378) Prepaid expenses and other current assets, net 38,656 57,385 (a) It mainly included prepaid rental deposits. The movements of the allowance for credit losses are as follows: December 31, 2021 2022 2023 RMB RMB RMB Balance at the beginning of the year — — 378 Additions charged to bad debt expense — 378 — Balance at the end of the year — 378 378 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 5 PROPERTY AND EQUIPMENT, NET Property and equipment consist of the following: December 31, 2022 2023 RMB RMB Furniture 19,592 18,277 Office equipment 161,001 164,261 Leasehold improvements 134,782 80,782 Total property and equipment 315,375 263,320 Less: accumulated depreciation (237,379) (197,256) Property and equipment, net 77,996 66,064 Depreciation expense for property and equipment was allocated to the following: Year Ended December 31, 2021 2022 2023 RMB RMB RMB Cost of revenues 58,097 55,911 38,026 Selling and marketing expenses 4,629 3,390 2,188 General and administrative expenses 8,072 6,456 4,921 Research and development expenses 677 140 2 Total 71,475 65,897 45,137 |
LONG-TERM INVESTMENTS
LONG-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2023 | |
LONG-TERM INVESTMENTS | |
LONG-TERM INVESTMENTS | 6 LONG-TERM INVESTMENTS Long-term investments consist of the following: December 31, 2022 2023 RMB RMB Equity investments without readily determinable fair values A company providing mechanic training (a) 12,000 11,992 Other equity investments without readily determinable fair values (b) 15,000 15,000 Impairment of equity investments without readily determinable fair values — (4,000) Total equity investments without readily determinable fair values, net 27,000 22,992 Equity method investments Companies providing hockey program management 2,156 2,257 A company providing Internet product solutions (c) 17,551 17,135 Impairment of equity method investments (524) (524) Total equity method investments, net 19,183 18,868 Total long-term investments 46,183 41,860 (a) In October 2015, the Company paid RMB 12,000 in cash to acquire 2.86% of the total equity interest in an education company, which provides training for senior mechanic in vehicle maintenance and repair. In 2023, the Company sold a portion of shares in the education company. No impairment loss was recognized as of December 31, 2021, 2022 and 2023, and for the years then ended. (b) During the years ended December 31, 2018 and 2019, the Company acquired minority equity interests in several third-party companies. The Company recognized impairment loss of nil , nil and RMB 4,000 for the years ended December 31 2021, 2022 and 2023, respectively. The Company written off impairment balance of 13,000 , nil and nil for the years ended December 31 2021, 2022 and 2023, respectively. (c) In January 2018, the Company paid RMB 14,000 in cash to acquire 20% of equity interest of a company which provides IT consulting services and programming and accounted for the investment using equity method. No impairment loss was recognized as of December 31, 2021, 2022 and 2023, and for the years then ended. |
OTHER NON-CURRENT ASSETS
OTHER NON-CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
OTHER NON-CURRENT ASSETS | |
OTHER NON-CURRENT ASSETS | 7 OTHER NON-CURRENT ASSETS Other non-current assets consist of the following: December 31, 2022 2023 RMB RMB Other non-current assets: Rent and property management deposits 24,445 22,683 Prepayment for equipment and leasehold improvement 2,425 2,831 Others 7,525 3,239 Total other non-current assets 34,395 28,753 |
SHORT-TERM BANK LOANS
SHORT-TERM BANK LOANS | 12 Months Ended |
Dec. 31, 2023 | |
SHORT-TERM BANK LOANS | |
SHORT-TERM BANK LOANS | 8 SHORT-TERM BANK LOANS On August 7, 2021, the Company signed a credit extension contract with the China Merchants Bank. As of December 31, 2021, the Company has drawn RMB 30,000, which will mature during the period from August 2022 to November 2022 and the annual interest rate is 5.3%. On October 12, 2022, the Company signed a credit extension contract with the China Merchants Bank with a limit of RMB 30,000 As of December 31, 2022, the Company has drawn RMB30,000, which will mature in 12 months from the drawdown date. The applicable interest rate for the loan is 4.9% per annum. The Company fully repaid the bank loans in May 2023. Interest expenses of the loans were RMB117, RMB2,812 and RMB929 for the years ended December 31, 2021, 2022 and 2023, respectively. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES December 31, 2022 2023 RMB RMB Recharge card (a) 156,003 228,655 Refund liability 128,940 190,591 Accrued payroll and employee benefits 83,955 72,715 VAT and other tax payables 4,629 10,680 Accrued compensation for minority shareholder litigation 20,894 — Professional service fee 9,454 5,881 Payable for advertisement 5,611 — Others 7,425 8,574 Total 416,911 517,096 (a) Recharge card is the amount that customers paid in advance without designated enrollment contract for IT-focused supplementary STEM education training courses. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
INCOME TAXES | 10 INCOME TAXES Under the current laws of the Cayman Islands, TCTM is not subject to tax on its income or capital gains. For the period from its inception on October 22, 2012 to December 31, 2023, Tarena HK did not have any assessable profits arising in or derived from HK SAR. TCTM’s PRC subsidiaries and consolidated VIEs and the subsidiaries of the VIEs file separate tax returns in the PRC. Effective from January 1, 2008, the PRC statutory income tax rate is 25% according to the Corporate Income Tax (“CIT”) Law which was passed by the National People’s Congress on March 16, 2007. Certain TCTM’s subsidiaries and branches in China have been qualified as “Small Profit Enterprises” since 2017 and 2018, and therefore are entitled to enjoy a preferential income tax rate of 20% on 50% of the assessable profit before tax. From January 1, 2021 to December 31, 2021, 12.5% of the first RMB 1.0 million of the assessable profit before tax is subject to preferential tax rate of 20% and the 50% of the assessable profit before tax exceeding RMB 1.0 million but not exceeding RMB 3.0 million is subject to preferential tax rate of 20%. From January 1, 2022 to December 31, 2022, 12.5% of the first RMB 1.0 million of the assessable profit before tax is subject to preferential tax rate of 20% and the 25% of the assessable profit before tax exceeding RMB 1.0 million but not exceeding RMB 3.0 million is subject to preferential tax rate of 20%. From January 1, 2023 to December 31, 2027, 25% of the first RMB 3.0 million of the assessable profit before tax is subject to the tax rate of 20% for the Company’s subsidiaries that are qualified as “Small Profit Enterprises”. 10 INCOME TAXES (CONTINUED) Since the Company wound up some PRC subsidiaries for the year ended December 31, 2023, deferred tax assets consisting mainly of net operating loss carryforwards will no longer be utilizable in the future due to their cancellation. As a result, these deferred tax assets of RMB988 along with related full valuation allowance provided from prior years were written-off by the management as of December 31, 2023. The components of (loss) income before income taxes are as follows: Year Ended December 31, 2021 2022 2023 RMB RMB RMB PRC (375,963) 36,389 34,810 Hong Kong (1,751) (669) (2,385) Cayman Islands (13,562) (50,283) (15,410) Canada (1,561) (2,003) (2,653) Total (loss) income before income taxes (392,837) (16,566) 14,362 Income tax (expense) benefit consists of the following: Year Ended December 31, 2021 2022 2023 RMB RMB RMB Current income tax expense (663) (3,796) (1,872) Deferred income tax (expense) benefit (115,788) 18,300 9,844 Total (116,451) 14,504 7,972 The actual income tax expense from continuing operations reported in the consolidated statements of comprehensive (loss) income for each of the years ended December 31, 2021, 2022 and 2023 differs from the amount computed by applying the PRC statutory income tax rate to income before income taxes due to the following: Year Ended December 31, 2021 2022 2023 PRC statutory income tax rate 25.0 % 25.0 % 25.0 % Increase (decrease) in effective income tax rate resulting from: Impact of different tax rates in other jurisdictions (0.9) % (76.2) % 28.2 % Research and development bonus deduction 0.7 % (12.9) % (10.8) % Non-deductible shared expenses from discontinued operations — % — % 114.9 % Non-deductible expenses — % (1.9) % 1.6 % Tax impact of investment loss — % 90.6 % — % Preferential tax rates (14.4) % 21.0 % 17.3 % Tax effect of expired tax attribute carryforwards — % — % 15.6 % Change of tax rates (5.2) % (1.5) % (0.2) % Change in valuation allowance (34.8) % 43.5 % (246.9) % Actual income tax expense (29.6) % 87.6 % (55.3) % 10 INCOME TAXES (CONTINUED) Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2022 2023 RMB RMB Deferred income tax assets: Tax loss carry forwards 176,296 163,331 Others 1,148 520 Total deferred income tax assets 177,444 163,851 Valuation allowance (158,812) (135,375) Deferred income tax assets, net 18,632 28,476 Deferred income tax liabilities: Valuation appreciation of intangible assets 750 433 Deferred income tax liabilities* 750 433 * Deferred income tax liabilities are combined in other non-current liabilities. The movements of the valuation allowance are as follows: Year Ended December 31, 2021 2022 2023 RMB RMB RMB Balance at the beginning of the year 4,551 140,621 158,812 Additions of valuation allowance 136,490 14,068 3,250 Reduction of valuation allowance 107 (10,000) (6,384) Reversal of valuation allowance — (11,280) (32,342) Change of tax rates (527) 25,445 13,027 Change of decrease related to subsidiary disposals and expiration — (42) (988) Balance at the end of the year 140,621 158,812 135,375 The valuation allowance as of December 31, 2022 and 2023 was primarily provided for the deferred income tax assets of certain TCTM’s PRC subsidiaries, consolidated VIEs, and the subsidiaries of the VIEs, which were at cumulative loss positions. In assessing the realizability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible or utilizable. Management has considered projected future taxable income and tax planning strategies in making this assessment. As of December 31, 2023, the Company had tax losses carryforwards of RMB1,263,133, including which from Hong Kong subsidiary of RMB6,560 that does not have an expiring date. Tax losses of RMB280,201, RMB336,215, RMB271,151, RMB184,458, and RMB184,548 will expire, if unused, by 2024, 2025, 2026, 2027 and 2028, respectively. The CIT Law and its implementation rules impose a withholding income tax at 10%, unless reduced by a tax treaty or arrangement, on the amount of dividends distributed by a PRC-resident enterprise to its immediate holding company in Hong Kong that are related to earnings accumulated beginning on January 1, 2008. Dividends relating to undistributed earnings generated prior to January 1, 2008 are exempt from such withholding income tax. The Company did not distribute any dividend for the years ended December 31, 2022 and 2023. 10 INCOME TAXES (CONTINUED) The Company has considered temporary differences on the book to tax differences pertaining to all investment in subsidiaries including the determination of the indefinite reinvestment assertion that would apply to each foreign subsidiary. The Company evaluated each entity’s historical, current business environment and plans to indefinitely reinvest all earnings accumulated in its respective jurisdiction for purpose of future business expansion. The Company 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, 2023, the Company did not have any unrecognized uncertain tax positions and the Company does not believe that its unrecognized tax benefits will change over the next twelve months. For the years ended December 31, 2023, the Company did not incur any interest and penalties related to potential underpaid income tax expenses. As of December 31, 2023, the tax years ended December 31, 2018 through 2022 for the Company’s subsidiaries in the PRC and the VIEs are generally subject to examination by the PRC tax authorities. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 11 RELATED PARTY TRANSACTIONS The following is a list of related parties from continuing operations which the Company has major transactions with: (1) Ms. Han Lijuan, a sister of Mr. Han. (2) Tarena Weishang Technology (Hainan) Co., Ltd., a company controlled by Mr. Han’s sister. Related party transactions On December 24, 2023, the Company entered into an equity transfer agreement to dispose of our equity interests in the professional education business to a buyer consortium led by Tarena Weishang Technology (Hainan) Co., Ltd, a company controlled by Mr. Han’s sister. (Note 1 & Note 3). The net transfer consideration, based on third party independent appraiser, for the Disposal amounted to RMB1 and RMB1 in exchange of the equity interest of Tarena Technologies and Tarena Hangzhou in cash, respectively. |
ORDINARY SHARES AND STATUTORY R
ORDINARY SHARES AND STATUTORY RESERVE | 12 Months Ended |
Dec. 31, 2023 | |
ORDINARY SHARES AND STATUTORY RESERVE | |
ORDINARY SHARES AND STATUTORY RESERVE | 12 ORDINARY SHARES AND STATUTORY RESERVE (a) Treasury shares No ordinary shares were repurchased for the year ended December 31, 2021. For the year ended December 31, 2022, 3,409,080 ordinary shares were repurchased on the open market with the amount of RMB17,103. For the year ended December 31, 2023, 496,240 ordinary shares were repurchased on the open market with the amount of RMB2,428. (b) Statutory reserves and restricted net assets Under PRC rules and regulations, TCTM’s PRC subsidiaries, consolidated VIEs, and the subsidiaries of the VIEs (the “PRC Entities”) are required to appropriate 10% of their net profit, as determined in accordance with PRC accounting rules and regulations, to a statutory surplus reserve until the reserve balance reaches 50% of their registered capital. In addition, private schools (held by the PRC Entities) which require reasonable returns are required to appropriate 25% of their net profit, as determined in accordance with PRC accounting rules and regulations, to a statutory development fund, whereas in the case of private schools which do not require reasonable return, 25% of the annual increase of their net assets. The appropriation to these statutory reserves must be made before distribution of dividends to TCTM can be made. 12 ORDINARY SHARES AND STATUTORY RESERVE (CONTINUED) (b) Statutory reserves and restricted net assets (Continued) For the years ended December 31, 2021, 2022 and 2023, the PRC Entities made appropriations to the statutory reserves of RMB16,736, RMB19,037 and RMB6,780, respectively. As of December 31, 2022 and 2023, the accumulated balance of the statutory reserves was RMB194,601 and RMB201,381, respectively, which is combined in accumulated deficit. Relevant laws and regulations of mainland China restrict the WFOE, VIE and VIE’s subsidiary from transferring a portion of their net assets, equivalent to the balance of their paid-in-capital, additional paid-in-capital and statutory reserves to the Company in the form of loans, advances or cash dividends. Relevant PRC statutory laws and regulations restrict the payments of dividends by the Company’s VIE and VIE’s subsidiary from their respective retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The balances of restricted net assets as of December 31, 2022 and 2023 were RMB1,558,879 and RMB1,228,153 respectively. Under applicable laws of mainland China, loans from PRC companies to their offshore affiliated entities require governmental approval, and advances by PRC companies to their offshore affiliated entities must be supported by bona fide business transactions. (c) Dividend No cash dividend was declared for the years ended December 31, 2021, 2022 and 2023. |
SHARE BASED COMPENSATION
SHARE BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2023 | |
SHARE BASED COMPENSATION | |
