Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Borqs Technologies, Inc. |
Entity Central Index Key | 1,650,575 |
Trading Symbol | PAACU |
Amendment Flag | false |
Document Type | S1 |
Document Period End Date | Dec. 31, 2017 |
Entity Filer Category | Smaller Reporting Company |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 13,060 | $ 3,610 |
Restricted cash | 3,459 | 1,153 |
Accounts receivable | 65,720 | 28,257 |
Accounts receivable from related parties | 490 | |
Receivable from Mobile Virtual Network Operator ("MVNO") franchisees | 3,514 | 4,319 |
Inventories | 17,031 | 12,682 |
Deferred cost of revenues | 507 | 969 |
Prepaid expenses and other current assets | 16,240 | 6,599 |
Total current assets | 119,531 | 58,079 |
Non-current assets: | ||
Property and equipment, net | 1,362 | 1,488 |
Intangible assets, net | 20,004 | 15,498 |
Goodwill | 736 | 693 |
Deferred tax assets | 1,463 | 1,054 |
Deferred cost of revenues | 2,642 | 689 |
Other non-current assets | 2,994 | 529 |
Total non-current assets | 29,201 | 19,951 |
Total assets | 148,732 | 78,030 |
Current liabilities: | ||
Accounts payable (including accounts payable of the Consolidated VIEs without recourse to the primary beneficiary of US$4,598 and US$4,143 as of December 31, 2016 and 2017, respectively) | 49,690 | 22,691 |
Accrued expenses and other payables (including accrued expenses and other payables of the Consolidated VIEs without recourse to the primary beneficiary of US$2,778 and US$4,038 as of December 31, 2016 and 2017, respectively) | 12,163 | 7,634 |
Advances from customers (including advances from customers of the Consolidated VIEs without recourse to the primary beneficiary of nil and nil as of December 31, 2016 and 2017, respectively) | 3,623 | |
Deferred revenue (including deferred revenue of the Consolidated VIEs without recourse to the primary beneficiary of US$9,134 and US$5,904 as of December 31, 2016 and 2017, respectively) | 7,960 | 11,995 |
Income tax payable (including income tax payable of the Consolidated VIEs without recourse to the primary beneficiary of nil and nil as of December 31, 2016 and 2017, respectively) | 1,232 | 216 |
Short-term bank and other borrowings (including short-term bank borrowings of the Consolidated VIEs without recourse to the primary beneficiary of US$721 and nil as of December 31, 2016 and 2017, respectively) | 12,648 | 6,306 |
Long-term bank borrowings - current portion (including long-term bank borrowings - current portion of the Consolidated VIEs without recourse to the primary beneficiary of nil and nil as of December 31, 2016 and 2017, respectively) | 5,432 | 1,381 |
Deferred government grants (including deferred government grants of the Consolidated VIEs without recourse to the primary beneficiary of nil and nil as of December 31, 2016 and 2017, respectively) | 264 | |
Total current liabilities | 92,748 | 50,487 |
Non-current liabilities: | ||
Unrecognized tax benefits (including unrecognized tax benefits of the Consolidated VIEs without recourse to the primary beneficiary of nil and nil as of December 31, 2016 and 2017, respectively) | 2,121 | 1,755 |
Warrant liabilities (including warrant liabilities grants of the Consolidated VIEs without recourse to the primary beneficiary of nil and nil as of December 31, 2016 and 2017, respectively) | 1,344 | |
Deferred tax liabilities (including deferred tax liabilities of the Consolidated VIEs without recourse to the primary beneficiary of US$1,539 and US$1,550 as of December 31, 2016 and 2017, respectively) | 3,555 | 2,170 |
Deferred revenue (including deferred revenue of the Consolidated VIEs without recourse to the primary beneficiary of nil and nil as of December 31, 2016 and 2017, respectively) | 1,346 | 2,428 |
Long-term bank borrowings (including long-term bank borrowings of the Consolidated VIEs without recourse to the primary beneficiary of nil and nil as of December 31, 2016 and 2017, respectively) | 4,491 | |
Deferred government grants (including deferred government grants of the Consolidated VIEs without recourse to the primary beneficiary of nil and nil as of December 31, 2016 and 2017, respectively) | 1,957 | 1,844 |
Total non-current liabilities | 8,979 | 14,032 |
Total liabilities | 101,727 | 64,519 |
Commitments and contingencies | ||
Mezzanine equity: | ||
Total mezzanine equity | 68,862 | |
Shareholders' (deficit) equity: | ||
Ordinary shares (no par value; unlimited shares authorized; 4,224,725 shares and 30,804,635 shares issued and outstanding as of December 31, 2016 and 2017, respectively) | ||
Additional paid-in capital | 120,642 | 1,178 |
Statutory reserve | 1,898 | 1,898 |
Accumulated deficit | (74,231) | (54,706) |
Accumulated other comprehensive loss | (507) | (2,626) |
Total Borqs Technologies, Inc. shareholders' (deficit) equity | 47,802 | (54,256) |
Noncontrolling interest | (797) | (1,095) |
Total shareholders' (deficit) equity | 47,005 | (55,351) |
Total liabilities, mezzanine equity, noncontrolling interest and shareholders' (deficit) equity | 148,732 | 78,030 |
Series A convertible redeemable preferred shares | ||
Mezzanine equity: | ||
Total mezzanine equity | 11,970 | |
Series B convertible redeemable preferred shares | ||
Mezzanine equity: | ||
Total mezzanine equity | 26,126 | |
Series C convertible redeemable preferred shares | ||
Mezzanine equity: | ||
Total mezzanine equity | 21,069 | |
Series D convertible redeemable preferred shares | ||
Mezzanine equity: | ||
Total mezzanine equity | 9,697 | |
Series E convertible redeemable preferred shares | ||
Mezzanine equity: | ||
Total mezzanine equity |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts payable, consolidated VIEs without recourse to primary beneficiaries | $ 49,690 | $ 22,691 |
Accrued expenses and other payables, consolidated VIEs without recourse to primary beneficiaries | 50 | |
Deferred revenue, consolidated VIEs without recourse to primary beneficiaries | 7,960 | 11,995 |
Short-term bank borrowings, consolidated VIEs without recourse to primary beneficiaries | 12,648 | 6,306 |
Deferred tax liabilities of the consolidated VIEs | 3,555 | 2,170 |
Other non-other current liabilities consolidated VIEs | $ 84 | |
Common stock, par value | ||
Common stock, shares authorized | Unlimited | Unlimited |
Common stock, shares issued | 30,804,635 | 4,224,725 |
Common stock, shares outstanding | 30,804,635 | 4,224,725 |
Series A convertible redeemable preferred shares | ||
Convertible redeemable preferred shares, par value | $ 0.0001 | $ 0.0001 |
Convertible redeemable preferred shares, shares authorized | 0 | 39,900,000 |
Convertible redeemable preferred shares, shares issued | 0 | 39,900,000 |
Convertible redeemable preferred shares, shares outstanding | 0 | 39,900,000 |
Series B convertible redeemable preferred shares | ||
Convertible redeemable preferred shares, par value | $ 0.0001 | $ 0.0001 |
Convertible redeemable preferred shares, shares authorized | 0 | 82,857,143 |
Convertible redeemable preferred shares, shares issued | 0 | 82,857,143 |
Convertible redeemable preferred shares, shares outstanding | 0 | 82,857,143 |
Series C convertible redeemable preferred shares | ||
Convertible redeemable preferred shares, par value | $ 0.0001 | $ 0.0001 |
Convertible redeemable preferred shares, shares authorized | 0 | 50,909,089 |
Convertible redeemable preferred shares, shares issued | 0 | 50,909,089 |
Convertible redeemable preferred shares, shares outstanding | 0 | 50,909,089 |
Series D convertible redeemable preferred shares | ||
Convertible redeemable preferred shares, par value | $ 0.0001 | $ 0.0001 |
Convertible redeemable preferred shares, shares authorized | 0 | 23,721,443 |
Convertible redeemable preferred shares, shares issued | 0 | 23,721,443 |
Convertible redeemable preferred shares, shares outstanding | 0 | 23,721,443 |
Series E convertible redeemable preferred shares | ||
Convertible redeemable preferred shares, par value | $ 0.001 | $ 0.001 |
Convertible redeemable preferred shares, shares authorized | 13,275,162 | 0 |
Convertible redeemable preferred shares, shares issued | 0 | 0 |
Convertible redeemable preferred shares, shares outstanding | 0 | 0 |
Variable Interest Entity [Member] | ||
Accounts payable, consolidated VIEs without recourse to primary beneficiaries | $ 4,143 | $ 4,598 |
Accrued expenses and other payables, consolidated VIEs without recourse to primary beneficiaries | 4,038 | 2,778 |
Advances from customer ,including advances from customers of the Consolidated VIEs without recourse to the primary beneficiary | ||
Deferred revenue, consolidated VIEs without recourse to primary beneficiaries | 5,904 | 9,134 |
Short-term bank borrowings, consolidated VIEs without recourse to primary beneficiaries | 721 | |
Deferred tax liabilities of the consolidated VIEs | 1,550 | 1,539 |
Other non-other current liabilities consolidated VIEs | $ 84 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net Revenues: | |||
Software | $ 11,212 | $ 14,912 | $ 22,468 |
Hardware | 111,021 | 70,536 | 32,647 |
MVNO | 30,118 | 29,309 | 16,007 |
Others | 1,956 | 5,829 | 3,950 |
Total net revenues | 154,307 | 120,586 | 75,072 |
Software | (7,247) | (7,491) | (12,699) |
Hardware | (96,247) | (57,452) | (26,101) |
MVNO | (22,836) | (28,784) | (16,225) |
Others | (811) | (1,709) | (2,980) |
Total cost of revenues | (127,141) | (95,436) | (58,005) |
Total gross profit | 27,166 | 25,150 | 17,067 |
Operating expenses: | |||
Sales and marketing expenses | (7,952) | (5,874) | (7,359) |
General and administrative expenses | (20,753) | (10,042) | (4,883) |
Research and development expenses | (6,443) | (5,742) | (7,206) |
Changes in the fair value of warrant liabilities | (200) | (12) | |
Total operating expenses | (35,348) | (21,670) | (19,448) |
Other operating income | 272 | 1,760 | 3,094 |
Operating income (loss) | (7,910) | 5,240 | 713 |
Interest income | 14 | 65 | 61 |
Interest expense | (1,877) | (797) | (156) |
Other income | 633 | 114 | 208 |
Other expense | (121) | (59) | (35) |
Foreign exchange gain (loss) | (779) | 692 | 855 |
Profit (loss) before income taxes | (10,040) | 5,255 | 1,646 |
Income tax expense | (2,319) | (2,659) | (851) |
Net income (loss) | (12,359) | 2,596 | 795 |
Less: net (loss) income attributable to noncontrolling interests | 210 | (632) | (1,316) |
Net income (loss) attributable to Borqs Technologies, Inc. | (12,569) | 3,228 | 2,111 |
Add: Accretion to redemption value of Convertible Redeemable Preferred Shares | (6,956) | (976) | (2,417) |
Allocation to holders of Convertible Redeemable Preferred Shares | (2,252) | ||
Net loss attributable to ordinary shareholders | $ (19,525) | $ (306) | |
Loss per share: | |||
Basic | $ (1.52) | $ 0 | $ (0.07) |
Diluted | $ (1.52) | $ 0 | $ (0.07) |
Number of ordinary shares used in loss per share computation: | |||
Basic | 12,842,671 | 4,224,725 | 4,224,090 |
Diluted | 12,842,671 | 4,224,725 | 4,224,090 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (12,359) | $ 2,596 | $ 795 |
Other comprehensive (loss) income, net of tax of nil: | |||
Foreign currency translation adjustments, net of tax of nil | 2,207 | (1,575) | (1,491) |
Other comprehensive (loss) income, net of tax of nil | 2,207 | (1,575) | (1,491) |
Comprehensive (loss) income | (10,152) | 1,021 | (696) |
Less: comprehensive (loss) income attributable to noncontrolling interest | 298 | (730) | (1,519) |
Comprehensive income (loss) attributable to Borqs Technologies, Inc. | $ (10,450) | $ 1,751 | $ 823 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' (Deficit) Equity - USD ($) $ in Thousands | Total | Series E-1 Preferred Shares | Ordinary shares | Additional paid-in capital | Accumulated statutory reserves | Accumulated other comprehensive loss | Accumulated deficit | Total Borqs Technologies, Inc. shareholders' deficit | Noncontrolling interest |
Beginning Balance at Dec. 31, 2014 | $ (52,287) | $ 1,178 | $ 860 | $ 139 | $ (55,614) | $ (53,441) | $ 1,154 | ||
Beginning Balance (shares) at Dec. 31, 2014 | 4,222,120 | ||||||||
Consolidated net income | 795 | 2,111 | 2,111 | (1,316) | |||||
Appropriation of statutory reserves | 410 | (410) | |||||||
Foreign exchange difference | (1,491) | (1,288) | (1,288) | (203) | |||||
Accretion to redemption value of Convertible Redeemable Preferred Shares | (2,417) | (2,417) | (2,417) | ||||||
Vesting of restricted shares, shares | 2,605 | ||||||||
Vesting of restricted shares | 4 | 4 | |||||||
Share-based compensation | |||||||||
Ending Balance at Dec. 31, 2015 | (55,396) | 1,178 | 1,270 | (1,149) | (56,330) | (55,031) | (365) | ||
Ending Balance (shares) at Dec. 31, 2015 | 4,224,725 | ||||||||
Consolidated net income | 2,596 | 3,228 | 3,228 | (632) | |||||
Appropriation of statutory reserves | 628 | (628) | |||||||
Foreign exchange difference | (1,575) | (1,477) | (1,477) | (98) | |||||
Accretion to redemption value of Convertible Redeemable Preferred Shares | (976) | (976) | (976) | ||||||
Share-based compensation | |||||||||
Ending Balance at Dec. 31, 2016 | (55,351) | 1,178 | 1,898 | (2,626) | (54,706) | (54,256) | (1,095) | ||
Ending Balance (shares) at Dec. 31, 2016 | 4,224,725 | ||||||||
Consolidated net income | (12,359) | (12,569) | (12,569) | 210 | |||||
Foreign exchange difference | 2,207 | 2,119 | 2,119 | 88 | |||||
Issuance of ordinary shares | 386 | 386 | 386 | ||||||
Issuance of ordinary shares, shares | 35,173 | ||||||||
Issuance of Series E-1 Preferred Shares | 2,708 | $ 2,708 | 2,708 | ||||||
Beneficiary conversion feature of Series E-1 Preferred Shares | 3,258 | 3,258 | 3,258 | ||||||
Reclassification of warrants upon the consummation of the Merger | 1,544 | 1,544 | 1,544 | ||||||
Conversion of Convertible Redeemable Preferred Shares into ordinary shares upon the consummation of the Merger | 71,904 | 78,860 | (6,956) | 71,904 | |||||
Conversion of Convertible Redeemable Preferred Shares into ordinary shares upon the consummation of the Merger, shares | 16,622,491 | ||||||||
Conversion of Series E-1 Preferred Shares into ordinary shares upon the consummation of the Merger | $ (2,708) | 2,708 | |||||||
Conversion of Series E-1 Preferred Shares into ordinary shares upon the consummation of the Merger, shares | 558,725 | ||||||||
Change in equity due to the Merger | 26,818 | 26,818 | 26,818 | ||||||
Change in equity due to the Merger, shares | 9,363,521 | ||||||||
Share-based compensation | 14,667 | 5,890 | 5,890 | ||||||
Ending Balance at Dec. 31, 2017 | $ 47,005 | $ 120,642 | $ 1,898 | $ (507) | $ (74,231) | $ 47,802 | $ (797) | ||
Ending Balance (shares) at Dec. 31, 2017 | 30,804,635 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income (loss) | $ (12,359) | $ 2,596 | $ 795 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Foreign exchange (gain) loss | 779 | (692) | (855) |
(Loss) gain on disposal of property and equipment | 1 | (350) | |
Depreciation of property and equipment | 744 | 1,011 | 1,371 |
Amortization of intangible assets | 3,935 | 2,146 | 1,109 |
Deferred income tax benefits | 937 | 402 | (1,044) |
Interest expense | 661 | 352 | |
Share-based compensation expenses | 14,667 | ||
Changes in the fair value of warrant liabilities | 200 | 12 | |
Changes in operating assets and liabilities, net of the effects of an acquisition: | |||
Restricted cash | (2,306) | (383) | 211 |
Accounts receivable | (37,463) | (22,189) | 6,830 |
Accounts receivable from related parties | 490 | 5,508 | (5,866) |
Receivable from MVNO franchisees | 805 | (1,024) | (3,295) |
Inventories | (4,349) | (6,418) | (4,074) |
Deferred cost of revenues | (1,491) | (497) | 2,469 |
Prepaid expenses and other current assets | (12,140) | (3,175) | 579 |
Accounts payable | 26,999 | 15,740 | (742) |
Accrued expenses and other payables | 5,215 | 1,371 | 2,100 |
Unrecognized tax benefits | 366 | 1,064 | 645 |
Advances from customers | 3,623 | ||
Deferred revenue | (5,117) | (3,351) | 4,888 |
Income tax payable | 1,016 | 51 | 165 |
Deferred government grants | (151) | (1,906) | (3,302) |
Net cash generated from (used in) operating activities | (14,939) | (9,381) | 1,634 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchases of property and equipment | (842) | (494) | (798) |
Purchases of intangible assets | (7,650) | (5,230) | (5,175) |
Proceeds from disposal of property and equipment | 1 | 1 | 14 |
Loan to a third party | (1,482) | ||
Repayments of a loan to a third party | 371 | 457 | 75 |
Net cash used in investing activities | (8,120) | (5,266) | (7,366) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from issuance of ordinary shares | 62 | ||
Cash received from the Merger | 18,034 | ||
Proceeds from issuance of Series E Preferred Shares | 9,000 | ||
Proceeds from exercise of warrants for Series E-1 Preferred Shares ("Series E-1 Warrants") | 8 | ||
Payment of issuance costs for Series E Preferred Shares | (312) | ||
Proceeds from short-term bank and other borrowings | 10,456 | 6,776 | |
Repayments of short-term bank and other borrowings | (4,756) | (2,000) | (817) |
Proceeds from long-term bank borrowings | 2,000 | 6,000 | 999 |
Repayments of long-term bank borrowings | (2,631) | (571) | (47) |
Net cash generated from financing activities | 31,861 | 10,205 | 135 |
Effect of foreign exchange rate changes on cash and cash equivalents | 648 | 265 | (34) |
Net (decrease) increase in cash and cash equivalents | 9,450 | (4,177) | (5,631) |
Cash and cash equivalents at beginning of year | 3,610 | 7,787 | 13,418 |
Cash and cash equivalents at end of year | 13,060 | 3,610 | 7,787 |
Supplemental disclosures of cash flow information: | |||
Income taxes paid | (554) | (620) | |
Interest paid | (1,877) | (797) | (156) |
Interest received | 14 | 65 | 61 |
Supplemental schedule of non-cash activities: | |||
Acquisition of fixed assets included in account payable, accrued expenses and other liabilities | $ 52 | $ 432 | $ 462 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2017 | |
Organization [Abstract] | |
ORGANIZATION | 1. ORGANIZATION Borqs Technologies, Inc. (formerly known as “Pacific Special Acquisition Corp.”, the “Company” or “Borqs Technologies”) was incorporated in the British Virgin Islands on July 1, 2015. The Company was formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation, purchasing all or substantially all of the assets of, entering into contractual arrangements, or engaging in any other similar business combination with one or more businesses or entities. On August 18, 2017, the Company acquired 100% equity interest of BORQS International Holding Corp. (“Borqs International”) and its subsidiaries, variable interest entities (the “VIE”) and the VIE’s subsidiaries (collectively referred to as “Borqs Group” hereinafter) (the Company and Borqs Group collectively referred to as the “Group”) in an all-stock transaction (the “Merger”) as described in Note 4. Concurrent with the completion of the acquisition of Borqs International, the Company changed its name from Pacific Special Acquisition Corp.”, to Borqs Technologies, Inc. Borqs Group are principally engaged in the provision of commercial grade Android+ platform solutions, hardware product sales and MVNO services in the People’s Republic of China (the “PRC”). (a) As of the date of report, the details of the Company’s major subsidiaries, consolidated VIEs and the subsidiaries of the VIEs are as follows: Entity Date of incorporation/ Acquisition Place of incorporation Percentage of direct or indirect ownership by the Company Direct Principal activities Subsidiaries: Borqs International July 27, 2007 Cayman 100% Holding company BORQS Hong Kong Limited (“Borqs HK”) July 19, 2007 Hong Kong 100% Provision of software and service solutions and hardware products sales BORQS Beijing Ltd. (“Borqs Beijing”) (1) September 4, 2007 PRC 100% Provision of software and service solutions and hardware products sales BORQS Software Solutions Private Limited (“Borqs India”) July 17, 2009 India 100% Provision of software and service solutions VIE: Beijing Big Cloud Century Network Technology Co., Ltd. (“Big Cloud Network”) (1)/(2) April 18, 2014 PRC Nil Holding company Subsidiaries of the VIE: Yuantel (Beijing) Investment Management Co., Ltd. (“Yuantel Investment”) (2)/(3) July 11, 2014 PRC 79% Holding company Yuantel (Beijing) Telecommunications Technology Co., Ltd. (“Yuantel Telecom”) (2)/(3) July 11, 2014 PRC 75.05% Provision of MVNO and other services (1) Collectively, the “PRC Subsidiaries”. (2) Collectively, the “Consolidated VIEs”. (3) On July 11, 2014, Borqs International through Big Cloud Network acquired controlling interest in Yuantel Investment and its subsidiary. (b) PRC laws and regulations prohibit foreign ownership in certain telecommunication related businesses. To comply with these foreign ownership restrictions, the Group conducts its businesses in the PRC through the VIE using contractual agreements (the “VIE Agreements”). The Group funds Big Cloud Network through loans to the two Big Cloud Network’s shareholders, (collectively the “Nominee Shareholders”). The effective control of Big Cloud Network is held by the Group, through a series of contractual agreements between Borqs Beijing and Big Cloud Network whereby Big Cloud Network became a consolidated VIE of the Group. Through the contractual agreements, the Group receives substantially all of the economic benefits of Big Cloud Network. Big Cloud Network provides MVNO services in China through its 79% owned entity of Yuantel Investment which owns 95% of Yuantel Telecom; therefore Big Cloud Network effectively owns 75.05% of Yuantel Telecom which is the entity that operates the business and holds the MVNO license from the Chinese Ministry of Industry and Information Technology. The following is a summary of the key terms of the latest VIE Agreements: Loan agreements Borqs Beijing and the Nominee Shareholders entered into loan agreements for Borqs Beijing to provide interest free loans of RMB50,000 to the Nominee Shareholders, respectively, for the purpose of providing capital to Big Cloud Network to develop its MVNO business. There is no fixed term for the loans. Power of attorney agreement The Nominee Shareholders of Big Cloud Network entered into the power of attorney agreement whereby they authorized Borqs Beijing or its designated party to act on behalf of the Nominee Shareholders as exclusive agent and attorney with all respect to all matters concerning the shareholding including but not limited to (1) attend shareholders’ meetings of Big Cloud Network; (2) exercise all the shareholders’ rights, including voting rights; and (3) designate and appoint on behalf of each shareholder the senior management members of Big Cloud Network. The power of attorney remains irrevocable and continuously valid from the date of execution so long as each Nominee Shareholder remains as a shareholder of Big Cloud Network. The power of attorney agreement was subsequently reassigned to Borqs International. Exclusive option agreement Pursuant to the exclusive option agreement entered into between the Nominee Shareholders and Borqs Beijing or its designated party, the Nominee Shareholders granted Borqs Beijing or its designated party, an irrevocable and exclusive right to purchase all or part of the equity interests held by the Nominee Shareholders in Big Cloud Network, to the extent permitted under the PRC laws, at an amount equal to RMB10 or the minimum consideration permitted under the applicable PRC law. The purchase consideration in excess of RMB10 shall be refunded by the Nominee Shareholders to Borqs Beijing or Borqs Beijing may deduct the excess amount upon payment of consideration. The Nominee Shareholders shall not declare dividend or any form of distribution or grant loans in any form without the prior consent of Borqs Beijing or its designated party. The term of the agreement is 10 years, expiring on June 22, 2024 which will be automatically renewed every three-year thereafter if Borqs Beijing or its designated party does not provide notice of termination to the Nominee Shareholders fifteen days prior to expiration. Exclusive technical & support agreement Pursuant to the agreement entered into between Borqs Beijing and Big Cloud Network, Big Cloud Network engaged Borqs Beijing or its designated party as its exclusive provider of technical, consulting and other services in relation to its major business during the contractual period in return for service fees which will be determined at the sole discretion of Borqs Beijing or its designated party. The term of the agreement is 10 years, expiring on June 22, 2024, which will be automatically renewed every three-year thereafter if Borqs Beijing or its designated party does not provide notice of termination to the Nominee Shareholders fifteen days prior to expiration. Business cooperation agreement Pursuant to the business cooperation agreement entered into between Borqs Beijing and Big Cloud Network, Borqs Beijing or its designated party agreed to provide unlimited financial support for the VIE’s daily operating activities through entrusted loans and agree to forgo the right to seek repayment. Share pledge agreement Pursuant to the agreement, the Nominee Shareholders pledged all of their equity interests in Big Cloud Network to Borqs Beijing as collateral to guarantee the repayment of the loans and to secure their obligations under the above agreements. The Nominee Shareholders agreed not to transfer or otherwise create any encumbrance on their equity interests in Big Cloud Network without prior consent of Borqs Beijing. The share pledge agreements will remain effective until all the obligations under above agreements have been satisfied in full or all of the guarantee liabilities have been repaid. Despite the lack of technical majority ownership, there exists a parent-subsidiary relationship between Borqs Beijing’s designee, Borqs International, and Big Cloud Network through the irrevocable power of attorney agreement, whereby the Nominee Shareholders effectively assigned all of the voting rights underlying their equity interest in Big Cloud Network to Borqs International. Furthermore, pursuant to the exclusive option agreement and share pledge agreement, Borqs International, via Borqs Beijing, obtained effective control over Big Cloud Network through the ability to exercise all the rights of Nominee Shareholders and therefore the power to govern the activities that most significantly impact the economic performance of Big Cloud Network. In addition, through the VIE Agreements, Borqs International demonstrates its ability and intention to continue the ability to absorb substantially all the expected losses and the majority of the profit of the VIE, and therefore have the rights to the economic benefits of the VIE. Thus, Borqs International consolidates Big Cloud Network and its subsidiaries under ASC 810-10 Consolidation Overall. In the opinion of the Group’s management and PRC counsel, (i) the ownership structure of the Consolidated