Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2022 shares | |
Document Information Line Items | |
Entity Registrant Name | Borqs Technologies, Inc. |
Trading Symbol | BRQS |
Document Type | 20-F |
Current Fiscal Year End Date | --12-31 |
Entity Common Stock, Shares Outstanding | 57,182,633 |
Amendment Flag | false |
Entity Central Index Key | 0001650575 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Non-accelerated Filer |
Entity Well-known Seasoned Issuer | No |
Document Period End Date | Dec. 31, 2022 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
ICFR Auditor Attestation Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-37593 |
Entity Incorporation, State or Country Code | D8 |
Entity Address, Address Line One | Office B, 21/F, Legend Tower |
Entity Address, Address Line Two | 7 Shing Yip Street |
Entity Address, City or Town | Kowloon |
Entity Address, Country | HK |
Title of 12(b) Security | Ordinary shares, no par value |
Security Exchange Name | NASDAQ |
Entity Interactive Data Current | Yes |
Document Accounting Standard | U.S. GAAP |
Auditor Firm ID | 5910 |
Auditor Name | Yu Certified Public Accountant, P.C. |
Auditor Location | New York, New York |
Entity Address, Postal Zip Code | 000000 |
Business Contact | |
Document Information Line Items | |
Entity Address, Address Line One | Office B, 21/F, Legend Tower, |
Entity Address, Address Line Two | 7 Shing Yip Street |
Entity Address, City or Town | Kowloon |
Entity Address, Country | HK |
Contact Personnel Name | Pat Sek Yuen Chan |
City Area Code | +852 |
Local Phone Number | 5188 1864 |
Contact Personnel Fax Number | +852 2114 0183 |
Entity Address, Postal Zip Code | 000000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 11,305 | $ 6,117 |
Restricted cash | 32 | 211 |
Time deposits | 1,436 | |
Accounts receivable, net (net of allowance of $13,049 and $12,881 as of December 31, 2021 and 2022, respectively) | 3,482 | 2,262 |
Inventories, net | 4,235 | 6,760 |
Prepaid expenses and other current assets, net (net of allowance of $11,327 and $11,383 as of December 31, 2021 and 2022, respectively) | 7,501 | 13,640 |
Current assets held for sale | 2,220 | |
Total current assets | 27,991 | 31,210 |
Non-current assets: | ||
Property and equipment, net | 1,024 | 724 |
Construction in progress | 94 | |
Intangible assets, net | 978 | |
Right of use asset | 704 | 1,674 |
Deferred tax assets | 424 | 471 |
Non-current assets held for sale | 18,101 | |
Total non-current assets | 2,152 | 22,042 |
Total assets | 30,143 | 53,252 |
Current liabilities: | ||
Accounts payable | 7,071 | 9,449 |
Accrued expenses and other payables | 23,938 | 27,648 |
Contract liabilities - current | 3,951 | 7,308 |
Lease liabilities - current | 536 | 1,032 |
Amount due to related parties-current | 746 | 2,492 |
Income tax payable | 7 | 399 |
Short-term bank and other borrowings | 361 | |
Long-term bank borrowings - current portion | 1,250 | |
Contingent consideration –current | 1,392 | |
Convertible notes | 1,691 | 9,990 |
Current liabilities held for sale | 3,070 | |
Total current liabilities | 37,940 | 64,391 |
Non-current liabilities: | ||
Unrecognized tax benefits | 1,990 | 2,174 |
Deferred tax liabilities | 909 | 1,011 |
Lease liabilities – non-current | 39 | 754 |
Other payable – non-current | 417 | |
Contingent consideration – non-current | 389 | |
Other non-current liabilities | 15 | |
Non-current liabilities held for sale | 1,804 | |
Total non-current liabilities | 3,355 | 6,147 |
Total liabilities | 41,295 | 70,538 |
Commitments and contingencies | ||
Shareholders’ deficit: | ||
Ordinary shares (no par value; unlimited shares authorized; 10,209,481 shares and 57,182,633 shares issued and outstanding as of December 31, 2021 and 2022, respectively *) | ||
Additional paid-in capital | 310,267 | 262,271 |
Subscriptions receivable | (14,378) | (15,287) |
Statutory reserve | 1,901 | 1,901 |
Accumulated deficit | (305,072) | (271,040) |
Accumulated other comprehensive loss | (3,512) | (1,091) |
Total Borqs Technologies, Inc. shareholders’ deficit | (10,794) | (23,246) |
Noncontrolling interest | (358) | 5,960 |
Total shareholders’ deficit | (11,152) | (17,286) |
Total liabilities, noncontrolling interest and shareholders’ deficit | $ 30,143 | $ 53,252 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, net of allowance (in Dollars) | $ 12,881 | $ 13,049 |
Prepaid expenses and other current assets, net of allowance (in Dollars) | $ 11,383 | $ 11,327 |
Ordinary shares, par value (in Dollars per share) | ||
Ordinary shares, shares authorized | ||
Ordinary shares, shares issued | 57,182,633 | 10,209,481 |
Ordinary shares, shares outstanding | 57,182,633 | 10,209,481 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net Revenues: | |||
Software | $ 13,080 | $ 10,732 | $ 10,063 |
Software – related party | 507 | ||
Hardware | 39,457 | 18,829 | 16,181 |
Total net revenues | 52,537 | 29,561 | 26,751 |
Software | (6,149) | (9,429) | (9,691) |
Hardware | (35,272) | (17,526) | (15,464) |
Total cost of revenues | (41,421) | (26,955) | (25,155) |
Total gross profit | 11,116 | 2,606 | 1,596 |
Operating expenses: | |||
Sales and marketing expenses | (341) | (151) | (750) |
General and administrative expenses | (7,186) | (23,558) | (33,304) |
Research and development expenses | (4,524) | (5,294) | (8,162) |
Total operating expenses | (12,051) | (29,003) | (42,216) |
Other operating income | 148 | 247 | |
Operating loss | (787) | (26,150) | (40,620) |
Interest income | 47 | 3 | 5 |
Interest expense | (11,732) | (11,680) | (3,795) |
Other income | 240 | 2,376 | 231 |
Other expense | (2,123) | (3,207) | (210) |
Gain (loss) on disposal of subsidiary | (303) | 10,096 | |
Contingency (loss) reversal | 3,277 | (3,065) | |
Gain (loss) on debt settlement | 217 | (17,199) | 26 |
Loss related to equity financing | (3,669) | ||
Change in fair value of contingent consideration for the acquisition of HHE | (111) | ||
Loss on additional acquisition cost to HHE in shares | (5,950) | ||
Loss on deconsolidation of a subsidiary | (3,610) | ||
Foreign exchange gain (loss) | (1,519) | (2,661) | 1,649 |
Loss from continuing operations, before income taxes | (28,886) | (55,655) | (35,683) |
Income tax (expense) benefit | (59) | 445 | (406) |
Net loss from continuing operations | (28,945) | (55,210) | (36,089) |
Discontinued operations | |||
Income (loss) from operations of discontinued entities | (9,916) | (1,392) | 1,302 |
Net income (loss) on discontinued operations | (9,916) | (1,392) | 1,302 |
Net loss | (38,861) | (56,602) | (34,787) |
Net loss attributable to noncontrolling interest – continuing operations | (190) | (54) | (1) |
Net income (loss) attributable to noncontrolling interest – discontinued operations | (4,639) | (683) | 716 |
Less: net income (loss) attributable to noncontrolling interest | (4,829) | (737) | 715 |
Net loss attributable to Borqs Technologies, Inc. | (34,032) | (55,865) | (35,502) |
Net loss attributable to ordinary shareholders | $ (34,032) | $ (55,865) | $ (35,502) |
Net loss per share from continuing operations attributable to Borqs Technologies, Inc. | |||
Loss per share—Basic (in Dollars per share) | $ (1.25) | $ (7.48) | $ (12.97) |
Loss per share—Diluted (in Dollars per share) | (1.25) | (7.48) | (12.97) |
Net (loss) earnings per share from discontinued operations attributable to Borqs Technologies, Inc. | |||
Earnings (loss) per share—Basic (in Dollars per share) | (0.23) | (0.1) | 0.21 |
Earnings (loss) per share—Diluted (in Dollars per share) | (0.23) | (0.1) | 0.21 |
Net loss per share attributable to Borqs Technologies, Inc. | |||
Loss per share—Basic (in Dollars per share) | (1.48) | (7.58) | (12.76) |
Loss per share—Diluted (in Dollars per share) | $ (1.48) | $ (7.58) | $ (12.76) |
Number of ordinary shares used in earnings per share computation: | |||
Weighted-average number of ordinary shares used in calculating continuing operations—basic (in Shares) | 22,951,092 | 7,370,719 | 2,782,188 |
Weighted-average number of ordinary shares used in calculating continuing operations—diluted (in Shares) | 22,951,092 | 7,370,719 | 2,782,188 |
Weighted-average number of ordinary shares used in calculating discontinued operations—basic (in Shares) | 22,951,092 | 7,370,719 | 2,782,188 |
Weighted-average number of ordinary shares used in calculating discontinued operations—diluted (in Shares) | 22,951,092 | 7,370,719 | 2,782,188 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (38,861) | $ (56,602) | $ (34,787) |
Other comprehensive income (loss) , net of tax of nil: | |||
Foreign currency translation adjustments, net of tax of nil | (1,456) | 507 | 1,498 |
Other comprehensive income (loss) , net of tax of nil | (1,456) | 507 | 1,498 |
Comprehensive loss | (40,317) | (56,095) | (33,289) |
Less: comprehensive income (loss) attributable to noncontrolling interest | 76 | (10) | 41 |
Comprehensive loss attributable to Borqs Technologies, Inc. | $ (40,393) | $ (56,085) | $ (33,330) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders’ (Deficit) Equity - USD ($) $ in Thousands | Number of ordinary shares | Additional paid-in capital | Subscription receivable | Statutory reserves | Accumulated Other comprehensive loss | Accumulated deficit | Total Borqs Technologies, Inc. shareholders’ equity | Noncontrolling interest | Total | |
Balance at Dec. 31, 2019 | $ 150,455 | $ (15,287) | $ 2,097 | $ (1,904) | $ (179,672) | $ (44,311) | $ (4,394) | $ (48,705) | ||
Balance (in Shares) at Dec. 31, 2019 | [1] | 2,429,820 | ||||||||
Consolidated net loss | (35,503) | (35,503) | 715 | (34,788) | ||||||
Foreign exchange difference | 661 | 661 | 661 | |||||||
Debt equity conversion settlement | [2] | 3,594 | 3,594 | 3,594 | ||||||
Debt equity conversion settlement (in Shares) | [1],[2] | 192,430 | ||||||||
Disposal of Yuantel | [3] | (6,959) | (6,959) | 3,566 | (3,393) | |||||
Contribution by management | [4] | 396 | 396 | 396 | ||||||
Issuance of ordinary shares for collateral | [5] | 4,080 | (4,080) | |||||||
Issuance of ordinary shares for collateral (in Shares) | [1],[5] | 250,000 | ||||||||
Share-based compensation | [6] | 19,994 | 19,994 | 19,994 | ||||||
Share-based compensation (in Shares) | [1],[6] | 873,946 | ||||||||
Balance at Dec. 31, 2020 | 171,560 | (19,367) | 2,097 | (1,243) | (215,175) | (62,128) | (113) | (62,241) | ||
Balance (in Shares) at Dec. 31, 2020 | [1] | 3,746,196 | ||||||||
Consolidated net loss | (55,865) | (55,865) | (737) | (56,602) | ||||||
Foreign exchange difference | 152 | 152 | 152 | |||||||
Debt equity conversion settlement | [2] | 36,092 | 36,092 | 36,092 | ||||||
Debt equity conversion settlement (in Shares) | [1],[2] | 1,514,646 | ||||||||
Disposal of a subsidiary | (196) | (196) | (196) | |||||||
Issuance of warrants associated with convertible notes | [7] | 12,950 | 12,950 | 12,950 | ||||||
Shares conversion of convertible notes | [7] | 21,433 | 21,433 | 21,433 | ||||||
Shares conversion of convertible notes (in Shares) | [1],[7] | 1,496,271 | ||||||||
Warrants exercised into shares | [7] | 55 | 55 | 55 | ||||||
Warrants exercised into shares (in Shares) | [1],[7] | 1,931,729 | ||||||||
Shares released from escrow | [5] | 4,080 | 4,080 | 4,080 | ||||||
Acquisition of a subsidiary | [7] | 5,516 | 5,516 | 6,513 | 12,029 | |||||
Acquisition of a subsidiary (in Shares) | [1],[7] | 925,398 | ||||||||
Capital injection from non-controlling shareholders of a subsidiary | [8] | 297 | 297 | |||||||
Share-based compensation | [6] | 14,665 | 14,665 | 14,665 | ||||||
Share-based compensation (in Shares) | [1],[6] | 594,980 | ||||||||
Balance at Dec. 31, 2021 | 262,271 | (15,287) | 1,901 | (1,091) | (271,040) | (23,246) | 5,960 | (17,286) | ||
Balance (in Shares) at Dec. 31, 2021 | [1] | 10,209,220 | ||||||||
Consolidated net loss | (34,032) | (34,032) | (4,829) | (38,861) | ||||||
Foreign exchange difference | (2,421) | (2,421) | (2,421) | |||||||
Loan conversion with ordinary shares | [2] | 1,139 | 1,139 | 1,139 | ||||||
Loan conversion with ordinary shares (in Shares) | [2] | 338,968 | ||||||||
Issuance of ordinary shares as collateral | 2,760 | (2,760) | ||||||||
Issuance of ordinary shares as collateral (in Shares) | 1,003,593 | |||||||||
Issuance of warrants associated with convertible notes | [7] | 6,069 | 6,069 | 6,069 | ||||||
Shares issued for additional acquisition cost to HHE | [7] | 5,950 | 5,950 | 5,950 | ||||||
Shares issued for additional acquisition cost to HHE (in Shares) | [7] | 5,000,000 | ||||||||
Shares conversion of convertible notes | [7] | 28,692 | 28,692 | 28,692 | ||||||
Shares conversion of convertible notes (in Shares) | [7] | 19,324,628 | ||||||||
Warrants exercised into shares | [7] | |||||||||
Warrants exercised into shares (in Shares) | [7] | 17,360,652 | ||||||||
Capital injection from non-controlling shareholders of a subsidiary | [8] | 437 | 437 | |||||||
Deconsolidation of a subsidiary | [9] | (1,926) | (1,926) | |||||||
Settlement of equity financing | [10] | 3,669 | 3,669 | 3,669 | ||||||
Share-based compensation | [6] | 3,386 | 3,386 | 3,386 | ||||||
Share-based compensation (in Shares) | [6] | 3,945,572 | ||||||||
Balance at Dec. 31, 2022 | $ 310,267 | $ (14,378) | $ 1,901 | $ (3,512) | $ (305,072) | $ (10,794) | $ (358) | $ (11,152) | ||
Balance (in Shares) at Dec. 31, 2022 | 57,182,633 | |||||||||
[1]Giving retroactive effect to the reverse split on June 27, 2022[2] Refer to Note 20(g) for information regarding debt repayment settlement. Refer to Note 1(c) for information regarding transactions related to equity interests in Yuantel. Refer to Note 20(h) for information regarding contribution by management. Refer to Note 20(i) for information regarding issuance of shares for collateral. Refer to Note 16(a)(b) for information regarding share-based compensation. Refer to Note 14 for information regarding warrants granted associated with convertible notes. Refer to Note 20(m) for information regarding capital injection from non-controlling shareholders. Refer to Note 4 for information regarding deconsolidation of a subsidiary. Refer to Note 20(c) for information regarding settlement of equity financing. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Cash Flows [Abstract] | |||
Net loss | $ (38,861) | $ (56,602) | $ (34,787) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Provision (reversal of provision) on accounts receivables & other current assets | (20) | (1,757) | 4,371 |
Depreciation of property and equipment | 376 | 123 | 149 |
Amortization of intangible assets | 1,427 | 2,110 | 5,430 |
Amortization of right of use asset | 537 | 829 | 815 |
Loss on disposal of property and equipment | 10 | ||
Impairment of inventory | 1,268 | 782 | |
Impairment of intangible assets | 724 | ||
Deferred income tax (benefits) expenses | (55) | 680 | (1,003) |
Interest expense related to debt discount | 11,387 | 9,945 | |
Share-based compensation expenses | 2,782 | 7,937 | 3,002 |
(Gain) loss on debt settlement | (217) | 17,199 | (26) |
(Gain) loss on disposal of subsidiary | 303 | (10,096) | |
Non-employee share-based compensation expenses | 604 | 9,596 | 16,992 |
Contingency loss | 3,065 | ||
Reversal of contingency loss | (3,277) | ||
Gain from debt forgiveness | (2,094) | ||
Change in fair value of contingent consideration for the acquisition of HHE | 111 | ||
Loss on additional acquisition cost to HHE in shares | 5,950 | ||
Loss related to equity financing | 3,669 | ||
Loss from deconsolidation of HHE | 3,610 | ||
Changes in operating assets and liabilities, net of the effects of an acquisition: | |||
Accounts receivable | (1,052) | (1,379) | 1,560 |
Inventories | 1,982 | (5,310) | 2,202 |
Contract assets | 1,485 | (1,414) | |
Prepaid expenses and other current assets | 6,343 | (12,944) | (7,678) |
Other non-current assets | (3,221) | ||
Accounts payable | (1,379) | (1,261) | (2,984) |
Accrued expenses and other payables | (3,673) | 9,753 | 13,032 |
Advances from customers and contract liabilities | 2,107 | (92) | 493 |
Amounts due to related parties | (1,766) | (1,288) | (351) |
Deferred revenues | 9 | 1,040 | (28) |
Long-term payable | (252) | 669 | (361) |
Income tax payable | (392) | (1,454) | 974 |
Right of use asset | 433 | (1,796) | (819) |
Lease liabilities | (542) | 435 | (132) |
Other non-current liabilities | (15) | (68) | 84 |
Net cash used in operating activities | (5,523) | (28,738) | (8,059) |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchases of property and equipment | (718) | (781) | (72) |
Purchases of intangible assets | (141) | ||
Cash disposed of from deconsolidation of HHE | (1,117) | ||
Proceeds from disposal of a subsidiary, net of cash balance at disposed entity | 4,172 | ||
Investment in time deposit | (1,436) | ||
Investment in convertible bond and cash loan | (100) | (338) | |
Proceeds from acquisition of a subsidiary, net of cash acquired | 121 | ||
Net cash generated from (used in) investing activities | (3,371) | (998) | 3,959 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from short-term bank and other borrowings | 155 | 3,507 | 5,300 |
Repayments of short-term bank and other borrowings | (579) | (3,906) | (7,905) |
Proceeds from long-term bank and other borrowings | 112 | 1,250 | |
Repayments of long-term bank and other borrowings | (1) | (111) | |
Proceeds from issuance of convertible notes | 15,075 | 34,427 | |
Proceeds from exercising of warrants | 55 | ||
Proceeds from non-controlling shareholders of a subsidiary | 138 | 297 | |
Net cash (used in) generated from financing activities | 14,900 | 34,269 | (1,355) |
Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash | (2,594) | 311 | 228 |
Net (decrease) increase in cash and cash equivalents and restricted cash | 3,412 | 4,844 | (5,227) |
Cash and cash equivalents and restricted cash at the beginning of year | 7,925 | 3,081 | 8,308 |
Cash and cash equivalents and restricted cash at the end of year | 11,337 | 7,925 | 3,081 |
Less: cash and cash equivalents and restricted cash of discontinued operations at the end of year | 1,597 | ||
Cash and cash equivalents and restricted cash of continuing operations at the end of year | 11,337 | 6,328 | 3,081 |
Reconciliation of cash and cash equivalents and restricted cash of the continuing operations | |||
Cash and cash equivalents of continuing operations at the end of year | 11,305 | 6,117 | 3,044 |
Restricted cash of continuing operations at the end of year | 32 | 211 | 37 |
Total cash and cash equivalents and restricted cash of continuing operations | 11,337 | 6,328 | 3,081 |
Reconciliation of cash and cash equivalents and restricted cash of the discontinued operations | |||
Cash and cash equivalents of discontinued operations at the end of year | 1,597 | ||
Restricted cash of discontinued operations at the end of year | |||
Total cash and cash equivalents and restricted cash of discontinued operations | 1,597 | ||
Supplemental disclosures of cash flow information: | |||
Interest paid | (232) | (1,707) | (3,614) |
Interest received | 24 | 4 | 8 |
Income tax paid | (254) | (375) | (544) |
Cash paid included in the measurement of lease liabilities | (678) | (1,088) | (1,008) |
Supplemental schedule of non-cash activities: | |||
Acquisition of a subsidiary | 3,529 | ||
Loan conversion with ordinary shares | 1,250 | ||
Conversion of convertible notes | 28,692 | 21,433 | |
Issuance of shares for an increase in subscription receivable | 2,760 | 4,080 | |
Shares released from escrow | 4,080 | ||
Issuance of shares in exchange for advisory services | 604 | 9,651 | 16,992 |
Debt settlements by issuance of ordinary shares | 36,092 | 3,439 | |
Settlement of equity financing | 3,669 | ||