SHARE BASED COMPENSATION | 13 SHARE BASED COMPENSATION Share incentive plans On February 1, 2014, TCTM adopted the 2014 Share Plan (the “2014 Plan”), pursuant to which TCTM was authorized to issue options, non-vested shares and non-vested share units to qualified employees, directors and consultants of the Company. The maximum aggregate number of shares which may be issued pursuant to all awards under the 2014 Plan, or the Award Pool, is 1,833,696, provided that the shares reserved in the Award Pool shall be increased on the first day of each fiscal year, commencing with January 1, 2015, if the unissued shares reserved in the Award Pool on such day account for less than 2% of the total number of shares issued and outstanding on a fully-diluted basis on December 31 of the immediately preceding fiscal year, as a result of which increase the shares unissued and reserved in the Award Pool immediately after each such increase shall equal 2% of the total number of shares issued and outstanding on a fully-diluted basis on December 31 of the immediately preceding fiscal year. Share options During the year ended December 31, 2021, the board of the directors of TCTM approved the grant of options to certain officers and employees to purchase 879,000 ordinary shares of TCTM at exercise prices ranging from US$0.00 to US$0.37 per share. These options vest over a period ranging between 1 and 2 years. The options have a contractual term of ten years. During the year ended December 31, 2022, the board of the directors of TCTM approved the grant of options to certain officers and employees to purchase 1,166,980 ordinary shares of TCTM at exercise price of US$0.01 per share. These options vest over a period ranging between 0.00 and 10 years. The options have a contractual term of ten years. 13 SHARE BASED COMPENSATION (CONTINUED) Share options (Continued) During the year ended December 31, 2023, the board of the directors of TCTM approved the grant of options to certain officers and employees to purchase 200,000 ordinary shares of TCTM at exercise price of US$0.01 per share. These options vest within 1 year. The options have a contractual term of ten years. A summary of share options activity for the year ended December 31, 2023 is as follows: Weighted Weighted Average Number of Average Remaining Aggregate Share Exercise Price Contractual Intrinsic Options US$ Years Value US$ Outstanding at December 31, 2022 3,356,635 0.10 6.89 2,994 Granted 200,000 0.01 — — Exercised (499,145) 0.01 — — Forfeited (762,605) 0.20 — — Outstanding at December 31, 2023 2,294,885 0.07 5.16 448 Vested and expected to vest as of December 31, 2023 4,665,092 0.30 4.30 919 Exercisable as of December 31, 2023 2,275,775 0.37 5.15 444 The total intrinsic value of options exercised during the years ended December 31, 2021, 2022 and 2023 were RMB6,261, RMB2,543 and RMB711, respectively. The Company calculated the fair value of the share options on the grant date using the Binomial option-pricing valuation model. The assumptions used in the valuation model are summarized in the following table. Year Ended December 31, 2021 2022 2023 Expected volatility 73.76%-75.78% 75.77%-77.77% 77.77% Expected dividends yield 0% 0% 0% Exercise multiple 2.2-2.8 2.2-2.8 2.8 Risk-free interest rate per annum 1.09%-1.66% 1.66%-4.10% 4.10% The fair value of underlying ordinary shares (per share) US$0.20-US$2.92 US$0.36-US$1.13 US$0.92 The expected volatility was based on the historical volatilities of the Company and comparable publicly traded companies engaged in the similar industry. No income tax benefit was recognized in the consolidated statements of comprehensive loss as the share-based compensation expense was not tax deductible. 13 SHARE BASED COMPENSATION (CONTINUED) Share options (Continued) The fair values of the options granted for the years ended December 31, 2021, 2022 and 2023 are as follows: Year Ended December 31, 2021 2022 2023 US$ US$ US$ Weighted average grant date fair value of option per share 0.82 0.92 0.92 Aggregate grant date fair value of options 720 1,079 184 As of December 31, 2023, there was approximately RMB 706 of total unrecognized compensation cost related to unvested share options and the unrecognized compensation costs are expected to be recognized over a weighted average period of approximately 1.32 years. Non-vested shares On March 1, 2021, the board of directors of TCTM approved the grant of 69,355 non-vested shares to 1 independent director and 1 executive officer, of which the vesting period is one year. On April 9, 2021, the board of directors of TCTM approved the grant of 48,690 non-vested shares to 1 independent director and 1 executive director, of which the vesting period is one year. On March 1, 2022, the board of directors of TCTM approved the grant of 50,000 non-vested shares to 1 former independent director, of which the vesting period is one year. On April 9, 2022, the board of directors of TCTM approved the grant of 337,170 non-vested shares to 1 independent director and 1 former independent director, of which the vesting period is one year. On April 9, 2023, the board of directors of TCTM approved the grant of 115,050 non-vested shares to 1 independent director, of which the vesting period is one year. A summary of the non-vested shares activity under the 2014 Share Plan for the year ended December 31, 2023 is summarized as follows: Number of Non- Weighted Average vested Shares Grant Date Fair Value US$ Outstanding as of December 31, 2022 144,920 4.38 Granted 115,050 0.66 Vested (185,340) 2.22 Forfeited (9,485) 9.50 Outstanding as of December 31, 2023 65,145 2.28 As of December 31, 2023, there was approximately RMB1,054 of total unrecognized compensation cost related to non-vested shares, which is expected to be recognized over a weighted average period of approximately 0.45 year. The total fair value of shares vested during the years ended December 31, 2021, 2022 and 2023 was RMB5,930, RMB3,358 and RMB2,916, respectively. |
(LOSS) EARNINGS PER SHARE
(LOSS) EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2023 | |
(LOSS) EARNINGS PER SHARE | |
(LOSS) EARNINGS PER SHARE | 14 (LOSS) EARNINGS PER SHARE Basic and diluted (loss) earnings per share is calculated as follows: Year Ended December 31, 2021 2022 2023 RMB RMB RMB Numerator: Net income (loss) from discontinued operation 33,508 87,295 (11,980) Denominator: Denominator for basic earnings per share: Weighted average number of Class A and Class B ordinary shares outstanding —basic 56,260,925 54,657,222 53,873,945 Dilutive effect of outstanding share options 1,369,440 3,073,450 1,460,629 Denominator for diluted (loss) earnings per share —diluted 57,630,365 57,730,672 55,334,574 Basic earnings(loss) from discontinued operation per ADS 2.98 7.99 (1.11) Diluted earnings(loss) from discontinued operation per ADS 2.91 7.56 (1.11) Numerator: Net (loss) income from continuing operations (509,288) (2,062) 22,334 Denominator: Denominator for basic earnings per share: Weighted average number of Class A and Class B ordinary shares outstanding —basic 56,260,925 54,657,222 53,873,945 Dilutive effect of outstanding share options 1,369,440 3,073,450 1,460,629 Denominator for diluted (loss) earnings per share —diluted 57,630,365 57,730,672 55,334,574 Basic (loss) earnings from continuing operations per ADS (45.15) (0.35) 1.94 Diluted (loss) earnings from continuing operations per ADS (45.15) (0.35) 1.89 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
LEASES | 15 LEASES The Company’s leases consist of operating leases for learning centers and office spaces in different cities in the PRC. The Company reviews all options to extend, terminate, or purchase its right-of-use assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised. As of December 31, 2023, the Company had no long-term leases that were classified as a financing lease, and the Company’s lease contracts only contain fixed lease payments and do not contain any residual value guarantee. Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheets. The Company recognizes rental expense on a straight-line basis over the lease term. The components of rental expense from continuing operations for the years ended December 31, 2021, 2022 and 2023 consist as follows: Year Ended December 31, 2021 2022 2023 RMB RMB RMB Short-term rental expense 14,116 7,411 9,961 Operating lease expense excluding short-term rental expense 169,613 148,867 133,106 15 LEASES (CONTINUED) Other information related to operating leases is as follows: Year Ended December 31, 2021 2022 2023 RMB RMB RMB Cash paid for amounts included in the measurement of lease liabilities: 119,932 123,263 143,602 Right-of-use assets obtained in exchange for new lease liabilities: 144,601 80,403 132,001 As of December 31, 2022 and 2023, the weighted average remaining lease term was 2.42 years and 3.48 years, respectively, and the weighted average discount rate was 5.62% and 5.58% for the Company’s operating leases, respectively. The Company’s lease agreements do not have a discount rate that is readily determinable. The incremental borrowing rate is determined at lease commencement or lease modification and represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. The weighted-average discount rate was calculated using the discount rate for the lease that was used to calculate the lease liability balance for each lease and the remaining balance of the lease payments for each lease as of December 31, 2022 and 2023. The weighted-average remaining lease terms were calculated by using the remaining lease term and the lease liability balance for each lease as of December 31, 2022 and 2023. As of December 31, 2023, maturities of lease liabilities were as follows: RMB Year ending December 31, 2024 113,686 2025 66,914 2026 37,027 2027 11,620 2028 and thereafter 6,326 Total lease payments 235,573 Less: imputed interest 15,929 Total 219,644 Less: current portion 111,840 Non-current portion 107,804 Gross rental expenses incurred under operating leases were RMB183,729, RMB156,278 and RMB143,067 for the years ended December 31, 2021, 2022 and 2023, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 16 COMMITMENTS AND CONTINGENCIES The Company and certain of its current and former officers and directors have been named as defendants in a putative securities class action captioned Yili Qiu v. TCTM, Inc. et al., (Case No. 1:21-cv-03502) filed on June 22, 2021 in the U.S. District Court for the Eastern District of New York. The complaint asserts that defendants made false or misleading statements in certain SEC filings between August 16, 2016 and November 1, 2019 related to the Company’s business and operating results in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On September 1, 2021, the court entered an order appointing lead plaintiff in this action. On September 14, 2021, the parties filed a joint status report and proposed scheduling stipulation, pursuant to which, the lead plaintiff filed an amended complaint on November 1, 2021. On December 16, 2021, the Company filed its pre-motion letter and the plaintiffs filed their opposition on December 23, 2021. On January 18, 2022, the Company moved to dismiss the complaint. On April 4, 2022, lead plaintiff served its opposition to the motion. Briefing was completed on May 19, 2022. While the motion to dismiss was pending, Plaintiff and the Company reached an agreement in principle to settle all claims. On July 13, 2022, Plaintiff filed a letter informing the court of the settlement in principle. On August 31, 2022, the parties filed a motion for preliminary approval of the proposed settlement agreement. Preliminary approval hearing took place on November 8, 2022, and the Court reserved judgement on the motion pending submission of additional information. In December 2022, the parties submitted revised settlement materials to the Court. On August 3, 2023, the Court ordered additional revisions to the settlement papers, which the parties submitted on August 18, 2023. On September 5, 2023, the Court granted preliminary approval for the TCTM settlement agreement. The Company settled the payment on September 23, 2023, and the plaintiff have filed their motions to approve the settlement and their proposed awards of attorney’s fees, etc. On February 9, 2024, the Court held the fairness hearing. The parties are awaiting the Court’s ruling. There will have no material adverse effect on the Company’s financial position, results of operations or liquidity. |
PARENT ONLY FINANCIAL INFORMATI
PARENT ONLY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
PARENT ONLY FINANCIAL INFORMATION | |
PARENT ONLY FINANCIAL INFORMATION | 17 PARENT ONLY FINANCIAL INFORMATION The following presents condensed parent company financial information of TCTM. Condensed Balance Sheets December 31, 2022 2023 2023 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 1,844 5,251 740 Prepaid expenses and other current assets 550 226 32 Due from subsidiaries 437,987 380,470 53,588 Total current assets 440,381 385,947 54,360 Investment in subsidiaries (1,574,974) (1,560,377) (219,775) Total assets (1,134,593) (1,174,430) (165,415) LIABILITIES AND SHAREHOLDERS’ DEFICIT Current liabilities: Accrued expenses and other current liabilities (1) 30,392 4,155 585 Due to subsidiaries 334,909 319,198 44,959 Total current liabilities 365,301 323,353 45,544 Total liabilities 365,301 323,353 45,544 Commitments and contingencies — — — Shareholders’ deficit: Class A ordinary shares (US$0.001 par value, 860,000,000 shares authorized, 57,176,842 and 57,861,327 shares issued, 46,567,892 and 46,756,137 shares outstanding as of December 31, 2022 and 2023, respectively) 359 364 51 Class B ordinary shares (US$0.001 par value, 40,000,000 shares authorized, 7,206,059 shares issued and outstanding as of December 31, 2022 and 2023, respectively) 74 74 10 Treasury shares (10,608,950 and 11,105,190 Class A ordinary shares as of December 31, 2022 and 2023, at cost) (476,918) (479,346) (67,514) Additional paid-in capital 1,363,845 1,360,901 191,679 Accumulated other comprehensive income 49,664 48,216 6,791 Accumulated deficit (2,436,918) (2,427,992) (341,976) Total shareholders’ deficit (1,499,894) (1,497,783) (210,959) Total liabilities and shareholders’ deficit (1,134,593) (1,174,430) (165,415) (1) Mainly related to repurchase of treasury shares. 17 PARENT ONLY FINANCIAL INFORMATION (CONTINUED) Condensed Statements of Comprehensive (Loss) Income Year Ended December 31, 2021 2022 2023 2023 RMB RMB RMB US$ Selling and marketing expenses (323) (8) — — General and administrative expenses 5,955 (34,558) (11,625) (1,637) Operating income (loss) 5,632 (34,566) (11,625) (1,637) Equity in (loss) income of subsidiaries (480,114) 117,266 20,415 2,875 Foreign currency exchange (loss) gains (268) 2,480 106 15 Interest income (expense) 203 (1,660) 30 5 (Loss) income before income taxes (474,547) 83,520 8,926 1,258 Income tax expense — — — — Net (loss) income (474,547) 83,520 8,926 1,258 Other comprehensive (loss) income Foreign currency translation adjustment (421) 965 (1,448) (204) Comprehensive (loss) income (474,968) 84,485 7,478 1,054 Condensed Statements of Cash Flows Year Ended December 31, 2021 2022 2023 2023 RMB RMB RMB US$ Operating activities: Net cash provided by (used in) operating activities 14,458 (5,699) 4,902 690 Financing activities: Issuance of Class A ordinary shares in connection with exercise of share options 3,947 107 227 32 Repurchase of treasury shares — (17,103) (2,428) (342) Net cash provided by (used in) financing activities 3,947 (16,996) (2,201) (310) Changes in cash and cash equivalents 18,405 (22,695) 2,701 380 Effect of foreign currency exchange rate changes on cash and cash equivalents 1,308 1,033 706 100 Net increase (decrease) in cash and cash equivalents 19,713 (21,662) 3,407 480 Cash and cash equivalents at beginning of year 3,793 23,506 1,844 260 Cash and cash equivalents at end of year 23,506 1,844 5,251 740 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 18 SUBSEQUENT EVENTS A Proposed Disposal On December 24, 2023, the Company held board meeting to approve the Proposed Disposal related the professional education business (the “Divestiture”). Upon consummation of the Divestiture on March 31, 2024, the Company lost its control over the professional education business while the primary focus has shifted to providing IT-focused supplementary STEM education services. Accordingly, the Company deconsolidated the professional education business financial statements, effective since March 31, 2024. Repurchase Shares from Affiliate of KKR & Co. Inc. (“KKR”) In January 2024, the Company entered into a share repurchase agreement with Talent Fortune Investment Limited, an affiliate of KKR, pursuant to which the Company agreed to repurchase 5,119,698 of its Class A ordinary shares beneficially owned by Talent Fortune Investment Limited at a repurchase price of $0.2 per share. The sale and repurchase of the 5,119,698 Class A ordinary shares has been closed in February 2024. 2024 Share Plan On February 28, 2024, TCTM adopted the 2024 Share Plan (the “2024 Plan”), pursuant to which TCTM was authorized to issue options, non-vested shares and non-vested share units to qualified employees, directors and consultants of the Company. The maximum aggregate number of shares which may be issued pursuant to all awards under the 2024 Plan, or the Award Pool, is 3,500,000, provided that the shares reserved in the Award Pool shall be increased on the first day of each fiscal year, commencing with January 1, 2025, if the unissued shares reserved in the Award Pool on such day account for less than 2% of the total number of shares issued and outstanding on a fully-diluted basis on December 31 of the immediately preceding fiscal year, as a result of which increase the shares unissued and reserved in the Award Pool immediately after each such increase shall equal 2% of the total number of shares issued and outstanding on a fully-diluted basis on December 31 of the immediately preceding fiscal year. The Company has evaluated subsequent events through the date of issuance of the consolidated financial statements. Other than the matters noted above, there are no any other subsequent events with material financial impact on the Company’s consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of consolidation | (a) Principles of consolidation The consolidated financial statements include the financial statements of TCTM, its wholly-owned subsidiaries, and VIEs which TCTM is the primary beneficiary. Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All significant intercompany balances and transactions have been eliminated upon consolidation. |