VIEs is in compliance with all existing PRC laws and regulations in any material respect, (ii) each of the VIE Agreements is valid, legally binding and enforceable to each party of such agreements and will not result in any violation of PRC laws or regulations currently in effect; and (iii) each of the Group’s PRC subsidiaries, VIE and VIE’s subsidiaries have the necessary corporate power and authority to conduct its business as described in its business scope under its business license, which is in full force and effect, and the Group’s business operation in PRC are in compliance with existing PRC laws and regulations. However, uncertainties in the PRC legal system could cause the relevant regulatory authorities to find the current VIE Agreements and businesses to be in violation of any existing or future PRC laws or regulations. If Borqs International, the primary beneficiary or any of its current or future VIEs are found in violation of any existing or future laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion in dealing with such violations, including levying fines, confiscating the income of the primary beneficiary, and the VIE, revoking the business licenses or operating licenses of the primary beneficiary, and VIE, shutting down the Group’s servers, discontinuing or placing restrictions or onerous conditions on the Group’s operations, requiring the Group to undergo a costly and disruptive restructuring or enforcing actions that could be harmful to the Group’s business. Any of these actions could cause significant disruption to the Group’s business operations and severely damage the Group’s reputation, which would in turn materially and adversely affect the Group’s business and results of operations. In addition, if the imposition of any of these penalties causes the primary beneficiary to lose the rights to direct the activities of VIE or the right to receive its economic benefits, Borqs International would no longer be able to consolidate the VIE. In addition, if the VIE or the Nominee Shareholders fail to perform their obligations under the VIE Agreements, the Group may have to incur substantial costs and expend resources to enforce the primary beneficiary’ rights under the contracts. The Group may have to rely on legal remedies under PRC laws, including seeking specific performance or injunctive relief and claiming damages, which may not be effective. All of these VIE Agreements are governed by PRC laws and provide for the resolution of disputes through arbitration in the PRC. Accordingly, these contracts would be interpreted in accordance with PRC laws and any disputes would be resolved in accordance with PRC legal procedures. The legal system in PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit the Group’s ability to enforce these contractual arrangements. Under PRC laws, rulings by arbitrators are final, parties cannot appeal the arbitration results in courts, and prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition proceedings, which would incur additional expenses and delay. In the event the Group is unable to enforce these VIE Agreements, the primary beneficiary may not be able to exert effective control over its VIE, and the Group’s ability to conduct its business may be negatively affected. (c) VIE disclosures The consolidated VIEs contributed 27%, 29% and 21% of the Group’s consolidated revenues for the years ended December 31, 2015, 2016 and 2017. As of December 31, 2016 and 2017, the Consolidated VIEs accounted for an aggregate of 23% and 17%, respectively, of the consolidated total assets, and 41% and 37%, respectively, of the consolidated total liabilities. The Consolidated VIEs mainly operate the MVNO services. The VIE also holds the MVNO license, which is a revenue-producing asset recorded on the Group’s consolidated balance sheets. The Group expects increases in revenue generated from the Consolidated VIEs compared to the whole Group for the foreseeable future as the Group focuses on strengthening telecommunication platforms to strategically grow the Group’s MVNO business. The Group believes that there are no assets held in the Consolidated VIEs that can be used only to settle obligations of the Consolidated VIEs, except for registered capital and the PRC statutory reserves. Relevant PRC laws and regulations restrict the Consolidated VIEs from transferring a portion of their net assets, equivalent to the balance of its statutory reserve and its share capital, to the Group in the form of loans and advances or cash dividends. Please refer to Note 18 for disclosure of restricted net assets. As the Consolidated VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the Consolidated VIEs do not have recourse to the general credit of the Group for any of the liabilities of the Consolidated VIEs. There were no pledges or collateralization of the Consolidated VIEs’ assets. The following tables represent the financial information of the Consolidated VIEs as of December 31, 2016 and 2017 and for the years ended December 31, 2015, 2016 and 2017 before eliminating the intercompany balances and transactions between the Consolidated VIEs and other entities within the Group: As of December 31, 2016 2017 US$ US$ ASSETS Current assets: Cash and cash equivalents 414 51 Restricted cash 1,153 3,459 Accounts receivable 129 2,565 Receivable from MVNO franchisees 4,319 3,514 Inventories 67 221 Prepaid expenses and other current assets 926 423 Total current assets 7,008 10,233 Non-current assets: Property and equipment, net 987 897 Intangible assets, net 8,609 8,393 Goodwill 693 736 Deferred tax assets 1,054 940 Other non-current assets 58 81 Total non-current assets 11,401 11,047 Total assets 18,409 21,280 As of December 31, 2016 2017 US$ US$ Current liabilities: Accounts payable 4,598 4,143 Accrued expenses and other payables 2,778 4,038 Deferred revenue 9,134 5,904 Short-term bank borrowings 721 - Intercompany payables 7,923 14,279 Total current liabilities 25,154 28,364 Non-current liabilities Deferred tax liabilities 1,539 1,500 Total non-current liabilities 1,539 1,500 Total liabilities 26,693 29,864 For the Years Ended December 31, 2015 2016 2017 US$ US$ US$ Net revenues 19,957 35,138 32,074 Net (loss) income (5,029 ) (3,381 ) 347 For the Years Ended December 31, 2015 2016 2017 US$ US$ US$ Net cash provided by (used in) operating activities 2,413 (2,128 ) 683 Net cash used in investing activities (1,622 ) (634 ) (281 ) Net cash (used in) provided by financing activities (770 ) 721 (765 ) Net increase (decrease) in cash and cash equivalents 21 (2,041 ) (363 ) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). (b) Liquidity As of December 31, 2017, the company has accumulated deficit of US$74,231 and has suffered net loss of US$12,359 and negative cash flow from operating of US$14,939 for the year then ended. These condition raises substantial doubt about the Group’s ability to continue as a going concern. When preparing the consolidated financial statements as of December 31, 2017 and for the year then ended, the Group’s management concluded that a going concern basis of preparation was appropriate after analyzing the forecasted cash flows for the next twelve months, which indicates that the Group will have sufficient liquidity through March 2019. In preparing the forecasted cash flow analysis, management took into account of the expected net cash inflows to be funded by the public offering and short term debt of approximately US$32,000. As a result, management prepared the consolidated financial statements assuming the Group will continue as a going concern. However, there is no assurance that the public offering can be completed in a timely manner or at all, and there is no assurance that any short term debt is available at acceptable terms. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. (c) Principles of consolidation The consolidated financial statements include the financial statements of the Group, its subsidiaries and Consolidated VIEs, for which, the Group is the primary beneficiary. All significant inter-company transactions and balances between the Group, its subsidiaries and the Consolidated VIEs are eliminated upon consolidation. Results of acquired subsidiaries and its Consolidated VIEs are consolidated from the date on which control is transferred to the Group. (d) Use of estimates The preparation of the consolidated financial statements in conformity with US 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 year. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets and intangible assets, assessing the initial valuation of the assets acquired and liabilities assumed in a business combination and the subsequent impairment assessment of long-lived assets, intangible assets and goodwill, determining the provisions for accounts receivable and inventories, accounting for deferred income taxes and uncertain tax benefits, valuation for share-based compensation arrangements, warrants for Series D convertible redeemable preferred shares, beneficiary conversion feature for Series E Preferred Shares. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. (e) Foreign currency The functional currency of the Group and its non-PRC subsidiaries, excluding Borqs India, is the United States dollar. The functional currency of Borqs India is Rupee, whereas the functional currency of the Group’s PRC subsidiaries and its Consolidated VIEs is the Chinese Renminbi (“RMB”) as determined based on the criteria of ASC 830, Foreign Currency Matters Assets and liabilities of the Group’s PRC subsidiaries are translated into US$ at fiscal year-end exchange rates. Equity amounts are translated at historical exchange rates. Income and expense items are translated at average exchange rates prevailing during the fiscal year. Translation adjustments arising from translation of foreign currency financial statements are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive (loss) income in the consolidated statements of comprehensive income (loss). (f) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and bank deposits which are unrestricted as to withdrawal and use. All highly liquid investments with a stated maturity of 90 days or less from the date of purchase are classified as cash equivalents. (g) Restricted cash Restricted cash mainly represents short-term deposits with China United Network Communications Group Co., Ltd. (“China Unicom”) as guarantee for minimum purchase requirements, and therefore are not available for the Group’s use until the end of contract period with China Unicom. (h) Accounts receivable Accounts receivable are carried at net realizable value. An allowance of doubtful accounts is recorded in the period when the collection of full amount is no longer probable. The Group reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its current credit-worthiness and current economic trends. As of December 31, 2016 and 2017, the Group evaluated and wrote off the doubtful accounts as they were determined to be uncollectible. Thus, there was no allowance for doubtful accounts outstanding. (i) Inventories Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. Adjustments to reduce the cost of inventories to its net market value are made, if required, for decreases in sales prices, obsolescence or similar reductions in the estimated net realizable value. Inventories provision of US$1,038 and US$918 was recorded as of December 31, 2016 and 2017, respectively. (j) Property and equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Category Estimated useful life Computer and network equipment 3-5 years Office equipment 5 years Motor vehicles 5 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Repair and maintenance costs are charged to expense as incurred, whereas the costs of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirements, sale and disposals of assets are recorded by removing the cost and accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of operations. Property and equipment that are purchased or constructed which require a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress is transferred to specific property and equipment accounts and commences depreciation when these assets are ready for their intended use. (k) Intangible assets Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets acquired in a business combination are recognized initially at fair value at the date of acquisition. Intangible assets with finite useful lives are amortized using the straight-line method. These amortization methods reflect the estimated pattern in which the economic benefits of the respective intangible assets are to be consumed. Development costs of software to be sold, leased, or otherwise marketed are subject to capitalization beginning when technological feasibility is reached, in accordance with ASC 985-20, Costs of Software to be Sold, Leased, or Marketed Intangible assets have weighted average useful lives from the date of purchase as follows: Purchased software 5.8 years MVNO license 10 years Capitalized software development costs 3 years Internal-use software 5 years (l) Goodwill Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an acquired business. The Group’s goodwill as of December 31, 2016 and 2017 was related to its acquisition of Yuantel Investment. In accordance with ASC 350, Goodwill and Other Intangible Assets ( ) The performance of the impairment test in accordance to ASC 350 involves a two-step process. The first step of the impairment test involves comparing the fair value of the reporting unit with its carrying amount, including goodwill. Fair value is primarily determined by computing the future discounted cash flows expected to be generated by the reporting unit. If the reporting unit’s carrying value exceeds its fair value, goodwill may be impaired. If this occurs, the Group performs the second step of the goodwill impairment test to determine the amount of impairment loss. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of the reporting unit’s goodwill. If the implied goodwill fair value is less than its carrying value, the difference is recognized an impairment loss. In accordance with ASC 350, the Group assigned and assessed goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment. The Group has determined that it has two operating segments as its reporting units, namely Yuantel and Connected Solution. Goodwill is recorded at the Yuantel reporting unit. (m) Impairment of long-lived assets The Group evaluates its long-lived assets or asset group, including intangible assets with indefinite and finite lives, for impairment. Intangible assets with indefinite lives that are not subject to amortization are tested for impairment at least annually or more frequently if events or changes in circumstances indicate that the assets might be impaired in accordance with ASC 350. Such impairment test compares the fair values of assets with their carrying values with an impairment loss recognized when the carrying values exceed fair values. For long-lived assets and intangible assets with finite lives that are subject to depreciation and amortization are tested for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset or a Group of long-lived assets may not be recoverable. When these events occur, the Group evaluates impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair value. (n) Fair value of financial instruments The Group’s financial instruments include cash and cash equivalents, restricted cash, accounts receivable and payable, accounts receivable from related parties, receivable from MVNO franchisees, short-term and long-term bank borrowings, warrants for Series D convertible redeemable preferred shares and Convertible Redeemable Preferred Shares. Other than the long-term bank borrowings, warrants for Series D convertible redeemable preferred shares, the carrying values of these financial instruments approximate their fair values due to their short-term maturities. The Group applies ASC 820, Fair Value Measurements and Disclosures ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. During the years ended December 31, 2016 and 2017, there was no financial instrument measured at fair value. The warrants for Series D convertible redeemable preferred shares were classified as level 3 and fair valued using the binomial option pricing model as of December 31, 2016. The carrying amounts of long-term bank borrowings approximated their fair values since they bear interest rates which approximate market interest rates. The Convertible Redeemable Preferred Shares are initially recognized at its fair value on the closing date, at the issuance price, net of issuance cost. (o) Revenue recognition The Group is mainly engaged in the business of providing 1) Android+ platform solutions and services, 2) hardware product sales, and 3) MVNO services. The Group recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed and determinable, and collectability is reasonably assured. 1. Android+ platform solutions and services Android+ platform solutions The Group provides customized Android+ software platform solutions that are developed to maximize the commercial grade quality or performance of open source Android+ software for integration with particular chipsets. The Group also provides customized Android+ service platform solutions that are end to end software developed for mobile operators to allow data synchronization between their platform and mobile devices. The Group charges its customers, mainly including mobile device manufacturers and mobile operators, fixed fees for project-based software contracts, as well as per chip or per mobile device royalty fees. The project-based software contracts are generally considered multiple element arrangements as they consist of perpetual software licenses, software development services such as customization, modification, implementation and integration, and post-contract customer support (“PCS”) where customers have the right to receive bug fixes, telephone support and unspecified upgrades on a when-and-if available basis. Pursuant to ASC 985-605, Revenue Recognition: Software Revenue Recognition: Contract Accounting As the Group was unable to establish vendor specific objective evidence of the fair value of PCS and PCS is the only undelivered element upon completion of software projects, the entire software project fixed fees are recognized ratably over the PCS service period. PCS service periods are generally 12 months, with ranges from six months to three years, and commences upon completion of customer acceptance of the completed software projects. Costs incurred to complete the software projects are deferred to match revenue recognition. Where the Group is entitled to receive on going usage based royalties determined based on the chip or mobile device sales, the usage-based royalties are recognized according to the customers’ usage reports, generally on a quarterly basis. Service contracts The Group provides research and development services to certain customers for their mobile-computing related development projects where fees are charged on a time and material basis and the Group is not responsible for the outcome of such development projects. The revenue is recognized proportionately as the services are delivered and is included as software revenues on the consolidated statement of operations. 2. Hardware product sales The Group provides total solutions on original design manufacturer (“ODM”) basis to customers of mobile devices. Revenue is recognized when sale of each final hardware product to the customers are delivered. Warranty is provided to all customers, which is not considered an additional service; rather, an integral part of the product sales. ASC 450, Contingencies, 3. MVNO On July 11, 2014, the Group, through the VIE, acquired and obtained control of Yuantel Investment, which mainly operates the MVNO business. The license to operate such MVNO business is issued by the Chinese Ministry of Industry and Information Technology and the core mobile network is provided by the PRC government owned China Unicom. Yuantel Investment receives wholesale rates for mobile voice and data services from China Unicom and repackages the voice and data services into competitive bundles for Chinese consumers. In accordance with ASC 605-45, Revenue Recognition; Principal agent consideration, Sales of the bundles are mostly made through agents and franchisees. Bundled services sold to agents are discounted and not refundable to the Group. The Group accounts for such discounts as reductions of revenue in accordance with ASC 605-50 (“ASC 605-50”) Customer Payments and Incentives The Group enters into profit sharing arrangements with franchisees under which bundled services may be returned to the Group if not sold to the consumers. The franchisees receive certain percentages of profits made by the Group on the sales of the bundled services as they are used by the consumers. The Group accounts for profit sharing with franchisees as selling expenses in the consolidated statements of operations. Pursuant to the Group’s policy, the amount of discounts that may be provided by the franchisees to consumers is capped at 5%, based on which, the Group recognized the maximum amount of discounts that may be provided by the franchisees as reductions of revenue in accordance with ASC 605-50. (p) Cost of revenues Cost of revenues consists primarily of telecommunication costs, depreciation of long-lived assets, amortization of acquired intangible asset, payroll and other related costs of operations. Deferred cost of revenues was US$1,658 and US$3,149 for the years ended December 31, 2016 and 2017. (q) Advertising expenditures Advertising expenditures are expensed as incurred and are included in sales and marketing expenses, which amounted to US$46, US$78 and US$45 for the years ended December 31, 2015, 2016 and 2017, respectively. (r) Research and development expenses Research and development expenses include payroll, employee benefits, and other headcount-related expenses associated with research and platform development. Research and development expenses also include rent, depreciation and other related expenses. Research and development expenses are expensed as incurred. (s) Government grants Government grants are provided by the relevant PRC municipal government authorities to subsidize the cost of certain technology development projects. The amount of such government grants are determined solely at the discretion of the relevant government authorities and there is no assurance that the Group will continue to receive these government grants in the future. Government grants are recognized when it is probable that the Group will comply with the conditions attached to them, and the grants are received. When the grant relates to an expense item, it is recognized in the consolidated statement of operations over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate, as a reduction of the related operating expense. When the grant relates to an asset, it is recognized as deferred government grants and released to the consolidated statement of operations in equal amounts over the expected useful life of the related asset, when operational, as a reduction of the related depreciation expense. (t) Leases Leases are classified at the inception date as either a capital lease or an operating lease. The Group did not enter into any leases whereby it is the lessor for any of the periods presented. As the lessee, a lease is a capital lease if any of the following conditions exists: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life, or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. The Group did not enter into any capital leases for the years ended December 31, 2015, 2016 and 2017. All other leases are accounted for as operating leases wherein rental payments are expensed on a straight-line basis over the periods of their respective lease terms. The Group leases office space under operating lease agreements. Certain lease agreements contain rent holidays and escalating rent. Rent holidays and escalating rent are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the lease property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. (u) Income taxes The Group accounts for income taxes using the liability method. Current income taxes are provided for in accordance with the laws of the relevant tax authorities. 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 Group 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 effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. The Group applies ASC 740, Accounting for Income Taxes, , The Group has elected to classify interest related to unrecognized tax benefits, if and when required, as part of “income tax expense” in the consolidated statements of operations. The Group elected to early adopt ASU No. 2016-16, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. (v) Share-based compensation The Group accounts for share-based compensation in accordance with ASC 718, Compensation-Stock Compensation: Overall In accordance with ASC 718, the Group determines whether an award should be classified and accounted for as a liability award or equity award. All grants of share-based awards to employees classified as equity awards are measured based on their grant date fair values and recognized as compensation expense over the requisite service period and/or performance period in the consolidated statements of operations. The Group recognizes compensation expense using the accelerated method for share-based awards granted with service and performance conditions. According to ASC 718, the amount of compensation cost recognized (or attributed) when achievement of a performance condition is probable depends on the relative satisfaction of the performance condition based on performance to date. According to ASC 718, probable means the future event or events are likely to occur and the Group interprets “probable” to be generally in excess of a 70% likelihood of occurrence. The Group elected to account for forfeitures as they occur. (w) Comprehensive income (loss) Comprehensive income (loss) is defined as the (decrease) increase in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Accumulated other comprehensive income (loss) of the Group includes foreign currency translation adjustments related to the Group and its PRC subsidiaries, whose functional currency is RMB. (x) Segment reporting In accordance with ASC 280 “ Segment Reporting (y) Employee benefits The full-time employees of the Group’s PRC subsidiaries are entitled to staff welfare benefits including medical care, housing fund, pension benefits and unemployment insurance, which are governmental mandated defined contribution plans. These entities are required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. (z) Comparatives Certain items reported in the prior year’s consolidated financial statements have been reclassified to conform to the current year’s presentation. (aa) (Loss) earnings per share (Loss) earnings per share is computed by dividing net (loss)/income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income (loss) is allocated between ordinary shares and other participating securities based on their participating rights. The Group’s Convertible Redeemable Preferred Shares (Note 19) were participating securities. As the participating securities do not share the losses of the Group, the computation of basic earnings per share using two-class method is not applicable when the Group is at a net loss position. Diluted (loss) earnings per share is calculated by dividing net (loss) income attributable to ordinary shareholders by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of shares issuable upon the exercise of share options using the treasury stock method and shares issuable upon the conversion of the Group’s Convertible Redeemable Preferred Shares using the if-converted method. Ordinary equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such shares would be anti-dilutive. (bb) Recent accounting pronouncements In August 2015, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-14 (“ASU 2015-14”), Revenue from Contracts with Customers-Deferral of the effective date Revenue from Contracts with Customers Revenue from Contracts with Customers—Principal versus Agent Considerations Revenue from Contracts with Customers—Identifying Performance Obligations and Licensing Revenue from Contracts with Customers— Narrow-Scope Improvements and Practical Expedients In February 2016, the FASB issued ASU No. 2016-02, Leases, . In June 2016, the FASB issued ASU No. 2016-13 (“ASU 2016-13”), Financial Instruments — Credit Losses In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In January 2017, FASB has issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (“ASU 2017-04”), Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In February 2017, the FASB issued ASU 2017-05 (“ASU 2017-05”), Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets In May 2017, the FASB issued ASU 2017-09 (“ASU 2017-09”), Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. |