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ 575 | $ 1,780 | $ 797 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [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”). Concurrent with the completion of the acquisition of Borqs International, the Company changed its name from Pacific Special Acquisition Corp.” to Borqs Technologies, Inc. In November 2018, the Company’s board of directors approved the plan to dispose all of its tangible and intangible assets related to the VIE and the VIE’s subsidiaries through a series of agreements as discussed in Note 1 (c). Borqs Group are principally engaged in the provision of commercial grade Android+ platform solutions and hardware product manufactured in the People’s Republic of China (the “PRC”) and sold almost entirely outside of the PRC. The Group has disposed Yuantel on October 29, 2020. Refer to Note 1(c) for transitions related to disposal of Yuantel during the year ended December 31, 2020. (a) As of the balance sheet date, the VIE has been disposed and the details of the Company’s major subsidiaries, are as follows: Entity Date of Acquisition Place of Percentage of Principal Direct 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”) 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 (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 the 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 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 as of December 31, 2018. Refer to Note 1(c) for transitions related to equity interests in Yuantel during the year ended December 31, 2020. 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 agreements 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 agreements, 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 Subtopic 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 the 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 the 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) COVID-19 Pandemic Since February 2020, the Group has experienced reductions and cancellations of orders due to effects of the COVID-19 pandemic has on the demand from certain of the Group’s customers. The Group expects this negative effect on global business activities will continue to have pressure on the Group’s sales as the pandemic environment persists and perhaps even post the pandemic. In addition, since the Group’s operations span over the countries of the United States, India, China and South Korea, international and intra-country travel restrictions will continue to hamper our operations and have negative effects including delays and uncertainties on the Group’s supply chain delivery schedules and the Group’s abilities to secure financing for the Group’s working capital needs. The Group expects the impacts of COVID-19 to have an adverse effect on the business, financial condition and results of operations. As the assessable risks due to COVID-19 change in the countries of India and China, our operations can be affected, including the restrictions from accessing office facilities and limitations on domestic travels which can hamper the Group’s ability to efficiently manage the manufacturing of products since the Group’s contracted factories are located over various cities in China. As the Group’s sales have been negatively impacted by the pandemic in 2020, the Group cut back the operational costs by reduction of approximately 20% of the workforce in India and 40% of headcount in China. The Group constantly evaluates the financial position according to changes in the international business environment and depending on forecast of orders from customers in the near future, the Group may further reduce staffing as necessary. Although the Group’s revenues in 2022 improved to $52.5 million as compared to $29.6 million in 2021, the impact of the continuing COVID-19 pandemic on the year 2023 and beyond is still unknown as of the filing of this annual report and may cause our revenue in future periods to decline. The extent to which COVID-19 impacts the business and financial results of the Group in the longer term will depend on future developments, which are uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others. The Group will continue to evaluate the impact on the results of operation, financial position and cash flows of the Group and react actively as the situation evolves. The COVID-19 pandemic also presented and may continue to present challenges to the Group’s business operations as well as the business operations of the Group’s customers, business partners and other participants in the Group’s ecosystem, such as closure of offices and facilities, disruptions to or even suspensions of normal business and logistics operations, as well as restrictions on travel. Moreover, due to the quick spread of Omicron new variant across mainland China and Hong Kong, many cities in China had experienced lockdown or partial lockdown from time to time since the beginning of 2022. Although the Group’s businesses have recovered or are starting to recover, it is not possible to determine the ultimate impact of the COVID-19 pandemic on the Group’s business operations and financial results, which is highly dependent on numerous factors, including the duration and spread of the pandemic and any resurgence of the COVID-19 pandemic in China or elsewhere, actions taken by governments, domestically and in international relations, the response of businesses and individuals to the pandemic, the impact of the pandemic on business and economic conditions in China and globally, consumer demand, the Group’s ability and the ability of customers, logistics service providers and other participants in the Group’s ecosystem to continue operations in areas affected by the pandemic and the Group’s efforts and expenditures to support customers and partners and ensure the safety of the Group’s employees. The COVID-19 pandemic may continue to adversely affect the Group’s business and results of operations. (d) VIE and discontinued operation disclosures The Group disposed Yuantel to a third-party entity which also purchased the ownership of Yuantel that was sold to the first buyer in 2019. The disposal was completed On October 29, 2020 and as a result, the Group deconsolidated Yuantel on that date. The Consolidated VIEs contributed 29% and 52% of the Group’s consolidated revenues for the years ended December 31, 2019 and from January through October of 2020, respectively. As of December 31, 2020 and 2021, the Consolidated VIEs accounted for an aggregate of nil% and nil%, respectively, of the consolidated total assets, and nil% and nil%, respectively, of the consolidated total liabilities. 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 20 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. In February 2018, the Company purchased 21% of equity interest in Yuantel (Beijing) Investment Management Co., Ltd at a consideration of RMB21.05 million. In the same month, the Company firstly sold to Jinan Yuantel 25% of equity interest in Yuantel (Beijing) Investment Management Co., Ltd at a consideration of RMB22 million. In November 2018, the Company’s board of director approved the plan to dispose all of its tangible and intangibles assets related to the Consolidated VIEs through a series of agreements with Jinan Yuantel Communication Technology LLP (“Jinan Yuantel”), a Company controlled by a non-controlling interest shareholder individual. The Company originally owned 79% of Yuantel (Beijing) Investment Management Co., Ltd which in turn owned 95% of Yuantel Telecom, and therefore the Company effectively owned 75.05% of Yuantel Telecom prior to receiving any sales proceeds from the disposal of Yuantel. In April 2019, the Company secondly sold to Jinan Yuantel 20% of equity interest in Yuantel (Beijing) Investment Management Co., Ltd at a consideration of RMB25 million. In May 2019, the Company also authorized Jinan Yuantel to actively seek for investors on behalf of the Company to sell 45% of the equity interest in Yuantel held by Big Cloud Network at a consideration which is based on the expected share valuation no less than RMB180 million by June 30, 2019, for which, Jinan Yuantel will be granted the option to purchase the remaining 10% of the equity interest in Yuantel held by Big Cloud Network at a consideration of RMB10 upon achievement of the sale. The Company only received partial proceeds from the buyers in the year 2019 and as a result the Company owned 45% of Yuantel as of December 31, 2019, however still maintaining control of the operations of Yuantel through influence on the board and operational management. The Company has the right to not grant the option for the remaining 10% of equity interest. The disposal of the Consolidated VIEs represents a strategic shift for the Company and has a major effect on the Company’s results of operations. Accordingly, assets and liabilities related to the Consolidated VIEs were reclassified as held for sale for the carrying amounts will be recovered principally through a sale and revenues and expenses related to the Consolidated VIEs have been reclassified in the accompanying consolidated financial statements as discontinued operations prior to October 29, 2020. The Company disposed Yuantel to a third-party entity which also purchased the ownership of Yuantel that was sold to the first buyer in 2019. The disposal was completed On October 29, 2020 and as a result, the Group deconsolidated Yuantel on that date. The consolidated balance sheets as of December 31, 2019 and consolidated statements of operations for the years ended December 31, 2019 have been adjusted to reflect this change. There was no discontinued operation on the balance sheet as of December 31, 2020 as Yuantel had been disposed of in October 2020. Accordingly, revenues and expenses and cash flows related to the Company’s MVNO BU during January 1, 2020 to October 29, 2020 presented as discontinued operation in the accompanying consolidated financial statements. Afterwards, the Group did not have any continuing involvement with Yuantel and Yuantel was a third-party company after the deconsolidation. Net cash consideration of approximate $4,826 included assets and liabilities exemption to Yuantel related to the transaction. The Group recognized gain on disposal of Yuantel with the amount of $10,096. One of the nominee shareholders denied his entrustment relationship with the Group and claimed his rights and interests proceeds of the disposal of Yuantel. Although there were agreements between the Group and the nominee shareholder, there was no direct evidence to show the entrustment relationship between both parties, which may not be supported by the existing PRC laws and regulation. As a result, the Group assessed that a probable loss could be incurred. The Group estimated a loss ranged from $3.2 million to $3.6 million based on the best estimate of the information available. Because of there was no amount within the range would be a better estimate than any other amount, the minimum amount of $3.2 million was recorded as a contingent liability as of December 31, 2020. During the year ended December 31, 2021, the nominee shareholder of Big Cloud Network signed an agreement with the Group, to transfer his equity share in Big Cloud Network to one of the Group’s subsidiaries. By transferring all the shareholder’s rights and obligations under the agreement, the nominee shareholder no longer has any rights in Big Cloud Network or rights and interests in the proceeds of disposal of Yuantel. As a result, the probable loss has been reversed and the contingent liability of $3.2 million has been reversed. The following tables represent the financial information of the Consolidated VIEs classified as discontinued operations for the period ended October 29, 2020 before eliminating the intercompany balances and transactions between the Consolidated VIEs and other entities within the Group: The period starting January 1 to 2020 $ Net revenues 29,023 Cost of revenues (21,637 ) Total gross profit 7,386 Operating expenses: Sales and marketing expenses (4,598 ) General and administrative expenses (540 ) Research and development expenses (938 ) Total operating expenses (6,076 ) Operating (loss) income 1,310 Interest income, net 4 Other (expense) income, net (12 ) (Loss) income from discontinued operation, before income taxes 1,302 Income tax benefit (expense) - (Loss) income from discontinued operations 1,302 Less: net income (loss) attributable to noncontrolling interest - Net (loss) income attributable to Borqs Technologies, Inc. 1,302 The period starting January 1 to 2020 $ CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income 1,302 Adjustments to reconcile net (loss) income to net cash used in operating activities: Impairment of doubtful debt (300 ) MNVO BU management compensation - Deferred income tax benefits - Changes in operating assets and liabilities (2,557 ) Net cash used in operating activities (1,555 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (37 ) Purchases of intangible assets (355 ) Proceeds from disposal of non-controlling interest - Payments to acquiring non-controlling interest - Net cash provided by (used in) investing activities (392 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of short-term bank and other borrowings - Net cash generated from (used in) financing activities - Effect of foreign exchange rate changes on cash and short-term investment 38 Net change in cash and cash equivalents and restricted cash (1,910 ) Cash and cash equivalents and restricted cash at beginning of year 2,296 Cash and cash equivalents and restricted cash at end of year 386 (e) HHE reclassified as discontinued operation disclosures In December 2022, the Group received letter from Department of the Treasury/Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”) regarding the case of Borqs owned 51% of HHE’s class A shares. The Committee identified risks to the national security of the United States arising from the transaction relate to foreign proximity to US military personnel and installations through HHE’s physical access to customers and facilities. According to the Committee’s assessments and evaluation, Borqs and HHE (“the parties”) may seek to abandon the transaction. Such action will require negotiation with CFIUS to fully divest Borqs’ ownership interests and rights in HHE, subject to terms that fully address all identified national security risks to the satisfaction of CFIUS. On March 16, 2023, the Company and HHE entered into a National Security Agreement (“NSA”) with the Department of Defense and Department of Treasury. The NSA provides that the divestment shall occur within six months unless extended by the U.S. Government. The NSA also contains standstill provisions which provide that the Group shall not acquire any additional ownership interest in HHE, merge with or into HHE, effect any changes to the rights held by the Company, except as necessary to effect its obligations under the NSA, or acquire or take possession of any assets of HHE. Further, upon the completion of the Divestment, the Group shall terminate or irrevocably waive any information, consent, board appointment, board observer, or other governance rights held by the Group, except for any and all rights that are determined by the U.S. Government to be necessary to effect the provisions of the NSA. The NSA outlines the steps to be taken with respect to the Divestment: engaging a nationally recognized investment bank with experience in administering competitive sales and auction processes; assigning and hiring of security and monitoring personnel to directly communicate with the U.S. Government; removing all of Borqs’ administrative and technical influence over HHE; and creating a plan to divest all of Borqs’ investment interests and rights in HHE. Pursuant to the requirement of the NSA, Borqs has assigned its interests in HHE into a Divestment Trust according to a Divestment Trust Agreement (“DTA”) dated March 20, 2023 entered into between Borqs, HHE and a trustee. As of December 31, 2021, the Group classified the HHE as held for sale and reported in discontinued operation (see Note 4(c) for details). The following tables represent the financial information of HHE classified as discontinued operations as of December 31, 2021, and as of December 31, 2022 before the deconsolidation of HHE, and for the years ended December 31, 2021 and 2022 before eliminating the intercompany balances and transactions between HHE and other entities within the Group: As of December 31, 2021 2022 Deconsolidation Date Carrying amounts of major classes of assets included as part of the assets held for sale $ $ Cash and cash equivalents 1,597 1,117 Inventories, net 430 973 Prepaid expenses and other current assets, net 193 31 Current assets held for sale 2,220 2,121 Property and equipment, net 9 45 Intangible assets, net 4,399 3,949 Goodwill 12,208 12,208 Contract assets 1,485 - Non-current assets held for sale 18,101 16,202 Total assets of HHE classified as held for sale 20,321 18,323 Carrying amounts of major classes of liabilities included as part of liabilities held for sale Accounts payable 754 1,755 Accrued expenses and other payables 287 218 Contract liabilities - current 1,095 6,567 Amount due to related parties 20 - Short-term borrowings 914 851 Current liabilities held for sale 3,070 9,391 Long-term borrowings 661 472 Deferred tax liabilities 1,143 1,143 Non-current liabilities held for sale 1,804 1,615 Total liabilities of HHE classified as held for sale 4,874 11,006 For the years ended 2021 2022 $ $ Net revenues - 4,034 Cost of revenues - (8,160 ) Total gross profit - (4,126 ) Operating expenses: Sales and marketing expenses (51 ) (142 ) General and administrative expenses (1,066 ) (4,044 ) Total operating expenses (1,117 ) (4,186 ) Operating loss (1,117 ) (8,312 ) Interest expense, net (275 ) (343 ) Other expense - (1,261 ) Loss from discontinued operation, before income taxes (1,392 ) (9,916 ) Income tax benefit (expense) - - Loss from discontinued operations (1,392 ) (9,916 ) For the years ended 2021 2022 $ $ CASH FLOWS FROM OPERATING ACTIVITIES Net loss (1,392 ) (9,916 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 102 479 Changes in operating assets and liabilities (343 ) 7,489 Net cash used in operating activities (1,633 ) (1,948 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment - (66 ) Net cash used in investing activities - (66 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from shareholders 3,547 1,487 Proceeds from short-term and other borrowings 200 155 Repayments of short-term and other borrowings (527 ) (218 ) Proceeds from long-term and other borrowings - 112 Repayments of long-term and other borrowings (111 ) (2 ) Net cash generated from financing activities 3,109 1,534 Net increase (decrease) in cash and cash equivalents and restricted cash 1,476 (480 ) Cash and cash equivalents and restricted cash at beginning of year 121 1,597 Cash and cash equivalents and restricted cash at end of year 1,597 1,117 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
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”). In December 2022, the Group received a letter from the Department of the Treasury on behalf of the Committee on Foreign Investment in the United States (“CFIUS”) stating that the Company is required to negotiate with CFIUS to fully divest its ownership interests and rights in HHE due to HHE’s solar energy storage system and EnergyShare technology for Multi-Dwelling Residential Units being deemed a potential national security risk. On March 16, 2023, the Group entered into the National Security Agreement by and among (i) Borqs; (ii) HHE; and (iii) Department of Defense and Department of Treasury, represents the U.S. Government. According to the agreement, the Group shall complete the Divestment within six months unless extended by the U.S. Government. The Group’s solar energy business met the criteria to be reported as a discontinued operation and, as a result, HHE’s historical financial results are reflected in the Group’s consolidated financial statements as a discontinued operation, and assets and liabilities were retrospectively reclassified as assets and liabilities held for sale for all periods presented. Refer to Note 1 (d) for detailed information. (b) Liquidity and going concern The Group’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of operations. As of December 31, 2022, the Group had cash and cash equivalents of $11.3 million and restricted cash of $0.03 million and has generated a net loss from continuing operations of $28.9 million and cash inflows of $3.4 million for the year then ended. The Group’s cash level at December 31, 2022 was not adequate for operations in the 2022 fiscal year and financing was needed; and the due to the COVID-19 pandemic, negative effects from slow collection from receivables and significant cancellation of otherwise signed purchase orders from customers were observed as early as January 2020. The Group’s operations in the fiscal year 2020 was reduced to minimal levels due to lock down of cities in India and in China, and our contracted manufacturing with third parties was also reduced to about one third of the previous year’s volume. The Group had to rely on customer advances and short-term supply chain related load to sustain such minimal operation during the months affected most severely affected by the COVID-19 pandemic. Except for one significant customer in the U.S., all other purchase order from different countries of the world have been reduced or cancelled. Although the Group’s businesses have recovered or are starting to recover in the fiscal 2022, it is not possible to determine the ultimate impact of the COVID-19 pandemic on the Group’s business operations and financial results as the quick spread of Omicron new variant across mainland China and Hong Kong, many cities in China had experienced lockdown or partial lockdown from time to time since the beginning of 2022. During the year ended December 31, 2022, the Group executed a settlement agreement with Samsung regarding the arbitration compensation. According to the settlement agreement, the payment period of eighteen months beginning on July 2022. These factors raise substantial doubt about the Group’s ability to continue as a going concern for the next twelve months from the date of issuance of these consolidated financial statements. Management’s plan to alleviate the substantial doubt about the Group’s ability to continue as a going concern include attempting to improve its business profitability, its ability to generate sufficient cash flow from its operations to meet its operating needs on a timely basis. The management plan cannot alleviate the substantial doubt of the Group’s ability to continue as a going concern. There can be no assurance that the Group will be successful in achieving its strategic plans, that the Group’s future capital raises will be sufficient to support its ongoing operations, or that any additional financing will be available in a timely manner or with acceptable terms, if at all. If the Group is unable to raise sufficient financing or events or circumstances occur such that the Group does not meet its strategic plans, it would have a material adverse effect on the Group’s financial position, results of operations, cash flows, and ability to achieve its intended business objectives. The consolidated financial statements have been prepared assuming that the Group will continue as a going concern and, accordingly, 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 Company, its subsidiaries and Consolidated VIEs, for which, the Company is the primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the Consolidated VIEs are eliminated upon consolidation. Results of its subsidiaries and its Consolidated VIEs are consolidated from the date on which control is transferred to the Company. (d) Discontinued operations A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Discontinued operations are reported when a component of an entity comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity is classified as held for disposal or has been disposed of, if the component either (1) represents a strategic shift or (2) have a major impact on an entity’s financial results and operations. In the consolidated statement of operations, result from discontinued operations is reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. Cash flows for discontinued operations are presented separately in Note 1 (c) and 1 (d). Assets and liabilities of the discontinued operations are classified as held for sale when the carrying amounts will be recovered principally through a sale transaction. (e) Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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 and the subsequent impairment assessment of long-lived assets, intangible assets and goodwill, determining the provisions for accounts receivable, prepaid expenses and other current assets and inventories, determining the valuation allowance for deferred tax assets and accounting for deferred income taxes, uncertain tax benefits, determining the valuation for share-based compensation arrangements, warrants for Series D convertible redeemable preferred shares and beneficiary conversion feature on the Series E Preferred Shares, convertible notes and warrants associated with convertible notes, fair value of identifiable intangible assets, contingent consideration liabilities and goodwill in a business combination,. 