Use of estimates | (b) 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 reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include goodwill impairment and long-term investments, the allowance for credit losses of amounts due from related parties, prepaid expenses and other current assets and other non-current assets, the realizability of deferred income tax assets, the accruals for other contingencies, the useful lives of property and equipment and the recoverability of the carrying amounts of property and equipment and right-of-use assets. The current economic environment has increased the degree of uncertainty inherent in those estimates and assumptions. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. |
Discontinued operation | (c) Discontinued operation A discontinued operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operation if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria to be classified as held-for-sale; (2) the component of an entity or group of components of an entity is disposed of by sale; (3) the component of an entity or group of components of an entity is disposed of other than by sale. For any component classified as held for sale or disposed of by sale or other than by sale that qualify for presentation as a discontinued operation in the period, the Company has reclassified certain comparative balances in the consolidated balance sheet as of December 31, 2022 and certain comparative amounts in the consolidated statements of operations for the years ended December 31, 2021 and 2022 to conform to the current year’s presentation. The results of discontinued operations for the years ended December 31, 2022, and 2021 have been reflected separately in the consolidated statement of operations as a single line item for all periods presented in accordance with U.S. GAAP. Cash flows from discontinued operations of the three categories for the years ended December 31, 2022 and 2021 were separately presented in the consolidated statements of cash flows for all periods presented in accordance with U.S. GAAP. |
Foreign currency | (d) Foreign currency The functional currency of TCTM and Tarena Hong Kong Limited (“Tarena HK”) is the USD. The functional currency of Techarena Canada Inc. is the Canadian Dollar (“CAD”). The functional currency of Taiwan Tarena Counseling Software Co., Ltd. is the Taiwan New Dollar (“TWD”). The functional currency of TCTM’s PRC subsidiaries, consolidated VIEs, and the subsidiaries of the VIE is the RMB. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rate at the balance sheet date. The resulting exchange differences are recorded in foreign currency exchange loss in the consolidated statements of comprehensive loss. Assets and liabilities of entities with functional currencies other than RMB are translated into RMB using the exchange rate on the balance sheet date. Revenues and expenses are translated into RMB at average rates prevailing during the reporting period. The resulting foreign currency translation adjustment are recorded in accumulated other comprehensive loss within shareholders’ equity. Since the RMB is not a fully convertible currency, all foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC. |
Cash, cash equivalents, restricted cash and time deposits | (e) Cash, cash equivalents, restricted cash and time deposits Cash consists of cash in bank and deposits placed in third party payment processors of Alipay, Wechat wallet and Baidu wallet, which are unrestricted as to withdrawal. Time deposits, which mature within one year as of the balance sheet date, represent interest-bearing certificates of deposit with an initial term of greater than three months when purchased. Time deposits which mature over one year as of the balance sheet date are included in non-current assets. As of December 31, 2023, restricted cash was the cash deposits in the escrow account as required by the local education committee. Cash, cash equivalents, time deposits and restricted cash maintained generated from continuing operations at financial institutions consist of the following: December 31, 2022 2023 RMB RMB RMB denominated bank deposits with financial institutions in the PRC 195,774 220,864 US dollar denominated bank deposits with financial institutions in the PRC 354 360 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) 574 4,519 HK dollar denominated bank deposits with financial institutions in HK SAR 37 48 RMB denominated bank deposits with a financial institution in HK SAR 797 114 US dollar denominated bank deposits with a financial institution in the U.S. 251 255 USD denominated bank deposits with a financial institution in Canada — 2 CAD denominated bank deposits with financial institutions in HK SAR 2 — CAD denominated bank deposits with a financial institution in Canada 844 1,402 Total 198,633 227,564 To limit exposure to credit risk relating to bank deposits, the Company primarily places bank deposits only with large financial institutions in the PRC, HK SAR, Canada and the U.S. |
Prepaid expenses and other current assets | (f) Prepaid expenses and other current assets Prepaid expenses and other current assets primarily represent prepaid deposits, advance to suppliers, inventories, prepaid rental expenses and so on. Prepaid expenses and other current assets which are due over one year as of the balance sheet date are presented as other non-current assets. The Company maintains an allowance for credit losses for the part that is not expected to be recovered. In establishing the allowance, management considers overdue employee loan upon the use of the Current Expected Credit Loss Model (“CECL Model”) in accordance with ASC Topic 326. Prepaid expenses and other current assets that are deemed to be uncollectible are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. There is a time lag between when the Company estimates a portion of or the entire account balances to be uncollectible and when a write off of the account balances is taken. The Company takes a write off of the account balances when the Company can demonstrate all means of collection on the outstanding balances have been exhausted. |
Property and equipment | (g) Property and equipment Property and equipment are recorded at cost. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets. The estimated useful life of property and equipment is as follows: Furniture 5 years Office equipment 3 Leasehold improvements Shorter of the lease term or the estimated useful life of the assets Ordinary maintenance and repairs are charged to expenses as incurred, while replacements and betterments are capitalized. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value of the item disposed of and proceeds realized thereon. Property and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of a long-lived asset or asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment loss is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell, and are no longer depreciated. No impairment of long-lived assets was recognized for any of the years presented. |
Goodwill | (h) Goodwill In January 2017, the FASB issued ASU 2017-04, simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment by eliminating Step two from the goodwill impairment test. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, versus determining an implied fair value in Step two to measure the impairment loss. The Company adopted this guidance on a prospective basis on January 1, 2020 with no material impact on its consolidated financial statements and related disclosures as a result of adopting the new standard. The Company assess goodwill for impairment on annual basis in accordance with ASC 350-20, Intangibles – Goodwill and Other: Goodwill Quantitative goodwill impairment test is used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired. If the fair value of the reporting unit is less than its carrying amount, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company performs the annual goodwill impairment assessment using qualitative impairment test on December 31, 2023 and no impairment recorded for the years ended 2023. |
Long-term investments | (i) Long-term investments ● Equity investments without readily determinable fair values Equity investments without readily determinable fair values are measured and recorded using a measurement alternative that measures the securities at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes in accordance with ASC Topic 321, Investments – Equity Securities. ● Equity method investments For an investee company over which the Company has the ability to exercise significant influence, but does not have a controlling interest, the Company accounted for those using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock of the investee between 20% and 50%. Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity investment is recognized in the consolidated statements of comprehensive (loss) income; and the Company’s share of post-acquisition movements in equity is recognized in equity in the consolidated balance sheets. Unrealized gains on transactions between the Company and an entity in which it has recorded an equity investment are eliminated to the extent of the Company’s interest in the entity. To the extent of the Company’s interest in the investment, unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. When the Company’s share of losses in an entity in which it has recorded an equity investment equal or exceeds the Company’s interest in the entity, it does not recognize further losses, unless it has incurred obligations or made payments on behalf of the equity investee. The Company evaluates the equity method investments for impairment. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. |
Revenue recognition | (j) Revenue recognition The Company evaluated and recognized revenue based on the five steps set forth in ASC 606 by: ● identifying the contract(s) with the customer; ● identifying the performance obligations in the contract; ● determining the transaction price; ● allocating the transaction price to performance obligations in the contract; and ● recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a customer (i.e., “transfer of control”). These criteria as they relate to each of the following major revenue generating activities are described below. Revenue is presented net of value added taxes (“VAT”) at rates ranging between 1% and 13%, and surcharges. VAT to be collected from customers, net of VAT paid for purchases, is recorded as a liability in the consolidated balance sheets until it is paid to the tax authorities. Tuition revenue The Company provides IT related training courses to IT-focused supplementary STEM education services. The contract of tuition service is accounted for as a single performance obligation which is satisfied proportionately over the service period. Tuition fees are recognized as revenue proportionately as the training courses are delivered, with unearned portion of tuition fees being recorded as deferred revenue. Refunds are provided to students if they withdraw from classes, and usually only those unearned portions of the fee which is available will be refunded. A refund liability represents the amounts of consideration received but are not expected to be entitled to earn, and thus are not included in the transaction price because these amounts are expected to be eventually refunded to students. The Company determines the transaction price to be earned by estimating the refund liability based on historical refund ratio on a portfolio basis using the expected value method. Reclassification was made from deferred revenue to refund liabilities, which was recorded under accrued expenses and other current liabilities. Certification service revenue The Company provides certification service to students who complete the training course and enroll for the exams. The Company is responsible for the certification service, including organization, proctoring and grading of exams, and providing the certificates to students. All certificates are issued by third parties to the students who pass the exam. The Company is the principal to end customers. The Company acts as the principal in providing the certificate service to the students and recognizes revenue on gross basis because the Company is able to determine the price, acts as the main obligor in the arrangement, and, is responsible for fulfilling the services ordered by the students. Cash received before the students receive the certificates is recorded as deferred revenue. Each contract of certification service is accounted for as a single performance obligation which is satisfied at a point in time. The performance obligation is satisfied when the certificates are provided to the students and the consideration are received, then the received consideration is recognized as certification service revenue. Net revenues from continuing operations recognized under ASC Topic 606 for the years ended December 31, 2021, 2022 and 2023 consist of the following: Year Ended December 31, 2021 2022 2023 RMB RMB RMB Tuition fee 1,223,760 1,384,602 1,372,460 Certification service fee 4,184 13,158 3,482 Others 11,594 4,993 2,885 Business taxes and surcharges (3,265) (2,909) (3,635) Total net revenues 1,236,273 1,399,844 1,375,192 Year Ended December 31, 2021 2022 2023 RMB RMB RMB Timing of revenue recognition Services transferred at a point in time 15,736 18,113 6,350 Services transferred over time 1,220,537 1,381,731 1,368,842 Total net revenues 1,236,273 1,399,844 1,375,192 Contract liability The Company does not have amounts of contract assets since the Company transfers the promised services to customers and have the billing right or after the customers pay consideration. The contract liabilities consist of deferred revenue, which represent the Company has received consideration but has not satisfied the related performance obligations. The revenue recognized from continuing operations for years ended December 31, 2022 and 2023 that was previously included in the deferred revenue balances as of December 31, 2021 and December 31, 2022 was RMB989,572 and RMB902,011, respectively. The Company’s deferred revenue from continuing operations amounted to RMB1,314,877 and RMB1,210,536 as of December 31, 2022 and 2023, respectively. The Company has selected to apply the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations in contracts that have an original expected length of one year or less. |
Cost of revenues | (k) Cost of revenues Cost of revenues consists of payroll and employee benefits, rent expenses of learning centers, depreciation relating to property and equipment used for operating the learning centers, and other operating costs that are directly attributed to the provision of training services. |
Selling and marketing expenses | (l) Selling and marketing expenses Selling and marketing expenses are expensed as incurred. Selling and marketing expenses primarily consist of compensation expenses relating to personnel involved in selling and marketing, including enrollment advisors and university cooperation representatives based at learning centers, advertising expenses relating to marketing activities, and, to a lesser extent, rental expenses relating to selling and marketing functions. Among them, advertising costs were RMB77,948, RMB42,015 and RMB43,480 for the years ended December 31, 2021, 2022 and 2023, respectively. |