Concentration of Risks
Concentration of Risks | 12 Months Ended |
Dec. 31, 2017 | |
Concentration of Risks [Abstract] | |
CONCENTRATION OF RISKS | 3. CONCENTRATION OF RISKS (a) Credit risk Financial instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, accounts receivable, accounts receivable from related parties and receivable from MVNO franchisees. As of December 31, 2016 and 2017, the aggregate amount of cash and cash equivalents and restricted cash of US$2,563 and US$4,545, respectively, were held at major financial institutions located in the PRC, and US$2,200 and US$11,974, respectively, were deposited with major financial institutions located outside the PRC. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions. Historically, deposits in Chinese banks are secure due to the state policy on protecting depositors’ interests. However, China promulgated a new Bankruptcy Law in August 2006 that came into effect on June 1, 2007, which contains a separate article expressly stating that the State Council may promulgate implementation measures for the bankruptcy of Chinese banks based on the Bankruptcy Law. Under the new Bankruptcy Law, a Chinese bank may go into bankruptcy. In addition, since China’s concession to the World Trade Organization, foreign banks have been gradually permitted to operate in China and have been significant competitors against Chinese banks in many aspects, especially since the opening of the Renminbi business to foreign banks in late 2006. Therefore, the risk of bankruptcy of those Chinese banks in which the Group has deposits has increased. In the event of bankruptcy of one of the banks which holds the Group’s deposits, it is unlikely to claim its deposits back in full since it is unlikely to be classified as a secured creditor based on PRC laws. Accounts receivable, accounts receivable from related parties and receivable from MVNO franchisees are both typically unsecured, and are derived from revenues earned from customers. The risk is mitigated by credit evaluations the Group performs on its ongoing credit evaluations of its customers’ financial conditions and ongoing monitoring process of outstanding balances. The Group maintains reserves for estimated credit losses and these losses have generally been within expectations. (b) Business supplier, customer, and economic risk The Group participates in a dynamic and competitive high technology industry and believes that changes in any of the following areas could have a material adverse effect on the Group’s future financial position, results of operations or cash flows: changes in the overall demand for services; competitive pressures due to new entrants; advances and new trends in new technology; control of telecommunication infrastructures by local regulators and industry standards; strategic relationships or customer relationships; regulatory considerations; and risks associated with the Group’s ability to attract and retain employees necessary to support its growth. (i) Business supplier risk – the Group’s MVNO operations are dependent upon telecommunication resources provided by China Unicom. There is no guarantee that the supply of telecommunication resources provided by China Unicom will be renewed annually. Further, there is no guarantee around the continuance of the MVNO license granted by the PRC government Ministry of Industry and Information Technology which may be amended or discontinued in light of changes to political, economic and social reforms. (ii) Customer risk – The success of the Group’s business going forward will rely in part on Group’s ability to continue to obtain and expand business from existing customers while also attracting new customers. The Group has a diversified base of customers covering its services and the revenue from the largest single customer A accounted for 9%, customer B accounted for 23% and customer C accounted for 41% of the Group’s total net revenues for the three years ended December 31, 2015, 2016 and 2017, respectively, and the accounts receivable from the largest single customer B accounted for 25% and customer C accounted for 47% of the Group’s total accounts receivable and accounts receivable from related parties for the years ended December 31, 2016 and 2017, respectively. (iii) Economic risk – the Group’s operations could be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than 20 years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC political, economic and social conditions. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective. (c) Foreign currency exchange rate risk From July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. The appreciation / (depreciation) of the US$ against RMB was approximately 6.1%, 6.8% and (5.8%) in the years ended December 31, 2015, 2016 and 2017, respectively. The appreciation / (depreciation) of the US$ against Rupee was approximately 4.7%, 3.3% and (5.9%) in the years ended December 31, 2015, 2016 and 2017, respectively. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions [Abstract] | |
ACQUISITIONS | 4. ACQUISITIONS Reverse Acquisition The Company was a NASDAQ listed special purpose acquisition company formed for the purpose of effecting a merger, acquisition, or similar business combination. On August 18, 2017, the Company completed the acquisition of Borqs International in an all-stock transaction (the “Merger”). The Company issued 25,913,950 of its ordinary shares (“Merger Consideration Shares”) to Borqs International’s shareholders in exchange for the transfer of 100% equity interest in Borqs International to the Company and Borqs International became the Company’s wholly own subsidiary. Of the Merger Consideration Shares, a total of 25,913,950 ordinary shares were issued to Borqs International’s shareholders at closing, with 942,467 of such shares deposited into escrow for indemnification obligations (“Indemnity shares”), 2,352,285 of such shares deposited in escrow subject to Borqs Technologies meeting certain earn-out requirements, (“Earnout Shares” and together with the Indemnity Shares, the “Escrow Shares”) in the event certain net income earnout conditions are met during the period from July 1, 2017 to June 30, 2018 (“Earnout Period”) and 1,178,084 ordinary shares were issued to a financial advisor engaged by Borqs International in connection with the Merger. As transfers between the shareholders of the Company, the Escrow Shares did not have any impact on the Company’s financial statements. Additionally at the effective time of the Merger, the holders of Borqs International issued and outstanding warrants (Note 10) received replacement warrants to acquire an aggregate of 417,166 Borqs Technologies’ ordinary shares (“Replacement Warrants”), and the holders of Borqs International issued and outstanding options (Note 15) had their options assumed by Borqs Technologies to hold options to acquire Borqs Technologies’ ordinary shares upon the exercise of those options (“Assumed Options”). Equity classified instruments including (i) an option to purchase up to 400,000 units at $10.00 per unit (“Unit Purchase Option”), (ii) 5,750,000 public warrants and (iii) 531,875 private warrants issued by the Company prior to the Merger remain outstanding. Each unit consists of one ordinary share of the Company, one right (convertible into one tenth of an ordinary share) and one warrant to purchase one half of one ordinary share at $12. Each public and private warrant also entitles the holder to purchase one half of one ordinary share at $12.00 per whole share. Borqs International was determined as the accounting acquirer in the Merger in accordance with ASC 805, Business Combinations. This determination was primarily based on the Group comprising the ongoing operations, with its senior management operating the business going forward, and Borqs International’s shareholders having the majority voting power of the combined entity. Consequently, in the transaction with a special purpose acquisition company whereby the operating company, Borqs International was identified as the accounting acquirer, the Merger was treated as a capital transaction involving the issuance of the Company’s ordinary shares. The historical consolidated financial statements for all periods prior to the consummation of the Merger only reflect the historical consolidated financial statements of Borqs International. Subsequent to the Merger, the consolidated financial statements reflect the results of the combined entity. The historically issued and outstanding Borqs International’s ordinary shares have been recasted to retrospectively reflect the number of ordinary shares issued in the Merger in all periods presented. As the Merger occurred between public accounting acquiree and a private accounting acquirer, the determination of consideration is based on the fair value of the legal acquirer’s stock. Difference between purchase consideration of US$45,734 transferred and net assets of US$18,059 acquired, which was predominately cash, was recorded in additional paid-in capital. Transaction Expenses Advisory, financing, integration and other transaction costs directly related to the Merger totaled US$15.3 million for the year ended December 31, 2017, including US$8.8 million in share-based compensation expense recorded for the ordinary shares issued to the financial advisors. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventories [Abstract] | |
INVENTORIES | 5. INVENTORIES Inventories consisted of the following as of December 31, 2016 and 2017: As of December 31, 2016 2017 US$ US$ Raw materials 5,406 11,588 Goods in transit 7,164 4,643 Work in process 1,023 977 Finished goods 127 741 Less: Provision (1,038 ) (918 ) Inventories, net 12,682 17,031 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: As of December 31, 2016 2017 US$ US$ Staff advances 293 312 Prepayment for products - 1,008 Advance to OEM 3,739 3,662 Rental and other deposits 1,048 1,203 VAT recoverable 963 2,189 Loan to third parties 519 1,469 Receivable from an agent - 6,318 Others 37 79 6,599 16,240 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment, Net [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET Property and equipment consist of the following: As of December 31, 2016 2017 US$ US$ At cost: Leasehold improvements 837 933 Computer and network equipment 5,801 6,458 Office equipment 763 918 Motor vehicles 220 233 7,621 8,542 Less: accumulated depreciation (6,133 ) (7,180 ) 1,488 1,362 Depreciation expense was US$1,371, US$1,011 and US$501 for the years ended December 31, 2015, 2016 and 2017, respectively, and were included in the following captions: For the years ended December 31, 2015 2016 2017 US$ US$ US$ Cost of revenues 472 347 140 Sales and marketing expenses 54 15 13 General and administrative expenses 144 277 190 Research and development expenses 701 372 158 1,371 1,011 501 |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2017 | |
Intangible Assets, Net/Goodwill [Abstract] | |
INTANGIBLE ASSETS, NET | 8. INTANGIBLE ASSETS, NET The following table presents the Group’s intangible assets as of the respective balance sheet dates: Software Capitalized software development costs License Total US$ US$ US$ US$ Balance as of January 1, 2016 2,337 3,266 7,659 13,262 Additions 315 4,915 - 5,230 Amortization expense (205 ) (1,098 ) (843 ) (2,146 ) Foreign currency translation difference (153 ) (209 ) (486 ) (848 ) Balance as of December 31, 2016 2,294 6,874 6,330 15,498 Additions 348 7,248 54 7,650 Amortization expense (253 ) (2,784 ) (898 ) (3,935 ) Foreign currency translation difference 140 262 389 791 Balance as of December 31, 2017 2,529 11,600 5,875 20,004 The intangible assets are amortized using the straight-line method, which is the Group’s best estimate of how these assets will be economically consumed over their respective estimated useful lives of 3-10 years. Amortization expense was US$1,109, US$2,146 and US$3,935 for the years ended December 31, 2015, 2016 and 2017, respectively. The annual estimated amortization expenses for the intangible assets for each of the next five years are as follows: US$ 2018 6,407 2019 5,272 2020 3,322 2021 1,114 2022 1,090 17,205 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2017 | |
Intangible Assets, Net/Goodwill [Abstract] | |
GOODWILL | 9. GOODWILL The changes in the carrying amount of goodwill were as follows: As of December 31, 2016 2017 US$ US$ Balance as of January 1 741 693 Foreign currency translation difference (48 ) 43 Balance as of December 31 693 736 No impairment charge was recorded in any of the three years ended December 31, 2016 and 2017. |
Bank and Other Borrowings
Bank and Other Borrowings | 12 Months Ended |
Dec. 31, 2017 | |
Bank and Other Borrowings [Abstract] | |
BANK AND OTHER BORROWINGS | 10. BANK AND OTHER BORROWINGS Bank and other borrowings are as follows as of the respective balance sheet dates: As of December 31, 2016 2017 US$ US$ Short-term bank and other borrowings 6,306 12,648 Long-term bank borrowings, current portion 1,381 5,432 7,687 18,080 Long-term bank borrowings, non-current portion 4,491 - Total borrowings 12,178 18,080 The short-term bank borrowings outstanding as of December 31, 2016 and 2017 bore a weighted average interest rate of 6.89% and 6.73% per annum, respectively, and were denominated in RMB and US$. These borrowings were obtained from financial institutions and have term of one year. The long-term bank borrowings, current portion outstanding as of December 31, 2017 bore a weighted average interest rate of 7.97%, and were denominated in US$. These borrowings were obtained from financial institutions located in USA, and have terms of three years. On November 28, 2017, the Company entered into short-term loan agreements with HHMC Microelectronic Co., Limited of US$5,000,000 with an interest rate of 14.6% per annum and a maturity term of three months, for working capital. Bank borrowings as of December 31, 2017 were pledged by the account receivable amounted to US$43,135. As of December 31, 2017, the Company was in breach of two of the financial covenants under a long-term bank borrowing with an outstanding balance of US$1,515. The breach would result in acceleration of the repayment according to the contract term. Therefore, the outstanding balance was reclassified as current liability as of December 31, 2017. In August 2016, the Group issued 2,515,123 and 1,900,800 warrants (“2016 Warrants”) to two banks in connection with a short term loan facility of $2,000,000 and a long term loan facility of $6,000,000 respectively, for working capital purpose. The 2016 Warrants entitled the banks to subscribe for Series D convertible redeemable preferred shares at the exercise price of $0.5059. The 2016 Warrants shall lapse and expire after 5 and 7 years from their issuance dates, respectively. The 2016 Warrants were replaced by Replacement Warrants to acquire an aggregate of 417,166 the Group’s ordinary shares at the consummation date of the Merger. As the 2016 Warrants were granted to the banks for loan facilities, their fair value on the issuance date were recognized as deferred borrowing costs presented as deductions of the carrying value of the term loans. The deferred borrowing costs were recognized over the lives of the term loans as financing cost, using the effective interest rate method. Given the 2016 Warrants were convertible into Series D convertible redeemable preferred shares classified as mezzanine equity, the 2016 Warrants were financial liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity As part of the Merger, the 2016 Warrants were replaced by Replacement Warrants to acquire an aggregate of 417,166 the Group’s ordinary shares classified as permanent equity. As the modification of the 2016 Warrants term resulted in the reclassification of the 2016 Warrants from liability to equity, the 2016 Warrants amounted to US$1,544 were re-measured at fair value upon Merger and reclassified to additional paid in capital as of December 31, 2017. |
Accrued Expenses and Other Paya
Accrued Expenses and Other Payables | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Expenses and Other Payables [Abstract] | |
ACCRUED EXPENSES AND OTHER PAYABLES | 11. ACCRUED EXPENSES AND OTHER PAYABLES The components of accrued expenses and other payables are as follows: As of December 31, 2016 2017 US$ US$ Payroll and welfare payable 3,235 2,030 Accrued liability 50 - VAT, and other taxes payable 831 2,473 Payables for office supply and utilities 743 711 Payables for purchase of property and equipment 432 52 Professional service fees - 3,161 Deposits from agents 2,315 3,509 Others 28 227 7,634 12,163 |
Deferred Government Grants
Deferred Government Grants | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Government Grants [Abstract] | |
DEFERRED GOVERNMENT GRANTS | 12. DEFERRED GOVERNMENT GRANTS The government grants received are required to be used in construction of property and equipment. These grants are initially deferred and subsequently recognized in the statement of operations over the life of the related assets as other operating income. For the years ended December 31, 2015 2016 2017 US$ US$ US$ Balance at beginning of the year 7,316 4,014 2,108 Recognized as other operating income (2,880 ) (1,650 ) (281 ) Foreign currency translation difference (422 ) (256 ) 130 Balance at ending of the year 4,014 2,108 1,957 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Loss [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 13. ACCUMULATED OTHER COMPREHENSIVE LOSS The changes in accumulated other comprehensive loss, net of tax of nil, are as follows: Foreign currency translation Total US$ US$ Balance as of January 1, 2015 139 139 Current year other comprehensive loss (1,288 ) (1,288 ) Balance as of December 31, 2015 (1,149 ) (1,149 ) Current year other comprehensive loss (1,477 ) (1,477 ) Balance as of December 31, 2016 (2,626 ) (2,626 ) Current year other comprehensive income 2,119 2,119 Balance as of December 31, 2017 (507 ) (507 ) |
Mainland China Employee Contrib
Mainland China Employee Contribution Plan | 12 Months Ended |
Dec. 31, 2017 | |
Mainland China Employee Contribution Plan [Abstract] | |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | 14. MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN As stipulated by the regulations of the PRC, full-time employees of the Group in the PRC participate in a government-mandated multiemployer defined contribution plan organized by municipal and provincial governments. Under the plan, certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. The Group is required to make contributions to the plan based on certain percentages of employees’ salaries. The total expenses the Group incurred for the plan were US$2,238, US$2,362 and US$2,527, respectively, for the years ended December 31, 2015, 2016 and 2017. |
Share Based Compensation
Share Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Share Based Compensation [Abstract] | |
SHARE BASED COMPENSATION | 15. SHARE BASED COMPENSATION Share-based awards under the 2007 Plan In order to provide additional incentives to employees and to promote the success of the Group’s business, the Group adopted a share incentive plan in (the “2007 Plan”) December 2007, which was last amended in February 2011. The 2007 Plan allows the Group to grant options to employees, directors, consultants or members of the board of directors of the Group. Under the 2007 Plan, the maximum aggregate number of shares that may be issued shall not exceed 38,700,000. The terms of the options shall not exceed ten years from the date of grant. 25% of the shares subject to the options shall vest on the first anniversary of the vesting commencement date, and 1/48 of the shares subject to the options shall vest each month thereafter over the next three years, provided the optionee continues to be a service provider to the Group. Thus, there is an explicit service condition of 4 years. In addition, the options contain a performance condition whereby vesting will commence upon the earlier to occur of an initial public offering or a change in control as defined in the 2007 Plan, provided there is continued employment of the optionees on such date. During the years ended December 31, 2015, December 31, 2016 and the period ended August 18, 2017, the Group granted 6,525,190, 610,000 and 9,085,000 shares of options, respectively, to purchase ordinary shares to employees, officers, and directors with the exercise price of $0.459, $0.56 and $0.678 ~ $0.859 per share, respectively. The following table summarizes the Group’s option activities under the 2007 Plan: Number of options Weighted average exercise price Weighted average remaining contractual term Aggregate intrinsic value (US$) (Years) (US$) Outstanding, January 1, 2015 29,554,630 0.27 6.88 308 Granted 6,525,190 0.46 Forfeited (4,042,580 ) 0.36 Outstanding, December 31, 2015 32,037,240 0.30 4.97 308 Vested and expect to vest at December 31, 2015 32,037,240 0.30 4.97 308 Outstanding, January 1, 2016 32,037,240 0.30 4.97 308 Granted 610,000 0.56 Forfeited (5,190,297 ) 0.34 Outstanding, December 31, 2016 27,456,943 0.30 5.26 308 Vested and expected to vest at December 31, 2016 27,456,943 0.30 5.26 308 Outstanding, January 1, 2017 27,456,943 0.30 5.26 308 Granted 9,085,000 0.70 Forfeited (8,007,606 ) 0.04 Outstanding, August 18, 2017 28,534,337 0.48 6.99 - Vested and expected to vest at August 18, 2017 28,534,337 0.48 6.99 - As of August 18, 2017, no options were vested and exercisable given the performance condition in place described above. Historically, compensation cost related to performance options that only vest upon the consummation of an initial public offering or change in control event was recognized when the offering or change in control event was consummated. Accordingly, the Group did not recognized any compensation cost under the 2007 Plan. The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the fair value of the underlying stock at each reporting date, for those awards that have an exercise price below the estimated fair value of the Group’s shares. As of December 31, 2015, 2016 and August 18, 2017, the Group had options outstanding to purchase an aggregate of 5,500,000 shares, 5,500,000 shares and nil with an exercise price below the fair value of the Group’s shares, resulting in an aggregate intrinsic value of US$308, US$308 and nil, respectively. Consummation of reverse acquisition in 2017 Upon the consummation of the Merger, the holders of Borqs International issued and outstanding options had their options assumed by the Company and now hold options to acquire a total of 2,695,194 of the Company’s ordinary shares upon exercise of those options. In addition, the performance condition whereby vesting will commence upon the earlier to occur of an initial public offering or a change in control (collectively, “IPO condition”) as defined in the 2007 Plan was removed. Pursuant to ASC 718, the cancellation of the terms or conditions of an equity award under original award in exchange for a new award should be treated as modification. As the IPO condition was not expected to be satisfied as of the modification date, the original grant-date fair value is no longer used to measure compensation cost for the awards. As a result, the compensation cost recognized for the replacement awards would be based on the modification date fair value of the awards. For those awards that were fully vested at the time of the modification, the Group recognized a one-time catch up of US$5,658 in share-based compensation expense upon the Merger. On November 18, 2017, the Group granted 180,000 share of options to purchase ordinary shares to directors with the exercise price of $5.30 share. Number of options Weighted average exercise price Weighted average remaining contractual term Aggregate intrinsic value (US$) (Years) (US$) Converted under Assumed Options: Outstanding, August 18, 2017 2,695,194 5.08 6.99 6,561 Granted 180,000 5.30 Forfeited (49,804 ) 6.58 Outstanding, December 31, 2017 2,825,390 5.38 6.43 6,860 Vested and expected to vest at December 31, 2017 2,825,390 5.38 6.43 6,860 As of August 18, 2017 and December 31, 2017, the Group had options outstanding to purchase an aggregate of 2,583,250 and 2,735,174 shares with an exercise price below the fair value of the Group’s shares, resulting in an aggregate intrinsic value of US$6,561 and US$6,860, respectively. The Group calculated the estimated fair value of the options on the respective grant dates using the binomial-lattice option valuation model with the following assumptions for each applicable period which takes into account variables such as volatility, dividend yield, and risk-free interest rate, contractual term of the option, the probability that the option will be exercised prior to the end of its contractual life, and the probability of termination or retirement of the option holder in computing the value of the option: Year 2015 Year 2016 Year 2017 Risk-free interest rates 1.95%-2.28 % 1.58%-2.60 % 1.06%-2.32 % Expected life (years) 10 years 10 years 10 years Expected volatility 40%-45 % 45%-46 % 31.9%-43.9 % Expected dividend yield 0 % 0 % 0 % Exercise multiple 2.20 2.20 2.20 Post-vesting forfeit rate 10 % 10 % 10 % Fair value of underlying ordinary shares US$0.158-US$0.231 US$0.615-US$0.697 US$7.45 Fair value of share option US$0.026-US$0.096 US$0.309-US$0.315 US$2.34-US$7.45 Total compensation expense relating to share options granted to employees recognized for the year ended December 31, 2017 is as follows: For the year ended December 31, 2017 Cost of revenues - Sales and marketing expenses 1,470 General and administrative expenses 1,277 Research and development expenses 3,143 5,890 Ordinary shares issued in 2017 On March 17, 2017, the Group issued 450,000 ordinary shares to certain employees and a non-employee for a total proceeds of US$62. The fair value of the ordinary shares in excess of the proceeds received by the Group was immediately recognized as compensation expense which amounted to US$324. The 450,000 ordinary shares were fully vested as of December 31, 2017. |