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. (f) 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 (“INR”), 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 Topic 830, Foreign Currency Matters Assets and liabilities of the Group’s PRC subsidiaries are translated into $ 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 income (loss) in the consolidated statements of comprehensive income (loss). (g) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and demand bank deposits which are unrestricted as to withdrawal and use have original maturities less than three months. All highly liquid investments with a stated maturity of 90 days or less from the date of purchase are classified as cash equivalents. (h) Restricted cash and time deposits Cash and time deposits that are restricted as to withdrawal or use for current operations are classified as restricted cash and restricted term deposits, respectively. Restricted cash as of December 31, 2021 mainly represents the cash frozen by the authority related to a lawsuit in PRC (Note 12). Restricted cash as of December 31, 2022 mainly represents the cash frozen by a bank as credit card deposit. Time deposits as of December 31, 2022 represents a bank deposit has original maturity with six months in one of the Group’s subsidiaries. As of December 31, 2021, the Group has no time deposit. (i) 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 for expected credit loss on a periodic basis and makes 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. The Group adopt Accounting Standard Update (ASU) 2016-13, Financial Instruments-Credit Losses (codified as Accounting Standard Codification Topic 326) on January 1, 2020, which requires measurement and recognition of current expected credit losses for financial instruments held at amortized cost. See Note 2 (o) below for current expected credit loss. (j) 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 $2,255 and $1,924 were recorded as of December 31, 2021 and 2022, respectively. (k) 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. (l) 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 and ending when the software is available for general release to customers, in accordance with ASC 350-20, 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 4.5 years MVNO license 10 years Capitalized software development costs 3 years Internal-use software 5 years Developed technology 10 years (m) Business combination Business combinations are accounted for using the acquisition method. The Group recognizes separately from goodwill the assets acquired, the liabilities assumed and the noncontrolling interest at their acquisition date fair values. 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. In accordance with ASC Topic 350, Goodwill and Other Intangible Assets In addition, the share purchase agreements entered into may contain contingent consideration provisions obligating the Group to pay additional purchase consideration, upon the acquired business’s achievement of certain agreed upon operating performance-based milestones. Under ASC 805, these contingent consideration arrangements are required to be recognized and measured at fair value at the acquisition date as either a liability or as an equity instrument, with liability instruments being required to be remeasured at each reporting period through the Company’s statements of comprehensive income (loss) until such time as to when the contingency is resolved. The fair value of the contingent consideration is valued by external valuers. The valuations are presented to the Group’s management. The fair value of the earn-out payments was measured using a Monte Carlo simulation analysis. 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 Solar Energy Business and Connected Solution. Goodwill is recorded at the Solar Energy reporting unit. The Group performed impairment analysis on goodwill as of December 31 every year beginning with a qualitative assessment, or starting with the quantitative assessment instead. The quantitative goodwill impairment test compares the fair values of each reporting unit to its carrying amount, including goodwill. A reporting unit constitutes a business for which discrete profit and loss financial information is available. The fair value of each reporting unit is established using a combination of expected present value of future cash flows and income approach valuation methodologies. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Determining when to test for impairment, the Group’s reporting units, the fair value of a reporting unit and the fair value of assets and liabilities within a reporting unit, requires judgment and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions and determination of appropriate market comparable. The Group bases fair value estimates on assumptions it believes to be reasonable but that are unpredictable and inherently uncertain. Significant changes in the economic characteristics of components or reorganization of an entity’s reporting structure can sometimes result in a re-assessment of the affected operating segment and its components to determine whether reporting units need to be redefined where the components are no longer economically similar. Future changes in the judgments and estimates underlying the Group’s analysis of goodwill for possible impairment, including expected future cash flows and discount rate, could result in a significantly different estimate of the fair value of the reporting units and could result in additional impairment of goodwill. (n) Long-term investments The Group’s long-term investments consist of equity investments without readily determinable fair value. The Group makes a qualitative assessment of whether the investment is impaired at each reporting date, applying judgment in considering various factors and events including a) adverse performance of investees; b) adverse industry developments affecting investees; and c) adverse regulatory social, economic or other developments affecting investees. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss of investments equal to the difference between the carrying value and fair value. (o) Current expected credit loss In 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”), which amends previously issued guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses rather than incurred losses. The Group no longer qualified as an emerging growth company in the year 2020 and adopted this ASC Topic 326 on January 1, 2020. The Group has identified the relevant risk characteristics of its customers and the related receivables, and other receivables which include type of the products the Group provides, nature of the customers or a combination of these characteristics. Receivables with similar risk characteristics have been grouped into pools. For each pool, the Group considers the historical credit loss experience, current economic conditions, reasonable and supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses. Other key factors that influence the expected credit loss analysis include customer demographics, payment terms offered in the normal course of business to customers, and industry-specific factors that could impact the Group’s receivables. Additionally, external data and macroeconomic factors are also considered. Movement of the allowance for doubtful accounts for accounts receivable and contract assets is as follows: Year ended December 31, 2021 2022 $ $ Balance as of January 1 12,883 13,049 Provisions (reversal of provision) for doubtful accounts 169 (153 ) Write offs - - Changes due to foreign exchange (3 ) (15 ) Balance as of December 31 13,049 12,881 Movement of the allowance for other receivables in prepaid expenses and other current assets, is as follows: Year ended December 31, 2021 2022 $ $ Balance as of January 1 13,992 11,327 Provisions for doubtful accounts - 133 Reversal of provision for doubtful accounts (1,926 ) - Write offs (764 ) - Changes due to foreign exchange 25 (77 ) Balance as of December 31 11,327 11,383 (p) 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. The impairment loss of long-lived assets was $703, $ nil nil (q) Convertible Promissory Notes In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. The FASB reduced the number of accounting models for convertible debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to users. For public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, the guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Group has elected to adopt the amendments in these ASUs on January 1, 2021. The Group determines the appropriate accounting treatment of its convertible notes in accordance with the terms in relation to the conversion feature, call and put options, and any other embedded features. After considering the impact of such features, the Group may account for such instrument as a liability in its entirety, or separate the instrument into debt and equity components following the respective guidance described under ASC 815 “Derivatives and Hedging” and ASC 470 “Debt”. The debt discount, if any, together with the related issuance cost are subsequently amortized as interest expense, using the effective interest method, from the issuance date to the earliest maturity date. Interest expenses are recognized in the consolidated statements of operations in the period in which they are incurred. (r) Debt Issuance Costs and Debt Discounts The Group may record debt issuance costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense through the maturity of the debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately expensed. (s) Derivative financial instruments The Group evaluates all of its equity-linked financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity and whether embedded derivative shall be bifurcated from the host instrument and separately accounted for as a derivative, is reassessed at the end of each reporting period. Derivative assets and liabilities are recorded at fair value at inception and re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. (t) 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, short-term bank and other borrowings and long-term bank borrowings. Other than the long-term bank borrowings, the carrying values of these financial instruments approximate their fair values due to their short-term maturities. The carrying amounts of long-term bank borrowings approximated their fair values since they bear interest rates which approximate market interest rates. The Group applies ASC Topic 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. (u) Revenue recognition The Group is mainly engaged in the business of providing 1) Android+ platform solutions and services, 2) hardware product sales, 3) MVNO services and 4) Solar. The Group adopted the new revenue recognition standards, or ASC 606, effective January 1, 2019 using the modified retrospective method for contracts which were not completed at the date of initial adoption. In accordance with ASC Topic 606, revenues are recognized when control of the promised goods or services is transferred to the Group’s customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services. In determining when and how much revenue is recognized from contracts with customers, the Group performs the following five-step analysis: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; (5) recognize revenue when (or as) the entity satisfies a performance obligation. When either party to a contract has performed, the Group presents the contract in the consolidated balance sheet as a contract asset or a contract liability, depending on the relationship between the entity’s performance and the customer’s payment. A contract asset is the Group’s right to consideration in exchange for goods and services that the Group has transferred to a customer. A receivable is recorded when the Group has an unconditional right to consideration, and it is probable that substantially all of the consideration will be collected. If a customer pays consideration or the Group has a right to an amount of consideration that is unconditional, before the Group transfers a good or service to the customer, the Group presents the contract liability when the payment is made or a receivable is recorded (whichever is earlier). A contract liability is the Group’s obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. The Group’s contract with customers do not include significant financing component and material variable consideration. Generally, the Group recognizes revenue under ASC Topic 606 for each type of its major revenue streams as follows: 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. There are executed contracts and purchase orders between the Group and each customer, and each party’s rights regarding the service to be rendered are written on the contracts. For this type of customers, the Group enters contract with them, which has the commercial substance to identify each party’s rights and obligations. There are two major performance obligations in the contracts with this type of customers: the delivery of the software product and the completion of the post-contract-service (“PCS”). The allocation of the transaction price between the two major performance obligations is based on the estimated standalone selling prices. The selling price for the performance obligation of PCS is estimated as the reasonable cost budget plus a margin or industrial standard. The rest of the transaction price other than the reasonable cost budget plus a margin for PCS will be allocated to the performance obligation of the delivery of the software product. For the sales derived from software development project in which the customer’s contract specifies the technical requirements of the software product, the Group recognizes revenue in accordance with the satisfaction of each performance obligation. For the performance obligation of the delivery of the software product, the Group recognizes the revenue at the point of time, upon the customers sign off the final acceptance. For the performance obligation of the completion of PCS Period, the Group recognizes the revenue over the period of the PCS Period. 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 over the time. The Group elects right to invoice expedient as the measure of progress. The revenue arising from contracts related to Android+ platform solutions and services is included as “Software Revenues” on the Group’s consolidated statement of operations. 2. Hardware product sales The Group provides total solutions on original design manufacturer (“ODM”) basis to customers of mobile devices. The Group recognizes revenue at the point of time, upon the delivery of products to customers, which is when the goods delivered to the designated address and it is probable that substantially all of the consideration will be collected. Warranty is provided to all customers, which is not considered an additional service; rather, an integral part of the product sales. ASC Topic 450, Contingencies, specifically addresses the accounting for standard warranties. The Group believes that accounting for its standard warranty pursuant to ASC 450 does not impact revenue recognition because the cost of honoring the warranty can be reliably estimated. The Group has determined the likelihood of claims arising from warranties to be remote based on strong quality control procedures in the production process and historical experience with regard to claims being |
Concentration of Risks
Concentration of Risks | 12 Months Ended |
Dec. 31, 2022 | |
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 and accounts receivable from related parties. As of December 31, 2021 and 2022, the aggregate amount of cash and cash equivalents and restricted cash from continuing operations were $6,328 and $11,337, respectively. As of December 31, 2021 and 2022, the aggregate amount of cash and cash equivalents and restricted cash of $1,443 and $1,930 respectively, were held at major financial institutions located in the PRC, and $4,885 and $9,407, 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, the Group is unlikely to claim its deposits back in full since the bank is unlikely to be classified as a secured creditor based on PRC laws. The Group has cash held by Silicon Valley Bank as of December 31, 2022. On March 10, 2023, the California Department of Financial Protection and Innovation closed Silicon Valley Bank and appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. On March 12, 2023, the U.S. Department of the Treasury, the Federal Reserve and the FDIC released a joint statement confirming that all depositors of Silicon Valley Bank would have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts. The Group received full access to the funds in its deposit and money market accounts on March 13, 2023. In light of actions by the federal government to fully protect deposit accounts, the Group has not experienced any credit losses on its deposits of cash. Accounts receivable, and accounts receivable from related parties 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. (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) Customer concentration risk – the Group’s main operations are dependent upon a few customers, with one particularly large customer representing 30.05% of our net revenues in the 2022 fiscal year. It is always considered at least reasonably possible that any customer can be lost in the near time. There is no guarantee that the large customer will continue to place orders with the Group or award similar volume of business to the Group. The Group’s top five customers accounted for 88.2%, 87.8% and 86.4% of our net revenues in the years ended December 31, 2020, 2021 and 2022, respectively. The accounts receivable from the largest single customer accounted for 77% and 43% of the Group’s total accounts receivable for the years ended December 31, 2021 and 2022, respectively. (ii) Product concentration and geography concentration risks – For the fiscal year of 2020, approximately 41.8% of the Group’s net revenue was focused on the mobile tracker device. For the fiscal year of 2021, approximately 37.6% of the Group’s net revenues was focused on the handset mobile device. For the fiscal year of 2022, approximately 43.4% of the Group’s net revenues was focused on the handset mobile device. There is no guarantee that this product type will continue to have demand in the fast-changing telecom industry or that the Group can continue to feasibly compete as a designer and manufacturer of such products. (iii) 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. In November 2018, the Company’s board of directors approved the plan to dispose all of its reporting units operating the MVNO business (Note 1 (c)). For the Group’s continuous operations, the Group’s top five suppliers accounted for 75.7% and 68.8% of our cost of goods sold in the years ended December 31, 2021 and 2022, respectively. (iv) 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 40 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 For financial reporting purposes, the financial statements of the Group’s PRC operating subsidiaries and VIE, which are prepared using the functional currency of the PRC, Renminbi (“RMB”), are translated into the Company’s reporting currency, the United States Dollar (“U.S. dollar”). Assets and liabilities are translated using the exchange rate at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and shareholders’ equity is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in shareholders’ equity. The exchange rates used to translate amounts in RMB into US$ for the purposes of preparing the consolidated financial statements are as follows: As of December 31, 2021 2022 Balance sheet items, except for equity accounts 6.3757 6.9646 Years ended 2021 2022 Items in the statements of operations and comprehensive loss 6.8976 6.7261 (d) Interest rate risk The Group is exposed to interest rate risk on its interest-bearing liabilities. As part of its liability risk management, the Group reviews and takes appropriate steps to manage its interest rate exposures on its interest-bearing liabilities. The Group has not been exposed to material risks due to changes in market interest rates, and not used any derivative financial instruments to manage the interest risk exposure during the years presented. |
Business Acquisitions and Dispo
Business Acquisitions and Disposal | 12 Months Ended |
Dec. 31, 2022 | |
Business Acquisitions and Disposal [Abstract] | |