Operating lease | (m) Operating leases The Company adopted Accounting Standards Update (“ASU”) 2016-02 Leases (“ASC 842”) as of January 1, 2019, using the non-comparative transition option pursuant to ASU 2018-11. Therefore, the Company has not restated comparative period financial information for the effects of ASC 842, and will not make the new required lease disclosures for comparative periods beginning before January 1, 2019. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things (i) allowed the Company to carry forward the historical lease classification; (ii) did not require the Company to reassess whether any expired or existing contracts are or contain leases; (iii) did not require the Company to reassess initial direct costs for any existing leases. The Company identifies lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. For all operating leases except for short-term leases, the Company recognizes operating right-of-use assets and operating lease liabilities. Leases with an initial term of 12 months or less are short-term lease and not recognized as right-of-use assets and lease liabilities on the consolidated balance sheet. The Company recognizes lease expense for short-term leases on a straight-line basis over the lease term. The operating lease liabilities are recognized based on the present value of the lease payments not yet paid, discounted using the Company’s incremental borrowing rate over a similar term of the lease payments at lease commencement. Some of the Company’s lease agreements contain renewal options; however, the Company do not recognize right-of-use assets or lease liabilities for renewal periods unless it is determined that the Company is reasonably certain of renewing the lease at inception or when a triggering event occurs. The right-of-use assets consist of the amount of the measurement of the lease liabilities and any prepaid lease payments. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. |
Government grant | (n) Government grant Government grant is recognized when there is reasonable assurance that the Company will comply with the conditions attached to it and the grant will be received. Government grant for the purpose of giving immediate financial support to the Company with no future related costs or obligation is recognized in the Company’s consolidated statements of comprehensive (loss) income when the grant becomes receivable. Government grants of RMB1,293, RMB5,303 and RMB724 were recognized and included in other income for the years ended December 31, 2021, 2022 and 2023, respectively. |
Research and development expense | (o) Research and development costs Research and development costs are expensed as incurred. Research and development expenses primarily consist of a portion of the personnel costs of instructors as determined based on the amount of time that they devote to research and development-related activities, as well as the personnel costs of software engineers. Research and development expenses were RMB40,311, RMB20,248 and RMB11,654 for the years ended December 31, 2021, 2022 and 2023, respectively. |
Employee benefits | (p) Employee benefits Pursuant to relevant PRC regulations, the Company is required to make contributions to various defined contribution plans organized by municipal and provincial PRC governments. The contributions are made for each PRC employee at rates ranging from 16.3% to 26.5% on a standard salary base as determined by local social security bureau. Contributions to the defined contribution plans are charged to the consolidated statements of comprehensive (loss) income when the related service is provided. For the years ended December 31, 2021, 2022 and 2023, the costs of the Company’s obligations to the defined contribution plans for employees from continuing and discontinued operation amounted to RMB133,012, RMB133,013, and RMB119,548, respectively. The Company has no other obligation for the payment of employee benefits associated with these plans beyond the contributions described above. |
Income taxes | (q) Income taxes The Company follows the asset and liability method in accounting for income taxes in accordance to ASC Topic 740 “Taxation” (“ASC 740”), Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The Company adopted ASC 740 to account for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. The Company recognizes in the consolidated financial statements the impact of a tax position, if that position is more likely than not of being sustained upon examination, based on the technical merits of the position. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company has elected to classify interest and penalties related to an unrecognized tax benefits, if and when required, as part of income tax expense in the consolidated statements of comprehensive loss. For the year ended December 31, 2023, there were no uncertain tax positions and the Company does not expect that the position of unrecognized tax benefits will materially change within the next twelve months. In accordance with PRC Tax Administration Law on the Levying and Collection of Taxes, the PRC authorities generally have up to five years to assess underpaid tax plus penalties and interest for PRC entities’ tax filings. In case of tax evasion, which is not clearly defined in the law, there is no limitation on the tax years open for investigation. Accordingly, the PRC entities remain subject to examination by the tax authorities based on above. |
Share based compensation | (r) Share based compensation The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and recognizes the cost over the period the employee is required to provide service in exchange for the award, which generally is the vesting period. The Company recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, net of estimated forfeitures, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. Forfeiture rates are estimated based on historical of employee turnover rates. |
Commitments and contingencies | (s) Commitments and contingencies In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, and non-income tax matters. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, is disclosed. |
Loss per share | (t) (Loss) Earnings per share Basic (loss) earnings per Class A and Class B ordinary share is computed by dividing net (loss) earnings attributable to TCTM’s Class A and Class B ordinary shareholders by the weighted average number of Class A and Class B ordinary shares outstanding during the year using the two-class method. Under the two-class method, net (loss) earnings attributable to TCTM’s Class A and Class B ordinary shareholders is allocated between Class A and Class B ordinary shares and other participating securities, if any, based on participating rights in undistributed loss. Diluted (loss) earnings per share is calculated by dividing net (loss) earnings attributable to TCTM’s Class A and Class B ordinary shareholders as adjusted for the effect of dilutive Class A and Class B ordinary share equivalents, if any, by the weighted average number of Class A and Class B ordinary and dilutive Class A and Class B ordinary share equivalents outstanding during the year. Class A and Class B ordinary share equivalents include the Class A and Class B ordinary shares issuable upon the exercise of the outstanding share options (using the treasury stock method). Potential dilutive securities are not included in the calculation of diluted (loss) earnings per Class A and Class B ordinary share if the impact is anti-dilutive. If there is a loss from continuing operations, diluted earnings per share (“EPS”) would be computed in the same manner as basic EPS is computed, even if an entity has net income after adjusting for a discontinued operation or an extraordinary item. |
Segment reporting | (u) Segment reporting The Company uses the management approach in determining its operating segments. The management approach considers the internal reporting used by the Company’s chief operating decision maker (“CODM”). The Company’s CODM has been identified as the CEO who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of the Company. Management has determined that the Company has two operating segments, which is the IT Professional Education segment and IT-focused Supplementary STEM Education Services segment. As described in Note 3, on December 24, 2023, the Company entered into an equity transfer agreement to dispose of its equity interests in the professional education business. As a result of the Divestiture, the Company has realigned its corporate and management reporting structure to focus solely on its IT-focused Supplementary STEM Education Services business. Upon the completion of the Divestiture, the Company reorganized its business to become a single reportable segment: (1) IT-focused Supplementary STEM Education Services. This segment structure reflects the financial information and reports used by the Company’s management, specifically its Chief Operating Decision Maker (“CODM”), to make decisions regarding the Company’s business, including resource allocations and performance assessments. All assets and continuing operations of the Company are physically located or domiciled in the PRC. Consequently, no geographic information is presented. |
Fair value measurements | (v) Fair value measurements The Company applies the provisions of ASC Topic 820, Fair Value Measurements and Disclosures, ASC Topic 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC Topic 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: ● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. ● Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. ● Level 3 inputs are unobservable inputs for the asset or liability. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. In situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects management’s own judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by management based on the best information available in the circumstances. Fair value measurements on a recurring basis The carrying amounts of cash and cash equivalents, current time deposits, accounts receivable, loans to employees, amounts due from related parties, accounts payable, amounts due to related parties, short-term bank loans, accrued expenses and other current liabilities as of December 31, 2022 and 2023 approximate their fair value because of short maturity of these instruments. The carrying amounts of non-current time deposits as of December 31, 2022 and 2023 approximates their fair value since the interest rates of the time deposits did not differ significantly from the market interest rates for similar types of time deposits. Fair value measurements on a non-recurring basis The Company measures certain financial assets, including the long-term investments at fair value on a non-recurring basis only if an impairment charge were to be recognized. The Company’s non-financial assets, such as property and equipment, intangible assets, right-of-use assets and goodwill, would be measured at fair value only if they were determined to be impaired. |
Recently issued accounting standards | (w) Recently issued accounting standards In March 2023, the FASB issued new accounting guidance, ASU 2023-01, for leasehold improvements associated with common control leases, which is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been made available for issuance. The new guidance introduced two issues: terms and conditions to be considered with leases between related parties under common control and accounting for leasehold improvements. The goals for the new issues are to reduce the cost associated with implementing and applying Topic 842 and to promote diversity in practice by entities within the scope when applying lease accounting requirements. ASU 2023-01 is effective for the Company for annual and interim reporting periods beginning after December 15, 2023. The Company concluded that no effect of the adoption of this ASU. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC’s disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services— Investment Companies— Investment Company Activities, and 974-10 Real Estate— Real Estate Investment Trusts—Overall. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC’s removal. The Company is in the process of evaluating the effect of the adoption of this ASU. In November 2023, the FASB issued ASU 2023-07, which is an update to Topic 280, Segment Reporting. The amendments in this Update improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The amendments in this update: (1) require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”), (2) Require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. The other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss, (3) Require that a public entity provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods, and (4) Clarify that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit. However, at least one of the reported segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity’s consolidated financial statements. In other words, in addition to the measure that is most consistent with the measurement principles under generally accepted accounting principles (GAAP), a public entity is not precluded from reporting additional measures of a segment’s profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources, (5) Require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources, and (6) Require that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this Update and all existing segment disclosures in Topic 280. The amendments in this Update also do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments in this Update retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company is evaluating the effect this guidance will have on the Company’s segment disclosures. In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The amendments allow investors to better assess, in their capital allocation decisions, how an entity’s worldwide operations and related tax risks and tax planning and operational opportunities affect its income tax rate and prospects for future cash flows. The other amendments in this Update improve the effectiveness and comparability of disclosures by (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application—General Notes to Financial Statements: Income Tax Expense, and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted. The Company is evaluating the effect this guidance will have on tax disclosures. Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent standards that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures. |
DESCRIPTION OF BUSINESS, ORGA_2
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |
Schedule of Variable Interest Entity Information | December 31, 2022 2023 RMB RMB Cash and cash equivalents 16,031 2,520 Amounts due from TCTM and its wholly-owned subsidiaries 120,746 104,642 Prepaid expenses and other current assets 1,191 62,550 Current assets of discontinued operations held for sale 9,127 36,779 Total current assets 147,095 206,491 Property and equipment, net 1,977 2,052 Long term investments 27,000 34,852 Right-of-use assets 8,405 9,209 Other non-current assets 322 258 Non-current assets of discontinued operations held for sale 1,690 — Total assets 186,489 252,862 Accounts payable 42 2,713 Deferred revenue-current 70,284 114,975 Operating lease liabilities-current 4,124 4,440 Income taxes payable 12 79 Accrued expenses and other current liabilities 59,729 30,762 Amounts due to TCTM and its wholly-owned subsidiaries 7,631 23,676 Current liabilities of discontinued operations held for sale 72,267 100,392 Total current liabilities 214,089 277,037 Operating lease liabilities-non current 4,176 4,252 Non-current liabilities of discontinued operations held for sale 257 — Total liabilities 218,522 281,289 Year Ended December 31, 2021 2022 2023 RMB RMB RMB Net revenues 16,673 40,755 90,661 Net (loss) income from continuing operations (21,541) 8,554 (7,241) Net (loss) income from discontinued operation (17,531) (7,299) 10,847 Net (loss) income (39,072) 1,255 3,606 Net cash provided by (used in) operating activities 10,308 7,722 (17,817) Net cash provided by investing activities — 19,975 — Net cash (used in) provided by financing activities (3,437) 5,762 (7,192) |
Net revenues | Product concentration | |
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |
Schedule of Revenue Concentration | Year Ended December 31, 2021 2022 2023 Childhood & adolescent Robotics Programming 30.3 % 49.2 % 46.4 % Childhood & adolescent Computer Programming 39.8 % 34.2 % 24.1 % Total net revenues from continuing operation 70.1 % 83.4 % 70.5 % |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Cash, cash equivalents, time deposits and restricted cash | December 31, 2022 2023 RMB RMB RMB denominated bank deposits with financial institutions in the PRC 195,774 220,864 US dollar denominated bank deposits with financial institutions in the PRC 354 360 US dollar denominated bank deposits with financial institutions in Hong Kong Special Administrative Region (“HK SAR”) 574 4,519 HK dollar denominated bank deposits with financial institutions in HK SAR 37 48 RMB denominated bank deposits with a financial institution in HK SAR 797 114 US dollar denominated bank deposits with a financial institution in the U.S. 251 255 USD denominated bank deposits with a financial institution in Canada — 2 CAD denominated bank deposits with financial institutions in HK SAR 2 — CAD denominated bank deposits with a financial institution in Canada 844 1,402 Total 198,633 227,564 |