Taxation
Taxation | 12 Months Ended |
Dec. 31, 2017 | |
Taxation [Abstract] | |
TAXATION | 16. TAXATION Enterprise income tax (“EIT”) British Virgin Islands The Company is incorporated in the British Virgin Islands and conducts its primary business operations through the subsidiaries and VIEs in the PRC, India and Hong Kong. Under the current laws of the British Virgin Islands, the Company is not subject to tax on income or capital gains. Cayman Islands Borqs International is incorporated in the Cayman Islands and conducts its primary business operations through the subsidiaries and VIEs in the PRC, India and Hong Kong. Under the current laws of the Cayman Islands, Borqs International is not subject to tax on income or capital gains. Hong Kong Borqs HK is subject to Hong Kong profits tax rate of 16.5% for the years ended December 31, 2015, 2016 and 2017. No provision for Borqs HK profits tax has been made in the consolidated financial statements as the entity had losses in the years ended December 31, 2015, 2016 and 2017. India Borqs India is subject to income tax rate of 32.45% for the years ended December 31, 2015, 2016 and 2017. Amounts of US$1,158, US$1,684 and US$2,024 are included as income tax expense for the years ended December 31, 2015, 2016 and 2017, respectively. The PRC The Group’s PRC subsidiaries are incorporated in the PRC and subject to PRC EIT on the taxable income in accordance with the relevant PRC income tax laws. Effective January 1, 2008, the statutory corporate income tax rate is 25%, except for certain entities eligible for preferential tax rates. BORQS Beijing was qualified for a High and New Technology Enterprises (“HNTE”) since 2012 and is eligible for a 15% preferential tax rate from 2012 to 2014. In July 2015, BORQS Beijing obtained a new HNTE certificate, which will expire in July 2018. For the years ended December 31, 2015, 2016 and 2017, BORQS Beijing enjoyed a preferential tax rate of 15%. Yuantel Telecom was qualified for a High and New Technology Enterprises (“HNTE”) since 2011 and is eligible for a 15% preferential tax rate from 2011 to 2013. In October 2014, Yuantel Telecom obtained a new HNTE certificate, which expired in October 2017. Yuantel Telecom has successfully renewed the HNTE certificate in December 2017 with effective term of three years. In accordance with the PRC Income Tax Laws, an enterprise awarded with the HNTE status may enjoy a reduced EIT rate of 15%. For the years ended December 31, 2015, 2016 and 2017, Yuantel Telecom enjoyed a preferential tax rate of 15%. The Group’s other PRC subsidiaries were subject to EIT at a rate of 25% for the years ended December 31, 2015, 2016 and 2017. The New EIT Law also provides that enterprises established under the laws of foreign countries or regions and whose “place of effective management” is located within the PRC are considered PRC tax resident enterprises and subject to PRC income tax at the rate of 25% on worldwide income. The definition of “place of effective management” refers to an establishment that exercises, in substance, overall management and control over the production and business, personnel, accounting, properties, etc. of an enterprise. As of December 31, 2017, no detailed interpretation or guidance has been issued to define “place of effective management”. Furthermore, as of December 31, 2017, the administrative practice associated with interpreting and applying the concept of “place of effective management” is unclear. If the Group is deemed as a PRC tax resident, it would be subject to PRC tax under the New CIT Law. The Group will continue to monitor changes in the interpretation or guidance of this law. Profit (loss) before income taxes consists of: For the years ended December 31, 2015 2016 2017 US$ US$ US$ Non-PRC 3,241 2,777 (7,138 ) PRC (1,595 ) 2,478 (2,902 ) 1,646 5,255 (10,040 ) Income tax expense comprises of: For the years ended December 31, 2015 2016 2017 US$ US$ US$ Current (1,895 ) (2,257 ) (1,382 ) Deferred 1,044 (402 ) (937 ) (851 ) (2,659 ) (2,319 ) The reconciliation of tax computed by applying the statutory income tax rate of 25% for the years ended December 31, 2015, 2016 and 2017 applicable to the PRC operations to income tax expense is as follows: For the years ended December 31, 2015 2016 2017 US$ US$ US$ Profit (loss) before income taxes 1,646 5,255 (10,040 ) Income tax (expense) income computed at the statutory income tax rate at 25% (412 ) (1,314 ) 2,510 Non-deductible expenses (166 ) (491 ) (2,698 ) Non-taxation income 1,300 414 68 Preferential rate (423 ) 400 (324 ) Current and deferred tax rate differences 790 310 55 Foreign rate differences (292 ) 560 (426 ) Change of valuation allowance (1,643 ) (2,529 ) (1,039 ) Taxable income - - (215 ) Deferred tax - 74 - Interest expense (5 ) (83 ) (250 ) Income tax expense (851 ) (2,659 ) (2,319 ) Deferred Taxes The significant components of deferred taxes are as follows: As of December 31, 2016 2017 US$ US$ Deferred tax assets Inventories provision 156 229 Accrued salary and welfare payable 274 165 Property and equipment 20 14 Tax losses 13,279 14,769 Valuation allowance (12,675 ) (13,714 ) Total deferred tax assets 1,054 1,463 Deferred tax liabilities Intangible assets 2,146 2,004 Deferred cost of revenue 24 1,551 Total deferred tax liabilities 2,170 3,555 As of December 31, 2017, the Group had net tax operating losses from its PRC subsidiaries and its Consolidated VIEs, as per filed tax returns, of US$38,503, which will expire from 2018 to 2022. The Group has net tax operating loss from its HK subsidiary of US$15,500, which will not expire. As of December 31, 2017, the Group intends to permanently reinvest the undistributed earnings from its foreign subsidiaries and the Consolidated VIEs to fund future operations. The amount of unrecognized deferred tax liabilities for temporary differences related to investments in foreign subsidiaries and the Consolidated VIEs is not determined because such a determination is not practicable. Unrecognized Tax Benefits As of December 31, 2016 and 2017, the Group recorded an unrecognized tax benefits of US$4,053 and US$4,547, respectively, of which, US$2,381 and US$2,764, respectively, are presented on a net basis against the deferred tax assets related to tax loss carry forwards on the consolidated balance sheets. The unrecognized tax benefits and its related interest are primarily related to under-reported intercompany profit. The amount of unrecognized tax benefits will change in the next 12 months, pending clarification of current tax law or audit by the tax authorities, however, an estimate of the range of the possible change cannot be made at this time. As of December 31, 2016 and 2017, unrecognized tax benefits of US$1,681 and US$2,043, if ultimately recognized, will impact the effective tax rate. A roll-forward of unrecognized tax benefits is as follows: For the years ended December 31, 2015 2016 2017 US$ US$ US$ Balance at beginning of year 620 2,177 4,053 Additions based on tax positions related to the current year 1,557 1,876 217 Foreign currency translation difference - - 277 Balance at end of year 2,177 4,053 4,547 In the years ended December 31, 2016 and 2017, the Group recorded interest expense accrued in relation to the unrecognized tax benefit of US$83 and US$250 in income tax expense, respectively. Accumulated interest expense recorded by the Group was US$88 and US$338 as of December 31, 2016 and 2017, respectively. As of December 31, 2017, the tax years ended December 31, 2012 through 2017 for the PRC subsidiaries and the VIE remain open for statutory examination by the PRC tax authorities. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 17. RELATED PARTY TRANSACTIONS (a) Related parties Names of related parties Relationship with the Group Intel Capital Corporation (“Intel”) and its affiliates Intel was a shareholder * Qualcomm Global Trading PTE. Ltd (“Qualcomm”) and its affiliates Qualcomm was a shareholder * (b) Other than disclosed elsewhere, the Group had the following significant related party transactions for the years ended December 31, 2015, 2016 and 2017: For the years ended December 31, 2015 2016 2017 US$ US$ US$ Software services provided to: Intel Corporation 6,204 271 * Intel (China) Co., Ltd. 5 9 * Intel Asia-Pacific Research and Development Ltd. 328 119 * Intel (China) Research Center Co., Ltd. - 57 * Hardware sold to: Intel Corporation 55 - * (c) The Group had the following related party balances as of December 31, 2016 and 2017: As of December 31, 2016 2017 US$ US$ Accounts receivable from related parties: Current: Intel Corporation 481 * Intel (China) Co., Ltd. - * Intel Asia-Pacific Research and Development Ltd. 9 * All balances with the related parties as of December 31, 2016 were unsecured, interest-free and have no fixed terms of repayment. * Upon the consummation of the Merger, both entities ceased to be shareholders of the Group. |
Restricted Net Assets
Restricted Net Assets | 12 Months Ended |
Dec. 31, 2017 | |
Restricted Net Assets [Abstract] | |
RESTRICTED NET ASSETS | 18. RESTRICTED NET ASSETS The Group’s ability to pay dividends is primarily dependent on the Group receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the VIE and subsidiaries of the VIE incorporated in PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The consolidated results of operations reflected in the consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Group’s subsidiaries. Under PRC law, the Group’s subsidiaries, VIE and the subsidiaries of the VIE located in the PRC (collectively referred as the “PRC subsidiaries”) are required to provide for certain statutory reserves, namely a general reserve, an enterprise expansion fund and a staff welfare and bonus fund. The PRC subsidiaries are required to allocate at least 10% of their after tax profits on an individual company basis as determined under PRC accounting standards to the statutory reserve and has the right to discontinue allocations to the statutory reserve if such reserve has reached 50% of registered capital on an individual company basis. In addition, the registered capital of the PRC subsidiaries is also restricted. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the Board of Directors of the subsidiary. The PRC subsidiaries are also subject to similar statutory reserve requirements. These reserves can only be used for specific purposes and are not transferable to the Group in the form of loans, advances or cash dividends. As of December 31, 2016 and December 31, 2017, the Group’s PRC subsidiaries had appropriated US$1,898 and US$1,898, respectively, in its statutory reserves. As a result of these PRC laws and regulations subject to the limit discussed above that require annual appropriations of 10% of after-tax income to be set aside, prior to payment of dividends as general reserve fund, the Group’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Group. Amounts restricted include paid-in capital and statutory reserve funds of the Group’s PRC subsidiaries and the equity of the Consolidated VIEs, as determined pursuant to PRC generally accepted accounting principles, totaling an aggregate of US$1,898 as of December 31, 2017. |
Convertible Redeemable Preferre
Convertible Redeemable Preferred Shares | 12 Months Ended |
Dec. 31, 2017 | |
Convertible Redeemable Preferred Shares [Abstract] | |
CONVERTIBLE REDEEMABLE PREFERRED SHARES | 19. CONVERTIBLE REDEEMABLE PREFERRED SHARES On December 27, 2007, March 17, 2008, September 26, 2008 and October 8, 2008, the Group issued 19,800,000, 3,100,000, 12,000,000 and 5,000,000 Series A convertible redeemable preferred shares (the “Series A Preferred Shares”), respectively, to certain external investors at a price of $0.20 per share for a total cash consideration of $7,980. The cash proceeds received was $7,889, net of issuance costs of $91. On June 26, 2009, August 19, 2009 and October 12, 2009, the Group issued 64,285,715,15,000,000 and 3,571,428 Series B convertible redeemable preferred shares (the “Series B Preferred Shares”), respectively, to certain external investors at a price of $0.21 per share for a total consideration of $17,400 (includes cash proceeds of $14,400 and $3,000 upon conversion of convertible notes). The cash proceeds received was $14,242, net of issuance costs of $158. On February 14, 2011 and May 24, 2012, the Group issued 38,181,817 and 5,454,545 Series C convertible redeemable preferred shares (the “Series C Preferred Shares”), to certain external investors at the price of $0.275 per share for a total cash consideration of $12,000. The cash proceeds received was $11,817, net of issuance costs of $183. On August 20, 2014 the Group issued 23,721,443 Series D convertible redeemable preferred shares (the “Series D Preferred Shares”), to certain external investors at the price of $0.33725 per share for a total cash consideration of $8,000. The cash proceeds received was $7,874, net of issuance costs of $126. On February 8, 2017 and March 2, 2017, the Group closed the issuances of 10,325,126 and 2,950,036 Series E convertible redeemable preferred shares (the “Series E Preferred Shares”), respectively, for a purchase price of $0.678 per share. Concurrently, Series E-1 Warrants to purchase up to an aggregate of 7,094,164 Series E-1 convertible preferred shares (the “Series E-1 Preferred Shares”) were issued and immediately exercised, at $0.001 per share. The total cash proceeds received was US$9,008, net of issuance costs of US$312. Net proceeds were allocated to the Series E Preferred Shares and Series E-1 Preferred Shares based on their relative fair value on closing dates. Series E-1 Preferred Shares shall vote with Series E Preferred Shares as a single class. Series E-1 Preferred Shares have neither redemption rights nor any other rights preferential to the ordinary shares and therefore Series E-1 Preferred Shares are classified as permanent equity. The significant terms of the Series A, Series B, Series C, Series D, and Series E convertible redeemable preferred shares (together “Convertible Redeemable Preferred Shares”) are summarized as follows. Conversion Convertible Redeemable Preferred Shares can be converted into ordinary shares at the option of the holder at any time by dividing the applicable original purchase price by the applicable conversion price which is initially equal to the original purchase price and as such, the initial conversion ratio for each Convertible Redeemable Preferred Shares into each ordinary share shall be one-for-one. Convertible Redeemable Preferred Shares shall automatically be converted into ordinary shares at the then-effective conversion rate applicable to the relevant series of Preferred Shares: (a) in the event of the closing of a Qualified IPO; or (b) in relation only to Series A and Series B Preferred Shares, upon the approval and written consent of a majority of the outstanding Series A and Series B Preferred Shares holders to convert their respective Preferred Shares into ordinary shares. The conversion price is subject to additional adjustments if the Group makes certain dilutive issuances of shares. Dividends Series D and Series E Preferred Shares shall receive dividends at an annual rate of six percent (6%) of the original purchase price in preference and priority to any dividends on the Series A, Series B, Series C Preferred Shares and ordinary shares. Dividends on Series D and Series E Preferred Shares shall be cumulative whether declared by the Board of Directors or not. Each holder of Series A, Series B and Series C Preferred Shares is entitled to receive non-cumulative dividends when and if declared by the Board of Directors of the Group in preference and priority to any dividends on ordinary shares, after all accumulated dividends on the Series D and Series E Preferred shares have been paid or set aside for payment to the holders of Series D and Series E Preferred Shares in a calendar year. Any additional dividends declared, after all accumulated dividends and declared dividends on the Preferred Shares have been paid or set aside for payment to the holders of Preferred Shares in a calendar year, shall be distributed among all holders of ordinary shares and Preferred Shares. Redemption All outstanding Convertible Redeemable Preferred Shares can be redeemed at the election of the majority holders at any time after the fifth anniversary of the first issuance date of Series E Preferred Shares. Prior to the fifth anniversary of the first issuance date of Series E Preferred Shares, all outstanding Series C Preferred Shares held by Intel can be redeemed at any time of the holder’s election to redeem for investigation or for breach as defined in the Memorandum of Association and Articles of Association. Prior to the fifth anniversary of the first issuance date of Series E Preferred Shares, all outstanding Series D and Series E Preferred Shares can be redeemed at any time of a holder of Series D and a holder of Series E Preferred Shares’ election to redeem for breach event or to redeem for investigation and failure to obtain MVNO license event as defined in the Memorandum of Association and Articles of Association. Convertible Redeemable Preferred Shares are redeemed at a price equal to 150% the original purchase price plus any unpaid declared dividends. The redemption price for Preferred Shares under the event of the election of Intel, a holder of Series D Preferred Shares or a holder of Series E Preferred Shares to redeem for investigation is set to be 100% of the original purchase price. The redemption price for Convertible Redeemable Preferred Shares under the event of the election of Intel, a holder of Series D Preferred Shares or a holder of Series E Preferred Shares to redeem for breach is set to be 150% of the original purchase price. Winding up / Liquidation In the event of any liquidation, dissolution, or winding up of the Group, either voluntary or involuntary, distributions to the shareholders of the Group shall be made as stated below. The holders of Series E Preferred Shares then outstanding are entitled to be paid first out of the assets of the Group available for distribution a liquidation preference in an amount per Preferred Share equal to the sum of (i) 150% of the original purchase price as adjusted and (ii) all unpaid accumulated dividends, in priority to any other holders of Preferred Shares or ordinary shares. Upon full payment of the Series E Preferred Shares liquidation preference, the holders of Series D Preferred Shares are entitled to be paid first out of the assets of the Group available for distribution a liquidation preference in an amount per Preferred Share equal to the sum of (i) 150% of the original purchase price as adjusted and (ii) all unpaid accumulated dividends, in priority to any other holders of Preferred Shares or ordinary shares. Upon full payment of the Series D and Series E Preferred Shares liquidation preference Series A, Series B and Series C Preferred Shares then outstanding shall be entitled to be paid first out of the assets of the Group available for distribution (and prior and in preference to any payment on the ordinary shares) a liquidation preference in an amount per Series A, Series B and Series C Preferred Shares equal to the sum of (i) the original purchase price applicable to such Preferred Share as adjusted and (ii) all unpaid declared dividends. The holders of Series C Preferred Shares shall receive their liquidation preference amount in preference to holders of Series A and Series B Preferred Shares. Subject to the prior payment of all amounts due to the holders of Preferred Shares, the balance of all remaining assets available for distribution are made with equal priority and pro rata amongst the holders of ordinary shares and the holders of Preferred Shares on an as–converted basis. Voting Each share of Convertible Redeemable Preferred Shares has voting rights equal to an equivalent number of shares of ordinary shares into which it is convertible and votes together as one class with the ordinary shares. All directors of the Group’s board of directors are elected by the holders of the outstanding ordinary shares and the Preferred Shares, voting together as a single class on an as-converted basis. Accounting for Convertible Redeemable Preferred Shares The Convertible Redeemable Preferred Shares have been classified as mezzanine equity as they can be redeemed at the option of the holders. The initial carrying values of the Preferred Shares are the total consideration received at their respective dates of issuance net of issuance costs. There were no embedded features except for Series E Preferred Shares that qualified for bifurcation and separate accounting in accordance with ASC 815-10 Derivatives and Hedging At the respective closing dates of the Series E Preferred Shares, beneficiary conversion feature was identified and recorded as a reduction of Series E Preferred Shares with an offsetting credit to additional paid-in capital. As of December 31, 2016 and August 18, 2017, no dividend was declared by the Group. US$1,120 and US$1,709 of dividend was accumulated to the holders of the Series D and Series E Preferred Shares as of December 31, 2016 and August 18, 2017. Convertible Redeemable Preferred Shares were accreted to redemption value based on the terms stipulated in the Memorandum of Association (“MOA”). Changes in the redemption value are recorded against retained earnings. Upon the consummation of the Merger, all Convertible Redeemable Preferred Shares and Series E-1 Preferred Shares were converted to ordinary shares. Upon conversion, all unamortized discounts, including any original issue discounts and discounts from allocation of proceeds for beneficiary conversion feature, are recognized immediately as deemed dividend and deducted from income available to ordinary shareholders. The following is the roll-forward of the carrying amounts of Convertible Redeemable Preferred Shares for the years ended December 31, 2015, 2016 and 2017: For the years ended December 31, 2015 2016 2017 US$ US$ US$ Balance at beginning of the year 65,469 67,886 68,862 Issuance of Series E Preferred Shares - - 6,300 Beneficiary conversion feature of Series E Preferred Shares - - (3,258 ) Change in redemption value 2,417 976 6,956 Conversion to ordinary shares - - (78,860 ) Balance at end of the year 67,886 68,862 - Series E-1 Preferred Shares of US$2,708 were converted to ordinary shares as of December 31, 2017. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Loss Per Share [Abstract] | |
LOSS PER SHARE | 20. LOSS PER SHARE Basic and diluted loss per share for each of the years presented are calculated as follows: For the years ended December 31, 2015 2016 2017 US$ US$ US$ Numerator: Net income (loss) 795 2,596 (12,359 ) Less: net (loss) income attributable to noncontrolling interests (1,316 ) (632 ) 210 Net income (loss) attributable to Borqs Technologies, Inc. 2,111 3,228 (12,569 ) Accretion to redemption value of Convertible Redeemable Preferred Shares (2,417 ) (976 ) (6,956 ) Allocation to holders of Convertible Redeemable Preferred Shares - (2,252 ) - Net loss attributable to Borqs Technologies, Inc.’s ordinary shareholders (306 ) - (19,525 ) Denominator: Weighted-average number of ordinary shares outstanding—basic 4,224,090 4,224,725 12,842,671 Weighted-average number of ordinary shares outstanding—diluted 4,224,090 4,224,725 12,842,671 Loss per share—Basic: (0.07 ) 0.00 (1.52 ) Loss per share—Diluted: (0.07 ) 0.00 (1.52 ) For the year ended December 31, 2017, share options and Replacement Warrants to purchase ordinary shares, Unit Purchase Option, public warrants and private warrants were anti-dilutive and excluded from the calculation of diluted net loss per share. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements [Abstract] | |