BUSINESS ACQUISITIONS AND DISPOSAL | 4. BUSINESS ACQUISITIONS AND DISPOSAL (a) Acquisition of HHE during fiscal 2021 On October 19, 2021, the Group signed definitive agreements to acquire 51% equity interests in Holu Hou Energy LLC (“HHE”). The total consideration for the acquisition of HHE amounted to $10.0 million in cash as capital contribution, and 877,183 of the Group’s ordinary shares. Of this consideration, $3.25 million cash and 219,296 shares were released at the closing date and the remaining $6.75 million of cash and 657,887 shares will be held in escrow and released as earn-out payments. The earn-out payment is based on the performance of the acquiree to achieve certain earn-out requirements from July 2022 to January 2024. The fair value of the earn-out payments was measured using a Monte Carlo simulation analysis. As of the acquisition date, the total contingent consideration recognized with the amount of $1,669. The Group and HHE entered into agreement to postpone the original earn-out to be measured in July 2022 to July 2023. HHE is an innovative solar energy and storage provider for the residential, multi-family residential and commercial building markets. With operations in California, Hawaii, Wisconsin and Shanghai, HHE engineers proprietary storage system and software and control platform solutions. The HHE team is made up of renewable energy industry veterans, engineering and deploying energy storage systems that enable greater energy independence. After the completion of the acquisition, HHE became a subsidiary of the Group. During the year ended December 31, 2022, the Group issued additional 5,000,000 shares to HHE as an additional acquisition cost, which held in escrow and will be released as earn-out payments. This transaction was considered a business acquisition and therefore was recorded using the acquisition method of accounting. The acquired assets and liabilities were recorded at their fair values at the date of acquisition. The purchase price for the acquisition was allocated as follows: Amount $ Net liabilities acquired $ (2,265 ) Amortizable intangible assets Developed Technology 4,492 Goodwill 12,208 Deferred tax liabilities (1,143 ) Noncontrolling interests (6,513 ) Total $ 6,779 Total purchase price consisted of: - cash consideration (paid in fiscal 2021) 3,250 - share-based consideration (219,296 of the Group’s ordinary shares) 1,860 - contingent considerations 1,669 Total $ 6,779 The goodwill is attributable to intangible assets that cannot be recognized separately as identifiable assets under U.S. GAAP, and comprise of (a) the assembled work force and (b) the expected but unidentifiable business growth as a result of the economy of scale, increase in cross-selling opportunities as well as synergy resulting from the acquisition. The amortizable intangible assets represent the developed technology acquired as of the acquisition date with the amount of $4,492, it was valued using the multi-period excess earnings approach. The non-controlling interest with the amount of $6,513 as of the acquisition date was valued using the discounted cashflow method. The key input and assumptions included internal rate of return of 11.2%, weighted average cost of capital of 12.0% and weighted average return of assets of 12.0%. Transaction Expenses Transaction costs directly related to the acquisition of $538 for the year ended December 31, 2021, recorded in share-based compensation expense for the ordinary shares issued to the financial advisors and general and administrative expenses for other related fees. See Note 4(c) below for the deconsolidation of HHE during the year ended December 31, 2022. (b) Disposal of Borqs Wireless Ltd. (“BWL”) during the year ended December 31, 2021 In July 2021, the Group entered into an agreement to sell its entire equity shares in Borqs Wireless Ltd. (“BWL”) a 100% subsidiary. Since the date of loss of control BWL was deconsolidated from the Group’s financial statements. The Group had balances due from BWL and exempted the balances before entering into the agreement. The loss on the disposal of BWL was calculated as the difference between: (i) The fair value of the consideration received (ii) the carrying value of net assets disposed of, as of the date of the transaction Amount $ ’000 The fair value of the consideration received Cash received $ - * Less: Net assets of BWL derecognized on disposal 303 Loss on disposal $ (303 ) * According to the agreement, the cash consideration was RMB 1 Yuan. Below are the assets and liabilities of BWL as of date of disposal: Amount $ ’000 Assets Cash $ 4 Other current assets 332 Total Assets $ 336 Liabilities Other current liabilities $ 33 Total liabilities $ 33 (c) Deconsolidation of HHE during the year ended December 31, 2022 In December 2022, the Group received a letter (the “CFIUS Letter”) from the Department of the Treasury on behalf of the Committee on Foreign Investment in the United States (“CFIUS”) stating that the Company is required to negotiate with CFIUS to fully divest its ownership interests and rights in HHE due to HHE’s solar energy storage system and EnergyShare technology for Multi-Dwelling Residential Units being deemed a potential national security risk. On December 31, 2022, the Group resolved that in order to comply fully with the requirements of the CFIUS Letter which involve multiple steps that the Group must adhere to, including: (i) Entering into a National Security Agreement with various departments of the US government with a plan that is effective, monitorable and verifiable to divest Borqs’ investment interests and rights in HHE; (ii) Selection of a trustee and entering into a Divestment Trust Agreement, and assigning the Group’s interest in HHE to the trustee; and, (iii) Selection of a nationally recognized investment bank as the exclusive agent for the divestment of HHE. Besides, the Group also resolved that as of December 31, 2022, terminate its control of HHE by (i) removal of all of the Group’s representatives from HHE’s Board of Directors, (ii) relinquishment of Class A Membership Unit voting rights, and (iii) reduction of the Group’s ownership of HHE from 51% down to 49% by allowing HHE to increase the total number of Class B membership units for employees of HHE such that the Group’s ownership is proportionally reduced. And the Group resolved to comply fully with the requirements of the CFIUS Letter and terminate its control of HHE on December 31, 2022. By taking above actions, the Group no longer has a controlling interest in HHE and result in deconsolidation of HHE as of December 31, 2022. On March 16, 2023, the Group and HHE entered into a National Security Agreement (“NSA”) with the Department of Defense and Department of Treasury. The NSA provides that the divestment shall occur within six months unless extended by the U.S. Government. The NSA also contains standstill provisions which provide that the Group shall not acquire any additional ownership interest in HHE, merge with or into HHE, effect any changes to the rights held by the Group, except as necessary to effect its obligations under the NSA, or acquire or take possession of any assets of HHE. Further, upon the completion of the Divestment, the Group shall terminate or irrevocably waive any information, consent, board appointment, board observer, or other governance rights held by the Group, except for any and all rights that are determined by the U.S. Government to be necessary to effect the provisions of the NSA. The NSA outlines the steps to be taken with respect to the Divestment: engaging a nationally recognized investment bank with experience in administering competitive sales and auction processes; assigning and hiring of security and monitoring personnel to directly communicate with the U.S. Government; removing all of Borqs’ administrative and technical influence over HHE; and creating a plan to divest all of Borqs’ investment interests and rights in HHE. Pursuant to the requirement of the NSA, Borqs has assigned its interests in HHE into a Divestment Trust according to a Divestment Trust Agreement (“DTA”) dated March 20, 2023 entered into between Borqs, HHE and a trustee. According to the DTA, when Borqs’ interests in HHE are being placed in a Voting Trust Agreement as a security measure designed to insulate HHE from any foreign control or influence that may arise from Borqs’ ownership of the investment interest. Also, it shall not accept direction from the Group on any matter before the trustee or the Board of Manager of HHE and not to permit the Group to exercise any control or influence over the business or management of HHE As above, HHE, which identified the innovative clean energy business, a separate segment was deconsolidated on December 31, 2022, and reclassified as held for sale as of December 31, 2021, for the carrying amounts will be recovered principally through a sale and revenues and expenses related to HHE have been reclassified in the accompanying consolidated financial statements as discontinued operations for fiscal 2022. The loss on the deconsolidation of HHE was calculated as below: Amount $ ’000 The fair value of the consideration received $ - Carrying value of non-controlling interest prior to the deconsolidation 1,926 Less: Net assets of HHE derecognized on deconsolidation 7,317 Loss from deconsolidation (5,391 ) Derecognition of contingent liabilities recognized during the acquisition 1,781 Net loss on deconsolidation $ (3,610 ) After the deconsolidation of HHE on December 31, 2022, the Group recorded the investment as equity investments without readily determinable fair value. Based on the valuation of the retained interest in HHE, the fair value of the investment is zero and the Group recognized the impairment loss equal to the difference between the carrying value and fair value. The loss related to the remeasurement of remaining investment in HHE is $5,391. The fair value of HHE was valued using the market approach and income approach. The key input and assumptions included long-term growth rate of 2.4%, weighted average cost of capital of 14.0% and risk-free rate of 4.1%. |
Inventories, Net
Inventories, Net | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | 5. INVENTORIES, NET Inventories consisted of the following: As of December 31, 2021 2022 $ $ Raw materials 7,714 5,779 Work in process 1,198 301 Finished goods 103 79 9,015 6,159 Less: provision (2,255 ) (1,924 ) Inventories, net 6,760 4,235 Provisions were $2,255 and $1,924 as of December 31, 2021 and 2022, respectively, due to obsolescence including the inventories from previous years. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses and Other Current Assets, Net [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | 6. PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET Prepaid expenses and other current assets consisted of the following: As of December 31, 2021 2022 $ $ Staff advances 134 61 Prepayment for products 2,346 1,174 Advance to OEMs 16,939 14,285 Rental and other deposits 1,010 736 VAT recoverable 2,696 1,836 Receivable from an export/import agent 1,138 - Investment of convertible bond 238 338 Cash loan 100 100 Others 366 354 25,160 18,884 Less: provision (11,327 ) (11,383 ) 13,640 7,501 Provisions were $11,327 and $11,383 as of December 31, 2021 and 2022, respectively. The Group reviews staff advances, rental and other deposits, receivable from an agent and other for expected credit loss. The Group determined the allowance based on known troubled accounts, historical experience, and other currently available evidence. |
Lease
Lease | 12 Months Ended |
Dec. 31, 2022 | |
Lease [Abstract] | |
LEASE | 7. LEASE The Group leases office space under non-cancelable operating lease agreements, which expire at various dates through 2024. As of December 31, 2021 and 2022, the Group’s operating leases had a weighted average discount rate of 11.2% and 8.16%, respectively. Weighted-average remaining lease term for the year ended December 31, 2021 and 2022 were 2.91 years and 2.83 years, respectively. Future lease payments under operating leases as of December 31, 2022 were as follows: As of 2022 $ 2023 604 2024 39 Total lease payments 643 Less: imputed interest 68 Present value of lease liabilities 575 Operating lease cost for the year ended December 31, 2022 was $592, which excluded cost of short-term contracts. Short-term lease cost for the year ended December 31, 2022 was $480. Operating lease cost for the year ended December 31, 2021 was $537, which excluded cost of short-term contracts. Short-term lease cost for the year ended December 31, 2021 was $379. Operating lease cost for the year ended December 31, 2020 was $899, which excluded cost of short-term contracts. Short-term lease cost for the year ended December 31, 2020 was $223. Cash paid for amounts included in the measurement of operating lease liabilities was $1,008, $1,088 and $678 for the year ended December 31, 2020, 2021 and 2022, respectively. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment, Net [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 8. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: As of December 31, 2021 2022 $ $ At cost: Computer and network equipment 1,516 1,592 Office equipment 1,118 1,318 Motor vehicles 185 171 Production equipment 312 466 3,131 3,547 Less: accumulated depreciation (2,407 ) (2,523 ) 724 1,024 Depreciation expense from continuing operations was $79, $114 and $346 for the years ended December 31, 2020, 2021 and 2022, respectively. Certain fully depreciated computer equipment and related peripherals were disposed in the year 2021. For the years ended December 31, 2020 2021 2022 $ $ $ Cost of revenues - - 145 Sales and marketing expenses 1 - 26 General and administrative expenses 13 44 155 Research and development expenses 65 70 20 79 114 346 |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net [Abstract] | |
INTANGIBLE ASSETS, NET | 9. INTANGIBLE ASSETS, NET The following table presents the intangible assets as of the respective balance sheet dates: Software Capitalized software Total $ $ $ Balance as of January 1, 2021 6 3,532 3,538 Additions - - - Disposal - (554 ) (554 ) Amortization expense - (2,017 ) (2,017 ) Foreign currency translation difference (6 ) 17 11 Accumulated impairment loss - - - Foreign currency translation difference - - - Balance as of December 31, 2021 - 978 978 Additions - - - Amortization expense - (978 ) (978 ) Foreign currency translation difference - - - Accumulated impairment loss - - - Foreign currency translation difference - - - - - - Balance as of December 31, 2022 - - - 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. There was no capitalization of intangible assets in the year ended December 31, 2021 and 2022 due to the fact that the Group received no orders for new products that required R&D expenditures that should be capitalized. For the year ended December 31, 2021 and 2022, the Group did not recognize any impairment loss associated with its intangible assets. |
Long-Term Investments
Long-Term Investments | 12 Months Ended |
Dec. 31, 2022 | |
Long-Term Investments [Abstract] | |
LONG-TERM INVESTMENTS | 10. LONG-TERM INVESTMENTS On January 18, 2018, the Company entered into an agreement with Colmei Technology International Ltd (“Colmei”) and its affiliate Shenzhen Crave Communication Co., Ltd (“Crave”), along with the shareholders of Crave and Colmei (the “Selling Shareholders”), pursuant to which the Selling Shareholders sold to the Company 13.8% of the outstanding shares of Crave and 13.8% of the outstanding shares of Colmei. Under the agreement, the Company paid purchase consideration consisting of the Company’s 29,607 ordinary shares at the fair value of $3,000 and cash in the amount of $10,000 to be paid to the Selling Shareholders by the end of 36 months from the date of agreement, which the Company has not yet paid as of the filing of this annual report. Subject to board approval, the Company agreed to issue 11,459 additional shares to the Selling Shareholders if the aggregate value of the ordinary shares initially issued at the closing to the Selling Shareholders was less than $3,000 in fair value as of August 18, 2018. The board of directors approved and 11,459 shares that were issued on January 10, 2019. The Company does not have significant influence over the investees and therefore the investment was accounted for under the cost method. Cost of the long-term investments originally consisted of the fair value of the ordinary shares on the dates of issuance and the present value of the cash consideration determined based on management’s estimated payment schedule. Due to significant numbers of claims against Crave and Colmei in the year 2019, the Company recorded $13,000 of impairment loss as of December 31, 2018. In June 2020, Crave and Colmei filed for bankruptcy, the Company cancelled any further investment into these entities. |
Bank and Other Borrowings
Bank and Other Borrowings | 12 Months Ended |
Dec. 31, 2021 | |
Bank and Other Borrowings [Abstract] | |
BANK AND OTHER BORROWINGS | 11. BANK AND OTHER BORROWINGS Bank and other borrowings were as follows as of the respective balance sheet dates: As of December 31, 2021 2022 $ $ Short-term bank and other borrowings (i) 361 - Long-term bank and other borrowings, current portion (ii) 1,250 - Subtotal 1,611 - Long-term bank and other borrowings, non-current portion (ii) - - Total borrowings 1,611 - (i) The short-term bank and other borrowings outstanding as of December 31, 2021 and 2022 bore a weighted average interest rate of 103.20% and 21.09% per annum, respectively, and were denominated in RMB. The borrowings was obtained from financial institution. The outstanding balances as of December 31, 2021 represented a loan borrowed by one of the Group’s subsidiaries. A subsidiary has entered into a short-term loan with the financial institution. As of December 31, 2021, the balance of this loan amounted to US $361. The balance has been fully paid off in the year 2022. (ii) The outstanding loans as of December 31, 2021 represented a loan from an individual shareholder. The long-term bank borrowing as of December 31, 2020 was a loan from an individual shareholder, bearing interest rates of 6.00% per annum with a period of 15 months. The loans were denominated in US$ with the amount of $1,250. The Group need to repay the principal amount in its entirely to the lender, together with interests. Subsequently in February 2022, the Group entered into an amendment agreement with the individual shareholder for the loan extension. The original due date of February 27, 2022 has been extended to December 31, 2022. The balance recorded in current portion of long-term bank borrowings as of December 31, 2021. On May 03, 2022, the Group entered into a share exchange agreement regarding the $1,250 loan with an individual shareholder. According to the agreement, the Group repaid the loan balance with the Group’s 338,968 ordinary shares on May 03, 2022. |
Accrued Expenses and Other Paya
Accrued Expenses and Other Payables | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER PAYABLES | 12. ACCRUED EXPENSES AND OTHER PAYABLES The components of accrued expenses and other payables were as follows: As of December 31, 2021 2022 $ $ Payroll and welfare payable 2,853 2,356 VAT, and other taxes payable 492 514 Payables for office supply and utilities 226 124 Payables for purchase of property and equipment 53 49 Professional service fees 963 748 Payables for share purchase consideration (Note 10) 10,000 10,000 Payables for Samsung arbitration compensation (Note 20(e)) 3,749 1,958 Interest and penalty payable 1,137 159 Advance from customers 5,084 5,422 Payables to an export/import agent 924 959 Payable related to a lawsuit 2,108 1,593 Others 60 56 27,649 23,938 Payable related to a lawsuit represented an amount due to a third-party company. The original debtor claimed that the Group has breached the previously agreed settlement agreement, and transferred the debt to the third-party company during the year ended December 31, 2021. On April 20, 2023, the Group entered into a settlement agreement with the third-party company regarding the payments. According to the agreement, the Group will settle the balance in several payments until March 2024, and part of the balance has been classified to other payables – noncurrent. During the year ended December 31, 2022, the Group executed a settlement agreement with Samsung regarding the payments with a payment period of eighteen months beginning on July 2022. |
Convertible Notes
Convertible Notes | 12 Months Ended |
Dec. 31, 2022 | |
Convertible Notes Abstract | |
CONVERTIBLE NOTES | 13. CONVERTIBLE NOTES Prior Private Placement Notes and Warrants On February 25, 2021 and April 14, 2021 the Group entered into securities purchase agreements with institutional and individual investors, pursuant to which the Group sold approximately $6.67 million of notes (the “February 25 Notes”) and 730,994 warrants at an exercise price of $35.55 per share (the “February 25 Warrants), $1 million of notes (the “April 14 Notes”) and 157,563 warrants at an exercise price of $24.64 per share (the “April 14 Warrants” and, together with the February 25 Warrants, the “Prior Private Placement Warrants”) and $15.3 million of notes (the “May 5 Notes” and, together with the February 25 Notes and the April 14 Notes, the “Prior Private Placement Notes.”) The Prior Private Placement Notes have a two-year term with a conversion price of $15.55 per share. The Prior Private Placement Notes have certain anti-dilution protections in the event of a lower priced issuance. Interest shall accrue on the notes at 8% annually, payable on a quarterly basis, in either cash or, in the event the registration statement registering such shares has been declared effective, ordinary shares. The Prior Private Placement Notes held by a particular holder will not be convertible to the extent such conversion would result in such holder owning more than 9.9% of the number of ordinary shares outstanding after giving effect to the issuance of ordinary shares issuable upon conversion of such note calculated in accordance with Section 13(d) of the Exchange Act. On May 5, 2021, the Company issued additional $15.3 million Prior Private Placement Notes to investors in the February and April transactions. The Prior Private Placement Warrants are exercisable immediately for a period of five years for cash, at an exercise price of $35.55 per ordinary share for the February 25 Warrants and $24.64 per ordinary share for the April 14 Warrants, subject to adjustment in the event of stock dividends and splits, or sales or grants of ordinary shares or ordinary share equivalents in certain transactions at less than the then current exercise price, or where the exercise price is higher than the then-current market price of the ordinary shares, on a cashless exercise basis, using the Black Scholes Value. The Prior Private Placement Warrants held by a particular holder will not be exercisable to the extent such conversion would result in such holder owning more than 9.9% of the number of ordinary shares outstanding after giving effect to the issuance of ordinary shares issuable upon exercise of such warrants calculated in accordance with Section 13(d) of the Exchange Act. During the year ended December 31, 2021, all of the February 25 Notes, April 14 Notes and May 5 Notes (except for $1.57 million), and the Prior Private Placement Warrants have been converted into 1,496,271 ordinary shares, and all the 888,083 warrants exercised to 1,770,838 ordinary shares. During the year ended December 31, 2022, all of the February 25 Notes, April 14 Notes, May 5 Notes and the Prior Private Placement Warrants have been converted into 421,339 ordinary shares. September 2021 Private Placement Notes and Warrants On September 14, 2021 the Group entered into securities purchase agreements with institutional and individual investors, pursuant to which the Group sold $13,575,000 of notes (the “September 2021 Notes”) and 2,337,293 Warrants (the “September 14 Warrants”). The September 2021 Notes have a two year term and are convertible into ordinary shares at the lower of (i) $10.45 per share, (ii) 90% of the closing price of the ordinary shares on the date that the registration statement registering the underlying shares is declared effective, or (iii) in the event that the registration statement registering the underlying shares is not declared effective by the date that the shares underlying the September 2021 Notes are eligible to be sold, assigned or transferred under Rule 144, 90% of the closing price of the ordinary shares on such date. The September 2021 Notes have certain anti-dilution protections in the event of a lower priced issuance. Interest shall accrue on the notes at 8% annually, payable on a quarterly basis, in either cash or, in the event the registration statement registering the underlying shares has been declared effective, ordinary shares. The September 2021 Notes held by a particular holder will not be convertible to the extent such conversion would result in such holder owning more than 9.9% of the number of ordinary shares outstanding after giving effect to the issuance of ordinary shares issuable upon conversion of such note calculated in accordance with Section 13(d) of the Exchange Act. An additional $13,575,000 of notes with the same terms will be issued upon the satisfaction of certain conditions, including the effectiveness of the registration statement. The Warrants are exercisable immediately for a period of five years for cash, at an exercise price of $13.89 per ordinary share, subject to adjustment in the event of stock dividends and splits, or sales or grants of ordinary shares or ordinary share equivalents in certain transactions at less than the then current exercise price, or where the exercise price is higher than the then-current market price of the ordinary shares, on a cashless exercise basis, using the Black Scholes Value. The Warrants held by a particular holder will not be exercisable to the extent such conversion would result in such holder owning more than 9.9% of the number of ordinary shares outstanding after giving effect to the issuance of ordinary shares issuable upon exercise of such warrants calculated in accordance with Section 13(d) of the Exchange Act. During the year ended December 31, 2021, 88,240 warrants were exercised into 128,418 ordinary shares on a cashless basis. As of December 31, 2022, all of the September 2021 Notes have been converted into 3,588,307 ordinary shares, and 1,080,406 warrants of the September 14 Warrants have been exercised to 2,782,471 ordinary shares. May 2022 Private Placement Notes and Warrants On May 25, 2022, the Group signed agreements with institutional and individual investors, for the sale of $16,000,000 in secured convertible notes. The notes are due in two years, have an annual interest rate of 10% and are convertible into ordinary shares at 90% of the closing bid price on the day of closing, or 90% of the closing bid price of the ordinary shares on the date that such shares are first eligible to be sold, assigned or transferred under Rule 144 or Regulation S, as applicable, whichever is lower but in no event at less than $0.1 per ordinary share, which was $1.476 per shares. The Group also issued warrants to purchase an aggregate of 6,049,607 ordinary shares at an exercise price of $3.34 per share, subject to adjustment in certain conditions. The Group issued the notes and warrants on May 25, 2022. As of December 31, 2022, $13.55 million of May 2022 Notes have been converted into 15,314,982 ordinary shares. 