Schedule of Property, Plant and Equipment, Useful Life | Furniture 5 years Office equipment 3 Leasehold improvements Shorter of the lease term or the estimated useful life of the assets |
Schedule of net revenues | Year Ended December 31, 2021 2022 2023 RMB RMB RMB Tuition fee 1,223,760 1,384,602 1,372,460 Certification service fee 4,184 13,158 3,482 Others 11,594 4,993 2,885 Business taxes and surcharges (3,265) (2,909) (3,635) Total net revenues 1,236,273 1,399,844 1,375,192 Year Ended December 31, 2021 2022 2023 RMB RMB RMB Timing of revenue recognition Services transferred at a point in time 15,736 18,113 6,350 Services transferred over time 1,220,537 1,381,731 1,368,842 Total net revenues 1,236,273 1,399,844 1,375,192 |
DISCONTINUED OPERATION (Tables)
DISCONTINUED OPERATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
DISCONTINUED OPERATION | |
Schedule of balance sheets, condensed cash flows, results of operations and revenue recognition of professional education business | December 31, 2022 2023 RMB RMB Cash and cash equivalents 157,708 59,068 Time deposits 6,277 — Restricted cash 17,730 3,520 Accounts receivable, net of allowance for credit losses-current 68,733 12,472 Amounts due from related parties 606 313 Assets held-for-sale 106,539 — Prepaid expenses and others current assets 72,683 64,250 Time deposits-non current 124 120 Accounts receivable, net of allowance for credit losses-non-current 182 — Property and equipment, net 44,838 34,991 Intangible assets, net 512 148 Right-of-use assets 101,797 49,671 Goodwill 3,366 3,366 Long-term investments — 11,859 Deferred income tax assets 21,495 18,848 Other non-current assets, net 14,472 16,977 Total assets of discontinued operations held for sale 617,062 275,603 Balance sheet classification: Current assets of discontinued operations held for sale 430,276 275,603 Non-current assets of discontinued operations held for sale 186,786 — Total assets of discontinued operations held for sale 617,062 275,603 Short-term bank loans 22,000 20,000 Accounts payable 1,071 116 Amounts due to related parties 87 3,596 Operating lease liabilities-current 49,386 21,872 Income taxes payable 104,153 106,944 Deferred revenue-current 373,733 265,132 Accrued expenses and other current liabilities 186,605 107,127 Deferred revenue-non current 14,051 7,363 Operating lease liabilities-non-current 59,625 25,130 Other non-current liabilities 3,698 3,511 Total liabilities of discontinued operations held for sale 814,409 560,791 Balance sheet classification: Current liabilities of discontinued operations held for sale 737,035 560,791 Non-current liabilities of discontinued operations held for sale 77,374 — Total liabilities of discontinued operations held for sale 814,409 560,791 Year Ended December 31, 2021 2022 2023 RMB RMB RMB Net cash provided by/(used in) operating activities 79,173 (28,574) (140,403) Net cash provided by investing activities 79,651 6,109 106,592 Net cash provided by/(used in) financing activities — 22,000 (2,000) Year Ended December 31, 2021 2022 2023 RMB RMB RMB Net revenues 1,150,247 1,068,230 624,586 Cost of revenues (405,750) (327,627) (226,214) Gross profit 744,497 740,603 398,372 Selling and marketing expenses (440,643) (362,844) (252,192) General and administrative expenses (210,532) (206,588) (149,828) Research and development expenses (65,787) (51,780) (28,434) Operating income (loss) 27,535 119,391 (32,082) Interest(expense) income, net (276) 738 185 Income (loss) from discontinued operation 27,259 120,129 (31,897) Gain on disposal of subsidiary (Note b) — — 26,797 Other income 4,106 3,133 64 Foreign currency exchange loss, net (251) (629) (395) Income/(loss) before income taxes 31,114 122,633 (5,431) Income tax benefit (expense) 2,394 (35,338) (6,549) Net income (loss) from discontinued operation 33,508 87,295 (11,980) December 31, 2021 2022 2023 RMB RMB RMB Timing of revenue recognition Services transferred over time 1,053,853 929,693 576,324 Services transferred at a point in time 96,394 138,537 48,262 Total net revenues 1,150,247 1,068,230 624,586 December 31, 2021 2022 2023 RMB RMB RMB Guarantee service 7,885 12,503 15,630 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | |
Schedule of Prepaid expenses and other current assets | December 31, 2022 2023 RMB RMB Prepaid expenses and other current assets: Prepaid deposits (a) 13,849 16,952 Advance to suppliers 2,956 14,325 Inventories 7,181 9,363 Prepaid rental expenses 3,256 6,750 Prepaid professional fee 3,374 2,436 Prepaid advertising expenses 1,049 2,043 Prepaid value-added tax 2,836 1,594 Others 4,533 4,300 Total prepaid expenses and other current assets 39,034 57,763 Less: allowance for credit losses (378) (378) Prepaid expenses and other current assets, net 38,656 57,385 (a) It mainly included prepaid rental deposits. December 31, 2021 2022 2023 RMB RMB RMB Balance at the beginning of the year — — 378 Additions charged to bad debt expense — 378 — Balance at the end of the year — 378 378 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of Property and Equipment | December 31, 2022 2023 RMB RMB Furniture 19,592 18,277 Office equipment 161,001 164,261 Leasehold improvements 134,782 80,782 Total property and equipment 315,375 263,320 Less: accumulated depreciation (237,379) (197,256) Property and equipment, net 77,996 66,064 |
Schedule of Depreciation Expense | Year Ended December 31, 2021 2022 2023 RMB RMB RMB Cost of revenues 58,097 55,911 38,026 Selling and marketing expenses 4,629 3,390 2,188 General and administrative expenses 8,072 6,456 4,921 Research and development expenses 677 140 2 Total 71,475 65,897 45,137 |
LONG-TERM INVESTMENTS (Tables)
LONG-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LONG-TERM INVESTMENTS | |
Schedule of Long-term investments | December 31, 2022 2023 RMB RMB Equity investments without readily determinable fair values A company providing mechanic training (a) 12,000 11,992 Other equity investments without readily determinable fair values (b) 15,000 15,000 Impairment of equity investments without readily determinable fair values — (4,000) Total equity investments without readily determinable fair values, net 27,000 22,992 Equity method investments Companies providing hockey program management 2,156 2,257 A company providing Internet product solutions (c) 17,551 17,135 Impairment of equity method investments (524) (524) Total equity method investments, net 19,183 18,868 Total long-term investments 46,183 41,860 (a) In October 2015, the Company paid RMB 12,000 in cash to acquire 2.86% of the total equity interest in an education company, which provides training for senior mechanic in vehicle maintenance and repair. In 2023, the Company sold a portion of shares in the education company. No impairment loss was recognized as of December 31, 2021, 2022 and 2023, and for the years then ended. (b) During the years ended December 31, 2018 and 2019, the Company acquired minority equity interests in several third-party companies. The Company recognized impairment loss of nil , nil and RMB 4,000 for the years ended December 31 2021, 2022 and 2023, respectively. The Company written off impairment balance of 13,000 , nil and nil for the years ended December 31 2021, 2022 and 2023, respectively. (c) In January 2018, the Company paid RMB 14,000 in cash to acquire 20% of equity interest of a company which provides IT consulting services and programming and accounted for the investment using equity method. No impairment loss was recognized as of December 31, 2021, 2022 and 2023, and for the years then ended. |
OTHER NON-CURRENT ASSETS (Table
OTHER NON-CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
OTHER NON-CURRENT ASSETS | |
Schedule of Other non-current assets | December 31, 2022 2023 RMB RMB Other non-current assets: Rent and property management deposits 24,445 22,683 Prepayment for equipment and leasehold improvement 2,425 2,831 Others 7,525 3,239 Total other non-current assets 34,395 28,753 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of Accrued Expenses and Other Current Liabilities | December 31, 2022 2023 RMB RMB Recharge card (a) 156,003 228,655 Refund liability 128,940 190,591 Accrued payroll and employee benefits 83,955 72,715 VAT and other tax payables 4,629 10,680 Accrued compensation for minority shareholder litigation 20,894 — Professional service fee 9,454 5,881 Payable for advertisement 5,611 — Others 7,425 8,574 Total 416,911 517,096 (a) Recharge card is the amount that customers paid in advance without designated enrollment contract for IT-focused supplementary STEM education training courses. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
Schedule of of (loss) income before income taxes | The components of (loss) income before income taxes are as follows: Year Ended December 31, 2021 2022 2023 RMB RMB RMB PRC (375,963) 36,389 34,810 Hong Kong (1,751) (669) (2,385) Cayman Islands (13,562) (50,283) (15,410) Canada (1,561) (2,003) (2,653) Total (loss) income before income taxes (392,837) (16,566) 14,362 |
Schedule of Income tax (expense) benefit | Year Ended December 31, 2021 2022 2023 RMB RMB RMB Current income tax expense (663) (3,796) (1,872) Deferred income tax (expense) benefit (115,788) 18,300 9,844 Total (116,451) 14,504 7,972 |
Schedule of income tax rate reconciliation | Year Ended December 31, 2021 2022 2023 PRC statutory income tax rate 25.0 % 25.0 % 25.0 % Increase (decrease) in effective income tax rate resulting from: Impact of different tax rates in other jurisdictions (0.9) % (76.2) % 28.2 % Research and development bonus deduction 0.7 % (12.9) % (10.8) % Non-deductible shared expenses from discontinued operations — % — % 114.9 % Non-deductible expenses — % (1.9) % 1.6 % Tax impact of investment loss — % 90.6 % — % Preferential tax rates (14.4) % 21.0 % 17.3 % Tax effect of expired tax attribute carryforwards — % — % 15.6 % Change of tax rates (5.2) % (1.5) % (0.2) % Change in valuation allowance (34.8) % 43.5 % (246.9) % Actual income tax expense (29.6) % 87.6 % (55.3) % |
Schedule of Deferred income tax assets | December 31, 2022 2023 RMB RMB Deferred income tax assets: Tax loss carry forwards 176,296 163,331 Others 1,148 520 Total deferred income tax assets 177,444 163,851 Valuation allowance (158,812) (135,375) Deferred income tax assets, net 18,632 28,476 Deferred income tax liabilities: Valuation appreciation of intangible assets 750 433 Deferred income tax liabilities* 750 433 * Deferred income tax liabilities are combined in other non-current liabilities. |
Summary of valuation allowance | The movements of the valuation allowance are as follows: Year Ended December 31, 2021 2022 2023 RMB RMB RMB Balance at the beginning of the year 4,551 140,621 158,812 Additions of valuation allowance 136,490 14,068 3,250 Reduction of valuation allowance 107 (10,000) (6,384) Reversal of valuation allowance — (11,280) (32,342) Change of tax rates (527) 25,445 13,027 Change of decrease related to subsidiary disposals and expiration — (42) (988) Balance at the end of the year 140,621 158,812 135,375 |
SHARE BASED COMPENSATION (Table
SHARE BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SHARE BASED COMPENSATION | |
Summary of share options activity | Weighted Weighted Average Number of Average Remaining Aggregate Share Exercise Price Contractual Intrinsic Options US$ Years Value US$ Outstanding at December 31, 2022 3,356,635 0.10 6.89 2,994 Granted 200,000 0.01 — — Exercised (499,145) 0.01 — — Forfeited (762,605) 0.20 — — Outstanding at December 31, 2023 2,294,885 0.07 5.16 448 Vested and expected to vest as of December 31, 2023 4,665,092 0.30 4.30 919 Exercisable as of December 31, 2023 2,275,775 0.37 5.15 444 |
Summary of fair value assumptions | Year Ended December 31, 2021 2022 2023 Expected volatility 73.76%-75.78% 75.77%-77.77% 77.77% Expected dividends yield 0% 0% 0% Exercise multiple 2.2-2.8 2.2-2.8 2.8 Risk-free interest rate per annum 1.09%-1.66% 1.66%-4.10% 4.10% The fair value of underlying ordinary shares (per share) US$0.20-US$2.92 US$0.36-US$1.13 US$0.92 |
Summary of fair values of the options granted | Year Ended December 31, 2021 2022 2023 US$ US$ US$ Weighted average grant date fair value of option per share 0.82 0.92 0.92 Aggregate grant date fair value of options 720 1,079 184 |
Summary of the non-vested shares activity | Number of Non- Weighted Average vested Shares Grant Date Fair Value US$ Outstanding as of December 31, 2022 144,920 4.38 Granted 115,050 0.66 Vested (185,340) 2.22 Forfeited (9,485) 9.50 Outstanding as of December 31, 2023 65,145 2.28 |
(LOSS) EARNINGS PER SHARE (Tabl
(LOSS) EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
(LOSS) EARNINGS PER SHARE | |
Basic and diluted (loss) earning per share | Year Ended December 31, 2021 2022 2023 RMB RMB RMB Numerator: Net income (loss) from discontinued operation 33,508 87,295 (11,980) Denominator: Denominator for basic earnings per share: Weighted average number of Class A and Class B ordinary shares outstanding —basic 56,260,925 54,657,222 53,873,945 Dilutive effect of outstanding share options 1,369,440 3,073,450 1,460,629 Denominator for diluted (loss) earnings per share —diluted 57,630,365 57,730,672 55,334,574 Basic earnings(loss) from discontinued operation per ADS 2.98 7.99 (1.11) Diluted earnings(loss) from discontinued operation per ADS 2.91 7.56 (1.11) Numerator: Net (loss) income from continuing operations (509,288) (2,062) 22,334 Denominator: Denominator for basic earnings per share: Weighted average number of Class A and Class B ordinary shares outstanding —basic 56,260,925 54,657,222 53,873,945 Dilutive effect of outstanding share options 1,369,440 3,073,450 1,460,629 Denominator for diluted (loss) earnings per share —diluted 57,630,365 57,730,672 55,334,574 Basic (loss) earnings from continuing operations per ADS (45.15) (0.35) 1.94 Diluted (loss) earnings from continuing operations per ADS (45.15) (0.35) 1.89 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LEASES | |
Schedule of components of rental expense | The components of rental expense from continuing operations for the years ended December 31, 2021, 2022 and 2023 consist as follows: Year Ended December 31, 2021 2022 2023 RMB RMB RMB Short-term rental expense 14,116 7,411 9,961 Operating lease expense excluding short-term rental expense 169,613 148,867 133,106 |
Schedule of other information related to operating leases | Year Ended December 31, 2021 2022 2023 RMB RMB RMB Cash paid for amounts included in the measurement of lease liabilities: 119,932 123,263 143,602 Right-of-use assets obtained in exchange for new lease liabilities: 144,601 80,403 132,001 |
Schedule of maturities of lease liabilities | RMB Year ending December 31, 2024 113,686 2025 66,914 2026 37,027 2027 11,620 2028 and thereafter 6,326 Total lease payments 235,573 Less: imputed interest 15,929 Total 219,644 Less: current portion 111,840 Non-current portion 107,804 |
PARENT ONLY FINANCIAL INFORMA_2
PARENT ONLY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PARENT ONLY FINANCIAL INFORMATION | |
Schedule of Condensed Balance Sheets | December 31, 2022 2023 2023 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 1,844 5,251 740 Prepaid expenses and other current assets 550 226 32 Due from subsidiaries 437,987 380,470 53,588 Total current assets 440,381 385,947 54,360 Investment in subsidiaries (1,574,974) (1,560,377) (219,775) Total assets (1,134,593) (1,174,430) (165,415) LIABILITIES AND SHAREHOLDERS’ DEFICIT Current liabilities: Accrued expenses and other current liabilities (1) 30,392 4,155 585 Due to subsidiaries 334,909 319,198 44,959 Total current liabilities 365,301 323,353 45,544 Total liabilities 365,301 323,353 45,544 Commitments and contingencies — — — Shareholders’ deficit: Class A ordinary shares (US$0.001 par value, 860,000,000 shares authorized, 57,176,842 and 57,861,327 shares issued, 46,567,892 and 46,756,137 shares outstanding as of December 31, 2022 and 2023, respectively) 359 364 51 Class B ordinary shares (US$0.001 par value, 40,000,000 shares authorized, 7,206,059 shares issued and outstanding as of December 31, 2022 and 2023, respectively) 74 74 10 Treasury shares (10,608,950 and 11,105,190 Class A ordinary shares as of December 31, 2022 and 2023, at cost) (476,918) (479,346) (67,514) Additional paid-in capital 1,363,845 1,360,901 191,679 Accumulated other comprehensive income 49,664 48,216 6,791 Accumulated deficit (2,436,918) (2,427,992) (341,976) Total shareholders’ deficit (1,499,894) (1,497,783) (210,959) Total liabilities and shareholders’ deficit (1,134,593) (1,174,430) (165,415) (1) Mainly related to repurchase of treasury shares. |