FAIR VALUE MEASUREMENTS | 21. FAIR VALUE MEASUREMENTS The Group applies ASC 820, Fair Value Measurements and Disclosures ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Include other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. 2016 Warrants are classified within Level 3. We estimated the fair value of these warrants as of December 31, 2016 and August 18, 2017 using the binomial-lattice option valuation model, based on the remaining contractual term of the warrants, risk-free interest rates and expected volatility of the price of the underlying Series D convertible redeemable preferred shares. The 2016 Warrants are then reclassified to equity following the Merger (Note 4). The assumptions used, including the market value of the underlying Series D convertible redeemable preferred shares and the expected volatility, were subjective unobservable inputs. Liabilities measured at fair value on a recurring basis are summarized below: Fair value measurement using: Quoted prices in active markets for identical assets Significant other observable inputs Unobservable inputs Fair value at December 31, 2016 US$ US$ US$ US$ Warrant liabilities - - 1,344 1,344 Liabilities - - 1,344 1,344 There are no assets and liabilities measured at fair value on a recurring basis as of December 31, 2017. Warrant liabilities US$ Fair value at January 1, 2016 - Increase in liability 1,332 Changes in the fair value 12 Fair value at December 31, 2016 1,344 Changes in the fair value 200 Fair value at August 18, 2017 1,544 Transfer to permanent equity (1,544 ) Fair value at December 31, 2017 - |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 22. COMMITMENTS AND CONTINGENCIES Operating lease commitments The Group leases buildings in the PRC and India under non-cancelable operating leases expiring on different dates. For the years ended December 31, 2015, 2016 and 2017, total rental expenses for all operating leases amounted to US$1,368, US$1,340 and US$1,418, respectively. As of December 31, 2017, the Group has future minimum lease payments under non-cancelable operating leases with initial terms in excess of one year in relation to office buildings consisting of the following: US$ 2018 1,138 2019 721 2020 654 2021 1,171 2022 and thereafter - 3,684 Payments under operating leases are expensed on a straight-line basis over the periods of their respective leases. Income Taxes As of December 31, 2017, the Group recognized an accrual of US$2,121 for unrecognized tax benefits and its interest (Note 16). The final outcome of the tax uncertainty is dependent upon various matters including tax examinations, interpretation of tax laws or expiration of statutes of limitation. However, due to the uncertainties associated with the status of examinations, including the protocols of finalizing audits by the relevant tax authorities, there is a high degree of uncertainty regarding the future cash outflows associated with these tax uncertainties. As of December 31, 2017, the Group classified the accrual for unrecognized tax benefits as a non-current liability. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 23. SEGMENT REPORTING The operations of the Group are organized into two segments, consisting of Yuantel and Connected Solution. The CODM measures the performance of each segment based on metrics of revenue and earnings from operations and uses these results to evaluate the performance of, and to allocate resources to each of the segments. CODM does not evaluate operating segments using asset information. The CODM evaluates performance based on each reporting segment’s net revenue and operating profit (loss). The table below provides a summary of the Group’s operating segment results for the years ended December 31, 2015, 2016 and 2017: FY2017 Yuantel Connected Solution Total segments Eliminations Consolidated Net revenue -External customers 32,074 122,233 154,307 - 154,307 -Inter-segment - 1,879 1,879 (1,879 ) - Total net revenue 32,074 124,112 156,186 (1,879 ) 154,307 Operating loss 331 (8,241 ) (7,910 ) - (7,910 ) FY2016 Yuantel Connected Solution Total segments Eliminations Consolidated Net revenue -External customers 35,138 85,448 120,586 - 120,586 -Inter-segment - 2,016 2,016 (2,016 ) - Total net revenue 35,138 87,464 122,602 (2,016 ) 120,586 Operating profit (3,589 ) 8,829 5,240 - 5,240 FY2015 Yuantel Connected Solution Total segments Eliminations Consolidated Net revenue -External customers 19,957 55,115 75,072 - 75,072 -Inter-segment - 3,615 3,615 (3,615 ) - Total net revenue 19,957 58,730 78,687 (3,615 ) 75,072 Operating profit (5,968 ) 6,789 821 (108 ) 713 For the years ended December 31, 2015 2016 2017 US$ US$ US$ PRC 28,442 41,214 49,761 Outside PRC: United States 14,978 34,526 23,312 India 7,949 25,126 70,421 Rest of the world 23,703 19,720 10,813 Total net revenue 75,072 120,586 154,307 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events Abstract] | |
SUBSEQUENT EVENTS | 24. SUBSEQUENT EVENTS (a) Repurchase of Shares from Zhengqi International Holding Ltd. On January 10, 2018, we entered into a stock repurchase agreement (“Stock Repurchase Agreement”) with Zhengqi International Holding Limited (“Zhengqi”), pursuant to which we agreed to repurchase 966,136 of our ordinary shares that were originally issued and sold to Zhengqi on August 18, 2017, at an aggregate purchase price of approximately US$10 million, or US$10.40 per share. In addition, Zhengqi agreed to forfeit all of its rights to 1,278,776 shares that had been held in escrow and which will instead be treated as part of the merger consideration shares under the merger agreement pursuant to which the Company acquired Borqs International. The Stock Repurchase Agreement provides that those shares will be treated in the following manner: 51,151 shares (4% of the total) became additional shares placed in an indemnity escrow account; and 1,227,625 shares were distributed to the former Borqs International shareholders based on their respective proportionate interests in the merger consideration. The funds used in the repurchase were the same amount of funds provided by Zhengqi when the shares were sold to Zhengqi on August 18, 2017 under the Backstop and Subscription Agreement between the Company, Zhengqi and EarlyBirdCapital. The Company and Zhengqi are currently making arrangements for the completion of this transaction. (b) Investment into Crave and Colmei. On January 18, 2018, the Company entered into an agreement with Shenzhen Crave Communication Co., Ltd (“Crave”) and Colmei Technology International Ltd (“Colmei”), along with the shareholders of Crave and Colmei (“Selling Shareholders”), pursuant to which the Selling Shareholders agreed to sell to the Company and the Company agreed to acquire 13.8% of the outstanding shares of Crave and 13.8% of the outstanding shares of Colmei from the Selling Shareholders. Under the agreement, the Company will pay purchase consideration consisting of Company shares and cash. The Company shares will consist of 473,717 ordinary shares issued to the order of the Selling Shareholders at closing and cash in the amount of US$10.0 million to be paid to the Selling Shareholders over a period of 36 months and tied to gross margin improvements attributable to Crave’s and Colmei’s component purchasing power and business referred to the Company by Crave and Colmei. If approved by the Company’s board of directors, the Company will also issue additional shares to the Selling Shareholders if the aggregate value of the Company shares initially issued to the Selling Shareholders under this agreement is less than US$3.0 million on August 18, 2018. This transaction was completed on March 22, 2018. (c) Share Purchase by Employees of our Subsidiary in India. In effort to gain compliance with Nasdaq’s requirement for the Company to have at least 300 round lot shareholders by April 10, 2018, the Company initiated a restricted ordinary shares purchase program through which eligible employees of our wholly owned subsidiary in India, Borqs Software Solutions Private Ltd, were allowed to voluntarily participate in the purchase of between 100 to 250 restricted ordinary shares of the Company pursuant to the terms and conditions of the Company’s 2017 Equity Incentive Plan. The purchase price was set at $9.40 per share which was the closing price of the Company’s ordinary shares as traded on Nasdaq on March 19, 2018, the day immediately prior to the date of the transaction. The participants of the program paid for the shares by having the purchase amount deducted from their payroll on March 23, 2018. A total of 222 employees participated and purchased a total of 29,170 ordinary shares. (d) Public Offering of Ordinary Shares For financing of the Company’s working capital needs and intended acquisitions, the Company is contemplating a public offering of its ordinary shares to be underwritten by the Maxim Group. A registration statement on form S-1 was filed on February 14, 2018 and the Company received a round of comments from the SEC on March 13, 2018. After the filing of this annual report, the Company will immediately respond to those SEC comments. (e) Acquisition of Shanghai KADI Machinery Technology Co., Ltd. (“KADI”) On January 8, 2018, the Company entered into a letter of intent to acquire a 60% equity interest in KADI, a Chinese company that develops software and hardware solutions for electric vehicle control modules, such as charging, battery management and vehicle controls. We are currently negotiating a definitive agreement to acquire such equity interest for an aggregate of $11.7 million in cash to be paid to KADI and ordinary shares with an agreed-upon value of $3.3 million to be issued to selling shareholders of KADI. KADI is not a customer or a supplier of Borqs. |
Parent Company Only condensed F
Parent Company Only condensed Financial Information | 12 Months Ended |
Dec. 31, 2017 | |
Parent Company Only condensed Financial Information [Abstract] | |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | 25. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION Condensed balance sheets As of December 31, Note 2016 2017 US$ US$ ASSETS Current assets Cash and cash equivalents 15 2 Prepaid expenses and other current assets 2 164 Amount due from subsidiaries (b) 50,107 68,643 Total current assets 50,124 68,809 Non-current assets Investments in subsidiaries (35,247 ) (13,197 ) Total non-current assets (35,247 ) (13,197 ) Total assets 14,877 55,612 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accrued expenses and other payables 271 2,810 Short-term bank and other borrowings - 5,000 Total current liabilities 271 7,810 Total liabilities 271 7,810 Mezzanine equity 68,862 - Total mezzanine equity 68,862 - Shareholders’ (deficit) equity Additional paid-in capital 1,178 120,642 Accumulated deficit (52,808 ) (72,333 ) Accumulated other comprehensive loss (2,626 ) (507 ) Total shareholders’ (deficit) equity (54,256 ) 47,802 Total liabilities, mezzanine equity and shareholders’ equity 14,877 55,612 Condensed statements of operations For the years ended December 31, 2015 2016 2017 US$ US$ US$ Revenues - - - Cost of revenues - - - Gross Profit - - - Operating Expenses General and administrative expenses (123 ) (383 ) (856 ) Operating loss (123 ) (383 ) (856 ) Investment (loss) income (183 ) 383 (18,669 ) Loss before income taxes (306 ) - (19,525 ) Net loss (306 ) - (19,525 ) Condensed statements of comprehensive loss For the years ended December 31, 2015 2016 2017 US$ US$ US$ Net profit (loss) 2,111 3,228 (12,569 ) Other comprehensive income (loss), net of tax of nil: Foreign currency translation adjustments, net of tax of nil (1,288 ) (1,477 ) 2,119 Other comprehensive loss, net of tax of nil: Comprehensive income (loss) 823 1,751 (10,450 ) Comprehensive income (loss) attributable to the Company’s ordinary shareholders 823 1,751 (10,450 ) Condensed statements of cash flows For the years ended December 31, 2015 2016 2017 US$ US$ US$ Net cash generated from operating activities 156 5 4,118 Net cash used in investing activities (3,466 ) - (17,117 ) Net cash generated from financing activities - - 12,986 Net (decrease) increase in cash (3,310 ) 5 (13 ) Cash at beginning of the year 3,320 10 15 Cash at end of the year 10 15 2 (a) Basis of presentation In the Company-only financial statements, the Company’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since inception. The Company records its investment in its subsidiary under the equity method of accounting as prescribed in ASC 323-10, Investment-Equity Method and Joint Ventures The subsidiaries did not pay any dividends to the Company for the years presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted and as such, these Company-only financial statements should be read in conjunction with the Group’s consolidated financial statements. (b) Intercompany transactions The Company had the following related party balances as of December 31, 2016 and 2017: As of December 31, 2016 2017 US$ US$ Amount due from subsidiaries - Borqs HK 50,107 68,643 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of presentation | (a) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). |
Liquidity | (b) Liquidity As of December 31, 2017, the company has accumulated deficit of US$74,231 and has suffered net loss of US$12,359 and negative cash flow from operating of US$14,939 for the year then ended. These condition raises substantial doubt about the Group’s ability to continue as a going concern. When preparing the consolidated financial statements as of December 31, 2017 and for the year then ended, the Group’s management concluded that a going concern basis of preparation was appropriate after analyzing the forecasted cash flows for the next twelve months, which indicates that the Group will have sufficient liquidity through March 2019. In preparing the forecasted cash flow analysis, management took into account of the expected net cash inflows to be funded by the public offering and short term debt of approximately US$32,000. As a result, management prepared the consolidated financial statements assuming the Group will continue as a going concern. However, there is no assurance that the public offering can be completed in a timely manner or at all, and there is no assurance that any short term debt is available at acceptable terms. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Principles of consolidation | (c) Principles of consolidation The consolidated financial statements include the financial statements of the Group, its subsidiaries and Consolidated VIEs, for which, the Group is the primary beneficiary. All significant inter-company transactions and balances between the Group, its subsidiaries and the Consolidated VIEs are eliminated upon consolidation. Results of acquired subsidiaries and its Consolidated VIEs are consolidated from the date on which control is transferred to the Group. |
Use of estimates | (d) Use of estimates The preparation of the consolidated financial statements in conformity with US 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 year. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets and intangible assets, assessing the initial valuation of the assets acquired and liabilities assumed in a business combination and the subsequent impairment assessment of long-lived assets, intangible assets and goodwill, determining the provisions for accounts receivable and inventories, accounting for deferred income taxes and uncertain tax benefits, valuation for share-based compensation arrangements, warrants for Series D convertible redeemable preferred shares, beneficiary conversion feature for Series E Preferred Shares. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. |
Foreign currency | (e) Foreign currency The functional currency of the Group and its non-PRC subsidiaries, excluding Borqs India, is the United States dollar. The functional currency of Borqs India is Rupee, whereas the functional currency of the Group’s PRC subsidiaries and its Consolidated VIEs is the Chinese Renminbi (“RMB”) as determined based on the criteria of ASC 830, Foreign Currency Matters Assets and liabilities of the Group’s PRC subsidiaries are translated into US$ at fiscal year-end exchange rates. Equity amounts are translated at historical exchange rates. Income and expense items are translated at average exchange rates prevailing during the fiscal year. Translation adjustments arising from translation of foreign currency financial statements are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive (loss) income in the consolidated statements of comprehensive income (loss). |
Cash and cash equivalents | (f) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and bank deposits which are unrestricted as to withdrawal and use. All highly liquid investments with a stated maturity of 90 days or less from the date of purchase are classified as cash equivalents. |
Restricted cash | (g) Restricted cash Restricted cash mainly represents short-term deposits with China United Network Communications Group Co., Ltd. (“China Unicom”) as guarantee for minimum purchase requirements, and therefore are not available for the Group’s use until the end of contract period with China Unicom. |
Accounts receivable | (h) Accounts receivable Accounts receivable are carried at net realizable value. An allowance of doubtful accounts is recorded in the period when the collection of full amount is no longer probable. The Group reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Group considers many factors, including the age of the balance, the customer’s payment history, its current credit-worthiness and current economic trends. As of December 31, 2016 and 2017, the Group evaluated and wrote off the doubtful accounts as they were determined to be uncollectible. Thus, there was no allowance for doubtful accounts outstanding. |
Inventories | (i) Inventories Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. Adjustments to reduce the cost of inventories to its net market value are made, if required, for decreases in sales prices, obsolescence or similar reductions in the estimated net realizable value. Inventories provision of US$1,038 and US$918 was recorded as of December 31, 2016 and 2017, respectively. |
Property and equipment | (j) Property and equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Category Estimated useful life Computer and network equipment 3-5 years Office equipment 5 years Motor vehicles 5 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Repair and maintenance costs are charged to expense as incurred, whereas the costs of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirements, sale and disposals of assets are recorded by removing the cost and accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of operations. Property and equipment that are purchased or constructed which require a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress is transferred to specific property and equipment accounts and commences depreciation when these assets are ready for their intended use. |
Intangible assets | (k) Intangible assets Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets acquired in a business combination are recognized initially at fair value at the date of acquisition. Intangible assets with finite useful lives are amortized using the straight-line method. These amortization methods reflect the estimated pattern in which the economic benefits of the respective intangible assets are to be consumed. Development costs of software to be sold, leased, or otherwise marketed are subject to capitalization beginning when technological feasibility is reached, in accordance with ASC 985-20, Costs of Software to be Sold, Leased, or Marketed Intangible assets have weighted average useful lives from the date of purchase as follows: Purchased software 5.8 years MVNO license 10 years Capitalized software development costs 3 years Internal-use software 5 years |
Goodwill | (l) Goodwill Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an acquired business. The Group’s goodwill as of December 31, 2016 and 2017 was related to its acquisition of Yuantel Investment. In accordance with ASC 350, Goodwill and Other Intangible Assets ( ) The performance of the impairment test in accordance to ASC 350 involves a two-step process. The first step of the impairment test involves comparing the fair value of the reporting unit with its carrying amount, including goodwill. Fair value is primarily determined by computing the future discounted cash flows expected to be generated by the reporting unit. If the reporting unit’s carrying value exceeds its fair value, goodwill may be impaired. If this occurs, the Group performs the second step of the goodwill impairment test to determine the amount of impairment loss. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of the reporting unit’s goodwill. If the implied goodwill fair value is less than its carrying value, the difference is recognized an impairment loss. In accordance with ASC 350, the Group assigned and assessed goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment. The Group has determined that it has two operating segments as its reporting units, namely Yuantel and Connected Solution. Goodwill is recorded at the Yuantel reporting unit. |
Impairment of long-lived assets | (m) Impairment of long-lived assets The Group evaluates its long-lived assets or asset group, including intangible assets with indefinite and finite lives, for impairment. Intangible assets with indefinite lives that are not subject to amortization are tested for impairment at least annually or more frequently if events or changes in circumstances indicate that the assets might be impaired in accordance with ASC 350. Such impairment test compares the fair values of assets with their carrying values with an impairment loss recognized when the carrying values exceed fair values. For long-lived assets and intangible assets with finite lives that are subject to depreciation and amortization are tested for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset or a Group of long-lived assets may not be recoverable. When these events occur, the Group evaluates impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair value. |
Fair value of financial instruments | (n) Fair value of financial instruments The Group’s financial instruments include cash and cash equivalents, restricted cash, accounts receivable and payable, accounts receivable from related parties, receivable from MVNO franchisees, short-term and long-term bank borrowings, warrants for Series D convertible redeemable preferred shares and Convertible Redeemable Preferred Shares. Other than the long-term bank borrowings, warrants for Series D convertible redeemable preferred shares, the carrying values of these financial instruments approximate their fair values due to their short-term maturities. The Group applies ASC 820, Fair Value Measurements and Disclosures ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. During the years ended December 31, 2016 and 2017, there was no financial instrument measured at fair value. The warrants for Series D convertible redeemable preferred shares were classified as level 3 and fair valued using the binomial option pricing model as of December 31, 2016. The carrying amounts of long-term bank borrowings approximated their fair values since they bear interest rates which approximate market interest rates. The Convertible Redeemable Preferred Shares are initially recognized at its fair value on the closing date, at the issuance price, net of issuance cost. |
Revenue recognition | (o) Revenue recognition The Group is mainly engaged in the business of providing 1) Android+ platform solutions and services, 2) hardware product sales, and 3) MVNO services. The Group recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed and determinable, and collectability is reasonably assured. 1. Android+ platform solutions and services Android+ platform solutions The Group provides customized Android+ software platform solutions that are developed to maximize the commercial grade quality or performance of open source Android+ software for integration with particular chipsets. The Group also provides customized Android+ service platform solutions that are end to end software developed for mobile operators to allow data synchronization between their platform and mobile devices. The Group charges its customers, mainly including mobile device manufacturers and mobile operators, fixed fees for project-based software contracts, as well as per chip or per mobile device royalty fees. The project-based software contracts are generally considered multiple element arrangements as they consist of perpetual software licenses, software development services such as customization, modification, implementation and integration, and post-contract customer support (“PCS”) where customers have the right to receive bug fixes, telephone support and unspecified upgrades on a when-and-if available basis. Pursuant to ASC 985-605, Revenue Recognition: Software Revenue Recognition: Contract Accounting As the Group was unable to establish vendor specific objective evidence of the fair value of PCS and PCS is the only undelivered element upon completion of software projects, the entire software project fixed fees are recognized ratably over the PCS service period. PCS service periods are generally 12 months, with ranges from six months to three years, and commences upon completion of customer acceptance of the completed software projects. Costs incurred to complete the software projects are deferred to match revenue recognition. Where the Group is entitled to receive on going usage based royalties determined based on the chip or mobile device sales, the usage-based royalties are recognized according to the customers’ usage reports, generally on a quarterly basis. Service contracts The Group provides research and development services to certain customers for their mobile-computing related development projects where fees are charged on a time and material basis and the Group is not responsible for the outcome of such development projects. The revenue is recognized proportionately as the services are delivered and is included as software revenues on the consolidated statement of operations. 2. Hardware product sales The Group provides total solutions on original design manufacturer (“ODM”) basis to customers of mobile devices. Revenue is recognized when sale of each final hardware product to the customers are delivered. Warranty is provided to all customers, which is not considered an additional service; rather, an integral part of the product sales. ASC 450, Contingencies, 3. MVNO On July 11, 2014, the Group, through the VIE, acquired and obtained control of Yuantel Investment, which mainly operates the MVNO business. The license to operate such MVNO business is issued by the Chinese Ministry of Industry and Information Technology and the core mobile network is provided by the PRC government owned China Unicom. Yuantel Investment receives wholesale rates for mobile voice and data services from China Unicom and repackages the voice and data services into competitive bundles for Chinese consumers. In accordance with ASC 605-45, Revenue Recognition; Principal agent consideration, Sales of the bundles are mostly made through agents and franchisees. Bundled services sold to agents are discounted and not refundable to the Group. The Group accounts for such discounts as reductions of revenue in accordance with ASC 605-50 (“ASC 605-50”) Customer Payments and Incentives The Group enters into profit sharing arrangements with franchisees under which bundled services may be returned to the Group if not sold to the consumers. The franchisees receive certain percentages of profits made by the Group on the sales of the bundled services as they are used by the consumers. The Group accounts for profit sharing with franchisees as selling expenses in the consolidated statements of operations. Pursuant to the Group’s policy, the amount of discounts that may be provided by the franchisees to consumers is capped at 5%, based on which, the Group recognized the maximum amount of discounts that may be provided by the franchisees as reductions of revenue in accordance with ASC 605-50. |