3,829,109 warrants were exercised into 14,578,181 ordinary shares on a cashless basis. The detachable Warrants issued to the above holder are considered to be indexed to the Company’s own stock and classified in stockholders’ equity and therefore they meet the scope exception prescribed in ASC 815-10-15. The Group early adopted ASU 2020-06 on January 1, 2021. As a result, the Notes above were accounted for as a liability in its entirety, equal to the proceeds received, net of debt issuance discounts and debt issuance costs if any. At the time of issuance, the Group allocated the proceeds to the Convertible Notes and the Warrants based on their relative fair values. During the year ended December 31, 2021, in connection with the issuance of the Convertible Notes and the Warrants, the Group recorded debt discount of $15,097 that will be amortized over the term of the Convertible Notes. During the year ended December 31, 2022, in connection with the issuance of the Convertible Notes and the Warrants, the Group recorded debt discount of $6,994 that will be amortized over the term of the Convertible Notes. The fair value of the Warrants was computed using the Black-Scholes option-pricing model. Variables used in the option-pricing model include the following: Value Risk-free Expected Expected February 25, 2021 Warrants 1.76 0.60 % 5 years 170 % April 14, 2021 Warrants 1.25 0.86 % 5 years 168 % September 14, 2021 Warrants 0.72 0.78 % 5 years 160 % May 25, 2022 Warrants 0.17 2.73 % 5 years 152 % The fair values of the convertible notes are determined by the optimized value derived from valuation of straight debt and valuation of convertible debt. The assumptions include the following: Coupon rate Risk-free Volatility Bond yield February 25, 2021 Notes ($6.67 million) 8 % 0.13 % 196 % 28 % April 14, 2021 Notes ($1 million) 8 % 0.16 % 196 % 29 % May 5, 2021 Notes ($13.33 million) 8 % 0.16 % 194 % 28 % May 5, 2021 Notes ($2 million) 8 % 0.16 % 193 % 28 % September 14, 2021 Notes ($13.575 million) 8 % 0.21 % 200 % 30 % May 25, 2022 Notes ($16.0 million) 10 % 2.50 % 153 % 33 % As of December 31, 2021 2022 $ $ Principal amount 15,142 2,450 Less: unamortized discount and debt issuance costs (5,152 ) (759 ) Total 9,990 1,691 Balance as of December 31, 2021: Principal Less: unamortized $ $ US$20.0 million 8% note due 2023 ($18.4 million converted in fiscal 2021) 1,567 (463 ) US$3.0 million 8% note due 2023 (fully converted in fiscal 2021) - - US$13.58 million 8% note due 2023 13,575 (4,689 ) Total 15,142 (5,152 ) Balance as of December 31, 2022: Principal Less: unamortized $ $ US$20.0 million 8% note due 2023 (fully converted in fiscal 2022) - - US$3.0 million 8% note due 2023 (fully converted in fiscal 2021) - - US$13.58 million 8% note due 2023 (fully converted in fiscal 2022) - - US$16.0 million 10% note due 2024 ($13.6 million converted in fiscal 2022) 2,450 (759 ) Total 2,450 (759 ) During the year ended December 31, 2021 and 2022, the holders of the convertible notes have converted into total of 1,496,271 and 19,324,628 the Group’s ordinary shares, respectively. Interest expense related to the amortization of the debt discount of $9,945 and $11,387 recorded for the year ended December 31, 2021 and 2022, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2022 | |
Accumulated Other Comprehensive Loss [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 14. ACCUMULATED OTHER COMPREHENSIVE LOSS The changes in accumulated other comprehensive loss, net of tax of nil, were as follows: Foreign currency Total $ $ Balance as of January 1, 2020 (1,904 ) (1,904 ) Current year other comprehensive income 661 661 Balance as of December 31, 2020 (1,243 ) (1,243 ) Current year other comprehensive income 152 152 Balance as of December 31, 2021 (1,091 ) (1,091 ) Current year other comprehensive loss (2,421 ) (2,421 ) Balance as of December 31, 2022 (3,512 ) (3,512 ) |
Mainland China Employee Contrib
Mainland China Employee Contribution Plan | 12 Months Ended |
Dec. 31, 2022 | |
Mainland China Employee Contribution Plan [Abstract] | |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | 15. 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 for the plan from continuing operations were $803, $1,026 and $721 and from discontinued operations were $172, nil nil |
Share Based Compensation
Share Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE BASED COMPENSATION | 16. SHARE BASED COMPENSATION (a) Options issued in 2020 The Group granted 140,625 shares of options to three non-employees to purchase ordinary shares with the exercise price of $20.0 per share on March 19, 2020. The expiration date of these options is March 19, 2023. The Group granted 6,250 shares of warrants to an advisory company to purchase ordinary shares with the exercise price of $0.16 per share on May 18, 2020. The expiration date of these warrants is May 18, 2027. The recipients received such warrants for bringing to the Company a merger possibility and have the ability to exercise the warrants into ordinary shares of the Company at the time of their own choosing by the expiration date or by the closing of a merger brought forth by them, whichever occurs earlier. In December 2020, the Group decided to cancel all the shares of options as of December 31, 2019 and replaced with issuing ordinary shares. Number of Weighted Weighted average Aggregate ($) (Years) ($) Outstanding, January 1, 2020 157,264 84.64 5.52 5,653 Granted 146,875 19.20 Forfeited (157,264 ) 81.92 Outstanding, December 31, 2020 146,875 19.20 2.39 4,828 Outstanding, January 1, 2021 146,875 19.20 2.39 4,828 Granted - - - - Forfeited - - - - Outstanding, December 31, 2021 146,875 19.20 1.22 - Outstanding, January 1, 2022 146,875 19.20 1.22 - Granted - - - - Forfeited - - - - Outstanding, December 31, 2022 146,875 19.20 1.22 - As of December 31, 2020, the Group had options outstanding to purchase an aggregate of 146,875 shares with an exercise price below the fair value of the Group’s shares, resulting in an aggregate intrinsic value of $4,828. As of December 31, 2021 and 2022, the Group had options outstanding to purchase an aggregate of 146,875 shares with an exercise price above the fair value of the Group’s shares, resulting in an aggregate intrinsic value of nil 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 2020 Risk-free interest rates 0.56%-0.57% Expected life (years) 3-7 years Expected volatility 70.6-72.2% Expected dividend yield 0% Exercise multiple 2.2 Post-vesting forfeit rate 0% Fair value of underlying ordinary shares $16.32-$20.00 Fair value of share option $8.80-$19.84 No compensation expenses relating to share options granted to employees recognized for the years ended December 31, 2020, 2021 and 2022. (b) Ordinary shares issued in 2020 In December 2020, the Group issued 873,946 ordinary shares to certain employees and non-employees. $18,220 recorded as general and administrative expenses, $87 recorded as selling and marketing expenses and $1,687 recorded as research and development expenses. The ordinary shares were fully vested as of December 31, 2020. (c) Ordinary shares issued in 2021 During fiscal 2021, the Group issued 643,194 ordinary shares to certain employees and non-employees. $17,308 recorded as general and administrative expenses, nil (d) Ordinary shares issued in 2022 During fiscal 2022, the Group issued 3,945,572 ordinary shares to certain employees and non-employees. $2,291 recorded as general and administrative expenses, $47 recorded as selling and marketing expenses and $1,048 recorded as research and development expenses. The ordinary shares issued were fully vested as of December 31, 2022. |
Taxation
Taxation | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
TAXATION | 17. 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. Additionally, upon payments of dividends by the Company to its shareholders, no BVI withholding tax will be imposed. 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. Additionally, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed. Hong Kong Borqs HK is subject to Hong Kong profits tax rate of 16.5% for the years ended December 31, 2020, 2021 and 2022. 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, 2020, 2021 and 2022. Additionally, upon payments of dividends by the Company to its shareholders, no HK withholding tax will be imposed. India Borqs India is subject to income tax rate of 25.17% for the years ended December 31, 2020, income tax rate of 25.17% for the years ended December 31, 2021 and income tax rate of 25.17% for the years ended December 31, 2022. Amounts $691 are included as income tax expense for the years ended December 31, 2020, and $445 are included as income tax benefit for the years ended December 31, 2021, and $59 are included as income tax expense for the years ended December 31, 2022. The PRC The Company’s subsidiaries and VIE in the PRC are subject to the statutory rate of 25%, in accordance with the Enterprise Income Tax law (the “EIT Law”), which was effective since January 1, 2008, except for certain entities eligible for preferential tax rates. Dividends, interests, rent or royalties payable by the Company’s PRC subsidiaries, to non-PRC resident enterprises, and proceeds from any such non-resident enterprise investor’s disposition of assets (after deducting the net value of such assets) shall be subject to 10% withholding tax, unless the respective non-PRC resident enterprise’s jurisdiction of incorporation has a tax treaty or arrangements with China that provides for a reduced withholding tax rate or an exemption from withholding tax. BORQS Beijing was qualified for a High and New Technology Enterprises (“HNTE”) since 2012 and was eligible for a 15% preferential tax rate from 2012 to 2014. In July 2015, BORQS Beijing obtained a new HNTE certificate. BORQS Beijing has successfully renewed the HNTE certificate in December 2021 with effective term of three years until 2023. 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, 2020, 2021 and 2022, 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 until 2019. 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 period from January 1 through October 29, 2020, Yuantel Telecom enjoyed a preferential tax rate of 15%. 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, 2022, no detailed interpretation or guidance has been issued to define “place of effective management”. Furthermore, as of December 31, 2022, 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) from continuing operations before income taxes consisted of: For the years ended December 31, 2020 2021 2022 $ $ $ Non-PRC (29,385 ) (44,550 ) (29,722 ) PRC (6,298 ) (11,105 ) 836 (35,683 ) (55,655 ) (28,886 ) Income tax benefit (expense) comprised of: For the years ended December 31, 2020 2021 2022 $ $ $ Current (1,410 ) - (343 ) Deferred 1,004 445 284 (406 ) 445 (59 ) The reconciliation of tax computed by applying the statutory income tax rate of 25% for the years ended December 31, 2020, 2021 and 2022 applicable to the PRC operations to income tax expense was as follows: For the years ended December 31, 2020 2021 2022 $ $ $ Loss before income taxes (35,683 ) (55,655 ) (28,886 ) Income tax income computed at the statutory income tax rate at 25% 4,594 13,914 7,220 Non-deductible expenses 380 (1,095 ) 71 Non-taxation income - - 19 Preferential rate (820 ) (935 ) 1,970 Current and deferred tax rate differences (291 (709 ) 299 Foreign rate differences (5 ) (3,316 ) (3,682 ) Change of valuation allowance (4,587 ) (8,024 ) (6,860 ) Statutory income - - - R&D super deduction 323 610 904 Income tax (expense) benefit (406 ) 445 (59 ) Deferred Taxes The significant components of deferred taxes were as follows: As of December 31, 2021 2022 $ $ Deferred tax assets Inventories provision 28 32 Accrued salary and welfare payable 214 217 Property, plant and equipment - 175 Tax losses 229 - Valuation allowance - - Others - - Total deferred tax assets 471 424 Deferred tax liabilities Intangible assets 671 15 Deferred cost of revenue 15 - Others 325 894 Total deferred tax liabilities 1,011 909 The Group operates through several subsidiaries and its Consolidated VIEs. Valuation allowance is considered for each of the entities where it was determined it was more likely than not that the benefits of the deferred tax assets will not be realized. Realization of the net deferred tax assets is dependent on factors including future reversals of existing taxable temporary differences and adequate future taxable income, exclusive of reversing deductible temporary differences and tax loss or credit carry forwards. As of December 31, 2022, the Group had net tax losses from its PRC subsidiaries, as per filed tax returns, of $18,657 which can be carried forward per tax regulation to offset future taxable income. The PRC taxable losses will expire from 2022 to 2031 if not utilized. The Group has net tax losses from its HK subsidiary of $76,963, which will not expire. Unrecognized Tax Benefits As of December 31, 2021 and 2022, the Group recorded an unrecognized tax benefits of $2,174 and $1,990, respectively, of which, $1,947 and $2,394, 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, 2021 and 2022, unrecognized tax benefits of $227 and nil A roll-forward of unrecognized tax benefits is as follows: For the years ended December 31, 2020 2021 2022 $ $ $ Balance at beginning of year 1,987 2,124 2,174 Reversal based on tax positions related to prior years - - - Additions based on tax positions related to the current year - - - Foreign currency translation difference 137 50 (184 ) Balance at end of year 2,124 2,174 1,990 In the years ended December 31, 2021 and 2022, the Group recorded interest expense accrued in relation to the unrecognized tax benefit of nil nil |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 18. RELATED PARTY TRANSACTIONS (a) Related parties Names of related parties Relationship with the Group Bluecap A company controlled by a key management of the Group Hareesh Ramanna Executive Vice President and Co-General Manager of Connected Solutions Business Unit (b) Other than disclosed elsewhere, the Group had the following significant related party transactions for the years ended December 31, 2020, 2021 and 2022: For the years ended December 31, 2020 2021 2022 $ $ $ Software services provided to: Bluecap 507 - - (c) Other than disclosed elsewhere, the Group had the following significant related party balances for the years ended December 31, 2020, 2021 and 2022: For the years ended December 31, 2020 2021 2022 $ $ $ Loan from: Bluecap 2,695 1,834 - Interest expense on loan from: Bluecap 438 658 746 All balances with related parties as of December 31, 2021 and 2022 were unsecured, and had no fixed terms of repayment. On July 31, 2018, the Group entered into a $1,325 short-term loan agreement with Bluecap Mobile Private Limited (“Bluecap”), a company controlled by a key management of the Group, bearing an interest rate of 8% per annum to fund the Company’s working capital. The loan does not carry a maturity date and the outstanding principal balance as of December 31, 2022 was nil |
Restricted Net Assets
Restricted Net Assets | 12 Months Ended |
Dec. 31, 2022 | |
Restricted Net Assets [Abstract] | |
RESTRICTED NET ASSETS | 19. RESTRICTED NET ASSETS The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries and VIE. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The 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 Company’s PRC subsidiaries and VIE. In accordance with the PRC Regulations on Enterprises with Foreign Investment and the articles of association of the Company’s PRC subsidiaries, a foreign-invested enterprise established in the PRC is required to provide certain statutory reserves, namely the general reserve fund, the enterprise expansion fund and the staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A foreign-invested enterprise is required to allocate at least 10% of its annual net profit to the general reserve until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. Appropriations to the enterprise expansion fund and the staff welfare and bonus fund are at the discretion of the board of directors for all foreign-invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. The PRC subsidiaries were established as foreign-invested enterprises and therefore, are subject to the above mandated restrictions on distributable profits. As of December 31, 2021 and 2022 the Group’s PRC subsidiaries had appropriated $1,901 and $1,901, respectively, in its statutory reserves. Foreign exchange and other regulations in the PRC may further restrict the Company’s VIE from transferring funds to the Company in the form of dividends, loans and advances. Amounts restricted include paid-in capital and statutory reserves of the Company’s PRC subsidiaries and the equity of the Consolidated VIEs, as determined pursuant to PRC generally accepted accounting principles. As of December 31, 2022, restricted net assets of the Company’s PRC subsidiaries were $82,072. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | 20. Equity (a) Disposal of MVNO BU (Note 1(c)) See Note 1(c) for details for equity transactions related to disposal of Yuantel. (b) Investment with KADI On December 15, 2018, the Group entered into a Share Purchase Agreement (“Purchase Agreement”) with Shanghai KADI Machinery Technology Co., Ltd. (“KADI SH”), KADI Technologies Limited (“KADI HK”) (collectively, “KADI”) and Lin Hu and Shou Huajun, the sole shareholders of KADI SH and KADI HK (the “KADI’s Selling Shareholders”), for the purchase of 60% of the issued and outstanding ordinary shares of KADI SH (“KADI SH Shares”) and 60% of the issued and outstanding ordinary shares of KADI HK (“KADI HK Shares”, together with the KADI SH Shares, the “KADI Shares”). The transaction with KADI consists of total cash consideration of $4,600 in installments and share consideration equivalent to $9,750 in installments upon achievement of earn-outs by KADI SH from 2018 to 2021. As of December 31, 2018, $600 was prepaid to KADI SH. The transaction did not close as of December 31, 2019 due to KADI not able to present audited financial statements as required by the earn-out provisions of the agreement and that KADI has not performed the ownership change registration at the local jurisdiction. Although KADI was not able to present audited financial statements as required by the earn-out provisions of the agreement and has not performed the ownership change registration, 102,035 of Borqs’ ordinary shares were issued to KADI on January 9, 2019, for which the Group recorded the fair value of these shares in an aggregate of $5,217 in additional paid-in capital, with a corresponding amount included in subscription receivable. As a result, future capital commitments for KADI has been voided due to KADI’s breach of provisions of the agreements. As of the filing of this annual report, the Group has cancelled all the ordinary shares of 36,813 shares, which were issued into escrow account with KADI. Also, the Group is in negotiation with KADI for a reduced ownership of KADI or a recission of the acquisition. The Group has initiated arbitration proceeding in February 2022 in Hong Kong against KADI and its owners for breach of contract according to the KADI Agreement, seeking from KADI of i) a payment of $600 in cash previously paid to KADI, ii) the return of 65,222 ordinary shares of Borqs previously issued to the owners of KADI, and iii) payment in cash for loss of profit from KADI’s projected business in the amount of $5.3 million. As of the filing of this annual report, the arbitration is in its initial stages and there is no assurance that the outcome of the proceedings will be in favor of Borqs. (c) Equity financing from Chongqing City Youtong Equity Investment Fund (“Chongqing Youtong”) On April 18, 2019, the Group entered into an equity financing agreement with Chongqing Youtong owned by the Chongqing Government in the PRC. According to the agreement, Chongqing Youtong purchased 9.9 % equity interest of the Company equivalent to 233,392 ordinary shares with a total purchase consideration of $13,865 on May 16, 2019, for which 75% of the total purchase consideration amounting to $10,399 in cash was received. The remaining 25% of the total purchase consideration amounting to $3,466 will be contributed in the form of real property and equipment (the “Property Investment”) by Chongqing Youtong within six months from May 16, 2019 the date that the cash investment portion was completed. However, the Property Investment has not yet been completed. In February 2023, the Group entered into a settlement agreement with Chongqing Youtong on the settlement of the equity financing. For the cash consideration with the amount of $10,399, the Group agreed to repay Chongqing Youtong the principal plus 8% annually interest with its ordinary shares. Besides, both parties agreed to not proceed with the remainder 25% investment and the related previous issued 58,348 shares will not withdraw. Also, to compensate Youtong’s investment loss from the share price decline, the Group issued additional 56,024,444 ordinary shares in February 2023 equal to approximately $13.46 million including interest expense from May 2019 to February 2023, with annual interest rate of 8%. By entering into the agreement not to proceed with the remainder 25% investment in the form of real property and equipment, the amount was released from subscriptions receivable, and a loss related to equity financing recognized during the year ended December 31, 2022. (d) Repurchase of Shares from Zhengqi International Holding Limited (“Zhengqi”) 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 60,384 of our ordinary shares that were originally issued and sold to Zhengqi on August 18, 2017, at an aggregate purchase price of approximately $10,070 or $166.40 per share. The $10,048 was paid on February 28, 2018 and recorded as prepayment. On May 20, 2019, the 60,384 repurchased shares were cancelled. (Note 6) (e) Settlement of arbitration with Claimant Samsung Electronics Co., Ltd. (“Samsung”) On November 27, 2018, the Secretariat of the International Court of Arbitration for the International Chamber of Commerce issued a final award to Samsung Electronics Co., Ltd. (“Samsung”) that constituted the final decision on the Group’s dispute with Samsung over a sales contract. The court order required the Group to pay to Samsung total payments of $4,650 including: i) $4,280 as the “Principal Amount”, plus (ii) accrued interest of $370 computed from March 31, 2019 on the outstanding balance of the Principal Amount at a simple interest rate of 9% per annum (together with the Principal Amount, collectively referred to as the “Settlement Payment”). On April 26, 2019, the Group entered into a settlement agreement with Samsung according to which, the Group shall pay the full and total amount of the Settlement Payment in equal monthly installments over a period of twenty-four months beginning on March 31, 2019. In addition, a total of 138,108 ordinary shares were issued to Samsung as escrow shares in the year 2019 as security for the payments. The Group recorded the fair value of the shares issued in an aggregate of $6,401 in additional paid-in capital, with a corresponding amount included in subscription receivable. Due to cash constraints, particularly due to the COVID-19 pandemic, the Group has not made monthly installments to Samsung since the fourth quarter of 2019, and Samsung has not pursued alternative means of repayment from the Group. In April 2022, the Group executed a settlement agreement with Samsung regarding the payments. The total amount of principal and accrued interest as of the end of May 2022 is approximately $4.4 million less $1.6 million paid in cash on May 27, 2022, equaling a net amount of approximately $2.8 million. According to the agreement, the Group shall pay the full and total amount of the payments in equal monthly installments over a period of eighteen months beginning on July 2022. In addition, a total of 1,003,593 ordinary shares were issued to Samsung as escrow shares as security for the payments. The Group recorded the fair value of the shares issued in an aggregate of $2,760 in additional paid-in capital, with a corresponding amount included in subscription receivable. (f) Investment in Shenzhen Crave Communication Co., Ltd. (“Crave”) and Refer to Note 10 for 11,459 shares on January 10, 2019 related to long-term investments. (g) Debt Repayments with ordinary shares (1) In May 2020, we issued ordinary shares to settle debt due to Coming Technologies Ltd valued per agreement at a total amount of $1,998 which comprised of: a. $880 in payables for products Borqs ordered from TianFu in the amount of $658 and EPIC in the amount of $222. TianFu and EPIC in turn ordered the manufacturing of components and parts from Coming Tech. Coming Tech had delivered such products, via TianFu and EPIC, to Borqs. These orders and deliveries were made in the year 2018. Borqs confirmed the receipt of the products in full and then delivered them to Borqs’ customer. Borqs had recorded these amounts as Accounts Payable to TianFu and EPIC; and by settling the amount of $880 directly with Coming Tech, Borqs can reduce our Accounts Payable with TianFu and EPIC for their respective amounts. b. $937 with Purchase Orders placed with EPIC in January of 2020 which EPIC in turn placed with Coming Tech. We anticipated to deliver the products to our customer by the end of the first calendar quarter in 2020. However, we determined that the project was cancelled by April 2020 most significantly due to the fact that the COVID-19 virus was spreading worldwide and turning into a pandemic, and the cancellation came prior to the delivery of our products to the customer. We sought alternative channels of distribution for the products but no customers were willing to commit to taking merchandise when many retail businesses were closing at that time. However, Coming Tech had already manufactured the products and Borqs became liable for the total of amount of $937. c. $182 in an extra compensation to Coming Tech in the settlement, for receiving ordinary shares of Borqs that were not freely tradable for a minimum of six months from issuance. No registration statement was to be filed for the settlement shares received by Coming Tech, and the shares could only become sellable after a minimum of six months from the date of issuance according to Rule 144. Also, if Borqs Technologies becomes not in compliance with the SEC rules and regulations as a listed company, the shares cannot be sold in the public market. The lapse of time by this minimum holding period and compliance requirements added risk to Coming Tech regarding the value of the shares. The Company and Coming Tech came to terms that an extra 10% in value of the shares were to be issued to Coming Tech due to this additional risk. The 60,679 ordinary shares issued on May 7, 2020 at the closing price of the Company stock of $24.96 per share. The Company recognized gain of $484 in gain on debt settlement during fiscal year 2020. For the year ended December 31, 2020, the issuance of $1,988 in value of ordinary shares caused a reduction of our Accounts Payable to TianFu of $658 and EPIC of $222, recording G&A Expense of $937 and Financing Expense of $182. (2) The Company entered into a loan agreement with American West Pacific International Investment Corporation (“AWP”) on June 8, 2020. Under this agreement, the Company need to repay the principal amount of $0.4 million in its entirety, with interest on the due date. AWP claimed the Company to the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County in Florida. On October 21, 2020, the Court issued an agreed order for the settlement of the claim and approved the issuance of 32,943 common shares of the Company in exchange for the settlement. The shares issued on October 29, 2020 at the closing price of the Company stock of $15.38 per share. The Company recognized loss of $101 in loss on debt settlement during fiscal year 2020. Significantly affected by the pandemic during 2020 when business activities dropped over 70% from the prior year, operational cash flow was severely challenged and we could not payback this loan in cash. We sought the alternate means via a court approval under securities rule 3(a)(10) and was able to issue free-trading shares to the lender as settlement. (3) Sinowinglaw LLP, aka Beijing Zhongpeng Law Firm (“Sinowing”) provided services to the Company. The Company was in default of its payment obligations to Sinowing for consulting and legal fees and costs in the amount of approximate $1.2 million. Sinowing claimed against the Company to the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County in Florida. On October 29, 2020, the Court issued an agreed order for the settlement of the claim and approved the issuance of 98,808 common shares of the Company in exchange for the settlement. The shares issued on November 4, 2020 at the closing price of the Company stock of $15.92 per share. The Company recognized loss of $356 in loss on debt settlement during fiscal year 2020. Significantly affected by the pandemic during 2020 when business activities dropped over 70% from the prior year, operational cash flow was severely challenged and we could not payback these back-due fees in cash. We sought the alternate means via a court approval under securities rule 3(a)(10) and was able to issue free-trading shares to Sinowing as settlement. (4) The Group was default with the terms of our loans and revolving credit lines PFG which is the prime lender. The Group has entered into agreements dated December 14, 2020 with PFG and LMFA Financing LLC (“LMFA”), a Florida limited liability company and wholly owned subsidiary of LM Funding America, Inc. (Nasdaq: LMFA), in which LMFA will purchase approximately $18 million of debt in tranches. As of February 10, 2021, LMFA has completed the purchase of $17.87 million of principal, accrued interest and applicable fees (the “Debt”), converted into all 1.42 million shares of the Group’s ordinary shares by February 10, 2021. With the Company settling another $1.27 million of Debt directly with PFG through the issuance of 94,170 shares on February 17, 2021. As of December 31, 2021, the Group’s defaulted Debts with PFG totaling $19.14 million have been eliminated. The Group recognized loss of $16,580 in loss on debt settlement during fiscal year 2021. (5) On March 03, 2020, the Group entered into an agreement with AWP. The Group has been offered a term loan of principal of $1 million for 6 months with interest at 12% per annum. On June 15, 2021, the Group has settled the $1 million loan principal with 99,206 shares. The Group recognized loss of $619 in loss on debt settlement during fiscal year 2021. (6) On May 03, 2022, the Group entered into a share exchange agreement regarding the $1,250 loan with an individual shareholder. According to the agreement, the Group shall repay the loan balance with 338,968 the Group’s ordinary shares. The Group issued shares on May 03, 2022 and recognized gain of $217 in loss on debt settlement during fiscal year 2022. (h) Management’s contribution Due to stringent operational cash flows caused by the COVID-19 pandemic, the CFO voluntarily forfeited his salary for the year 2020 as a contribution to the Group. (i) Collateral of 250,000 restricted ordinary shares to AWP In December 2020, the Group entered into an agreement with AWP. The Group has been offered a term loan for 6 months with interest at 12% per annum. According to the agreement, the Group issued 250,000 restricted ordinary shares to be held in escrow at Continental Stock Transfer & Trust Company as collateral. The Group recorded the fair value of the shares issued in an aggregate of $4,080 in additional paid-in capital, with a corresponding amount included in subscription receivable. On June 15, 2021, the Group has released the 250,000 shares from escrow to AWP as full payment of the $1 million loan principal with 99,206 shares, and a compensation for service of a future project with 150,794 shares. (j) Shares conversion from the holders of the convertible notes During the year ended December 31, 2021, all of the February 25 Notes, April 14 Notes and May 5 Notes (except for $1.57 million) have been converted into the Group’s ordinary shares of 1,496,271 shares. None of the September 2021 Notes have been converted. During the year ended December 31, 2022, total of 19,324,628 ordinary share were converted by the holders. (k) Warrants exercised from the holders of the convertible notes During the year ended December 31, 2021, all of the February 25, 2021, April 14, 2021 and May 5, 2021 Warrants have been exercised by the holders into 1,770,838 of the Group’s ordinary shares. 88,240 warrants of the September 14, 2021 Warrants have been exercised into 128,418 of the Group’s ordinary shares. During the year ended December 31, 2022, 1,080,406 warrants of the September 14, 2021 Warrants have been exercised into 2,782,471 of the Group’s ordinary shares. And 3,829,109 warrants of the May 25, 2022 Warrants have been exercised into 14,578,181 of the Group’s ordinary shares. All of these warrants were exercised on a cashless basis. (l) Acquisition of HHE Refer to Note 4 for 877,183 shares issued on October 20, 2021 related to the acquisition of HHE. (m) Capital injection from non-controlling shareholders of a subsidiary The non-controlling shareholders of HHE have capital injection to HHE with the amount of $297 after the Group’s acquisition of HHE in 2021 and capital injection with the amount of $438 during the year ended December 31, 2022. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 21. FAIR VALUE MEASUREMENTS The Group applies ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 requires disclosures to be provided on fair value measurement. The Group has adopted the ASU 2018-13 Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement on January 1, 2020. It requires public companies to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. 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. The Group differentiate between those assets and liabilities required to be carried at fair value at every reporting period (“recurring”) and those assets and liabilities that are only required to be adjusted to fair value under certain circumstances (“nonrecurring”). The key input and assumptions included internal rate of return of 11.2%, weighted average cost of capital of 12.0% and weighted average return of assets of 12.0%. The following tables present recorded amounts of major financial assets and liabilities measured at Level 3 fair value on a recurring basis as of December 31, 2021: December 31, 2021 Contingent consideration - current (1,392 ) Contingent consideration – non-current (389 ) Total (1,781 ) The contingent consideration was recognized through the acquisition of HHE. As of the acquisition date, the fair value of the contingent consideration was $1,669 and the change in fair value from the acquisition date to December 31, 2021 was recorded as change in fair value of contingent consideration. As of December 31, 2022, HHE was deconsolidated and the contingent consideration was derecognized. |
Debt Forgiveness
Debt Forgiveness | 12 Months Ended |
Dec. 31, 2022 | |
Debt Forgiveness Abstract | |
DEBT FORGIVENESS | 22. DEBT FORGIVENESS During the year ended December 31, 2021, the Group entered into an account payable forgiveness agreement with a supplier in December 2021. The Group has long cooperation relationship with the supplier, and there was long-aging balance of account payable due to the supplier. The supplier agreed to waive part of the long-aging account payable balance with the amount of $2.1 million, and retained the remaining part of the balance. According to the agreement, the Group wrote off $2.1 million of liability and recorded as other income in the consolidated statement of operations for the year ended December 31, 2021. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Loss Per Share [Abstract] | |
LOSS PER SHARE | 23. 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, 2020 2021 2022 $ $ $ Numerator: Net loss from continuing operations (36,089 ) (55,210 ) (28,945 ) Less: Net loss attributable to noncontrolling interest from continuing operation (1 ) (54 ) (190 ) Net loss from continuing operations attributable to Borqs Technologies, Inc. (36,088 ) (55,156 ) (28,755 ) Accretion to redemption value of preferred shares for continuing operations - - - Net loss from continuing operations attributable to Borqs Technologies, Inc.’s ordinary shareholders (36,088 ) (55,156 ) (28,755 ) Net income (loss) from discontinued operations 1,302 (1,392 ) (9,916 ) Less: Net income (loss) attributable to noncontrolling interest from discontinued operation 716 (683 ) (4,639 ) Net income (loss) from discontinued operations attributable to Borqs Technologies, Inc. 586 (709 ) (5,277 ) Net loss attributable to Borqs Technologies, Inc.’s ordinary shareholders (35,502 ) (55,865 ) (34,032 ) Denominator: Weighted-average number of ordinary shares—basic 2,782,188 7,370,719 22,951,092 Weighted-average number of ordinary shares—diluted 2,782,188 7,370,719 22,951,092 Weighted-average number of shares outstanding from discontinued operations—basic 2,782,188 7,370,719 22,951,092 Weighted-average number of shares outstanding from discontinued operations—diluted 2,782,188 7,370,719 22,951,092 Net loss per share from continuing operations attributable to Borqs Technologies, Inc. Loss per share—Basic: (12.97 ) (7.48 ) (1.25 ) Loss per share—Diluted: (12.97 ) (7.48 ) (1.25 ) Net earnings (loss) per share from discontinued operations attributable to Borqs Technologies, Inc. Earnings (loss) per share—Basic: 0.21 (0.10 ) (0.23 ) Earnings (loss) per share—Diluted: 0.21 (0.10 ) (0.23 ) Net loss per share attributable to Borqs Technologies, Inc. Loss per share—Basic: (12.76 ) (7.58 ) (1.48 ) Loss per share—Diluted: (12.76 ) (7.58 ) (1.48 ) For the years ended December 31, 2020, 2021 and 2022, share options and warrants associated with private placements were anti-dilutive and excluded from the calculation of diluted net loss per share. See Note 20(c) for the 56,024,444 ordinary shares issued subsequently in February 2023. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 24. COMMITMENTS AND CONTINGENCIES (a) Capital commitments and contingencies Refer to Note 21 (b) for details related to investments with KADI. As of the filing of this annual report, the Group is in negotiation with KADI for a reduced ownership of KADI or a rescission of the acquisition. (b) Income taxes As of December 31, 2021 and 2022, the Group recognized an accrual of $2,174 and $1,990, respectively, in unrecognized tax benefits and its interest (Note 17). 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, 2021 and 2022, the Group classified the accrual for unrecognized tax benefits as a non-current liability. (c) Contingent liability in relation to disposal of a subsidiary One of the nominee shareholders of Big Cloud Network denied his entrustment relationship with the Group and claimed his rights and interests proceeds of the disposal of Yuantel. Although there were agreements between the Group and the nominee shareholder, there was no direct evidence to show the entrustment relationship between both parties, which may not be supported by the existing PRC laws and regulation. As a result, the Group assessed that a probable loss could be incurred. The Group estimated a loss ranged from $3.2 million to $3.6 million based on the best estimate of the information available. Because of there was no amount within the range would be a better estimate than any other amount, the minimum amount of $3.2 million was recorded as a contingent liability as of December 31, 2020. Even though the minimum amount in the range is not necessarily the amount of loss that will be ultimately determined, it is not likely that the ultimate loss will be less than the minimum amount. The ultimate amount could result in a loss of up to $0.4 million in excess of the amount accrued. During the year ended December 31, 2021, the nominee shareholder of Big Cloud Network signed an agreement with the Group, to transfer his equity share in Big Cloud Network to one of the Group’s subsidiaries. By transferring all the shareholder’s rights and obligations under the agreement, the nominee shareholder no longer has any rights in Big Cloud Network or rights and interests in the proceeds of disposal of Yuantel. As a result, the probable loss has been reversed and the contingent liability of $3.2 million has been reversed as of December 31, 2021. (d) Contingency in business disposal during 2021 During the year ended December 31 2021, the Group(transferor) disposed one of its subsidiaries (the target company) to a 3rd party (transferee) (Note 4). The Group is currently not a party to any claims related to the disposal of this subsidiary. However, according to the disposal agreement, after the completion of this transfer, the Group may compensate the transferee for losses suffered in the event that: a. the transferee is liable for the debts of the target company, or b. the target company goes into liquidation or bankruptcy, and the transferee is required to assume the responsibility for repayment of any debt of the target company. Also, if losses are caused to the transferee, due to any claims and liabilities that have occurred before the completion of the transfer, The Group shall compensate the transferee for any such losses. While management believes that such matter is currently not likely to happen, there can be no assurance that matter arising in the course of business for which the Group is or could become involved. |
Parent Company Only Condensed F