Schedule of Condensed Statements of Comprehensive Profit/(Loss) | Year Ended December 31, 2021 2022 2023 2023 RMB RMB RMB US$ Selling and marketing expenses (323) (8) — — General and administrative expenses 5,955 (34,558) (11,625) (1,637) Operating income (loss) 5,632 (34,566) (11,625) (1,637) Equity in (loss) income of subsidiaries (480,114) 117,266 20,415 2,875 Foreign currency exchange (loss) gains (268) 2,480 106 15 Interest income (expense) 203 (1,660) 30 5 (Loss) income before income taxes (474,547) 83,520 8,926 1,258 Income tax expense — — — — Net (loss) income (474,547) 83,520 8,926 1,258 Other comprehensive (loss) income Foreign currency translation adjustment (421) 965 (1,448) (204) Comprehensive (loss) income (474,968) 84,485 7,478 1,054 |
Schedule of Condensed Statements of Cash Flows | Year Ended December 31, 2021 2022 2023 2023 RMB RMB RMB US$ Operating activities: Net cash provided by (used in) operating activities 14,458 (5,699) 4,902 690 Financing activities: Issuance of Class A ordinary shares in connection with exercise of share options 3,947 107 227 32 Repurchase of treasury shares — (17,103) (2,428) (342) Net cash provided by (used in) financing activities 3,947 (16,996) (2,201) (310) Changes in cash and cash equivalents 18,405 (22,695) 2,701 380 Effect of foreign currency exchange rate changes on cash and cash equivalents 1,308 1,033 706 100 Net increase (decrease) in cash and cash equivalents 19,713 (21,662) 3,407 480 Cash and cash equivalents at beginning of year 3,793 23,506 1,844 260 Cash and cash equivalents at end of year 23,506 1,844 5,251 740 |
DESCRIPTION OF BUSINESS, ORGA_3
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (Organization) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 24, 2023 CNY (¥) | |
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | ||||
Cash and cash equivalents | ¥ 220,689 | ¥ 198,529 | $ 31,083 | |
Prepaid expenses and other current assets | 57,385 | 38,656 | 8,083 | |
Current assets of discontinued operations held for sale | 275,603 | 430,276 | 38,818 | |
Total current assets | 560,596 | 667,553 | 78,958 | |
Property and equipment, net | 66,064 | 77,996 | 9,305 | |
Right-of-use assets | 237,059 | 248,704 | 33,389 | |
Other non-current assets | 28,753 | 34,395 | 4,050 | |
Non-current assets of discontinued operations held for sale | 186,786 | |||
Total assets | 1,018,243 | 1,337,500 | 143,417 | |
Accounts payable | 4,988 | 5,259 | 704 | |
Deferred revenue- current | 1,210,536 | 1,314,877 | 170,500 | |
Operating lease liabilities-current | 111,840 | 148,583 | 15,752 | |
Income taxes payable | 6,105 | 4,281 | 860 | |
Accrued expenses and other current liabilities | 517,096 | 416,911 | 72,831 | |
Current liabilities of discontinued operations held for sale | 560,791 | 737,035 | 78,986 | |
Total current liabilities | 2,411,356 | 2,656,946 | 339,633 | |
Operating lease liabilities-non current | 107,804 | 109,111 | 15,184 | |
Non-current liabilities of discontinued operations held for sale | 77,374 | |||
Total liabilities | ¥ 2,519,593 | ¥ 2,844,181 | $ 354,878 | |
Equity method investments, percentage of equity acquired through options | 100% | |||
Mr. Han | Tarena Entities | ||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | ||||
Equity method investments, percentage of equity acquired through options | 62.70% | 69% | ||
Equity investment percentage | 62.70% | 62.70% | ||
Mr. Han | Tongcheng Jinqiao | ||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | ||||
Equity method investments, percentage of equity acquired through options | 70% | |||
Mr. Li | Tarena Entities | ||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | ||||
Equity investment percentage | 0.40% | 0.40% | ||
IT Professional Education | Divestiture | ||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | ||||
Current assets of discontinued operations held for sale | ¥ 275,603 | ¥ 430,276 | ||
Non-current assets of discontinued operations held for sale | 186,786 | |||
Current liabilities of discontinued operations held for sale | ¥ 560,791 | 737,035 | ||
Non-current liabilities of discontinued operations held for sale | 77,374 | |||
IT Professional Education | Divestiture | Tarena Technologies Inc. | Related Party | ||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | ||||
Disposal group Consideration | ¥ 1 | |||
IT Professional Education | Divestiture | Tarena Hangzhou | Related Party | ||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | ||||
Disposal group Consideration | ¥ 1 | |||
Loan Agreements | ||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | ||||
Debt expiration year | 2026 | |||
Loan Agreements | Tongcheng Jinqiao | ||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | ||||
Debt amount | ¥ 5,000 | |||
Loan Agreements | Equity Holders | Tarena Entities | ||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | ||||
Debt amount | 6,000 | |||
Parent Company | ||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | ||||
Prepaid expenses and other current assets | 226 | 550 | $ 32 | |
Total current assets | 385,947 | 440,381 | 54,360 | |
Total assets | (1,174,430) | (1,134,593) | (165,415) | |
Accrued expenses and other current liabilities | 4,155 | 30,392 | 585 | |
Total current liabilities | 323,353 | 365,301 | 45,544 | |
Total liabilities | 323,353 | 365,301 | $ 45,544 | |
Parent Company | Tarena Entities | ||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | ||||
Cash and cash equivalents | 16,031 | |||
Amounts due from TCTM and its wholly-owned subsidiaries | 120,746 | |||
Prepaid expenses and other current assets | 1,191 | |||
Current assets of discontinued operations held for sale | 9,127 | |||
Total current assets | 147,095 | |||
Property and equipment, net | 1,977 | |||
Long term investments | 27,000 | |||
Right-of-use assets | 8,405 | |||
Other non-current assets | 322 | |||
Non-current assets of discontinued operations held for sale | 1,690 | |||
Total assets | 186,489 | |||
Accounts payable | 42 | |||
Deferred revenue- current | 70,284 | |||
Operating lease liabilities-current | 4,124 | |||
Income taxes payable | 12 | |||
Accrued expenses and other current liabilities | 59,729 | |||
Amounts due to TCTM and its wholly-owned subsidiaries | 7,631 | |||
Current liabilities of discontinued operations held for sale | 72,267 | |||
Total current liabilities | 214,089 | |||
Operating lease liabilities-non current | 4,176 | |||
Non-current liabilities of discontinued operations held for sale | 257 | |||
Total liabilities | ¥ 218,522 | |||
VIE and VIE Subsidiaries Consolidated | Tarena Entities | ||||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | ||||
Cash and cash equivalents | 2,520 | |||
Amounts due from TCTM and its wholly-owned subsidiaries | 104,642 | |||
Prepaid expenses and other current assets | 62,550 | |||
Current assets of discontinued operations held for sale | 36,779 | |||
Total current assets | 206,491 | |||
Property and equipment, net | 2,052 | |||
Long term investments | 34,852 | |||
Right-of-use assets | 9,209 | |||
Other non-current assets | 258 | |||
Total assets | 252,862 | |||
Accounts payable | 2,713 | |||
Deferred revenue- current | 114,975 | |||
Operating lease liabilities-current | 4,440 | |||
Income taxes payable | 79 | |||
Accrued expenses and other current liabilities | 30,762 | |||
Amounts due to TCTM and its wholly-owned subsidiaries | 23,676 | |||
Current liabilities of discontinued operations held for sale | 100,392 | |||
Total current liabilities | 277,037 | |||
Operating lease liabilities-non current | 4,252 | |||
Total liabilities | ¥ 281,289 |
DESCRIPTION OF BUSINESS, ORGA_4
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (VIE and Non-VIE Financial Information) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Variable Interest Entity [Line Items] | ||||
Net revenues | ¥ 1,375,192 | $ 193,692 | ¥ 1,399,844 | ¥ 1,236,273 |
Net (loss)/income from continuing operations | 22,334 | 3,146 | (2,062) | (509,288) |
Net (loss) income from discontinued operation | 11,980 | 1,687 | (87,295) | (33,508) |
Net (loss) income | 10,354 | 1,459 | 85,233 | (475,780) |
Net cash provided by operating activities | 21,468 | 3,025 | 1,046 | (70,563) |
Net cash used in investing activities | (34,544) | (4,866) | (28,818) | (45,958) |
Net cash provided by (used in) financing activities | (33,781) | $ (4,758) | (24,105) | 23,237 |
VIE and VIE Subsidiaries Consolidated | ||||
Variable Interest Entity [Line Items] | ||||
Net revenues | 90,661 | 40,755 | 16,673 | |
Net (loss)/income from continuing operations | (7,241) | 8,554 | (21,541) | |
Net (loss) income from discontinued operation | (10,847) | 7,299 | 17,531 | |
Net (loss) income | 3,606 | 1,255 | (39,072) | |
Net cash provided by operating activities | (17,817) | 7,722 | 10,308 | |
Net cash used in investing activities | 19,975 | |||
Net cash provided by (used in) financing activities | ¥ 7,192 | ¥ (5,762) | ¥ 3,437 |
DESCRIPTION OF BUSINESS, ORGA_5
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS (Significant Concentrations and Risks) (Details) - Net revenues | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product concentration | K-12 Robotics Programming | |||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||
Concentration percentage | 46.40% | 49.20% | 30.30% |
Product concentration | K-12 Programming | |||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||
Concentration percentage | 24.10% | 34.20% | 39.80% |
Product concentration | Major Products | |||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||
Concentration percentage | 70.50% | 83.40% | 70.10% |
Geographic concentration | Beijing | |||
DESCRIPTION OF BUSINESS, ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT CONCENTRATIONS AND RISKS | |||
Concentration percentage | 17.50% | 10.60% | 11.20% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2023 CNY (¥) segment | Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Deferred revenue liability | ¥ 902,011 | ¥ 989,572 | |||
Restricted cash | ¥ 10,095 | 17,730 | 255 | $ 1,422 | |
Cash, cash equivalents, time deposits and restricted time deposits | 227,564 | 198,633 | |||
Impairment of long-lived assets | 0 | ||||
Goodwill Impairment | 0 | ||||
Deferred revenue | 1,210,536 | 1,314,877 | |||
Advertising costs | 43,480 | 42,015 | 77,948 | ||
Net revenues | 1,375,192 | $ 193,692 | 1,399,844 | 1,236,273 | |
Contributions to employee benefits | 119,548 | 133,013 | 133,012 | ||
Research and development expenses | ¥ 11,654 | $ 1,641 | 20,248 | 40,311 | |
Number of operating segments | segment | 2 | 2 | |||
Grant | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Net revenues | ¥ 724 | 5,303 | ¥ 1,293 | ||
PRC | RMB Denominated Bank Deposits | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Cash, cash equivalents, time deposits and restricted time deposits | 220,864 | 195,774 | |||
PRC | US Dollar Denominated Bank Deposits | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Cash, cash equivalents, time deposits and restricted time deposits | 360 | 354 | |||
Hong Kong | RMB Denominated Bank Deposits | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Cash, cash equivalents, time deposits and restricted time deposits | 114 | 797 | |||
Hong Kong | US Dollar Denominated Bank Deposits | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Cash, cash equivalents, time deposits and restricted time deposits | 4,519 | 574 | |||
Hong Kong | HK Dollar Denominated Bank Deposits | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Cash, cash equivalents, time deposits and restricted time deposits | 48 | 37 | |||
US | US Dollar Denominated Bank Deposits | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Cash, cash equivalents, time deposits and restricted time deposits | 255 | 251 | |||
Taiwan | TWD Denominated Bank Deposit | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Cash, cash equivalents, time deposits and restricted time deposits | 2 | ||||
Canada | US Dollar Denominated Bank Deposits | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Cash, cash equivalents, time deposits and restricted time deposits | 2 | ||||
Canada | CAD denominated bank deposits with financial institutions in HK SAR | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Cash, cash equivalents, time deposits and restricted time deposits | ¥ 1,402 | ¥ 844 | |||
Furniture | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Useful life | 5 years | 5 years | |||
Minimum | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Business and Value Added Taxes | 1% | 1% | |||
Contributions to employee benefits, percentage of salary | 16.30% | 16.30% | |||
Minimum | Office equipment | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Useful life | 3 years | 3 years | |||
Maximum | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Business and Value Added Taxes | 13% | 13% | |||
Contributions to employee benefits, percentage of salary | 26.50% | 26.50% | |||
Maximum | Office equipment | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Useful life | 5 years | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Revenue Recognition) (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Business taxes and surcharges | ¥ (3,635) | ¥ (2,909) | ¥ (3,265) |
Total net revenues | 1,375,192 | 1,399,844 | 1,236,273 |
Services transferred at a point in time | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Total net revenues | 6,350 | 18,113 | 15,736 |
Services transferred over time | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Total net revenues | 1,368,842 | 1,381,731 | 1,220,537 |
Tuition fee | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Net revenues | 1,372,460 | 1,384,602 | 1,223,760 |
Certification service fee | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Net revenues | 3,482 | 13,158 | 4,184 |
Others | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Net revenues | ¥ 2,885 | ¥ 4,993 | ¥ 11,594 |
DISCONTINUED OPERATION - Conden
DISCONTINUED OPERATION - Condensed Balance Sheet of professional education business (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
DISCONTINUED OPERATION | |||
Current assets of discontinued operations held for sale | ¥ 275,603 | $ 38,818 | ¥ 430,276 |
Non-current assets of discontinued operations held for sale | 186,786 | ||
Current liabilities of discontinued operations held for sale | 560,791 | $ 78,986 | 737,035 |
Non-current liabilities of discontinued operations held for sale | 77,374 | ||
IT Professional Education | Divestiture | |||
DISCONTINUED OPERATION | |||
Cash and cash equivalents | 59,068 | 157,708 | |
Time deposits | 6,277 | ||
Restricted cash | 3,520 | 17,730 | |
Accounts receivable, net of allowance for credit losses-current | 12,472 | 68,733 | |
Amounts due from related parties | 313 | 606 | |
Assets held-for-sale | 106,539 | ||
Prepaid expenses and others current assets | 64,250 | 72,683 | |
Time deposits-non current | 120 | 124 | |
Accounts receivable, net of allowance for credit losses-non-current | 182 | ||
Property and equipment, net | 34,991 | 44,838 | |
Intangible assets, net | 148 | 512 | |
Right-of-use assets | 49,671 | 101,797 | |
Goodwill | 3,366 | 3,366 | |
Long-term investments | 11,859 | ||
Deferred income tax assets | 18,848 | 21,495 | |
Other non-current assets, net | 16,977 | 14,472 | |
Total assets of discontinued operations held for sale | 275,603 | 617,062 | |
Current assets of discontinued operations held for sale | 275,603 | 430,276 | |
Non-current assets of discontinued operations held for sale | 186,786 | ||
Short-term bank loans | 20,000 | 22,000 | |
Accounts payable | 116 | 1,071 | |
Amounts due to related parties | 3,596 | 87 | |
Operating lease liabilities-current | 21,872 | 49,386 | |
Income taxes payable | 106,944 | 104,153 | |
Deferred revenue-current | 265,132 | 373,733 | |
Accrued expenses and other current liabilities | 107,127 | 186,605 | |
Deferred revenue-non current | 7,363 | 14,051 | |
Operating lease liabilities-non current | 25,130 | 59,625 | |
Other non-current liabilities | 3,511 | 3,698 | |
Total liabilities of discontinued operations held for sale | 560,791 | 814,409 | |
Current liabilities of discontinued operations held for sale | ¥ 560,791 | 737,035 | |
Non-current liabilities of discontinued operations held for sale | ¥ 77,374 |
DISCONTINUED OPERATION - Cond_2
DISCONTINUED OPERATION - Condensed cash flows of professional education business (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
DISCONTINUED OPERATION | ||||
Net cash provided by/ (used in) operating activities from discontinued operation | ¥ (140,403) | $ (19,775) | ¥ (28,574) | ¥ 79,173 |
Net cash provided by investing activities from discontinued operation | 106,592 | 15,013 | 6,109 | 79,651 |
Net cash provided by/ (used in) financing activities from discontinued operation | (2,000) | $ (283) | 22,000 | |
IT Professional Education | Divestiture | ||||
DISCONTINUED OPERATION | ||||
Net cash provided by/ (used in) operating activities from discontinued operation | (140,403) | (28,574) | 79,173 | |
Net cash provided by investing activities from discontinued operation | 106,592 | 6,109 | ¥ 79,651 | |