Cost of revenues | (p) Cost of revenues Cost of revenues consists primarily of telecommunication costs, depreciation of long-lived assets, amortization of acquired intangible asset, payroll and other related costs of operations. Deferred cost of revenues was US$1,658 and US$3,149 for the years ended December 31, 2016 and 2017. |
Advertising expenditures | (q) Advertising expenditures Advertising expenditures are expensed as incurred and are included in sales and marketing expenses, which amounted to US$46, US$78 and US$45 for the years ended December 31, 2015, 2016 and 2017, respectively. |
Research and development expenses | (r) Research and development expenses Research and development expenses include payroll, employee benefits, and other headcount-related expenses associated with research and platform development. Research and development expenses also include rent, depreciation and other related expenses. Research and development expenses are expensed as incurred. |
Government grants | (s) Government grants Government grants are provided by the relevant PRC municipal government authorities to subsidize the cost of certain technology development projects. The amount of such government grants are determined solely at the discretion of the relevant government authorities and there is no assurance that the Group will continue to receive these government grants in the future. Government grants are recognized when it is probable that the Group will comply with the conditions attached to them, and the grants are received. When the grant relates to an expense item, it is recognized in the consolidated statement of operations over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate, as a reduction of the related operating expense. When the grant relates to an asset, it is recognized as deferred government grants and released to the consolidated statement of operations in equal amounts over the expected useful life of the related asset, when operational, as a reduction of the related depreciation expense. |
Leases | (t) Leases Leases are classified at the inception date as either a capital lease or an operating lease. The Group did not enter into any leases whereby it is the lessor for any of the periods presented. As the lessee, a lease is a capital lease if any of the following conditions exists: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life, or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. The Group did not enter into any capital leases for the years ended December 31, 2015, 2016 and 2017. All other leases are accounted for as operating leases wherein rental payments are expensed on a straight-line basis over the periods of their respective lease terms. The Group leases office space under operating lease agreements. Certain lease agreements contain rent holidays and escalating rent. Rent holidays and escalating rent are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the lease property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. |
Income taxes | (u) Income taxes The Group accounts for income taxes using the liability method. Current income taxes are provided for in accordance with the laws of the relevant tax authorities. 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 Group 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 effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. The Group applies ASC 740, Accounting for Income Taxes, , The Group has elected to classify interest related to unrecognized tax benefits, if and when required, as part of “income tax expense” in the consolidated statements of operations. The Group elected to early adopt ASU No. 2016-16, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. |
Share-based compensation | (v) Share-based compensation The Group accounts for share-based compensation in accordance with ASC 718, Compensation-Stock Compensation: Overall In accordance with ASC 718, the Group determines whether an award should be classified and accounted for as a liability award or equity award. All grants of share-based awards to employees classified as equity awards are measured based on their grant date fair values and recognized as compensation expense over the requisite service period and/or performance period in the consolidated statements of operations. The Group recognizes compensation expense using the accelerated method for share-based awards granted with service and performance conditions. According to ASC 718, the amount of compensation cost recognized (or attributed) when achievement of a performance condition is probable depends on the relative satisfaction of the performance condition based on performance to date. According to ASC 718, probable means the future event or events are likely to occur and the Group interprets “probable” to be generally in excess of a 70% likelihood of occurrence. The Group elected to account for forfeitures as they occur. |
Comprehensive income (loss) | (w) Comprehensive income (loss) Comprehensive income (loss) is defined as the (decrease) increase in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Accumulated other comprehensive income (loss) of the Group includes foreign currency translation adjustments related to the Group and its PRC subsidiaries, whose functional currency is RMB. |
Segment reporting | (x) Segment reporting In accordance with ASC 280 “ Segment Reporting |
Employee benefits | (y) Employee benefits The full-time employees of the Group’s PRC subsidiaries are entitled to staff welfare benefits including medical care, housing fund, pension benefits and unemployment insurance, which are governmental mandated defined contribution plans. These entities are required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. |
Comparatives | (z) Comparatives Certain items reported in the prior year’s consolidated financial statements have been reclassified to conform to the current year’s presentation. |
(Loss) earnings per share | (aa) (Loss) earnings per share (Loss) earnings per share is computed by dividing net (loss)/income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income (loss) is allocated between ordinary shares and other participating securities based on their participating rights. The Group’s Convertible Redeemable Preferred Shares (Note 19) were participating securities. As the participating securities do not share the losses of the Group, the computation of basic earnings per share using two-class method is not applicable when the Group is at a net loss position. Diluted (loss) earnings per share is calculated by dividing net (loss) income attributable to ordinary shareholders by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of shares issuable upon the exercise of share options using the treasury stock method and shares issuable upon the conversion of the Group’s Convertible Redeemable Preferred Shares using the if-converted method. Ordinary equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such shares would be anti-dilutive. |
Recent accounting pronouncements | (bb) Recent accounting pronouncements In August 2015, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-14 (“ASU 2015-14”), Revenue from Contracts with Customers-Deferral of the effective date Revenue from Contracts with Customers Revenue from Contracts with Customers—Principal versus Agent Considerations Revenue from Contracts with Customers—Identifying Performance Obligations and Licensing Revenue from Contracts with Customers— Narrow-Scope Improvements and Practical Expedients In February 2016, the FASB issued ASU No. 2016-02, Leases, . In June 2016, the FASB issued ASU No. 2016-13 (“ASU 2016-13”), Financial Instruments — Credit Losses In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In January 2017, FASB has issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (“ASU 2017-04”), Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In February 2017, the FASB issued ASU 2017-05 (“ASU 2017-05”), Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets In May 2017, the FASB issued ASU 2017-09 (“ASU 2017-09”), Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. |
Organization (Tables)
Organization (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization [Abstract] | |
Schedule of wholly owned consolidated VIEs and the subsidiaries | Entity Date of incorporation/ Acquisition Place of incorporation Percentage of direct or indirect ownership by the Company Direct Principal activities Subsidiaries: Borqs International July 27, 2007 Cayman 100% Holding company BORQS Hong Kong Limited (“Borqs HK”) July 19, 2007 Hong Kong 100% Provision of software and service solutions and hardware products sales BORQS Beijing Ltd. (“Borqs Beijing”) (1) September 4, 2007 PRC 100% Provision of software and service solutions and hardware products sales BORQS Software Solutions Private Limited (“Borqs India”) July 17, 2009 India 100% Provision of software and service solutions VIE: Beijing Big Cloud Century Network Technology Co., Ltd. (“Big Cloud Network”) (1)/(2) April 18, 2014 PRC Nil Holding company Subsidiaries of the VIE: Yuantel (Beijing) Investment Management Co., Ltd. (“Yuantel Investment”) (2)/(3) July 11, 2014 PRC 79% Holding company Yuantel (Beijing) Telecommunications Technology Co., Ltd. (“Yuantel Telecom”) (2)/(3) July 11, 2014 PRC 75.05% Provision of MVNO and other services (1) Collectively, the “PRC Subsidiaries”. (2) Collectively, the “Consolidated VIEs”. (3) On July 11, 2014, Borqs International through Big Cloud Network acquired controlling interest in Yuantel Investment and its subsidiary. |
Schedule of VIE statements | As of December 31, 2016 2017 US$ US$ ASSETS Current assets: Cash and cash equivalents 414 51 Restricted cash 1,153 3,459 Accounts receivable 129 2,565 Receivable from MVNO franchisees 4,319 3,514 Inventories 67 221 Prepaid expenses and other current assets 926 423 Total current assets 7,008 10,233 Non-current assets: Property and equipment, net 987 897 Intangible assets, net 8,609 8,393 Goodwill 693 736 Deferred tax assets 1,054 940 Other non-current assets 58 81 Total non-current assets 11,401 11,047 Total assets 18,409 21,280 As of December 31, 2016 2017 US$ US$ Current liabilities: Accounts payable 4,598 4,143 Accrued expenses and other payables 2,778 4,038 Deferred revenue 9,134 5,904 Short-term bank borrowings 721 - Intercompany payables 7,923 14,279 Total current liabilities 25,154 28,364 Non-current liabilities Deferred tax liabilities 1,539 1,500 Total non-current liabilities 1,539 1,500 Total liabilities 26,693 29,864 For the Years Ended December 31, 2015 2016 2017 US$ US$ US$ Net revenues 19,957 35,138 32,074 Net (loss) income (5,029 ) (3,381 ) 347 For the Years Ended December 31, 2015 2016 2017 US$ US$ US$ Net cash provided by (used in) operating activities 2,413 (2,128 ) 683 Net cash used in investing activities (1,622 ) (634 ) (281 ) Net cash (used in) provided by financing activities (770 ) 721 (765 ) Net increase (decrease) in cash and cash equivalents 21 (2,041 ) (363 ) |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of property and equipment estimated useful lives | Category Estimated useful life Computer and network equipment 3-5 years Office equipment 5 years Motor vehicles 5 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets |
Schedule of intangible assets weighted average useful lives | Purchased software 5.8 years MVNO license 10 years Capitalized software development costs 3 years Internal-use software 5 years |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventories [Abstract] | |
Schedule of inventories | As of December 31, 2016 2017 US$ US$ Raw materials 5,406 11,588 Goods in transit 7,164 4,643 Work in process 1,023 977 Finished goods 127 741 Less: Provision (1,038 ) (918 ) Inventories, net 12,682 17,031 |
Prepaid Expenses and Other Cu37
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Schedule of prepaid expenses and other current assets | As of December 31, 2016 2017 US$ US$ Staff advances 293 312 Prepayment for products - 1,008 Advance to OEM 3,739 3,662 Rental and other deposits 1,048 1,203 VAT recoverable 963 2,189 Loan to third parties 519 1,469 Receivable from an agent - 6,318 Others 37 79 6,599 16,240 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment, Net [Abstract] | |
Schedule of property and equipment | As of December 31, 2016 2017 US$ US$ At cost: Leasehold improvements 837 933 Computer and network equipment 5,801 6,458 Office equipment 763 918 Motor vehicles 220 233 7,621 8,542 Less: accumulated depreciation (6,133 ) (7,180 ) 1,488 1,362 |
Summary of depreciation expense on property and equipment | For the years ended December 31, 2015 2016 2017 US$ US$ US$ Cost of revenues 472 347 140 Sales and marketing expenses 54 15 13 General and administrative expenses 144 277 190 Research and development expenses 701 372 158 1,371 1,011 501 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Intangible Assets, Net/Goodwill [Abstract] | |
Summry of presents the Group's intangible assets as of the respective balance sheet dates | Software Capitalized software development costs License Total US$ US$ US$ US$ Balance as of January 1, 2016 2,337 3,266 7,659 13,262 Additions 315 4,915 - 5,230 Amortization expense (205 ) (1,098 ) (843 ) (2,146 ) Foreign currency translation difference (153 ) (209 ) (486 ) (848 ) Balance as of December 31, 2016 2,294 6,874 6,330 15,498 Additions 348 7,248 54 7,650 Amortization expense (253 ) (2,784 ) (898 ) (3,935 ) Foreign currency translation difference 140 262 389 791 Balance as of December 31, 2017 2,529 11,600 5,875 20,004 |
Schedule of estimated amortization expenses for the intangible assets | US$ 2018 6,407 2019 5,272 2020 3,322 2021 1,114 2022 1,090 17,205 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Intangible Assets, Net/Goodwill [Abstract] | |
Schedule of changes in carrying amount of goodwill | As of December 31, 2016 2017 US$ US$ Balance as of January 1 741 693 Foreign currency translation difference (48 ) 43 Balance as of December 31 693 736 |
Bank and Other Borrowings (Tabl
Bank and Other Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Bank and Other Borrowings [Abstract] | |
Schedule of bank borrowings of the balance sheet | As of December 31, 2016 2017 US$ US$ Short-term bank and other borrowings 6,306 12,648 Long-term bank borrowings, current portion 1,381 5,432 7,687 18,080 Long-term bank borrowings, non-current portion 4,491 - Total borrowings 12,178 18,080 |
Accrued Expenses and Other Pa42
Accrued Expenses and Other Payables (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Expenses and Other Payables [Abstract] | |
Schedule of accrued expenses and other payables | As of December 31, 2016 2017 US$ US$ Payroll and welfare payable 3,235 2,030 Accrued liability 50 - VAT, and other taxes payable 831 2,473 Payables for office supply and utilities 743 711 Payables for purchase of property and equipment 432 52 Professional service fees - 3,161 Deposits from agents 2,315 3,509 Others 28 227 7,634 12,163 |
Deferred Government Grants (Tab
Deferred Government Grants (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Government Grants [Abstract] | |
Summary of defferred government grants | For the years ended December 31, 2015 2016 2017 US$ US$ US$ Balance at beginning of the year 7,316 4,014 2,108 Recognized as other operating income (2,880 ) (1,650 ) (281 ) Foreign currency translation difference (422 ) (256 ) 130 Balance at ending of the year 4,014 2,108 1,957 |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Schedule of accumulated other comprehensive loss, net of tax | Foreign currency translation Total US$ US$ Balance as of January 1, 2015 139 139 Current year other comprehensive loss (1,288 ) (1,288 ) Balance as of December 31, 2015 (1,149 ) (1,149 ) Current year other comprehensive loss (1,477 ) (1,477 ) Balance as of December 31, 2016 (2,626 ) (2,626 ) Current year other comprehensive income 2,119 2,119 Balance as of December 31, 2017 (507 ) (507 ) |
Share Based Compensation (Table
Share Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Share Based Compensation [Abstract] | |
Summary of company's option activities under the 2007 Plan | The following table summarizes the Group’s option activities under the 2007 Plan: Number of options Weighted average exercise price Weighted average remaining contractual term Aggregate intrinsic value (US$) (Years) (US$) Outstanding, January 1, 2015 29,554,630 0.27 6.88 308 Granted 6,525,190 0.46 Forfeited (4,042,580 ) 0.36 Outstanding, December 31, 2015 32,037,240 0.30 4.97 308 Vested and expect to vest at December 31, 2015 32,037,240 0.30 4.97 308 Outstanding, January 1, 2016 32,037,240 0.30 4.97 308 Granted 610,000 0.56 Forfeited (5,190,297 ) 0.34 Outstanding, December 31, 2016 27,456,943 0.30 5.26 308 Vested and expected to vest at December 31, 2016 27,456,943 0.30 5.26 308 Outstanding, January 1, 2017 27,456,943 0.30 5.26 308 Granted 9,085,000 0.70 Forfeited (8,007,606 ) 0.04 Outstanding, August 18, 2017 28,534,337 0.48 6.99 - Vested and expected to vest at August 18, 2017 28,534,337 0.48 6.99 - |
Summary of share based compensation on the original grant-date fair value of the award | Number of options Weighted average exercise price Weighted average remaining contractual term Aggregate intrinsic value (US$) (Years) (US$) Converted under Assumed Options: Outstanding, August 18, 2017 2,695,194 5.08 6.99 6,561 Granted 180,000 5.30 Forfeited (49,804 ) 6.58 Outstanding, December 31, 2017 2,825,390 5.38 6.43 6,860 Vested and expected to vest at December 31, 2017 2,825,390 5.38 6.43 6,860 |
Schedule of estimated fair value of options | Year 2015 Year 2016 Year 2017 Risk-free interest rates 1.95%-2.28 % 1.58%-2.60 % 1.06%-2.32 % Expected life (years) 10 years 10 years 10 years Expected volatility 40%-45 % 45%-46 % 31.9%-43.9 % Expected dividend yield 0 % 0 % 0 % Exercise multiple 2.20 2.20 2.20 Post-vesting forfeit rate 10 % 10 % 10 % Fair value of underlying ordinary shares US$0.158-US$0.231 US$0.615-US$0.697 US$7.45 Fair value of share option US$0.026-US$0.096 US$0.309-US$0.315 US$2.34-US$7.45 |
Schedule of compensation expense relating to share options granted to employees | For the year ended December 31, 2017 Cost of revenues - Sales and marketing expenses 1,470 General and administrative expenses 1,277 Research and development expenses 3,143 5,890 |
Taxation (Tables)
Taxation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Taxation [Abstract] | |
Schedule of profit before income taxes | For the years ended December 31, 2015 2016 2017 US$ US$ US$ Non-PRC 3,241 2,777 (7,138 ) PRC (1,595 ) 2,478 (2,902 ) 1,646 5,255 (10,040 ) |
Schedule of income tax expense | For the years ended December 31, 2015 2016 2017 US$ US$ US$ Current (1,895 ) (2,257 ) (1,382 ) Deferred 1,044 (402 ) (937 ) (851 ) (2,659 ) (2,319 ) |
Schedule of reconciliation of tax computed by applying the statutory income tax rate | For the years ended December 31, 2015 2016 2017 US$ US$ US$ Profit (loss) before income taxes 1,646 5,255 (10,040 ) Income tax (expense) income computed at the statutory income tax rate at 25% (412 ) (1,314 ) 2,510 Non-deductible expenses (166 ) (491 ) (2,698 ) Non-taxation income 1,300 414 68 Preferential rate (423 ) 400 (324 ) Current and deferred tax rate differences 790 310 55 Foreign rate differences (292 ) 560 (426 ) Change of valuation allowance (1,643 ) (2,529 ) (1,039 ) Taxable income - - (215 ) Deferred tax - 74 - Interest expense (5 ) (83 ) (250 ) Income tax expense (851 ) (2,659 ) (2,319 ) |
Schedule of significant components of deferred taxes | As of December 31, 2016 2017 US$ US$ Deferred tax assets Inventories provision 156 229 Accrued salary and welfare payable 274 165 Property and equipment 20 14 Tax losses 13,279 14,769 Valuation allowance (12,675 ) (13,714 ) Total deferred tax assets 1,054 1,463 Deferred tax liabilities Intangible assets 2,146 2,004 Deferred cost of revenue 24 1,551 Total deferred tax liabilities 2,170 3,555 |
Schedule of roll-forward of unrecognized tax benefits | For the years ended December 31, 2015 2016 2017 US$ US$ US$ Balance at beginning of year 620 2,177 4,053 Additions based on tax positions related to the current year 1,557 1,876 217 Foreign currency translation difference - - 277 Balance at end of year 2,177 4,053 4,547 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of names of related parties and relationship with group | Names of related parties Relationship with the Group Intel Capital Corporation (“Intel”) and its affiliates Intel was a shareholder * Qualcomm Global Trading PTE. Ltd (“Qualcomm”) and its affiliates Qualcomm was a shareholder * |
Schedule of significant related party transactions | For the years ended December 31, 2015 2016 2017 US$ US$ US$ Software services provided to: Intel Corporation 6,204 271 * Intel (China) Co., Ltd. 5 9 * Intel Asia-Pacific Research and Development Ltd. 328 119 * Intel (China) Research Center Co., Ltd. - 57 * Hardware sold to: Intel Corporation 55 - * |
Schedule of related party balances | As of December 31, 2016 2017 US$ US$ Accounts receivable from related parties: Current: Intel Corporation 481 * Intel (China) Co., Ltd. - * Intel Asia-Pacific Research and Development Ltd. 9 * |
Convertible Redeemable Prefer48
Convertible Redeemable Preferred Shares (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Convertible Redeemable Preferred Shares [Abstract] | |
Schedule of carrying amounts of convertible redeemable preferred shares | For the years ended December 31, 2015 2016 2017 US$ US$ US$ Balance at beginning of the year 65,469 67,886 68,862 Issuance of Series E Preferred Shares - - 6,300 Beneficiary conversion feature of Series E Preferred Shares - - (3,258 ) Change in redemption value 2,417 976 6,956 Conversion to ordinary shares - - (78,860 ) Balance at end of the year 67,886 68,862 - |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Loss Per Share [Abstract] | |
Schedule of basic and diluted loss per share | For the years ended December 31, 2015 2016 2017 US$ US$ US$ Numerator: Net income (loss) 795 2,596 (12,359 ) Less: net (loss) income attributable to noncontrolling interests (1,316 ) (632 ) 210 Net income (loss) attributable to Borqs Technologies, Inc. 2,111 3,228 (12,569 ) Accretion to redemption value of Convertible Redeemable Preferred Shares (2,417 ) (976 ) (6,956 ) Allocation to holders of Convertible Redeemable Preferred Shares - (2,252 ) - Net loss attributable to Borqs Technologies, Inc.’s ordinary shareholders (306 ) - (19,525 ) Denominator: Weighted-average number of ordinary shares outstanding—basic 4,224,090 4,224,725 12,842,671 Weighted-average number of ordinary shares outstanding—diluted 4,224,090 4,224,725 12,842,671 Loss per share—Basic: (0.07 ) 0.00 (1.52 ) Loss per share—Diluted: (0.07 ) 0.00 (1.52 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Schedule of liabilities measured at fair value on a recurring basis | Fair value measurement using: Quoted prices in active markets for identical assets Significant other observable inputs Unobservable inputs Fair value at December 31, 2016 US$ US$ US$ US$ Warrant liabilities - - 1,344 1,344 Liabilities - - 1,344 1,344 |
Schedule of no asset and liabilities measured at fair value on recurring basis | Warrant liabilities US$ Fair value at January 1, 2016 - Increase in liability 1,332 Changes in the fair value 12 Fair value at December 31, 2016 1,344 Changes in the fair value 200 Fair value at August 18, 2017 1,544 Transfer to permanent equity (1,544 ) Fair value at December 31, 2017 - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Schedule of future minimum lease payments under non-cancelable operating leases | US$ 2018 1,138 2019 721 2020 654 2021 1,171 2022 and thereafter - 3,684 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of group's operating segment | FY2017 Yuantel Connected Solution Total segments Eliminations Consolidated Net revenue -External customers 32,074 122,233 154,307 - 154,307 -Inter-segment - 1,879 1,879 (1,879 ) - Total net revenue 32,074 124,112 156,186 (1,879 ) 154,307 Operating loss 331 (8,260 ) (7,929 ) - (7,929 ) FY2016 Yuantel Connected Solution Total segments Eliminations Consolidated Net revenue -External customers 35,138 85,448 120,586 - 120,586 -Inter-segment - 2,016 2,016 (2,016 ) - Total net revenue 35,138 87,464 122,602 (2,016 ) 120,586 Operating profit (3,589 ) 8,829 5,240 - 5,240 FY2015 Yuantel Connected Solution Total segments Eliminations Consolidated Net revenue -External customers 19,957 55,115 75,072 - 75,072 -Inter-segment - 3,615 3,615 (3,615 ) - Total net revenue 19,957 58,730 78,687 (3,615 ) 75,072 Operating profit (5,968 ) 6,789 821 (108 ) 713 For the years ended December 31, 2015 2016 2017 US$ US$ US$ PRC 28,442 41,214 113,240 Outside PRC: United States 14,978 34,526 23,312 India 7,949 25,126 6,942 Rest of the world 23,703 19,720 10,813 Total net revenue 75,072 120,586 154,307 |
Parent Company Only condensed53
Parent Company Only condensed Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Statements, Captions [Line Items] | |
Schedule of condensed balance sheets | As of December 31, Note 2016 2017 US$ US$ ASSETS Current assets Cash and cash equivalents 15 2 Prepaid expenses and other current assets 2 164 Amount due from subsidiaries (b) 50,107 68,643 Total current assets 50,124 68,809 Non-current assets Investments in subsidiaries (35,247 ) (13,197 ) Total non-current assets (35,247 ) (13,197 ) Total assets 14,877 55,612 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accrued expenses and other payables 271 2,810 Short-term bank and other borrowings - 5,000 Total current liabilities 271 7,810 Total liabilities 271 7,810 Mezzanine equity 68,862 - Total mezzanine equity 68,862 - Shareholders’ (deficit) equity Additional paid-in capital 1,178 120,642 Accumulated deficit (52,808 ) (72,333 ) Accumulated other comprehensive loss (2,626 ) (507 ) Total shareholders’ (deficit) equity (54,256 ) 47,802 Total liabilities, mezzanine equity and shareholders’ equity 14,877 55,612 |
Schedule of condensed statements of operations | For the years ended December 31, 2015 2016 2017 US$ US$ US$ Revenues - - - Cost of revenues - - - Gross Profit - - - Operating Expenses General and administrative expenses (123 ) (383 ) (856 ) Operating loss (123 ) (383 ) (856 ) Investment (loss) income (183 ) 383 (18,669 ) Loss before income taxes (306 ) - (19,525 ) Net loss (306 ) - (19,525 ) |
Schedule of condensed statements of comprehensive loss | For the years ended December 31, 2015 2016 2017 US$ US$ US$ Net profit (loss) 2,111 3,228 (12,569 ) Other comprehensive income (loss), net of tax of nil: Foreign currency translation adjustments, net of tax of nil (1,288 ) (1,477 ) 2,119 Other comprehensive loss, net of tax of nil: Comprehensive income (loss) 823 1,751 (10,450 ) Comprehensive income (loss) attributable to the Company’s ordinary shareholders 823 1,751 (10,450 ) |