Parent Company Only Condensed Financial Information | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION | 25. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION Condensed balance sheets As of December 31, Note 2021 2022 $ $ ASSETS Current assets Prepaid expenses and other current assets - 1,514 Amount due from related parties 41,646 38,405 Total current assets 41,646 39,919 Non-current assets Investments in subsidiaries and Consolidated VIEs (33,781 ) (18,166 ) Total non-current assets (33,781 ) (18,166 ) Total assets 7,865 21,753 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accrued expenses and other payables 14,733 14,658 Total current liabilities 14,733 14,658 Total liabilities 14,733 14,658 Shareholders’ (deficit) equity Additional paid-in capital 262,271 310,267 Accumulated deficit (271,040 ) (305,073 ) Statutory reserve 1,901 1,901 Total shareholders’ (deficit) equity (6,868 ) 7,095 Total liabilities and shareholders’ equity 7,865 21,753 Condensed statements of operations For the years ended December 31, 2020 2021 2022 $ $ $ Operating Expenses General and administrative expenses (2,125 ) (2,450 ) (1,653 ) Operating loss (2,125 ) (2,450 ) (1,653 ) Share of losses of subsidiaries and Consolidated VIEs (33,965 ) (54,152 ) (37,208 ) Loss before income taxes (36,090 ) (56,602 ) (38,861 ) Income tax expense - - - Net loss (36,090 ) (56,602 ) (38,861 ) Condensed statements of comprehensive income (loss) For the years ended December 31, 2020 2021 2022 $ $ $ Net loss (36,090 ) (56,602 ) (38,861 ) Other comprehensive (loss) income, net of tax of nil: Foreign currency translation adjustments, net of tax of nil 1,498 507 (1,456 ) Other comprehensive income (loss), net of tax of nil: Comprehensive loss (34,592 ) (56,095 ) (40,317 ) Comprehensive loss attributable to the Company’s ordinary shareholders (34,633 ) (56,085 ) (40,393 ) Condensed statements of cash flows For the years ended December 31, 2020 2021 2022 $ $ $ Net cash generated from operating activities - - - Net cash used in investing activities - - - Net cash generated from (used in) financing activities - - - Net increase (decrease) in cash and cash equivalent and restricted cash - - - Cash and cash equivalent and restricted cash at beginning of the year - - - Cash and cash equivalent and restricted cash at end of the year - - - Reconciliation of cash and cash equivalents and restricted cash Cash and cash equivalents at end of the year - - - Restricted cash at the end of the year - - - Total cash and cash equivalents and restricted cash at the end of year - - - (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 Subtopic 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 Company’s consolidated financial statements. (b) Intercompany transactions The Company had the following related party balances as of December 31, 2021 and 2022: As of December 31, 2021 2022 $ $ Amount due from (to) related parties - Borqs HK 17,472 17,280 - Borqs Beijing (83 ) (113 ) - Borqs USA 808 808 - Borqs International 23,449 20,430 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 26. SUBSEQUENT EVENTS The Group has cash balance of $1,823 held by Silicon Valley Bank as of December 31, 2022. On March 10, 2023, the California Department of Financial Protection and Innovation closed Silicon Valley Bank and appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. On March 12, 2023, the U.S. Department of the Treasury, the Federal Reserve and the FDIC released a joint statement confirming that all depositors of Silicon Valley Bank would have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts. The Group received full access to the funds in its deposit and money market accounts on March 13, 2023. On March 14, 2023, the Group wired out the majority of the cash balance deposit in Silicon Valley Bank to HSBC bank account located in Hong Kong within the Group and only $0.4 thousand left. The Group has a payable related to a lawsuit due to a third-party company. The original debtor claimed that the Group has breached the previously agreed settlement agreement, and transferred the debt to the third-party company during the year ended December 31, 2021. On April 20, 2023, the Group entered into a settlement agreement with the third-party company regarding the payments. According to the agreement, the Group will settle the balance in several payments until March 2024. On May 03, 2023, the Group received written notification from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Group has not regained compliance with the minimum bid price of $1 required for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”). The Group has engaged an advisory firm to request a hearing which will stay the suspension or delisting action pending the hearing and the expiration of any extension period granted by the Panel following the hearing. Consequently, the Group’s ordinary shares are expected to remain listed on The Nasdaq Capital Market at least until the Panel renders a decision following the hearing. There can be no assurance that the Panel will determine to continue the Company’s listing on the Nasdaq Capital Market or that the Group will timely evidence compliance with the terms of any extension that may be granted by the Panel following the hearing. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
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”). In December 2022, the Group received a letter from the Department of the Treasury on behalf of the Committee on Foreign Investment in the United States (“CFIUS”) stating that the Company is required to negotiate with CFIUS to fully divest its ownership interests and rights in HHE due to HHE’s solar energy storage system and EnergyShare technology for Multi-Dwelling Residential Units being deemed a potential national security risk. On March 16, 2023, the Group entered into the National Security Agreement by and among (i) Borqs; (ii) HHE; and (iii) Department of Defense and Department of Treasury, represents the U.S. Government. According to the agreement, the Group shall complete the Divestment within six months unless extended by the U.S. Government. The Group’s solar energy business met the criteria to be reported as a discontinued operation and, as a result, HHE’s historical financial results are reflected in the Group’s consolidated financial statements as a discontinued operation, and assets and liabilities were retrospectively reclassified as assets and liabilities held for sale for all periods presented. Refer to Note 1 (d) for detailed information. |
Liquidity and going concern | (b) Liquidity and going concern The Group’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of operations. As of December 31, 2022, the Group had cash and cash equivalents of $11.3 million and restricted cash of $0.03 million and has generated a net loss from continuing operations of $28.9 million and cash inflows of $3.4 million for the year then ended. The Group’s cash level at December 31, 2022 was not adequate for operations in the 2022 fiscal year and financing was needed; and the due to the COVID-19 pandemic, negative effects from slow collection from receivables and significant cancellation of otherwise signed purchase orders from customers were observed as early as January 2020. The Group’s operations in the fiscal year 2020 was reduced to minimal levels due to lock down of cities in India and in China, and our contracted manufacturing with third parties was also reduced to about one third of the previous year’s volume. The Group had to rely on customer advances and short-term supply chain related load to sustain such minimal operation during the months affected most severely affected by the COVID-19 pandemic. Except for one significant customer in the U.S., all other purchase order from different countries of the world have been reduced or cancelled. Although the Group’s businesses have recovered or are starting to recover in the fiscal 2022, it is not possible to determine the ultimate impact of the COVID-19 pandemic on the Group’s business operations and financial results as the quick spread of Omicron new variant across mainland China and Hong Kong, many cities in China had experienced lockdown or partial lockdown from time to time since the beginning of 2022. During the year ended December 31, 2022, the Group executed a settlement agreement with Samsung regarding the arbitration compensation. According to the settlement agreement, the payment period of eighteen months beginning on July 2022. These factors raise substantial doubt about the Group’s ability to continue as a going concern for the next twelve months from the date of issuance of these consolidated financial statements. Management’s plan to alleviate the substantial doubt about the Group’s ability to continue as a going concern include attempting to improve its business profitability, its ability to generate sufficient cash flow from its operations to meet its operating needs on a timely basis. The management plan cannot alleviate the substantial doubt of the Group’s ability to continue as a going concern. There can be no assurance that the Group will be successful in achieving its strategic plans, that the Group’s future capital raises will be sufficient to support its ongoing operations, or that any additional financing will be available in a timely manner or with acceptable terms, if at all. If the Group is unable to raise sufficient financing or events or circumstances occur such that the Group does not meet its strategic plans, it would have a material adverse effect on the Group’s financial position, results of operations, cash flows, and ability to achieve its intended business objectives. The consolidated financial statements have been prepared assuming that the Group will continue as a going concern and, accordingly, 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 Company, its subsidiaries and Consolidated VIEs, for which, the Company is the primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the Consolidated VIEs are eliminated upon consolidation. Results of its subsidiaries and its Consolidated VIEs are consolidated from the date on which control is transferred to the Company. |
Discontinued operations | (d) Discontinued operations A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Discontinued operations are reported when a component of an entity comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity is classified as held for disposal or has been disposed of, if the component either (1) represents a strategic shift or (2) have a major impact on an entity’s financial results and operations. In the consolidated statement of operations, result from discontinued operations is reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. Cash flows for discontinued operations are presented separately in Note 1 (c) and 1 (d). Assets and liabilities of the discontinued operations are classified as held for sale when the carrying amounts will be recovered principally through a sale transaction. |
Use of estimates | (e) Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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 and the subsequent impairment assessment of long-lived assets, intangible assets and goodwill, determining the provisions for accounts receivable, prepaid expenses and other current assets and inventories, determining the valuation allowance for deferred tax assets and accounting for deferred income taxes, uncertain tax benefits, determining the valuation for share-based compensation arrangements, warrants for Series D convertible redeemable preferred shares and beneficiary conversion feature on the Series E Preferred Shares, convertible notes and warrants associated with convertible notes, fair value of identifiable intangible assets, contingent consideration liabilities and goodwill in a business combination,. 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 | (f) 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 (“INR”), 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 Topic 830, Foreign Currency Matters Assets and liabilities of the Group’s PRC subsidiaries are translated into $ 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 income (loss) in the consolidated statements of comprehensive income (loss). |
Cash and cash equivalents | (g) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and demand bank deposits which are unrestricted as to withdrawal and use have original maturities less than three months. 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 | (h) Restricted cash and time deposits Cash and time deposits that are restricted as to withdrawal or use for current operations are classified as restricted cash and restricted term deposits, respectively. Restricted cash as of December 31, 2021 mainly represents the cash frozen by the authority related to a lawsuit in PRC (Note 12). Restricted cash as of December 31, 2022 mainly represents the cash frozen by a bank as credit card deposit. Time deposits as of December 31, 2022 represents a bank deposit has original maturity with six months in one of the Group’s subsidiaries. As of December 31, 2021, the Group has no time deposit. |
Accounts Receivable | (i) 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 for expected credit loss on a periodic basis and makes 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. The Group adopt Accounting Standard Update (ASU) 2016-13, Financial Instruments-Credit Losses (codified as Accounting Standard Codification Topic 326) on January 1, 2020, which requires measurement and recognition of current expected credit losses for financial instruments held at amortized cost. See Note 2 (o) below for current expected credit loss. |
Inventories | (j) 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 $2,255 and $1,924 were recorded as of December 31, 2021 and 2022, respectively. |
Property and equipment | (k) 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. |
Intangible assets | (l) 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 and ending when the software is available for general release to customers, in accordance with ASC 350-20, 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 4.5 years MVNO license 10 years Capitalized software development costs 3 years Internal-use software 5 years Developed technology 10 years |
Business combination | (m) Business combination Business combinations are accounted for using the acquisition method. The Group recognizes separately from goodwill the assets acquired, the liabilities assumed and the noncontrolling interest at their acquisition date fair values. 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. In accordance with ASC Topic 350, Goodwill and Other Intangible Assets In addition, the share purchase agreements entered into may contain contingent consideration provisions obligating the Group to pay additional purchase consideration, upon the acquired business’s achievement of certain agreed upon operating performance-based milestones. Under ASC 805, these contingent consideration arrangements are required to be recognized and measured at fair value at the acquisition date as either a liability or as an equity instrument, with liability instruments being required to be remeasured at each reporting period through the Company’s statements of comprehensive income (loss) until such time as to when the contingency is resolved. The fair value of the contingent consideration is valued by external valuers. The valuations are presented to the Group’s management. The fair value of the earn-out payments was measured using a Monte Carlo simulation analysis. 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 Solar Energy Business and Connected Solution. Goodwill is recorded at the Solar Energy reporting unit. The Group performed impairment analysis on goodwill as of December 31 every year beginning with a qualitative assessment, or starting with the quantitative assessment instead. The quantitative goodwill impairment test compares the fair values of each reporting unit to its carrying amount, including goodwill. A reporting unit constitutes a business for which discrete profit and loss financial information is available. The fair value of each reporting unit is established using a combination of expected present value of future cash flows and income approach valuation methodologies. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Determining when to test for impairment, the Group’s reporting units, the fair value of a reporting unit and the fair value of assets and liabilities within a reporting unit, requires judgment and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions and determination of appropriate market comparable. The Group bases fair value estimates on assumptions it believes to be reasonable but that are unpredictable and inherently uncertain. Significant changes in the economic characteristics of components or reorganization of an entity’s reporting structure can sometimes result in a re-assessment of the affected operating segment and its components to determine whether reporting units need to be redefined where the components are no longer economically similar. Future changes in the judgments and estimates underlying the Group’s analysis of goodwill for possible impairment, including expected future cash flows and discount rate, could result in a significantly different estimate of the fair value of the reporting units and could result in additional impairment of goodwill. |
Long-term investments | (n) Long-term investments The Group’s long-term investments consist of equity investments without readily determinable fair value. The Group makes a qualitative assessment of whether the investment is impaired at each reporting date, applying judgment in considering various factors and events including a) adverse performance of investees; b) adverse industry developments affecting investees; and c) adverse regulatory social, economic or other developments affecting investees. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss of investments equal to the difference between the carrying value and fair value. |
Current expected credit loss | (o) Current expected credit loss In 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”), which amends previously issued guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses rather than incurred losses. The Group no longer qualified as an emerging growth company in the year 2020 and adopted this ASC Topic 326 on January 1, 2020. The Group has identified the relevant risk characteristics of its customers and the related receivables, and other receivables which include type of the products the Group provides, nature of the customers or a combination of these characteristics. Receivables with similar risk characteristics have been grouped into pools. For each pool, the Group considers the historical credit loss experience, current economic conditions, reasonable and supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses. Other key factors that influence the expected credit loss analysis include customer demographics, payment terms offered in the normal course of business to customers, and industry-specific factors that could impact the Group’s receivables. Additionally, external data and macroeconomic factors are also considered. Movement of the allowance for doubtful accounts for accounts receivable and contract assets is as follows: Year ended December 31, 2021 2022 $ $ Balance as of January 1 12,883 13,049 Provisions (reversal of provision) for doubtful accounts 169 (153 ) Write offs - - Changes due to foreign exchange (3 ) (15 ) Balance as of December 31 13,049 12,881 Movement of the allowance for other receivables in prepaid expenses and other current assets, is as follows: Year ended December 31, 2021 2022 $ $ Balance as of January 1 13,992 11,327 Provisions for doubtful accounts - 133 Reversal of provision for doubtful accounts (1,926 ) - Write offs (764 ) - Changes due to foreign exchange 25 (77 ) Balance as of December 31 11,327 11,383 |
Impairment of long-lived assets | (p) 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. The impairment loss of long-lived assets was $703, $ nil nil |
Convertible Promissory Notes | (q) Convertible Promissory Notes In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. The FASB reduced the number of accounting models for convertible debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to users. For public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, the guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Group has elected to adopt the amendments in these ASUs on January 1, 2021. The Group determines the appropriate accounting treatment of its convertible notes in accordance with the terms in relation to the conversion feature, call and put options, and any other embedded features. After considering the impact of such features, the Group may account for such instrument as a liability in its entirety, or separate the instrument into debt and equity components following the respective guidance described under ASC 815 “Derivatives and Hedging” and ASC 470 “Debt”. The debt discount, if any, together with the related issuance cost are subsequently amortized as interest expense, using the effective interest method, from the issuance date to the earliest maturity date. Interest expenses are recognized in the consolidated statements of operations in the period in which they are incurred. |
Debt Issuance Costs and Debt Discounts | (r) Debt Issuance Costs and Debt Discounts The Group may record debt issuance costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense through the maturity of the debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately expensed. |
Derivative financial instruments | (s) Derivative financial instruments The Group evaluates all of its equity-linked financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity and whether embedded derivative shall be bifurcated from the host instrument and separately accounted for as a derivative, is reassessed at the end of each reporting period. Derivative assets and liabilities are recorded at fair value at inception and re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. |
Fair value of financial instruments | (t) 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, short-term bank and other borrowings and long-term bank borrowings. Other than the long-term bank borrowings, the carrying values of these financial instruments approximate their fair values due to their short-term maturities. The carrying amounts of long-term bank borrowings approximated their fair values since they bear interest rates which approximate market interest rates. The Group applies ASC Topic 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. |