Net cash provided by/ (used in) financing activities from discontinued operation | ¥ (2,000) | ¥ 22,000 |
DISCONTINUED OPERATION - Result
DISCONTINUED OPERATION - Results of operations of professional education business (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
DISCONTINUED OPERATION | ||||
Income/(loss) before income taxes | ¥ (5,431) | $ (765) | ¥ 122,633 | ¥ 31,114 |
Income tax benefit (expense) | (6,549) | (922) | (35,338) | 2,394 |
Net income (loss) from discontinued operation | (11,980) | $ (1,687) | 87,295 | 33,508 |
IT Professional Education | Divestiture | ||||
DISCONTINUED OPERATION | ||||
Net revenues | 624,586 | 1,068,230 | 1,150,247 | |
Cost of revenues | (226,214) | (327,627) | (405,750) | |
Gross profit | 398,372 | 740,603 | 744,497 | |
Selling and marketing expenses | (252,192) | (362,844) | (440,643) | |
General and administrative expenses | (149,828) | (206,588) | (210,532) | |
Research and development expenses | (28,434) | (51,780) | (65,787) | |
Operating income (loss) | (32,082) | 119,391 | 27,535 | |
Interest (expense) income, net | 185 | 738 | (276) | |
Income (loss) from discontinued operation | (31,897) | 120,129 | 27,259 | |
Gain on disposal of subsidiary (Note b) | 26,797 | |||
Other income | 64 | 3,133 | 4,106 | |
Foreign currency exchange loss, net | (395) | (629) | (251) | |
Income/(loss) before income taxes | (5,431) | 122,633 | 31,114 | |
Income tax benefit (expense) | (6,549) | (35,338) | 2,394 | |
Net income (loss) from discontinued operation | ¥ (11,980) | ¥ 87,295 | ¥ 33,508 |
DISCONTINUED OPERATION - Revenu
DISCONTINUED OPERATION - Revenue Recognition (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Minimum | |||
DISCONTINUED OPERATION | |||
Net of value added tax | 1% | ||
Maximum | |||
DISCONTINUED OPERATION | |||
Net of value added tax | 13% | ||
IT Professional Education | Divestiture | |||
DISCONTINUED OPERATION | |||
Net revenues | ¥ 624,586 | ¥ 1,068,230 | ¥ 1,150,247 |
IT Professional Education | Divestiture | Guarantee Service | |||
DISCONTINUED OPERATION | |||
Net revenues | 15,630 | 12,503 | 7,885 |
IT Professional Education | Divestiture | Services transferred over time | |||
DISCONTINUED OPERATION | |||
Net revenues | 576,324 | 929,693 | 1,053,853 |
IT Professional Education | Divestiture | Services transferred at a point in time | |||
DISCONTINUED OPERATION | |||
Net revenues | ¥ 48,262 | ¥ 138,537 | ¥ 96,394 |
DISCONTINUED OPERATION - Dispos
DISCONTINUED OPERATION - Disposal of subsidiary (Details) - CNY (¥) ¥ in Thousands | May 31, 2023 | Apr. 28, 2023 |
Gaohui group | ||
DISCONTINUED OPERATION | ||
Equity investment percentage | 20% | |
Gain on disposal of subsidiary | ¥ 26,797 | |
Gaohui group | Disposal of subsidiary | Beijing Weike | ||
DISCONTINUED OPERATION | ||
Disposal group Consideration | ¥ 43,750 | |
Gaohui group | Disposal of subsidiary | Beijing Weike | Beijing Tarena | ||
DISCONTINUED OPERATION | ||
Equity Interest acquired | 70% | |
Gaohui group | Disposal of subsidiary | Mr. Shaoyun Han | ||
DISCONTINUED OPERATION | ||
Disposal group Consideration | ¥ 6,250 | |
Gaohui group | Disposal of subsidiary | Mr. Shaoyun Han | Beijing Tarena | ||
DISCONTINUED OPERATION | ||
Equity Interest acquired | 10% |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET - (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | |||
Prepaid deposits | ¥ 16,952 | ¥ 13,849 | |
Advance to suppliers | 14,325 | 2,956 | |
Inventories | 9,363 | 7,181 | |
Prepaid rental expenses | 6,750 | 3,256 | |
Prepaid professional fee | 2,436 | 3,374 | |
Prepaid advertising expenses | 2,043 | 1,049 | |
Prepaid value-added tax | 1,594 | 2,836 | |
Others | 4,300 | 4,533 | |
Total prepaid expenses and other current assets | 57,763 | 39,034 | |
Less: allowance for credit losses | (378) | (378) | |
Prepaid expenses and other current assets, net | ¥ 57,385 | $ 8,083 | ¥ 38,656 |
PREPAID EXPENSES AND OTHER CU_4
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET - Allowance for credit losses (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | ||
Balance at the beginning of the year | ¥ 378 | |
Additions charged to bad debt expense | 0 | ¥ 378 |
Balance at the end of the year | ¥ 378 | ¥ 378 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | ¥ 263,320 | ¥ 315,375 | |
Less: accumulated depreciation | (197,256) | (237,379) | |
Property and equipment, net | 66,064 | $ 9,305 | 77,996 |
Furniture | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 18,277 | 19,592 | |
Office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 164,261 | 161,001 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | ¥ 80,782 | ¥ 134,782 |
PROPERTY AND EQUIPMENT, NET -_2
PROPERTY AND EQUIPMENT, NET - Schedule of Depreciation Expense (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation, Total | ¥ 45,137 | ¥ 65,897 | ¥ 71,475 |
Cost of Sales | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation, Total | 38,026 | 55,911 | 58,097 |
Selling and marketing expenses | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation, Total | 2,188 | 3,390 | 4,629 |
General and administrative expenses | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation, Total | 4,921 | 6,456 | 8,072 |
Research and development expenses | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation, Total | ¥ 2 | ¥ 140 | ¥ 677 |
LONG-TERM INVESTMENTS (Details)
LONG-TERM INVESTMENTS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Equity investments without readily determinable fair values | |||||
Impairment of equity investments without readily determinable fair values | ¥ 4,000 | ||||
Total equity investments without readily determinable fair values, net | 22,992 | ¥ 27,000 | |||
Equity method investments | |||||
Impairment of equity method investments | (524) | (524) | |||
Total equity method investments, net | 18,868 | 19,183 | |||
Total long-term investments | 41,860 | $ 5,896 | 46,183 | ||
A company providing mechanic training | |||||
Equity investments without readily determinable fair values | |||||
Equity investments without readily determinable fair values | [1] | 11,992 | 12,000 | ||
Other equity investments without readily determinable fair values | |||||
Equity investments without readily determinable fair values | |||||
Equity investments without readily determinable fair values | [2] | 15,000 | 15,000 | ||
Impairment of equity investments without readily determinable fair values | 0 | 0 | ¥ 13,000 | ||
Companies providing hockey program management | |||||
Equity method investments | |||||
Total equity method investments, net | [3] | 2,257 | 2,156 | ||
A company providing Internet product solutions | |||||
Equity investments without readily determinable fair values | |||||
Impairment of equity investments without readily determinable fair values | 0 | 0 | ¥ 0 | ||
Equity method investments | |||||
Total equity method investments, net | ¥ 17,135 | ¥ 17,551 | |||
[1] In October 2015, the Company paid RMB 12,000 in cash to acquire 2.86% of the total equity interest in an education company, which provides training for senior mechanic in vehicle maintenance and repair. In 2023, the Company sold a portion of shares in the education company. No impairment loss was recognized as of December 31, 2021, 2022 and 2023, and for the years then ended. During the years ended December 31, 2018 and 2019, the Company acquired minority equity interests in several third-party companies. The Company recognized impairment loss of nil , nil and RMB 4,000 for the years ended December 31 2021, 2022 and 2023, respectively. The Company written off impairment balance of 13,000 , nil and nil for the years ended December 31 2021, 2022 and 2023, respectively. In January 2018, the Company paid RMB 14,000 in cash to acquire 20% of equity interest of a company which provides IT consulting services and programming and accounted for the investment using equity method. No impairment loss was recognized as of December 31, 2021, 2022 and 2023, and for the years then ended. |
LONG-TERM INVESTMENTS - Additio
LONG-TERM INVESTMENTS - Additional information (Details) - CNY (¥) ¥ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2018 | Oct. 31, 2015 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Investments and Cost Method Investments [Line Items] | |||||
Impairment of equity investments without readily determinable fair values | ¥ 4,000 | ||||
Impairment of long-term investments | (524) | ¥ (524) | |||
A company providing mechanic training | |||||
Schedule of Investments and Cost Method Investments [Line Items] | |||||
Payment to acquire cost method investment | ¥ 12,000 | ||||
Equity investment , cost method percentage | 2.86% | ||||
Impairment of equity investments without readily determinable fair values | 0 | 0 | ¥ 0 | ||
Other equity investments without readily determinable fair values | |||||
Schedule of Investments and Cost Method Investments [Line Items] | |||||
Impairment of equity investments without readily determinable fair values | 4,000 | 0 | 0 | ||
Impairment of equity investments without readily determinable fair values | 0 | 0 | 13,000 | ||
A company providing Internet product solutions | |||||
Schedule of Investments and Cost Method Investments [Line Items] | |||||
Equity investment percentage | 20% | ||||
Impairment of equity investments without readily determinable fair values | ¥ 0 | ¥ 0 | ¥ 0 | ||
Payment to acquire investment | ¥ 14,000 |
OTHER NON-CURRENT ASSETS (Detai
OTHER NON-CURRENT ASSETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
Other non-current assets: | |||
Rent and property management deposits | ¥ 22,683 | ¥ 24,445 | |
Prepayment for equipment and leasehold improvement | 2,831 | 2,425 | |
Others | 3,239 | 7,525 | |
Total other non-current assets | ¥ 28,753 | $ 4,050 | ¥ 34,395 |
SHORT-TERM BANK LOANS (Details)
SHORT-TERM BANK LOANS (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 12, 2022 | |
SHORT-TERM BANK LOANS | ||||
Proceeds from bank loan | ¥ 30,000 | ¥ 30,000 | ||
Interest rate for the loan | 5.30% | 4.90% | ||
Debt term | 12 months | |||
Interest expense | ¥ 929 | ¥ 2,812 | ¥ 117 | |
Line Of Credit Contract With China Merchants Bank Member | ||||
SHORT-TERM BANK LOANS | ||||
Borrowing capacity | ¥ 30,000 | ¥ 30,000 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||
Recharge card | ¥ 228,655 | ¥ 156,003 | |
Refund liability | 190,591 | 128,940 | |
Accrued payroll and employee benefits | 72,715 | 83,955 | |
VAT and other tax payables | 10,680 | 4,629 | |
Accrued compensation for minority shareholder litigation | 20,894 | ||
Professional service fee | 5,881 | 9,454 | |
Payable for advertisement | 5,611 | ||
Others | 8,574 | 7,425 | |
Total | ¥ 517,096 | $ 72,831 | ¥ 416,911 |
INCOME TAXES - Schedule of (los
INCOME TAXES - Schedule of (loss) income before income taxes (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
INCOME TAXES | ||||
Total (loss) income before income taxes | ¥ 14,362 | $ 2,023 | ¥ (16,566) | ¥ (392,837) |
PRC | ||||
INCOME TAXES | ||||
Total (loss) income before income taxes | 34,810 | 36,389 | (375,963) | |
Hong Kong | ||||
INCOME TAXES | ||||
Total (loss) income before income taxes | (2,385) | (669) | (1,751) | |
Cayman Islands | ||||
INCOME TAXES | ||||
Total (loss) income before income taxes | (15,410) | (50,283) | (13,562) | |
Canada | ||||
INCOME TAXES | ||||
Total (loss) income before income taxes | ¥ (2,653) | ¥ (2,003) | ¥ (1,561) |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Tax Expense benefit (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
INCOME TAXES | ||||
Current income tax expense | ¥ (1,872) | ¥ (3,796) | ¥ (663) | |
Deferred income tax (expense) benefit | 9,844 | $ 1,386 | 18,300 | (115,788) |
Total | ¥ 7,972 | $ 1,123 | ¥ 14,504 | ¥ (116,451) |
INCOME TAXES - Schedule of In_2
INCOME TAXES - Schedule of Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | |||
PRC statutory income tax rate | 25% | 25% | 25% |
Impact of different tax rates in other jurisdictions | 28.20% | (76.20%) | (0.90%) |
Research and development bonus deduction | (10.80%) | (12.90%) | 0.70% |
Non-deductible shared expenses from discontinued operations | 114.90% | ||
Non-deductible selling, general and administrative expenses | |||
Non-deductible expenses | 1.60% | (1.90%) | |
Tax impact of investment loss | 90.60% | ||
Preferential tax rates | 17.30% | 21% | (14.40%) |
Tax effect of expired tax attribute carryforwards | 15.60% | ||
Change of tax rates | (0.20%) | (1.50%) | (5.20%) |
Change in valuation allowance | (246.90%) | 43.50% | (34.80%) |
Actual income tax expense | (55.30%) | 87.60% | (29.60%) |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Income Tax Assets And Liabilities (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred income tax assets: | ||||
Tax loss carry forwards | ¥ 163,331 | ¥ 176,296 | ||
Others | 520 | 1,148 | ||
Total deferred income tax assets | 163,851 | 177,444 | ||
Valuation allowance | (135,375) | (158,812) | ¥ (140,621) | ¥ (4,551) |
Deferred income tax assets, net | 28,476 | 18,632 | ||
Deferred income tax liabilities: | ||||
Valuation appreciation of intangible assets | 433 | 750 | ||
Deferred income tax liabilities | ¥ 433 | ¥ 750 |
INCOME TAXES - Summary of Valua
INCOME TAXES - Summary of Valuation Allowance (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | |||
Balance at the beginning of the year | ¥ 158,812 | ¥ 140,621 | ¥ 4,551 |
Additions of valuation allowance | 3,250 | 14,068 | 136,490 |
Reduction of valuation allowance | (6,384) | (10,000) | 107 |
Reversal of valuation allowance | (32,342) | (11,280) | |
Change of tax rates | 13,027 | 25,445 | (527) |
Change of decrease related to subsidiary disposals and expiration | (988) | (42) | |
Balance at the end of the year | ¥ 135,375 | ¥ 158,812 | ¥ 140,621 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) ¥ in Thousands | 12 Months Ended | 24 Months Ended | 60 Months Ended | 72 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2018 | Dec. 31, 2027 CNY (¥) | Dec. 31, 2021 | Dec. 31, 2022 | |
PRC statutory income tax rate | 25% | 25% | 25% | ||||
Preferential income tax rate small profit enterprises, percent | 20% | ||||||
Assessable tax, percent | 12.5 | 12.5 | 25 | ||||
Assessable profit before tax | ¥ 1,000 | ¥ 1,000 | ¥ 3,000 | ||||
Deferred tax assets along with valuation allowance | ¥ 988 | ||||||
Tax losses carry forwards | 1,263,133 | ||||||
2024 | 280,201 | ||||||
2025 | 336,215 | ||||||
2026 | 271,151 | ||||||
2027 | 184,458 | ||||||
2028 | 184,548 | ||||||
Unrecognized tax benefits | 0 | ||||||
Unrecognized tax benefits, income tax penalties and interest expense | ¥ 0 | ||||||
State Administration of Taxation, China | |||||||
Withholding income tax percentage | 10% | ||||||
Maximum [Member] | |||||||
Preferential income tax rate small profit enterprises, percent | 25% | 50% | 20% | 20% | 20% | ||
Following preferential income tax rate small profit enterprises, percent | 50% | ||||||
Assessable profit before tax | ¥ 3,000 | ¥ 3,000 | |||||
Minimum [Member] | |||||||
Preferential income tax rate small profit enterprises, percent | 20% | 20% | |||||
Assessable profit before tax | ¥ 1,000 | ¥ 1,000 | |||||
HK | |||||||
Tax losses carry forwards | ¥ 6,560 |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Related Party balances (Details) - Related Party - IT Professional Education - Divestiture ¥ in Thousands | Dec. 24, 2023 CNY (¥) |
Tarena Technologies Inc. | |
Related party balances | |
Disposal group Consideration | ¥ 1 |
Tarena Hangzhou | |
Related party balances | |
Disposal group Consideration | ¥ 1 |
ORDINARY SHARES AND STATUTORY_2
ORDINARY SHARES AND STATUTORY RESERVE (Treasury Shares) (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
ORDINARY SHARES AND STATUTORY RESERVE | |||
Total consideration of Shares repurchased | ¥ 2,428 | ¥ 17,103 | |
Treasury Shares | |||
ORDINARY SHARES AND STATUTORY RESERVE | |||
Shares repurchased | 496,240 | 3,409,080 | 0 |
Total consideration of Shares repurchased | ¥ 2,428 | ¥ 17,103 |
ORDINARY SHARES AND STATUTORY_3
ORDINARY SHARES AND STATUTORY RESERVE (Statutory reserves and restricted net assets and Dividend) (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
ORDINARY SHARES AND STATUTORY RESERVE | |||
Statutory Reserves, Percentage of Appropriation From Net Profit | 10% | ||
Statutory Reserves, Balance As Percentage to Capital | 50% | ||
Statutory Reserves for Private Schools Requiring Reasonable Returns, Percentage of Appropriation From Net Profit | 25% | ||
Statutory Reserves for Private Schools Not Requiring Reasonable Returns, Percentage of Expected Annual Increase in Net Assets | 25% | ||
Appropriations | ¥ 6,780 | ¥ 19,037 | ¥ 16,736 |
Statutory reserve | 201,381 | 194,601 | |
Restricted net assets | 1,228,153 | 1,558,879 | |
Cash dividends | ¥ 0 | ¥ 0 | ¥ 0 |
SHARE BASED COMPENSATION - Summ
SHARE BASED COMPENSATION - Summary of share options activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Share Options | |||