Schedule of condensed cash flow statement | For the years ended December 31, 2015 2016 2017 US$ US$ US$ Net cash generated from operating activities 156 5 4,118 Net cash used in investing activities (3,466 ) - (17,117 ) Net cash generated from financing activities - - 12,986 Net (decrease) increase in cash (3,310 ) 5 (13 ) Cash at beginning of the year 3,320 10 15 Cash at end of the year 10 15 2 |
Organization (Details)
Organization (Details) | 12 Months Ended | |
Dec. 31, 2017 | ||
Borqs International [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Entity Incorporation, Date of Incorporation | Jul. 27, 2007 | |
Entity Incorporation, State Country Name | Cayman | |
Percentage of direct or indirect ownership by the Company Direct | 100.00% | |
Principal activities | Holding company | |
BORQS Hong Kong Limited. [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Entity Incorporation, Date of Incorporation | Jul. 19, 2007 | |
Entity Incorporation, State Country Name | Hong Kong | |
Percentage of direct or indirect ownership by the Company Direct | 100.00% | |
Principal activities | Provision of software and service solutions and hardware products sales | |
Borqs Beijing Ltd. [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Entity Incorporation, Date of Incorporation | Sep. 4, 2007 | [1] |
Entity Incorporation, State Country Name | PRC | [1] |
Percentage of direct or indirect ownership by the Company Direct | 100.00% | [1] |
Principal activities | Provision of software and service solutions and hardware products sales | [1] |
BORQS Software Solutions Private Limited [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Entity Incorporation, Date of Incorporation | Jul. 17, 2009 | |
Entity Incorporation, State Country Name | India | |
Percentage of direct or indirect ownership by the Company Direct | 100.00% | |
Principal activities | Provision of software and service solutions | |
Beijing Big Cloud Century Network Technology Co., Ltd. [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Entity Incorporation, Date of Incorporation | Apr. 18, 2014 | [1],[2] |
Entity Incorporation, State Country Name | PRC | [1],[2] |
Percentage of direct or indirect ownership by the Company Direct | [1],[2] | |
Principal activities | Holding company | [1],[2] |
Yuantel (Beijing) Investment Management Co., Ltd. [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Entity Incorporation, Date of Incorporation | Jul. 11, 2014 | [2],[3] |
Entity Incorporation, State Country Name | PRC | [2],[3] |
Percentage of direct or indirect ownership by the Company Direct | 79.00% | [2],[3] |
Principal activities | Holding company | [2],[3] |
Yuantel (Beijing) Telecommunications Technology Co., Ltd. [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Entity Incorporation, Date of Incorporation | Jul. 11, 2014 | [2],[3] |
Entity Incorporation, State Country Name | PRC | [2],[3] |
Percentage of direct or indirect ownership by the Company Direct | 75.05% | [2],[3] |
Principal activities | Provision of MVNO and other services | [2],[3] |
[1] | Collectively, the "PRC Subsidiaries". | |
[2] | Collectively, the "Consolidated VIEs". | |
[3] | On July 11, 2014, Borqs International through Big Cloud Network acquired controlling interest in Yuantel Investment and its subsidiary. |
Organization (Details 1)
Organization (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2014 | |
Current assets: | |||||
Cash and cash equivalents | $ 13,060 | $ 3,610 | $ 7,787 | $ 5,477 | $ 13,418 |
Restricted cash | 3,459 | 1,153 | |||
Accounts receivable | 65,720 | 28,257 | |||
Receivable from MVNO franchisees | 3,514 | 4,319 | |||
Inventories | 17,031 | 12,682 | |||
Prepaid expenses and other current assets | 16,240 | 6,599 | |||
Total current assets | 119,531 | 58,079 | |||
Non-current assets: | |||||
Property and equipment, net | 1,362 | 1,488 | |||
Intangible assets, net | 20,004 | 15,498 | |||
Goodwill | 736 | 693 | 741 | ||
Deferred tax assets | 1,463 | 1,054 | |||
Other non-current assets | 2,994 | 529 | |||
Total non-current assets | 29,201 | 19,951 | |||
Total assets | 148,732 | 78,030 | |||
Current liabilities: | |||||
Accounts payable | 49,690 | 22,691 | |||
Accrued expenses and other payables | 50 | ||||
Deferred revenue | 7,960 | 11,995 | |||
Short-term bank borrowings | 12,648 | 6,306 | |||
Total current liabilities | 92,748 | 50,487 | |||
Non-current liabilities | |||||
Deferred tax liabilities | 3,555 | 2,170 | |||
Total non-current liabilities | 8,979 | 14,032 | |||
Total liabilities | 101,727 | 64,519 | |||
Income Statement [Abstract] | |||||
Net revenues | 154,307 | 120,586 | 75,072 | ||
Net (loss) income | (12,359) | 2,596 | 795 | ||
Statement of Cash Flows [Abstract] | |||||
Net increase (decrease) in cash and cash equivalents | 9,450 | (4,177) | (5,631) | ||
VIE [Member] | |||||
Current assets: | |||||
Cash and cash equivalents | 51 | 414 | |||
Restricted cash | 3,459 | 1,153 | |||
Accounts receivable | 2,565 | 129 | |||
Receivable from MVNO franchisees | 3,514 | 4,319 | |||
Inventories | 221 | 67 | |||
Prepaid expenses and other current assets | 423 | 926 | |||
Total current assets | 10,233 | 7,008 | |||
Non-current assets: | |||||
Property and equipment, net | 897 | 987 | |||
Intangible assets, net | 8,393 | 8,609 | |||
Goodwill | 736 | 693 | |||
Deferred tax assets | 940 | 1,054 | |||
Other non-current assets | 81 | 58 | |||
Total non-current assets | 11,047 | 11,401 | |||
Total assets | 21,280 | 18,409 | |||
Current liabilities: | |||||
Accounts payable | 4,143 | 4,598 | |||
Accrued expenses and other payables | 4,038 | 2,778 | |||
Deferred revenue | 5,904 | 9,134 | |||
Short-term bank borrowings | 721 | ||||
Intercompany payables | 14,279 | 7,923 | |||
Total current liabilities | 28,364 | 25,154 | |||
Non-current liabilities | |||||
Deferred tax liabilities | 1,550 | 1,539 | |||
Total non-current liabilities | 1,500 | 1,539 | |||
Total liabilities | 29,864 | 26,693 | |||
Income Statement [Abstract] | |||||
Net revenues | 32,074 | 35,138 | 19,957 | ||
Net (loss) income | 347 | (3,381) | (5,029) | ||
Statement of Cash Flows [Abstract] | |||||
Net cash provided by (used in) operating activities | 683 | (2,128) | 2,413 | ||
Net cash used in investing activities | (281) | (634) | (1,622) | ||
Net cash (used in) provided by financing activities | (765) | 721 | (770) | ||
Net increase (decrease) in cash and cash equivalents | $ (363) | $ (2,041) | $ 21 |
Organization (Details Textual)
Organization (Details Textual) - CNY (¥) ¥ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Organization (Textual) | ||||
Shareholders rights, description | The shareholding including but not limited to (1) attend shareholders' meetings of Big Cloud Network; (2) exercise all the shareholders' rights, including voting rights; and (3) designate and appoint on behalf of each shareholder the senior management members of Big Cloud Network. | |||
Consolidated VIEs contribution from revenue, percentage | 21.00% | 29.00% | 27.00% | |
Consolidated VIEs contribution from consolidated total assets, percentage | 17.00% | 23.00% | ||
Consolidated VIEs contribution from consolidated total liabilities, percentage | 37.00% | 41.00% | ||
Nominee Shareholders and Borqs Beijing [Member] | ||||
Organization (Textual) | ||||
Purchase consideration | ¥ 10 | |||
Investment Options, Expiration Date | Jun. 22, 2024 | |||
Agreement term | 10 years | |||
Borqs Beijing Ltd. [Member] | ||||
Organization (Textual) | ||||
Provide interest free loans | ¥ 50 | |||
Equity Method Investment, Ownership Percentage | [1] | 100.00% | ||
Yuantel (Beijing) Investment Management Co., Ltd. [Member] | ||||
Organization (Textual) | ||||
Equity Method Investment, Ownership Percentage | [2],[3] | 79.00% | ||
Borqs Beijing and Big Cloud Network [Member] | ||||
Organization (Textual) | ||||
Investment Options, Expiration Date | Jun. 22, 2024 | |||
Agreement term | 10 years | |||
Equity Method Investment, Ownership Percentage | 79.00% | |||
Yuantel Telecom [Member] | ||||
Organization (Textual) | ||||
Equity Method Investment, Ownership Percentage | [2],[3] | 75.05% | ||
[1] | Collectively, the "PRC Subsidiaries". | |||
[2] | Collectively, the "Consolidated VIEs". | |||
[3] | On July 11, 2014, Borqs International through Big Cloud Network acquired controlling interest in Yuantel Investment and its subsidiary. |
Summary of Significant Accoun57
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Computer and network equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 3 years |
Computer and network equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Office equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Motor vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Leasehold improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful life description | Over the shorter of lease term or the estimated useful lives of the assets. |
Summary of Significant Accoun58
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Dec. 31, 2017 | |
Purchased software [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets have weighted average useful lives | 5 years 9 months 18 days |
MVNO license [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets have weighted average useful lives | 10 years |
Capitalized software development costs [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets have weighted average useful lives | 3 years |
Internal-use software [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets have weighted average useful lives | 5 years |
Summary of Significant Accoun59
Summary of Significant Accounting Policies (Details Textual) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)Operatingsegments | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Summary of Significant Accounting Policies (Textual) | |||
Inventories provision | $ 918 | $ 1,038 | |
Deferred cost of revenues | 3,188 | 1,658 | |
Advertising expenditures included in sales and marketing expenses | 78 | 45 | $ 46 |
Funded by public | $ 32,000 | ||
Agreements, description | PCS service periods are generally 12 months, with ranges from Six Months to three years, and commences upon completion of customer acceptance of the completed software projects. | ||
Franchisees discount, percentage | 5.00% | ||
Number of operating segments | Operatingsegments | 2 | ||
Lease term description | a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property's estimated remaining economic life, or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. | ||
Cash used in operating activities | $ (14,939) | (9,381) | 1,634 |
Accumulated deficit | (74,231) | (54,706) | |
Net income (loss) | $ (12,359) | $ 2,596 | $ 795 |
Concentration of Risks (Details
Concentration of Risks (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Concentration of Risks (Textual) | |||
Cash and cash equivalents and restricted cash | $ 4,545 | $ 2,563 | |
Financial institutions deposit | $ 11,974 | $ 2,200 | |
Foreign currency exchange rate risk, description | The appreciation / (depreciation) of the US$ against RMB was approximately 6.1%, 6.8% and (5.8%) in the years ended December 31, 2015, 2016 and 2017, respectively. The appreciation / (depreciation) of the US$ against Rupee was approximately 4.7%, 3.3% and (5.9%) in the years ended December 31, 2015, 2016 and 2017, respectively. | ||
Customer A [Member] | Net revenues [Member] | |||
Concentration of Risks (Textual) | |||
Concentration risk, percentage | 9.00% | ||
Customer B [Member] | Net revenues [Member] | |||
Concentration of Risks (Textual) | |||
Concentration risk, percentage | 23.00% | ||
Customer B [Member] | Accounts receivable [Member] | |||
Concentration of Risks (Textual) | |||
Concentration risk, percentage | 25.00% | ||
Customer C [Member] | Net revenues [Member] | |||
Concentration of Risks (Textual) | |||
Concentration risk, percentage | 41.00% | ||
Customer C [Member] | Accounts receivable [Member] | |||
Concentration of Risks (Textual) | |||
Concentration risk, percentage | 47.00% |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended |
Aug. 18, 2017 | Dec. 31, 2017 | |
Acquisitions (Textual) | ||
Warrants to acquire an aggregate shares | 417,166 | |
Business combination, description | The Merger Consideration Shares, a total of 25,913,950 ordinary shares were issued to Borqs International’s shareholders at closing, with 942,467 of such shares deposited into escrow for indemnification obligations (“Indemnity shares”), 2,352,285 of such shares deposited in escrow subject to Borqs Technologies meeting certain earn-out requirements, (“Earnout Shares” and together with the Indemnity Shares, the “Escrow Shares”) in the event certain net income earnout conditions are met during the period from July 1, 2017 to June 30, 2018 (“Earnout Period”) and 1,178,084 ordinary shares were issued to a financial advisor engaged by Borqs International in connection with the Merger. | |
Directly related transaction total | $ 15,300 | |
Net assets acquired | $ 18,059 | |
Purchase consideration transferred | $ 45,734 | |
Warrant purchase agreement, description | Equity classified instruments including (i) an option to purchase up to 400,000 units at $10.00 per unit ("Unit Purchase Option"), (ii) 5,750,000 public warrants and (iii) 531,875 private warrants issued by the Company prior to the Merger remain outstanding. Each unit consists of one ordinary share of the Company, one right (convertible into one tenth of an ordinary share) and one warrant to purchase one half of one ordinary share at $12. Each public and private warrant also entitles the holder to purchase one half of one ordinary share at $12.00 per whole share. | |
Financial Advisors [Member] | ||
Acquisitions (Textual) | ||
Share based payments cost | $ 8,800 | |
Merger Consideration Shares [Member] | ||
Acquisitions (Textual) | ||
Ordinary shares issued | 25,913,950 | |
Percentage of equity interest | 100.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventories [Abstract] | ||
Raw materials | $ 11,588 | $ 5,406 |
Goods in transit | 4,643 | 7,164 |
Work in process | 977 | 1,023 |
Finished goods | 741 | 127 |
Less: Provision | (918) | (1,038) |
Inventories, net | $ 17,031 | $ 12,682 |
Prepaid Expenses and Other Cu63
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Prepaid Expenses and Other Current Assets [Abstract] | ||
Staff advances | $ 312 | $ 293 |
Prepayment for products | 1,008 | |
Advance to OEM | 3,662 | 3,739 |
Rental and other deposits | 1,203 | 1,048 |
VAT recoverable | 2,189 | 963 |
Loan to third parties | 1,469 | 519 |
Receivable from an agent | 6,318 | |
Others | 79 | 37 |
Prepaid expenses and other current assets | $ 16,240 | $ 6,599 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
At cost: | ||
Property and equipment, gross | $ 8,542 | $ 7,621 |
Less: accumulated depreciation | (7,180) | (6,133) |
Property and equipment, net | 1,362 | 1,488 |
Leasehold improvements [Member] | ||
At cost: | ||
Property and equipment, gross | 933 | 837 |
Computer and network equipment [Member] | ||
At cost: | ||
Property and equipment, gross | 6,458 | 5,801 |
Office equipment [Member] | ||
At cost: | ||
Property and equipment, gross | 918 | 763 |
Motor vehicles [Member] | ||
At cost: | ||
Property and equipment, gross | $ 233 | $ 220 |
Property and Equipment, Net (65
Property and Equipment, Net (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense, Total | $ 744 | $ 1,011 | $ 1,371 |
Cost of revenues [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense, Total | 140 | 347 | 472 |
Sales and marketing expenses [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense, Total | 13 | 15 | 54 |
General and administrative expenses [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense, Total | 190 | 277 | 144 |
Research and development expenses [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation expense, Total | $ 158 | $ 372 | $ 701 |
Property and Equipment, Net (66
Property and Equipment, Net (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and Equipment, Net (Textual) | |||
Depreciation expense | $ 744 | $ 1,011 | $ 1,371 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Beginning Balance | $ 15,498 | $ 13,262 | |
Additions | 7,650 | 5,230 | |
Amortization expense | (3,935) | (2,146) | $ (1,109) |
Foreign currency translation difference | 791 | (848) | |
Ending Balance | 20,004 | 15,498 | 13,262 |
Software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Beginning Balance | 2,294 | 2,337 | |
Additions | 48 | 315 | |
Amortization expense | (253) | (205) | |
Foreign currency translation difference | 140 | (153) | |
Ending Balance | 2,529 | 2,294 | 2,337 |
Capitalized software development costs [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Beginning Balance | 6,874 | 3,266 | |
Additions | 7,248 | 4,915 | |
Amortization expense | (2,784) | (1,098) | |
Foreign currency translation difference | 262 | (209) | |
Ending Balance | 11,600 | 6,874 | 3,266 |
License [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Beginning Balance | 6,330 | 7,659 | |
Additions | 54 | ||
Amortization expense | (898) | (843) | |
Foreign currency translation difference | 389 | (486) | |
Ending Balance | $ 5,875 | $ 6,330 | $ 7,659 |
Intangible Assets, Net (Detai68
Intangible Assets, Net (Details 1) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Intangible Assets, Net/Goodwill [Abstract] | |||
2,018 | $ 6,407 | ||
2,019 | 5,272 | ||
2,020 | 3,322 | ||
2,021 | 1,114 | ||
2,022 | 1,090 | ||
Estimated amortization expenses for the intangible assets | $ 20,004 | $ 15,498 | $ 13,262 |
Intangible Assets, Net (Detai69
Intangible Assets, Net (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 3,935 | $ 2,146 | $ 1,109 |
Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful lives | 10 years | ||
Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful lives | 3 years |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Intangible Assets, Net/Goodwill [Abstract] | ||
Balance as of January 1 | $ 693 | $ 741 |
Foreign currency translation difference | 43 | (48) |
Balance as of December 31 | $ 736 | $ 693 |
Bank and Other Borrowings (Deta
Bank and Other Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Bank and Other Borrowings [Abstract] | ||
Short-term bank and other borrowings | $ 12,648 | $ 6,306 |
Long-term bank borrowings, current portion | 5,432 | 1,381 |
Bank borrowings, current | 18,080 | 7,687 |
Long-term bank borrowings, non-current portion | 4,491 | |
Total borrowings | $ 18,080 | $ 12,178 |
Bank and Other Borrowings (De72
Bank and Other Borrowings (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 8 Months Ended | 12 Months Ended | |||
Nov. 28, 2017 | Aug. 31, 2016 | Aug. 18, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Bank Borrowings (Textual) | ||||||
Weighted average interest rate | 6.73% | 6.89% | ||||
Short term bank term | These borrowings were obtained from financial institutions and have term of one year. The long-term bank borrowings (including current portion) outstanding as of December 31, 2017 bore a weighted average interest rate of 7.97%, and were denominated in US$. These borrowings were obtained from financial institutions located in USA, and have term of 3 years. | |||||
Short term loan | $ 12,648 | $ 6,306 | ||||
Long term loan | 18,080 | 12,178 | ||||
Warrant purchase agreement, description | Equity classified instruments including (i) an option to purchase up to 400,000 units at $10.00 per unit ("Unit Purchase Option"), (ii) 5,750,000 public warrants and (iii) 531,875 private warrants issued by the Company prior to the Merger remain outstanding. Each unit consists of one ordinary share of the Company, one right (convertible into one tenth of an ordinary share) and one warrant to purchase one half of one ordinary share at $12. Each public and private warrant also entitles the holder to purchase one half of one ordinary share at $12.00 per whole share. | |||||
Accounts receivable | 43,135 | |||||
Warrants re-measured at fair value | 200 | $ 12 | ||||
Long-term bank borrowing | 1,515 | |||||
HHMC Microelectronic Co., Limited [Member] | ||||||
Bank Borrowings (Textual) | ||||||
Short term bank term | Three months | |||||
Short term loan | $ 5,000,000 | |||||
Interest rate | 14.60% | |||||
Warrants [Member] | ||||||
Bank Borrowings (Textual) | ||||||
Short term loan | $ 2,000 | |||||
Warrants shares | 1,900,800 | |||||
Shares issued | 2,515,123 | |||||
Long term loan | $ 6,000 | |||||
Shares of warrant acquire | 417,166 | |||||
Warrants re-measured at fair value | $ 1,544 | |||||
Series D convertible redeemable preferred shares [Member] | Warrants [Member] | ||||||
Bank Borrowings (Textual) | ||||||
Exercise price | $ 0.5059 | |||||
Warrant purchase agreement, description | The 2016 Warrants shall lapse and expire after 5 and 7 years from their issuance dates, respectively. |
Accrued Expenses and Other Pa73
Accrued Expenses and Other Payables (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued Expenses and Other Payables [Abstract] | ||
Payroll and welfare payable | $ 2,030 | $ 3,235 |
Accrued liability | 50 | |
VAT, and other taxes payable | 2,492 | 831 |
Payables for office supply and utilities | 711 | 743 |
Payables for purchase of property and equipment | 52 | 432 |
Professional service fees | 3,161 | |
Deposits from agents | 3,509 | 2,315 |
Others | 227 | 28 |
Accrued expenses and other payabes | $ 12,163 | $ 7,634 |
Deferred Government Grants (Det
Deferred Government Grants (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred Government Grants [Abstract] | |||
Balance at beginning of the year | $ 2,108 | $ 4,014 | $ 7,316 |
Recognized as other operating income | (281) | (1,650) | (2,880) |
Foreign currency translation difference | 130 | (256) | (422) |
Balance at ending of the year | $ 1,957 | $ 2,108 | $ 4,014 |
Accumulated Other Comprehensi75
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Class of Stock [Line Items] | |||
Beginning balance | $ (2,626) | $ (1,149) | $ 139 |
Current year other comprehensive loss | 2,122 | (1,477) | (1,288) |
Ending balance | (507) | (2,626) | (1,149) |
Foreign currency translation [Member] | |||
Class of Stock [Line Items] | |||
Beginning balance | (2,626) | (1,149) | 139 |
Current year other comprehensive loss | 2,119 | (1,477) | (1,288) |
Ending balance | $ (507) | $ (2,626) | $ (1,149) |
Mainland China Employee Contr76
Mainland China Employee Contribution Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Mainland China Employee Contribution Plan (Textual) | |||
Total expenses for employee contribution plan | $ 2,527 | $ 2,362 | $ 2,238 |
Share Based Compensation (Detai
Share Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 8 Months Ended | 12 Months Ended | |
Aug. 18, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of options, Granted | |||
2007 Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of options, Outstanding, Beginning | 27,456,943 | 32,037,240 | 29,554,630 |
Number of options, Granted | 9,085,000 | 610,000 | 6,525,190 |
Number of options, Forfeited | (8,007,606) | (5,190,297) | (4,042,580) |
Number of options, Outstanding, Ending | 28,534,337 | 27,456,943 | 32,037,240 |
Number of options, Vested and expected to vest | 28,534,337 | 27,456,943 | 32,037,240 |
Weighted average exercise price, Outstanding, Beginning | $ 0.30 | $ 0.30 | $ 0.27 |
Weighted average exercise price, Granted | 0.7 | 0.56 | 0.46 |
Weighted average exercise price, Forfeited | 0.04 | 0.34 | 0.36 |
Weighted average exercise price, Outstanding, Ending | 0.48 | 0.30 | 0.30 |
Weighted average exercise price, Vested and expected to vest | $ 0.48 | $ 0.30 | $ 0.30 |
Weighted average remaining contractual term (Years), Outstanding, Beginning | 5 years 3 months 4 days | 4 years 11 months 19 days | 6 years 10 months 17 days |
Weighted average remaining contractual term (Years), Outstanding, Ending | 6 years 11 months 26 days | 5 years 3 months 4 days | 4 years 11 months 19 days |
Weighted average remaining contractual term (Years), Vested and expected to vest | 6 years 11 months 26 days | 5 years 3 months 4 days | 4 years 11 months 19 days |
Aggregate intrinsic value, Outstanding, Beginning | $ 308 | $ 308 | $ 308 |
Aggregate intrinsic value, Outstanding, Ending | 308 | 308 | |
Aggregate intrinsic value, Vested and expected to vest | $ 308 | $ 308 |
Share Based Compensation (Det78
Share Based Compensation (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 4 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2016 | |
Converted under Assumed Options: | ||
Number of options, Granted | ||
Stock Options [Member] | ||
Converted under Assumed Options: | ||
Number of options, Outstanding, Beginning | 2,695,194 | |
Number of options, Granted | 180,000 | |
Number of options, Forfeited | (49,804) | |
Number of options, Outstanding, Ending | 2,825,390 | |
Number of options, Vested and expected to vest | 2,825,390 | |
Weighted average exercise price, Outstanding, Beginning | $ 5.08 | |
Weighted average exercise price, Granted | 5.30 | |
Weighted average exercise price, Forfeited | 6.58 | |
Weighted average exercise price, Outstanding, Ending | 5.38 | |
Weighted average exercise price, Vested and expected to vest | $ 5.38 | |
Weighted average remaining contractual term (Years), Outstanding, Beginning | 6 years 11 months 26 days | |
Weighted average remaining contractual term (Years), Outstanding, Ending | 6 years 5 months 5 days | |
Weighted average remaining contractual term (Years), Vested and expected to vest | 6 years 5 months 5 days | |
Aggregate intrinsic value, Outstanding, Beginning | $ 6,561 | |
Aggregate intrinsic value, Outstanding, Ending | 6,860 | |
Aggregate intrinsic value, Vested and expected to vest | $ 6,860 |
Share Based Compensation (Det79
Share Based Compensation (Details 2) - $ / shares | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Feb. 08, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected life (years) | 10 years | 10 years | 10 years | |
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
Exercise multiple | $ 2.20 | $ 2.20 | ||
Post-vesting forfeit rate | 10.00% | 10.00% | 10.00% | |
Fair value of underlying ordinary shares | $ 7.45 | $ 0.678 | ||
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rates | 2.32% | 2.60% | 2.28% | |
Expected volatility | 43.90% | 46.00% | 45.00% | |
Exercise multiple | $ 2.20 | |||
Fair value of underlying ordinary shares | $ 0.697 | 0.231 | ||
Fair value of share option | $ 7.45 | $ 0.315 | $ 0.096 | |
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Risk-free interest rates | 1.06% | 1.58% | 1.95% | |
Expected volatility | 31.90% | 45.00% | 40.00% | |
Fair value of underlying ordinary shares | $ 0.615 | $ 0.158 | ||
Fair value of share option | $ 2.34 | $ 0.309 | $ 0.026 |
Share Based Compensation (Det80
Share Based Compensation (Details 3) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Share Based Compensation [Abstract] | |
Cost of revenues | |
Sales and marketing expenses | 1,470 |
General and administrative expenses | 1,277 |
Research and development expenses | 3,143 |
Total compensation expense | $ 5,890 |