Outstanding, beginning balance | 3,356,635 | ||
Granted | 200,000 | 1,166,980 | 879,000 |
Exercised | (499,145) | ||
Forfeited | (762,605) | ||
Outstanding, ending balance | 2,294,885 | 3,356,635 | |
Vested and expected to vest | 4,665,092 | ||
Exercisable | 2,275,775 | ||
Weighted Average Exercise Price | |||
Outstanding, beginning balance | $ 0.10 | ||
Granted | 0.01 | ||
Exercised | 0.01 | ||
Forfeited | 0.20 | ||
Outstanding, ending balance | 0.07 | $ 0.10 | |
Vested and expected to vest | 0.30 | ||
Exercisable | $ 0.37 | ||
Weighted Average Remaining Contractual Years | |||
Outstanding | 5 years 1 month 28 days | 6 years 10 months 20 days | |
Vested and expected to vest | 4 years 3 months 18 days | ||
Exercisable | 5 years 1 month 24 days | ||
Outstanding, Aggregate Intrinsic Value | $ 448 | $ 2,994 | |
Vested and expected to vest, Aggregate Intrinsic Value | 919 | ||
Exercisable, Aggregate Intrinsic Value | $ 444 |
SHARE BASED COMPENSATION - Su_2
SHARE BASED COMPENSATION - Summary of fair value assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SHARE BASED COMPENSATION | |||
Expected volatility | 77.77% | ||
Expected dividends yield | 0% | 0% | 0% |
Exercise multiple | 2.8 | ||
Risk-free interest rate per annum | 4.10% | ||
The fair value of underlying ordinary shares (per share) | $ 0.92 | ||
Minimum | |||
SHARE BASED COMPENSATION | |||
Expected volatility | 77.77% | 75.77% | 73.76% |
Exercise multiple | 2.2 | 2.2 | |
Risk-free interest rate per annum | 4.10% | 1.66% | 1.09% |
The fair value of underlying ordinary shares (per share) | $ 0.36 | $ 0.20 | |
Maximum | |||
SHARE BASED COMPENSATION | |||
Expected volatility | 77.77% | 75.78% | |
Exercise multiple | 2.8 | 2.8 | |
Risk-free interest rate per annum | 4.10% | 1.66% | |
The fair value of underlying ordinary shares (per share) | $ 1.13 | $ 2.92 |
SHARE BASED COMPENSATION - Sche
SHARE BASED COMPENSATION - Schedule fair values of the options granted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SHARE BASED COMPENSATION | |||
Weighted average grant date fair value of option per share | $ 0.92 | $ 0.92 | $ 0.82 |
Aggregate grant date fair value of options | $ 184 | $ 1,079 | $ 720 |
SHARE BASED COMPENSATION - Su_3
SHARE BASED COMPENSATION - Summary of the non-vested shares activity (Details) | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Number of Non-vested Shares | |
Outstanding, beginning balance | shares | 144,920 |
Granted | shares | 115,050 |
Vested | shares | (185,340) |
Forfeited | shares | (9,485) |
Outstanding, ending balance | shares | 65,145 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance | $ / shares | $ 4.38 |
Granted | $ / shares | 0.66 |
Vested | $ / shares | 2.22 |
Forfeited | $ / shares | 9.50 |
Outstanding, ending balance | $ / shares | $ 2.28 |
SHARE BASED COMPENSATION (Narra
SHARE BASED COMPENSATION (Narrative) (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||||||||||
Apr. 09, 2023 shares | Apr. 09, 2022 shares | Mar. 01, 2022 shares | Apr. 09, 2021 shares | Mar. 01, 2021 shares | Dec. 31, 2023 CNY (¥) shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2021 CNY (¥) shares | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares | Dec. 31, 2014 shares | |
SHARE BASED COMPENSATION | |||||||||||||
Options granted | 200,000 | 200,000 | 1,166,980 | 879,000 | |||||||||
Vesting period | 1 year | 1 year | |||||||||||
Total intrinsic value of options exercised | ¥ | ¥ 711 | ¥ 2,543 | ¥ 6,261 | ||||||||||
Income tax benefit from share-based compensation | $ | $ 0 | ||||||||||||
Unrecognized stock option compensation expense | ¥ | ¥ 706 | ||||||||||||
Unrecognized stock option compensation expense, period for recognition | 1 year 3 months 25 days | 1 year 3 months 25 days | |||||||||||
Non-vested shares granted | 115,050 | 115,050 | |||||||||||
Non-vested shares vested | 185,340 | 185,340 | |||||||||||
Unrecognized non-vested shares compensation expense | ¥ | ¥ 1,054 | ||||||||||||
Unrecognized non-vested shares compensation expense, period for recognition | 5 months 12 days | 5 months 12 days | |||||||||||
Fair value of vested restricted shares | ¥ | ¥ 2,916 | ¥ 3,358 | ¥ 5,930 | ||||||||||
Minimum | |||||||||||||
SHARE BASED COMPENSATION | |||||||||||||
Exercise prices | $ / shares | $ 0.01 | $ 0.01 | $ 0 | ||||||||||
Vesting period | 0 years | 1 year | |||||||||||
Maximum | |||||||||||||
SHARE BASED COMPENSATION | |||||||||||||
Exercise prices | $ / shares | $ 0.37 | ||||||||||||
Vesting period | 10 years | 2 years | |||||||||||
Independent director | |||||||||||||
SHARE BASED COMPENSATION | |||||||||||||
Vesting period | 1 year | 1 year | 1 year | 1 year | 1 year | ||||||||
Non-vested shares granted | 115,050 | 337,170 | 50,000 | 48,690 | 69,355 | ||||||||
January 1 | |||||||||||||
SHARE BASED COMPENSATION | |||||||||||||
Expiration period | 10 years | 10 years | 10 years | ||||||||||
January 1 | Maximum | |||||||||||||
SHARE BASED COMPENSATION | |||||||||||||
Expiration period | 10 years | ||||||||||||
2014 Plan | |||||||||||||
SHARE BASED COMPENSATION | |||||||||||||
Authorized | 1,833,696 |
(LOSS) EARNINGS PER SHARE (Deta
(LOSS) EARNINGS PER SHARE (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) ¥ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) ¥ / shares shares | Dec. 31, 2021 CNY (¥) ¥ / shares shares | |
Numerator: | ||||
Less: net income/(loss) from discontinuing operations | ¥ (11,980) | $ (1,687) | ¥ 87,295 | ¥ 33,508 |
Net (loss)/income from continuing operations | ¥ 22,334 | $ 3,146 | ¥ (2,062) | ¥ (509,288) |
Denominator: | ||||
Weighted average number of Class A and Class B ordinary shares outstanding | 53,873,945 | 53,873,945 | 54,657,222 | 56,260,925 |
Dilutive effect of outstanding share options | 1,460,629 | 1,460,629 | 3,073,450 | 1,369,440 |
Denominator for diluted (loss) earnings per share | 55,334,574 | 55,334,574 | 57,730,672 | 57,630,365 |
Basic earnings(loss) from discontinued operation per ADS | (per share) | ¥ (1.11) | $ (0.16) | ¥ 7.99 | ¥ 2.98 |
Diluted earnings(loss) from discontinued operation per ADS | (per share) | (1.11) | (0.16) | 7.56 | 2.91 |
Basic (loss) earnings from continuing operations per ADS | (per share) | 1.94 | 0.27 | (0.35) | (45.15) |
Diluted (loss) earnings from continuing operations per ADS | (per share) | ¥ 1.89 | $ 0.27 | ¥ (0.35) | ¥ (45.15) |
LEASES - Components of rental e
LEASES - Components of rental expense (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
LEASES | |||
Short-term rental expense | ¥ 9,961 | ¥ 7,411 | ¥ 14,116 |
Operating lease expense excluding short-term rental expense | ¥ 133,106 | ¥ 148,867 | ¥ 169,613 |
LEASES - Other information rela
LEASES - Other information related to operating leases (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
LEASES | ||||
Cash paid for amounts included in the measurement of lease liabilities | ¥ 143,602 | ¥ 123,263 | ¥ 119,932 | |
Right-of-use assets obtained in exchange for new lease liabilities | ¥ 132,001 | $ 18,592 | ¥ 80,403 | ¥ 144,601 |
Weighted average remaining lease term | 3 years 5 months 23 days | 3 years 5 months 23 days | 2 years 5 months 1 day | |
Weighted average discount rate | 5.58% | 5.58% | 5.62% |
LEASES - Maturities of lease li
LEASES - Maturities of lease liabilities (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | |
LEASES | ||||
2024 | ¥ 113,686 | |||
2025 | 66,914 | |||
2026 | 37,027 | |||
2027 | 11,620 | |||
2028 and thereafter | 6,326 | |||
Total lease payments | 235,573 | |||
Less: imputed interest | 15,929 | |||
Total | 219,644 | |||
Less: current portion | 111,840 | ¥ 148,583 | $ 15,752 | |
Non-current portion | 107,804 | 109,111 | $ 15,184 | |
Gross rental expenses incurred under operating leases | ¥ 143,067 | ¥ 156,278 | ¥ 183,729 |
PARENT ONLY FINANCIAL INFORMA_3
PARENT ONLY FINANCIAL INFORMATION - Condensed Balance Sheets (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 CNY (¥) |
Current assets: | ||||||
Cash and cash equivalents | ¥ 279,757 | $ 39,403 | ¥ 356,237 | ¥ 423,766 | ||
Prepaid expenses and other current assets | 57,385 | 8,083 | 38,656 | |||
Amounts due from related parties | ¥ 44 | $ 6 | ¥ 92 | |||
Other Receivable, after Allowance for Credit Loss, Current, Related Party, Type [Extensible Enumeration] | Related Party [Member] | Related Party [Member] | Related Party [Member] | Related Party [Member] | ||
Total current assets | ¥ 560,596 | $ 78,958 | ¥ 667,553 | |||
Total assets | 1,018,243 | 143,417 | 1,337,500 | |||
Current liabilities: | ||||||
Accrued expenses and other current liabilities | 517,096 | 72,831 | 416,911 | |||
Total current liabilities | 2,411,356 | 339,633 | 2,656,946 | |||
Total liabilities | 2,519,593 | 354,878 | 2,844,181 | |||
Commitments and contingencies | ||||||
Shareholders' equity: | ||||||
Additional paid-in capital | 1,360,901 | 191,679 | 1,363,845 | |||
Accumulated other comprehensive income | 48,216 | 6,791 | 49,664 | |||
Accumulated deficit | (2,427,992) | (341,976) | (2,436,918) | |||
Total shareholders' deficit | (1,501,350) | (211,461) | (1,506,681) | (1,592,420) | ¥ (1,139,269) | |
Total liabilities and deficit | 1,018,243 | 143,417 | 1,337,500 | |||
Class A ordinary shares | ||||||
Shareholders' equity: | ||||||
Ordinary shares | 364 | 51 | 359 | |||
Treasury shares (10,608,950 and 11,105,190 Class A ordinary shares as of December 31, 2022 and 2023, at cost) | ¥ (479,346) | $ (67,514) | ¥ (476,918) | |||
Ordinary shares | ||||||
Ordinary shares, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Ordinary shares authorized | 860,000,000 | 860,000,000 | 860,000,000 | 860,000,000 | ||
Ordinary shares issued | 57,861,327 | 57,861,327 | 57,176,842 | 57,176,842 | ||
Ordinary shares outstanding | 46,756,137 | 46,756,137 | 46,567,892 | 46,567,892 | ||
Treasury shares | 11,105,190 | 11,105,190 | 10,608,950 | 10,608,950 | ||
Class B ordinary shares | ||||||
Shareholders' equity: | ||||||
Ordinary shares | ¥ 74 | $ 10 | ¥ 74 | |||
Ordinary shares | ||||||
Ordinary shares, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Ordinary shares authorized | 40,000,000 | 40,000,000 | 40,000,000 | 40,000,000 | ||
Ordinary shares issued | 7,206,059 | 7,206,059 | 7,206,059 | 7,206,059 | ||
Ordinary shares outstanding | 7,206,059 | 7,206,059 | 7,206,059 | 7,206,059 | ||
Parent Company | ||||||
Current assets: | ||||||
Cash and cash equivalents | ¥ 5,251 | $ 740 | ¥ 1,844 | $ 260 | ¥ 23,506 | ¥ 3,793 |
Prepaid expenses and other current assets | 226 | 32 | 550 | |||
Amounts due from related parties | ¥ 380,470 | $ 53,588 | ¥ 437,987 | |||
Other Receivable, after Allowance for Credit Loss, Current, Related Party, Type [Extensible Enumeration] | Related Party [Member] | Related Party [Member] | Related Party [Member] | Related Party [Member] | ||
Total current assets | ¥ 385,947 | $ 54,360 | ¥ 440,381 | |||
Investment in subsidiaries | (1,560,377) | (219,775) | (1,574,974) | |||
Total assets | (1,174,430) | (165,415) | (1,134,593) | |||
Current liabilities: | ||||||
Accrued expenses and other current liabilities | 4,155 | 585 | 30,392 | |||
Due to subsidiaries | ¥ 319,198 | $ 44,959 | ¥ 334,909 | |||
Other Liability, Current, Related Party, Type [Extensible Enumeration] | Related Party [Member] | Related Party [Member] | Related Party [Member] | Related Party [Member] | ||
Total current liabilities | ¥ 323,353 | $ 45,544 | ¥ 365,301 | |||
Total liabilities | 323,353 | 45,544 | 365,301 | |||
Commitments and contingencies | ||||||
Shareholders' equity: | ||||||
Treasury shares (10,608,950 and 11,105,190 Class A ordinary shares as of December 31, 2022 and 2023, at cost) | (479,346) | (67,514) | (476,918) | |||
Additional paid-in capital | 1,360,901 | 191,679 | 1,363,845 | |||
Accumulated other comprehensive income | 48,216 | 6,791 | 49,664 | |||
Accumulated deficit | (2,427,992) | (341,976) | (2,436,918) | |||
Total shareholders' deficit | (1,497,783) | (210,959) | (1,499,894) | |||
Total liabilities and deficit | (1,174,430) | (165,415) | (1,134,593) | |||
Parent Company | Class A ordinary shares | ||||||
Shareholders' equity: | ||||||
Ordinary shares | ¥ 364 | $ 51 | ¥ 359 | |||
Ordinary shares | ||||||
Ordinary shares, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Ordinary shares authorized | 860,000,000 | 860,000,000 | 860,000,000 | 860,000,000 | ||
Ordinary shares issued | 57,861,327 | 57,861,327 | 57,176,842 | 57,176,842 | ||
Ordinary shares outstanding | 46,756,137 | 46,756,137 | 46,567,892 | 46,567,892 | ||
Treasury shares | 11,105,190 | 11,105,190 | 10,608,950 | 10,608,950 | ||
Parent Company | Class B ordinary shares | ||||||
Shareholders' equity: | ||||||
Ordinary shares | ¥ 74 | $ 10 | ¥ 74 | |||
Ordinary shares | ||||||
Ordinary shares, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Ordinary shares authorized | 40,000,000 | 40,000,000 | 40,000,000 | 40,000,000 | ||
Ordinary shares issued | 7,206,059 | 7,206,059 | 7,206,059 | 7,206,059 | ||
Ordinary shares outstanding | 7,206,059 | 7,206,059 | 7,206,059 | 7,206,059 |
PARENT ONLY FINANCIAL INFORMA_4
PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Comprehensive (Loss) Income (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Condensed Statements of Comprehensive Profit/(Loss) | ||||
Selling and marketing expenses | ¥ 268,399 | $ 37,803 | ¥ 280,093 | ¥ 437,487 |
General and administrative expenses | (330,848) | (46,599) | (397,440) | (359,453) |
Operating income (loss) | 13,451 | 1,895 | (26,353) | (396,647) |
Foreign currency exchange (loss) gains | (901) | (127) | (325) | (267) |
Interest income (expense) | 1,089 | 153 | 1,962 | 2,611 |
(Loss) income before income taxes | 14,362 | 2,023 | (16,566) | (392,837) |
Income tax expense | 7,972 | 1,123 | 14,504 | (116,451) |
Net (loss) income | 10,354 | 1,459 | 85,233 | (475,780) |
Other comprehensive (loss) income | ||||
Foreign currency translation adjustment | (1,448) | (204) | 965 | (421) |
Comprehensive (loss) income | 8,906 | 1,255 | 86,198 | (476,201) |
Parent Company | ||||
Condensed Statements of Comprehensive Profit/(Loss) | ||||
Selling and marketing expenses | (8) | (323) | ||
General and administrative expenses | (11,625) | (1,637) | (34,558) | 5,955 |
Operating income (loss) | (11,625) | (1,637) | (34,566) | 5,632 |
Equity in (loss) income of subsidiaries | 20,415 | 2,875 | 117,266 | (480,114) |
Foreign currency exchange (loss) gains | 106 | 15 | 2,480 | (268) |
Interest income (expense) | 30 | 5 | (1,660) | 203 |
(Loss) income before income taxes | 8,926 | 1,258 | 83,520 | (474,547) |
Net (loss) income | 8,926 | 1,258 | 83,520 | (474,547) |
Other comprehensive (loss) income | ||||
Foreign currency translation adjustment | (1,448) | (204) | 965 | (421) |
Comprehensive (loss) income | ¥ 7,478 | $ 1,054 | ¥ 84,485 | ¥ (474,968) |
PARENT ONLY FINANCIAL INFORMA_5
PARENT ONLY FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Operating activities: | ||||
Net cash (used in) provided by operating activities | ¥ 21,468 | $ 3,025 | ¥ 1,046 | ¥ (70,563) |
Financing activities: | ||||
Issuance of Class A ordinary shares in connection with exercise of share options | 227 | 32 | 107 | 3,947 |
Repurchase of treasury shares | (2,428) | (342) | (17,103) | |
Net cash provided by/ (used in) financing activities from continuing operations | (33,781) | (4,758) | (24,105) | 23,237 |
Changes in cash, cash equivalents and restricted cash | (82,668) | (11,644) | (52,342) | 65,540 |
Effect of foreign currency exchange rate changes on cash and cash equivalents | (1,447) | (203) | 2,288 | (67) |
Net change in cash, cash equivalents and restricted cash | (84,115) | (11,847) | (50,054) | 65,473 |
Cash and cash equivalents at beginning of year | 356,237 | 423,766 | ||
Cash and cash equivalents at end of year | 279,757 | 39,403 | 356,237 | 423,766 |
Parent Company | ||||
Operating activities: | ||||
Net cash (used in) provided by operating activities | 4,902 | 690 | (5,699) | 14,458 |
Financing activities: | ||||
Issuance of Class A ordinary shares in connection with exercise of share options | 227 | 32 | 107 | 3,947 |
Repurchase of treasury shares | (2,428) | (342) | (17,103) | |
Net cash provided by/ (used in) financing activities from continuing operations | (2,201) | (310) | (16,996) | 3,947 |
Changes in cash, cash equivalents and restricted cash | 2,701 | 380 | (22,695) | 18,405 |
Effect of foreign currency exchange rate changes on cash and cash equivalents | 706 | 100 | 1,033 | 1,308 |
Net change in cash, cash equivalents and restricted cash | 3,407 | 480 | (21,662) | 19,713 |
Cash and cash equivalents at beginning of year | 1,844 | 260 | 23,506 | 3,793 |
Cash and cash equivalents at end of year | ¥ 5,251 | $ 740 | ¥ 1,844 | ¥ 23,506 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event - $ / shares | 1 Months Ended | ||
Feb. 29, 2024 | Jan. 31, 2024 | Feb. 28, 2024 | |
Shares reserved in the Award | 3,500,000 | ||
Class A ordinary shares | |||
Shares repurchased | 5,119,698 | 5,119,698 | |
Temporary Equity, Redemption Price Per Share | $ 0.2 |