Share Based Compensation (Det81
Share Based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Mar. 17, 2017 | Jan. 08, 2018 | Nov. 18, 2017 | Aug. 18, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share Based Compensation (Textual) | |||||||
Options granted | |||||||
Borqs International [Member] | |||||||
Share Based Compensation (Textual) | |||||||
Ordinary shares issued | 2,695,194 | ||||||
2007 Plan [Member] | |||||||
Share Based Compensation (Textual) | |||||||
Options granted | 9,085,000 | 610,000 | 6,525,190 | ||||
Exercise price | $ 0.56 | $ 0.459 | |||||
Purchase of aggregate shares | 5,500,000 | 5,500,000 | 5,500,000 | ||||
Aggregate intrinsic value | $ 308 | $ 308 | |||||
Ordinary shares issued | 450,000 | ||||||
Total proceeds | $ 62 | ||||||
Share based compensation expense | $ 324 | $ 5,658 | |||||
Terms of options, description | The terms of the options shall not exceed ten years from the date of grant. | ||||||
Maximum aggregate number of shares | 38,700,000 | ||||||
Ordinary shares were fully vested | 450,000 | ||||||
2007 Plan [Member] | Subsequent Event [Member] | |||||||
Share Based Compensation (Textual) | |||||||
Options granted | 9,085,000 | ||||||
Exercise price | $ 0.859 | ||||||
2007 Plan [Member] | Employees, Officers, and Directors [Member] | |||||||
Share Based Compensation (Textual) | |||||||
Exercise price | $ 0.459 | ||||||
2007 Plan [Member] | Employees, Officers, and Directors [Member] | Maximum [Member] | |||||||
Share Based Compensation (Textual) | |||||||
Exercise price | $ 0.859 | ||||||
2007 Plan [Member] | Employees, Officers, and Directors [Member] | Minimum [Member] | |||||||
Share Based Compensation (Textual) | |||||||
Exercise price | $ 0.678 | ||||||
2007 Plan [Member] | Directors [Member] | |||||||
Share Based Compensation (Textual) | |||||||
Options granted | 180,000 | ||||||
Exercise price | $ 5.30 |
Taxation (Details)
Taxation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of profit before income taxes | |||
Non-PRC | $ (7,138) | $ 2,777 | $ 3,241 |
PRC | (2,902) | 2,478 | (1,595) |
Profit before income taxes | $ (10,040) | $ 5,255 | $ 1,646 |
Taxation (Details 1)
Taxation (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of income tax expense | |||
Current | $ (1,382) | $ (2,257) | $ (1,895) |
Deferred | (937) | (402) | 1,044 |
Income tax expense | $ (2,319) | $ (2,659) | $ (851) |
Taxation (Details 2)
Taxation (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Taxation [Abstract] | |||
Profit before income taxes | $ (10,040) | $ 5,255 | $ 1,646 |
Income tax (expense) income computed at the statutory income tax rate at 25% | 2,510 | (1,314) | (412) |
Non-deductible expenses | (2,698) | (491) | (166) |
Non-taxation income | 68 | 414 | 1,300 |
Preferential rate | (324) | 400 | (423) |
Current and deferred tax rate differences | 55 | 310 | 790 |
Foreign rate differences | (426) | 560 | 292 |
Change of valuation allowance | (1,039) | (2,529) | (1,643) |
Taxable income | (215) | ||
Deferred tax | 74 | ||
Interest expense | (250) | (83) | (5) |
Income tax expense | $ (2,319) | $ (2,659) | $ (851) |
Taxation (Details 3)
Taxation (Details 3) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets | ||
Inventories provision | $ 229 | $ 156 |
Accrued salary and welfare payable | 165 | 274 |
Property and equipment | 14 | 20 |
Tax losses | 14,769 | 13,279 |
Valuation allowance | (13,714) | (12,675) |
Total deferred tax assets | 1,463 | 1,054 |
Deferred tax liabilities | ||
Intangible assets | 2,004 | 2,146 |
Deferred cost of revenue | 1,551 | 24 |
Total deferred tax liabilities | $ 3,555 | $ 2,170 |
Taxation (Details 4)
Taxation (Details 4) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
A roll-forward of unrecognized tax benefits is as follows: | |||
Balance at beginning of year | $ 1,755 | ||
Balance at end of year | 2,121 | $ 1,755 | |
Unrecognized tax benefits [Member] | |||
A roll-forward of unrecognized tax benefits is as follows: | |||
Balance at beginning of year | 4,053 | 2,177 | $ 620 |
Additions based on tax positions related to the current year | 217 | 1,876 | 1,557 |
Foreign currency translation difference | 277 | ||
Balance at end of year | $ 4,547 | $ 4,053 | $ 2,177 |
Taxation (Details Textual)
Taxation (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Taxation (Textual) | |||
Income tax expense computed at the statutory income tax rate | 25.00% | ||
Unrecognized tax benefits | $ 4,547 | $ 4,053 | |
Deferred tax assets related to tax loss carry forwards | 2,764 | 2,381 | |
Unrecognized tax benefits of ultimately recognized, will impact the effective tax rate | 2,043 | 1,681 | |
Interest expense accrued in relation to the unrecognized tax benefit | 250 | 83 | |
Accumulated interest expense | 338 | 88 | |
Current income tax expense | $ (1,382) | $ (2,257) | $ (1,895) |
PRC [Member] | |||
Taxation (Textual) | |||
Income tax expense computed at the statutory income tax rate | 25.00% | 25.00% | 25.00% |
Net tax operating loss from subsidiaries | $ 38,503 | ||
Net tax operating loss expiration term | Expire from 2018 to 2022 | ||
Borqs HK [Member] | |||
Taxation (Textual) | |||
Net tax operating loss from subsidiaries | $ 15,500 | ||
Net tax operating loss expiration term | Will not expire. | ||
Profits tax rate | 16.50% | 16.50% | 16.50% |
Borqs India [Member] | |||
Taxation (Textual) | |||
Income tax expense computed at the statutory income tax rate | 32.45% | 32.45% | 32.45% |
Current income tax expense | $ 2,024 | $ 1,684 | $ 1,158 |
Borqs Beijing [Member] | |||
Taxation (Textual) | |||
Income tax preferential rate, description | BORQS Beijing was qualified for a High and New Technology Enterprises ("HNTE") since 2012 and is eligible for a 15% preferential tax rate from 2012 to 2014. In July 2015, BORQS Beijing obtained a new HNTE certificate, which will expire in July 2018. For the years ended December 31, 2015, 2016 and 2017, BORQS Beijing enjoyed a preferential tax rate of 15%. | ||
Yuantel Telecom [Member] | |||
Taxation (Textual) | |||
Income tax preferential rate, description | Yuantel Telecom was qualified for a High and New Technology Enterprises ("HNTE") since 2011 and is eligible for a 15% preferential tax rate from 2011 to 2013. In October 2014, Yuantel Telecom obtained a new HNTE certificate, which expired in October 2017. Yuantel Telecom has successfully renewed the HNTE certificate in December 2017 with effective term of three years. In accordance with the PRC Income Tax Laws, an enterprise awarded with the HNTE status may enjoy a reduced EIT rate of 15%. For the years ended December 31, 2015, 2016 and 2017, Yuantel Telecom enjoyed a preferential tax rate of 15 %. |
Related Party Transactions (Det
Related Party Transactions (Details) | 12 Months Ended | |
Dec. 31, 2017 | [1] | |
Intel Capital Corporation (''Intel") and its affiliates [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship with the Group | Intel was a shareholder. | |
Qualcomm Global Trading PTE. Ltd (''Qualcomm'') and its affiliates [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship with the Group | Qualcomm was a shareholder. | |
[1] | Upon the consummation of the Merger, both entities ceased to be the shareholders of the Group. |
Related Party Transactions (D89
Related Party Transactions (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | [1] | Dec. 31, 2016 | Dec. 31, 2015 | |
Intel Corporation [Member] | ||||
Related Party Transaction [Line Items] | ||||
Software services provided to | $ 271 | $ 6,204 | ||
Hardware sold to related party Intel Corporation | 55 | |||
Intel (China) Co., Ltd. [Member] | ||||
Related Party Transaction [Line Items] | ||||
Software services provided to | 9 | 5 | ||
Intel Asia-Pacific Research and Development Ltd [Member] | ||||
Related Party Transaction [Line Items] | ||||
Software services provided to | 119 | 328 | ||
Intel (China) Research Center Co., Ltd [Member] | ||||
Related Party Transaction [Line Items] | ||||
Software services provided to | $ 57 | |||
[1] | Upon the consummation of the Merger, both entities ceased to be the shareholders of the Group. |
Related Party Transactions (D90
Related Party Transactions (Details 2) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounts receivable from related parties: | |||
Accounts receivable from related parties | $ 490 | ||
Intel Corporation [Member] | |||
Accounts receivable from related parties: | |||
Accounts receivable from related parties | [1] | 481 | |
Intel (China) Co., Ltd. [Member] | |||
Accounts receivable from related parties: | |||
Accounts receivable from related parties | [1] | 9 | |
Intel Asia-Pacific Research and Development Ltd [Member] | |||
Accounts receivable from related parties: | |||
Accounts receivable from related parties | [1] | ||
[1] | Upon the consummation of the Merger, both entities ceased to be the shareholders of the Group. |
Restricted Net Assets (Details)
Restricted Net Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted Net Assets (Textual) | ||
Statutory reserves | $ 1,898 | $ 1,898 |
Income tax, description | The PRC subsidiaries are required to allocate at least 10% of their after tax profits on an individual company basis as determined under PRC accounting standards to the statutory reserve and has the right to discontinue allocations to the statutory reserve if such reserve has reached 50% of registered capital on an individual company basis. In addition, the registered capital of the PRC subsidiaries is also restricted. | |
PRC subsidiaries [Member] | ||
Restricted Net Assets (Textual) | ||
Statutory reserves | $ 1,898 | $ 1,898 |
Convertible Redeemable Prefer92
Convertible Redeemable Preferred Shares (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Convertible Redeemable Preferred Shares [Abstract] | |||
Beginning Balance | $ 68,862 | $ 67,886 | $ 65,469 |
Issuance of Series E Preferred Shares | 6,300 | ||
Beneficiary conversion feature of Series E Preferred Shares | (3,258) | ||
Change in redemption value | 6,956 | 976 | 2,417 |
Conversion to ordinary shares | (78,860) | ||
Ending Balance | $ 68,862 | $ 67,886 |
Convertible Redeemable Prefer93
Convertible Redeemable Preferred Shares (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | Mar. 02, 2017 | Feb. 08, 2017 | Oct. 12, 2009 | Oct. 08, 2008 | May 24, 2012 | Feb. 14, 2011 | Aug. 19, 2009 | Jun. 26, 2009 | Sep. 26, 2008 | Mar. 17, 2008 | Dec. 27, 2007 | Aug. 18, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 20, 2014 |
Convertible Redeemable Preferred Shares (Textual) | ||||||||||||||||
Purchase price | $ 0.678 | $ 7.45 | ||||||||||||||
Net cash proceeds | $ 6,300 | |||||||||||||||
Dividends annual rate | 6.00% | |||||||||||||||
Percentage of original purchase price | 100.00% | |||||||||||||||
Redemption, description | Convertible Redeemable Preferred Shares are redeemed at a price equal to 150% the original purchase price plus any unpaid declared dividends. | |||||||||||||||
Series E-1 Preferred Shares [Member] | ||||||||||||||||
Convertible Redeemable Preferred Shares (Textual) | ||||||||||||||||
Convertible preferred stock shares | 7,094,164 | 7,094,164 | ||||||||||||||
Purchase price | $ 0.678 | |||||||||||||||
Warrants, exercise price | $ 0.001 | $ 0.001 | ||||||||||||||
Issuance costs | $ 312 | $ 312 | ||||||||||||||
Net cash proceeds | $ 9,008 | $ 9,008 | ||||||||||||||
Converted to ordinary shares amount | $ 2,708 | |||||||||||||||
Issuances of convertible redeemable preferred shares | 2,950,036 | 10,325,126 | ||||||||||||||
Series A Preferred Shares [Member] | ||||||||||||||||
Convertible Redeemable Preferred Shares (Textual) | ||||||||||||||||
Convertible preferred stock shares | 5,000,000 | 12,000,000 | 3,100,000 | 19,800,000 | ||||||||||||
Purchase price | $ 0.20 | $ 0.20 | $ 0.20 | $ 0.20 | ||||||||||||
Issuance costs | 91 | |||||||||||||||
Net cash proceeds | 7,889 | |||||||||||||||
Total cash consideration | $ 7,980 | $ 7,980 | $ 7,980 | $ 7,980 | ||||||||||||
Series B Preferred Shares [Member] | ||||||||||||||||
Convertible Redeemable Preferred Shares (Textual) | ||||||||||||||||
Convertible preferred stock shares | 3,571,428 | 15,000,000 | 64,285,715 | |||||||||||||
Purchase price | $ 0.21 | $ 0.21 | $ 0.21 | |||||||||||||
Issuance costs | 158 | |||||||||||||||
Net cash proceeds | 14,242 | |||||||||||||||
Total cash consideration | $ 17,400 | $ 17,400 | $ 17,400 | |||||||||||||
Series C Preferred Shares [Member] | ||||||||||||||||
Convertible Redeemable Preferred Shares (Textual) | ||||||||||||||||
Convertible preferred stock shares | 5,454,545 | 38,181,817 | ||||||||||||||
Purchase price | $ 0.275 | $ 0.275 | ||||||||||||||
Issuance costs | 183 | |||||||||||||||
Net cash proceeds | 11,817 | |||||||||||||||
Total cash consideration | $ 12,000 | $ 12,000 | ||||||||||||||
Series D Preferred Shares [Member] | ||||||||||||||||
Convertible Redeemable Preferred Shares (Textual) | ||||||||||||||||
Convertible preferred stock shares | 23,721,443 | |||||||||||||||
Purchase price | $ 0.33725 | |||||||||||||||
Issuance costs | 126 | |||||||||||||||
Net cash proceeds | $ 7,874 | |||||||||||||||
Total cash consideration | $ 8,000 | |||||||||||||||
Percentage of original purchase price | 150.00% | |||||||||||||||
Convertible Redeemable Preferred Shares [Member] | ||||||||||||||||
Convertible Redeemable Preferred Shares (Textual) | ||||||||||||||||
Dividend was accumulated to holder | $ 1,709 | $ 1,120 |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | |||
Net income (loss) | $ (12,359) | $ 2,596 | $ 795 |
Less: net (loss) income attributable to noncontrolling interests | 210 | (632) | (1,316) |
Net income (loss) attributable to Borqs Technologies, Inc. | (12,569) | 3,228 | 2,111 |
Accretion to redemption value of Convertible Redeemable Preferred Shares | (6,956) | (976) | (2,417) |
Allocation to holders of Convertible Redeemable Preferred Shares | (2,252) | ||
Net loss attributable to Borqs Technologies, Inc.'s ordinary shareholders | $ (19,525) | $ (306) | |
Denominator: | |||
Weighted-average number of shares outstanding-basic | 12,842,671 | 4,224,725 | 4,224,090 |
Weighted-average number of shares outstanding-diluted | 12,842,671 | 4,224,725 | 4,224,090 |
Loss per share-Basic: | $ (1.52) | $ 0 | $ (0.07) |
Loss per share-Diluted: | $ (1.52) | $ 0 | $ (0.07) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities | $ 1,344 |
Warrant liabilities | 1,344 |
Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities | |
Warrant liabilities | |
Level 2 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities | |
Warrant liabilities | |
Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Liabilities | 1,344 |
Warrant liabilities | $ 1,344 |
Fair Value Measurements (Deta96
Fair Value Measurements (Details 1) - Warrants Liability [Member] - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | |
Aug. 18, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Warrant liabilities fair value, Beginning balance | $ 1,344 | $ 1,344 | |
Changes in the fair value | 200 | 1,332 | |
Transfer to permanent equity | (1,544) | 12 | |
Warrant liabilities fair value, Ending balance | $ 1,544 | $ 1,344 |
Fair Value Measurements (Deta97
Fair Value Measurements (Details Textual) | Dec. 31, 2017Approaches |
Fair Value Measurements (Textual) | |
Number of approaches | 3 |
Commitments and Contingencies98
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies [Abstract] | |
2,018 | $ 1,138 |
2,019 | 721 |
2,020 | 654 |
2,021 | 1,171 |
2022 and thereafter | |
Total | $ 3,684 |
Commitments and Contingencies99
Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies (Textual) | |||
Total rental expenses for all operating leases | $ 1,418 | $ 1,340 | $ 1,368 |
Unrecognized tax benefits and interest | $ 2,121 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of group's operating segment | |||
Total net revenues | $ 154,307 | $ 120,586 | $ 75,072 |
Operating loss | (7,910) | 5,240 | 713 |
PRC [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | 49,761 | 41,214 | 28,442 |
United States [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | 23,312 | 34,526 | 14,978 |
India [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | 70,421 | 25,126 | 7,949 |
Rest of the world [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | 10,813 | 19,720 | 23,703 |
Consolidated [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | 154,575 | 120,586 | 75,072 |
Operating loss | (7,910) | 5,240 | 713 |
Consolidated [Member] | External customers [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | 154,307 | 120,586 | 75,072 |
Consolidated [Member] | Inter-segment [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | |||
Eliminations [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | (1,879) | (2,016) | (3,615) |
Operating loss | (108) | ||
Eliminations [Member] | External customers [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | (3,615) | ||
Eliminations [Member] | Inter-segment [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | (1,879) | (2,016) | |
Total segments [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | 156,186 | 122,602 | 78,687 |
Operating loss | (7,910) | 5,240 | 821 |
Total segments [Member] | External customers [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | 154,307 | 120,586 | 75,072 |
Total segments [Member] | Inter-segment [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | 1,879 | 2,016 | 3,615 |
Yuantel [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | 32,074 | 35,138 | 19,957 |
Operating loss | 331 | (3,589) | (3,589) |
Yuantel [Member] | External customers [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | 32,074 | 35,138 | 19,957 |
Yuantel [Member] | Inter-segment [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | |||
Connected Solution [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | 124,112 | 87,464 | 58,730 |
Operating loss | (8,241) | 8,829 | 6,789 |
Connected Solution [Member] | External customers [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | 122,233 | 85,448 | 55,115 |
Connected Solution [Member] | Inter-segment [Member] | |||
Schedule of group's operating segment | |||
Total net revenues | $ 1,879 | $ 2,016 | $ 3,615 |
Segment Reporting (Details Text
Segment Reporting (Details Textual) | 12 Months Ended |
Dec. 31, 2017Segments | |
Segment Reporting (Textual) | |
Number of segments reports | 2 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Millions | Apr. 10, 2018shares | Mar. 19, 2018Employees$ / sharesshares | Jan. 18, 2018USD ($)shares | Jan. 10, 2018USD ($)$ / sharesshares | Jan. 08, 2018USD ($) | Aug. 18, 2017shares | Aug. 18, 2018USD ($) |
Subsequent Events (Textual) | |||||||
Ordinary shares issued to selling shareholders | 417,166 | ||||||
Subsequent Event [Member] | |||||||
Subsequent Events (Textual) | |||||||
Ordinary shares to selling shareholders value | $ | $ 3 | ||||||
Subsequent Event [Member] | Zhengqi International Holding Limited [Member] | |||||||
Subsequent Events (Textual) | |||||||
Repurchase of agreement ordinary shares | 966,136 | ||||||
Stock aggregate purchase price | $ | $ 10 | ||||||
Aggregate purchase price per share | $ / shares | $ 10.40 | ||||||
Forfeited ordinary shares | 1,278,776 | ||||||
Stock repurchase agreement description | The Stock Repurchase Agreement provides that those shares will be treated in the following manner: 51,151 shares (4% of the total) became additional shares placed in an indemnity escrow account; and 1,227,625 shares were distributed to the former Borqs International shareholders based on their respective proportionate interests in the merger consideration. | ||||||
Subsequent Event [Member] | Shenzhen Crave Communication Co., Ltd [Member] | |||||||
Subsequent Events (Textual) | |||||||
Agreed to acquire equity percentage | 13.80% | ||||||
Ordinary shares issued to selling shareholders | 473,717 | ||||||
Ordinary shares to selling shareholders value | $ | $ 10 | ||||||
Subsequent Event [Member] | Colmei Technology International Ltd [Member] | |||||||
Subsequent Events (Textual) | |||||||
Agreed to acquire equity percentage | 13.80% | ||||||
Ordinary shares issued to selling shareholders | 473,717 | ||||||
Ordinary shares to selling shareholders value | $ | $ 10 | ||||||
Subsequent Event [Member] | Borqs Software Solutions Private Ltd [Member] | |||||||
Subsequent Events (Textual) | |||||||
Repurchase of agreement ordinary shares | 29,170 | ||||||
Aggregate purchase price per share | $ / shares | $ 9.40 | ||||||
Number of employees participated | Employees | 222 | ||||||
Subsequent Event [Member] | Borqs Software Solutions Private Ltd [Member] | Minimum [Member] | 2017 Equity Incentive Plan [Member] | |||||||
Subsequent Events (Textual) | |||||||
Purchase of restricted ordinary shares | 100 | ||||||
Subsequent Event [Member] | Borqs Software Solutions Private Ltd [Member] | Maximum [Member] | 2017 Equity Incentive Plan [Member] | |||||||
Subsequent Events (Textual) | |||||||
Purchase of restricted ordinary shares | 200 | ||||||
Subsequent Event [Member] | Shanghai KADI Machinery Technology Co., Ltd. [Member] | |||||||
Subsequent Events (Textual) | |||||||
Ordinary shares to selling shareholders value | $ | $ 3.3 | ||||||
Agreement to acquire equity interest | 60.00% | ||||||
Aggregate of cash to paid | $ | $ 11.7 |
Parent Company Only condense103
Parent Company Only condensed Financial Information (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | |||||
Cash and cash equivalents | $ 13,060 | $ 3,610 | $ 5,477 | $ 7,787 | $ 13,418 |
Prepaid expenses and other current assets | 16,240 | 6,599 | |||
Amount due from subsidiaries | 490 | ||||
Total current assets | 119,531 | 58,079 | |||
Non-current assets: | |||||
Total non-current assets | 29,201 | 19,951 | |||
Total assets | 148,732 | 78,030 | |||
Current liabilities: | |||||
Accrued expenses and other payables | 12,163 | 7,634 | |||
Short-term bank and other borrowings | 12,648 | 6,306 | |||
Total current liabilities | 92,748 | 50,487 | |||
Total liabilities | 101,727 | 64,519 | |||
Mezzanine equity: | |||||
Total mezzanine equity | 68,862 | ||||
Shareholders' (deficit) equity: | |||||
Additional paid-in capital | 120,642 | 1,178 | |||
Accumulated deficit | (74,231) | (54,706) | |||
Accumulated other comprehensive loss | (507) | (2,626) | (1,149) | 139 | |
Total shareholders' (deficit) equity | 47,005 | (55,351) | (55,396) | (52,287) | |
Total liabilities, mezzanine equity and shareholders' equity | 148,732 | 78,030 | |||
Parent Company [Member] | |||||
Current assets: | |||||
Cash and cash equivalents | 2 | 15 | $ 10 | $ 3,320 | |
Prepaid expenses and other current assets | 164 | 2 | |||
Amount due from subsidiaries | 68,643 | 50,107 | |||
Total current assets | 68,809 | 50,124 | |||
Non-current assets: | |||||
Investments in subsidiaries | (13,197) | (35,247) | |||
Total non-current assets | (13,197) | (35,247) | |||
Total assets | 55,612 | 14,877 | |||
Current liabilities: | |||||
Accrued expenses and other payables | 2,810 | 271 | |||
Short-term bank and other borrowings | 5,000 | ||||
Total current liabilities | 7,810 | 271 | |||
Total liabilities | 7,810 | 271 | |||
Mezzanine equity: | |||||
Total mezzanine equity | 68,862 | ||||
Shareholders' (deficit) equity: | |||||
Additional paid-in capital | 120,642 | 1,178 | |||
Accumulated deficit | (72,333) | (52,808) | |||
Accumulated other comprehensive loss | (504) | (2,626) | |||
Total shareholders' (deficit) equity | 47,879 | (54,256) | |||
Total liabilities, mezzanine equity and shareholders' equity | $ 55,612 | $ 14,877 |
Parent Company Only condense104
Parent Company Only condensed Financial Information (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Financial Statements, Captions [Line Items] | |||
Revenues | $ 154,307 | $ 120,586 | $ 75,072 |
Total cost of revenues | 127,141 | 95,436 | 58,005 |
Gross Profit | 27,166 | 25,150 | 17,067 |
Operating Expenses | |||
General and administrative expenses | 20,753 | 10,042 | 4,883 |
Operating loss | (7,910) | 5,240 | 713 |
Loss before income taxes | (10,040) | 5,255 | 1,646 |
Net income (loss) | (12,359) | 2,596 | 795 |
Parent Company [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Revenues | |||
Total cost of revenues | |||
Gross Profit | |||
Operating Expenses | |||
General and administrative expenses | (856) | (383) | (123) |
Operating loss | (856) | (383) | (123) |
Investment (loss) income | (18,669) | 383 | (183) |
Loss before income taxes | (19,525) | (306) | |
Net income (loss) | $ (19,525) | $ (306) |
Parent Company Only condense105
Parent Company Only condensed Financial Information (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Financial Statements, Captions [Line Items] | |||
Net profit (loss) | $ (12,359) | $ 2,596 | $ 795 |
Other comprehensive (loss) income, net of tax of nil: | |||
Foreign currency translation adjustments, net of tax of nil | 2,207 | (1,575) | (1,491) |
Other comprehensive loss, net of tax of nil: | 2,207 | (1,575) | (1,491) |
Comprehensive income (loss) | (10,152) | 1,021 | (696) |
Comprehensive income (loss) attributable to the Company's ordinary shareholders | (10,450) | 1,751 | 823 |
Parent Company [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net profit (loss) | (19,525) | (306) | |
Other comprehensive (loss) income, net of tax of nil: | |||
Foreign currency translation adjustments, net of tax of nil | 2,119 | (1,477) | (1,288) |
Comprehensive income (loss) | (10,450) | 1,751 | 823 |
Comprehensive income (loss) attributable to the Company's ordinary shareholders | $ (10,450) | $ 1,751 | $ 823 |
Parent Company Only condense106
Parent Company Only condensed Financial Information (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Financial Statements, Captions [Line Items] | |||
Net cash used in operating activities | $ (14,939) | $ (9,381) | $ 1,634 |
Net cash used in investing activities | (8,120) | (5,266) | (7,366) |
Net cash generated from financing activities | 31,861 | 10,205 | 135 |
Net (decrease) increase in cash | 9,450 | (4,177) | (5,631) |
Cash and cash equivalents at beginning of year | 3,610 | 7,787 | 13,418 |
Cash and cash equivalents at end of year | 13,060 | 3,610 | 7,787 |
Parent Company [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Net cash used in operating activities | 4,118 | 5 | 156 |
Net cash used in investing activities | (17,117) | (3,466) | |
Net cash generated from financing activities | 12,986 | ||
Net (decrease) increase in cash | (13) | 5 | (3,310) |
Cash and cash equivalents at beginning of year | 15 | 10 | 3,320 |
Cash and cash equivalents at end of year | $ 2 | $ 15 | $ 10 |
Parent Company Only condense107
Parent Company Only condensed Financial Information (Details 4) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Condensed Financial Statements, Captions [Line Items] | ||
Amount due from subsidiaries,- Borqs HK | $ 490 | |
Parent Company [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Amount due from subsidiaries,- Borqs HK | $ 68,643 | $ 50,107 |