Revenue recognition | (u) Revenue recognition The Group is mainly engaged in the business of providing 1) Android+ platform solutions and services, 2) hardware product sales, 3) MVNO services and 4) Solar. The Group adopted the new revenue recognition standards, or ASC 606, effective January 1, 2019 using the modified retrospective method for contracts which were not completed at the date of initial adoption. In accordance with ASC Topic 606, revenues are recognized when control of the promised goods or services is transferred to the Group’s customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services. In determining when and how much revenue is recognized from contracts with customers, the Group performs the following five-step analysis: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; (5) recognize revenue when (or as) the entity satisfies a performance obligation. When either party to a contract has performed, the Group presents the contract in the consolidated balance sheet as a contract asset or a contract liability, depending on the relationship between the entity’s performance and the customer’s payment. A contract asset is the Group’s right to consideration in exchange for goods and services that the Group has transferred to a customer. A receivable is recorded when the Group has an unconditional right to consideration, and it is probable that substantially all of the consideration will be collected. If a customer pays consideration or the Group has a right to an amount of consideration that is unconditional, before the Group transfers a good or service to the customer, the Group presents the contract liability when the payment is made or a receivable is recorded (whichever is earlier). A contract liability is the Group’s obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. The Group’s contract with customers do not include significant financing component and material variable consideration. Generally, the Group recognizes revenue under ASC Topic 606 for each type of its major revenue streams as follows: 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. There are executed contracts and purchase orders between the Group and each customer, and each party’s rights regarding the service to be rendered are written on the contracts. For this type of customers, the Group enters contract with them, which has the commercial substance to identify each party’s rights and obligations. There are two major performance obligations in the contracts with this type of customers: the delivery of the software product and the completion of the post-contract-service (“PCS”). The allocation of the transaction price between the two major performance obligations is based on the estimated standalone selling prices. The selling price for the performance obligation of PCS is estimated as the reasonable cost budget plus a margin or industrial standard. The rest of the transaction price other than the reasonable cost budget plus a margin for PCS will be allocated to the performance obligation of the delivery of the software product. For the sales derived from software development project in which the customer’s contract specifies the technical requirements of the software product, the Group recognizes revenue in accordance with the satisfaction of each performance obligation. For the performance obligation of the delivery of the software product, the Group recognizes the revenue at the point of time, upon the customers sign off the final acceptance. For the performance obligation of the completion of PCS Period, the Group recognizes the revenue over the period of the PCS Period. 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 over the time. The Group elects right to invoice expedient as the measure of progress. The revenue arising from contracts related to Android+ platform solutions and services is included as “Software Revenues” on the Group’s consolidated statement of operations. 2. Hardware product sales The Group provides total solutions on original design manufacturer (“ODM”) basis to customers of mobile devices. The Group recognizes revenue at the point of time, upon the delivery of products to customers, which is when the goods delivered to the designated address and it is probable that substantially all of the consideration will be collected. Warranty is provided to all customers, which is not considered an additional service; rather, an integral part of the product sales. ASC Topic 450, Contingencies, specifically addresses the accounting for standard warranties. The Group believes that accounting for its standard warranty pursuant to ASC 450 does not impact revenue recognition because the cost of honoring the warranty can be reliably estimated. The Group has determined the likelihood of claims arising from warranties to be remote based on strong quality control procedures in the production process and historical experience with regard to claims being made by customers. The basis for the warranty accrual will be reviewed periodically based on actual experience. The Group does not sell extended warranty coverage. The revenue arising from contracts related to hardware product sales is included as “Hardware Revenues” on the Group’s consolidated statement of operations. 3. MVNO On July 11, 2014, the Group, through the VIE, acquired and obtained control of Yuantel, 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 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 Subtopic 606-10-55, the Group is the principal in providing the bundled voice and data services to Chinese consumers, thus revenue is recognized on a gross basis. As sales of bundled services are mostly pre-paid by the consumers, cash received in advance of voice and data consumption are recognized as advances from customers. Revenue is recognized over the time by measuring the consumption of the time of voice and the amount of data. Pre-paid bundled services do not expire. 4. Solar Solar, Holu Hou Energy LLC (“HHE”) provides services under three business models, which are residential projects, commercial projects and wholesale equipment sales. For residential projects and commercial projects, HHE complete solar + battery systems to residential homeowners and commercial customers. There are several milestones in both projects. The Group recognizes the revenue at the point of time, upon the satisfaction of the performance obligation (upon all of the contract milestones complete). For wholesale equipment sale, customers either purchases equipment from HHE inventory, or purchase a large order of equipment from HHE with payment terms. Revenue is recognized upon the satisfaction of the performance obligation (upon equipment delivery). The revenue arising from contracts related to MVNO business is included in the line of “Income (loss) from operations of discontinued entities” on the Group’s consolidated statement of operations. Practical expedients and exemptions Besides the right to invoice expedients, the Group generally expenses sales commissions if any incurred because the amortization period would have been one year or less. Remaining performance obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. 2023 2024 2025 (US$ in thousands) Software development service 1,025 177 255 Hardware product sales 1,614 17 854 |
Contract assets | (v) Contract assets Contract assets represent the right to consideration in exchange for services that the Group have transferred to the customer before payment is due. |
Deferred cost of revenue [policy text block] | (w) Deferred cost of revenue The Group’s deferred cost of revenues primarily consists of (i) materials and equipment costs, (ii) compensation and related overhead expenses for personnel involved in the customization of its products, delivery, installation and maintenance (“compensation and overhead costs”), and (iii) contractor costs. The deferred cost of revenue will be charged to the cost of revenue when revenue is recognized. |
Contract Costs | (x) Contract Costs Costs of fulfilling a contract are recognized as an asset if those costs meet all the following criteria: (1) the costs relate directly to a contract that the Group can specifically identify; (2) the costs generate or enhance resources of the Group that will be used in satisfying performance obligations in the future; (b) the costs are expected to be recovered. The Group chooses to use consistent method to amortize such contract costs, with the timing of the transfer of goods and services to customers. Over time, the carrying amount of the contract costs may become impaired. |
Contract Liabilities | (y) Contract Liabilities Contract liabilities primarily relate to multiple element arrangements for which billing has occurred but transfer of control of all elements to the customer has either partially or not occurred at the balance sheet date. This includes cash received from customers for services or products in advance of the transfer of control. For the year ended December 31, 2022, the Group recognized revenue of $5,738 that was included in the advances from customers and deferred revenue at January 1, 2022. For the year ended December 31, 2021, the Group recognized revenue of $4,949 that was included in the advances from customers and deferred revenue at January 1, 2021. |
Cost of revenues | (z) 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. |
Advertising expenditures | (aa) Advertising expenditures Advertising expenditures are expensed as incurred and are included in sales and marketing expenses, which amounted to $1, nil nil |
Research and development expenses | (bb) 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 | (cc) 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 | (dd) Leases On January 1, 2019, the Group adopted ASU No. 2016-02, Leases (Topic 842), as amended, which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. The Group elected to apply practical expedients permitted under the transition method that allow the Group to use the beginning of the period of adoption as the date of initial application, to not recognize lease assets and lease liabilities for leases with a term of twelve months or less, to not separate non-lease components from lease components, and to not reassess lease classification, treatment of initial direct costs, or whether an existing or expired contract contains a lease. The Group used modified retrospective method and did not adjust the prior comparative periods. Under the new lease standard, the Group determines if an arrangement is or contains a lease at inception. Right-of-use assets and liabilities are recognized at lease commencement date based on the present value of remaining lease payments over the lease terms. The Group considers only payments that are fixed and determinable at the time of lease commencement. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Group’s leases do not provide an implicit rate, the Group uses its incremental borrowing rate as the discount rate for the lease. The Group’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. The Group’s lease terms may include options to extend or terminate the lease. Renewal options are considered within the right-of-use assets and lease liability when it is reasonably certain that the Group will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. |
Income taxes | (ee) 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 Topic 740, Accounting for Income Taxes |
Reverse stock split | (ff) Reverse stock split The Board of Directors of the Group approved a reverse stock split of the Group’s issued and outstanding shares at a ratio of 1-for-16 (the “Reverse Stock Split”) on June 08, 2022. The Reverse Stock Split became effective on June 27, 2022. As a result, the Group’s issued and outstanding shares was decreased in inverse proportion to the ratio. When the Reverse Stock Split became effective, each sixteen shares of issued and outstanding shares were converted into one newly issued and outstanding share. No fractional shares were issued in connection with the Reverse Stock Split. Any fractional shares of common stock that would have otherwise resulted from the Reverse Stock Split were rounded up to the nearest full share. No cash or other consideration was paid in connection with any fractional shares that would otherwise have resulted from the Reverse Stock Split. As a result of the Reverse Stock Split, 298,406,545 shares of common stock that were issued and outstanding at June 27, 2022 was reduced to 18,681,481 shares of common stock (taking into account the rounding of fractional shares). Except where otherwise specified, all number of shares, share prices and per share data in the consolidated financial statements and the notes to the consolidated financial statements have been retroactively restated as if the Reverse Stock Split occurred at the beginning of the periods presented. |
Subscriptions receivable | (gg) Subscriptions receivable As of December 31, 2022, subscriptions receivable included investment amounts in the form of (i) ownership of KADI that has been contemplated to be sold to the Group in exchange for shares of the Group, and (ii) escrow shares to Samsung in the year 2019 and 2022 as security for arbitration compensation. Since the shares in all these cases have already been issued, these items were recorded as subscriptions receivable on the equity section of the Group’s consolidated balance sheet as of December 31, 2022. |
Share-based compensation | (hh) Share-based compensation The Group accounts for share-based compensation in accordance with ASC Topic 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) | (ii) Comprehensive income (loss) Comprehensive income (loss) is defined as the increase (decrease) 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 loss of the Group includes foreign currency translation adjustments related to the Group and its PRC subsidiaries, whose functional currency is RMB. |
Segment reporting | (jj) Segment reporting In accordance with ASC Topic 280, Segment Reporting As discussed in Note 1(c), in November 2018, assets and liabilities related to Yuantel were reclassified as held for sale and revenues and expenses related to Yuantel segment were reclassified in the accompanying consolidated financial statements as discontinued operations for all periods presented. As discussed in Note 1(c), assets and liabilities related to HHE, which the Group acquired in October 2021 were reclassified as held for sale and revenues and expenses related to Solar segment were reclassified in the accompanying consolidated financial statements as discontinued operations for all periods presented. |
Employee benefits | (kk) 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. |
(Loss) earnings per share | (ll) Loss per share Loss per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights. The Group’s Convertible Redeemable Preferred Shares (Note 24) 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 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 exercise of the Group’s warrant 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 | (mm) Recent accounting pronouncements Recently issued accounting pronouncements not yet adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which provides guidance on the acquirer’s accounting for acquired revenue contracts with customers in a business combination. The amendments require an acquirer to recognize and measures contract assets and contract liabilities acquired in a business combination at the acquisition date in accordance with ASC 606 as if it had originated the contracts. This guidance also provides certain practical expedients for acquirers when recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination. The new guidance is required to be applied prospectively to business combinations occurring on or after the date of adoption. This guidance is effective for the Group for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Group does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations and cash flows. Recently adopted accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, to require financial assets carried at amortized cost to be presented at the net amount expected to be collected based on historical experience, current conditions and forecasts. Subsequently, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, to clarify that receivables arising from operating leases are within the scope of lease accounting standards. Further, the FASB issued ASU No. 2019-04, ASU No. 2019-05, ASU 2019-10 and ASU 2019- 11 to provide additional guidance on the credit losses standard. The ASUs are effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. Adoption of the ASUs is on a modified retrospective basis. The Group has adopted the amendments in these ASUs on January 1, 2020, and the adoption of the amendments did not have a material impact on the consolidated financial position and results of operations. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments in this ASU eliminate, add and modify certain disclosure requirements for fair value measurements. The amendments in this ASU, among other things, require public companies to disclose the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this ASU are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Group has adopted the amendments in these ASUs on January 1, 2020, and the adoption of these amendments did not have a material impact on the consolidated financial position and results of operations. In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. The FASB reduced the number of accounting models for convertible debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to users. For public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, the guidance is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Group has elected to adopt the amendments in these ASUs on January 1, 2021, and the adoption of these amendments did not have a material impact on the consolidated financial position and results of operations. |
Organization (Tables)
Organization (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of variable interest entities | Entity Date of Acquisition Place of Percentage of Principal Direct 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”) 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 |
Schedule of consolidated VIEs and discontinued operation disclosures | The period starting January 1 to 2020 $ Net revenues 29,023 Cost of revenues (21,637 ) Total gross profit 7,386 Operating expenses: Sales and marketing expenses (4,598 ) General and administrative expenses (540 ) Research and development expenses (938 ) Total operating expenses (6,076 ) Operating (loss) income 1,310 Interest income, net 4 Other (expense) income, net (12 ) (Loss) income from discontinued operation, before income taxes 1,302 Income tax benefit (expense) - (Loss) income from discontinued operations 1,302 Less: net income (loss) attributable to noncontrolling interest - Net (loss) income attributable to Borqs Technologies, Inc. 1,302 For the years ended 2021 2022 $ $ Net revenues - 4,034 Cost of revenues - (8,160 ) Total gross profit - (4,126 ) Operating expenses: Sales and marketing expenses (51 ) (142 ) General and administrative expenses (1,066 ) (4,044 ) Total operating expenses (1,117 ) (4,186 ) Operating loss (1,117 ) (8,312 ) Interest expense, net (275 ) (343 ) Other expense - (1,261 ) Loss from discontinued operation, before income taxes (1,392 ) (9,916 ) Income tax benefit (expense) - - Loss from discontinued operations (1,392 ) (9,916 ) |
Schedule of consolidated VIEs and cash flow disclosures | The period starting January 1 to 2020 $ CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income 1,302 Adjustments to reconcile net (loss) income to net cash used in operating activities: Impairment of doubtful debt (300 ) MNVO BU management compensation - Deferred income tax benefits - Changes in operating assets and liabilities (2,557 ) Net cash used in operating activities (1,555 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (37 ) Purchases of intangible assets (355 ) Proceeds from disposal of non-controlling interest - Payments to acquiring non-controlling interest - Net cash provided by (used in) investing activities (392 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayments of short-term bank and other borrowings - Net cash generated from (used in) financing activities - Effect of foreign exchange rate changes on cash and short-term investment 38 Net change in cash and cash equivalents and restricted cash (1,910 ) Cash and cash equivalents and restricted cash at beginning of year 2,296 Cash and cash equivalents and restricted cash at end of year 386 For the years ended 2021 2022 $ $ CASH FLOWS FROM OPERATING ACTIVITIES Net loss (1,392 ) (9,916 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 102 479 Changes in operating assets and liabilities (343 ) 7,489 Net cash used in operating activities (1,633 ) (1,948 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment - (66 ) Net cash used in investing activities - (66 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from shareholders 3,547 1,487 Proceeds from short-term and other borrowings 200 155 Repayments of short-term and other borrowings (527 ) (218 ) Proceeds from long-term and other borrowings - 112 Repayments of long-term and other borrowings (111 ) (2 ) Net cash generated from financing activities 3,109 1,534 Net increase (decrease) in cash and cash equivalents and restricted cash 1,476 (480 ) Cash and cash equivalents and restricted cash at beginning of year 121 1,597 Cash and cash equivalents and restricted cash at end of year 1,597 1,117 |
Schedule of financial information of HHE classified as discontinued operations | As of December 31, 2021 2022 Deconsolidation Date Carrying amounts of major classes of assets included as part of the assets held for sale $ $ Cash and cash equivalents 1,597 1,117 Inventories, net 430 973 Prepaid expenses and other current assets, net 193 31 Current assets held for sale 2,220 2,121 Property and equipment, net 9 45 Intangible assets, net 4,399 3,949 Goodwill 12,208 12,208 Contract assets 1,485 - Non-current assets held for sale 18,101 16,202 Total assets of HHE classified as held for sale 20,321 18,323 Carrying amounts of major classes of liabilities included as part of liabilities held for sale Accounts payable 754 1,755 Accrued expenses and other payables 287 218 Contract liabilities - current 1,095 6,567 Amount due to related parties 20 - Short-term borrowings 914 851 Current liabilities held for sale 3,070 9,391 Long-term borrowings 661 472 Deferred tax liabilities 1,143 1,143 Non-current liabilities held for sale 1,804 1,615 Total liabilities of HHE classified as held for sale 4,874 11,006 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 4.5 years MVNO license 10 years Capitalized software development costs 3 years Internal-use software 5 years Developed technology 10 years |
Schedule of doubtful accounts for accounts receivable and contract assets | Year ended December 31, 2021 2022 $ $ Balance as of January 1 12,883 13,049 Provisions (reversal of provision) for doubtful accounts 169 (153 ) Write offs - - Changes due to foreign exchange (3 ) (15 ) Balance as of December 31 13,049 12,881 |
Schedule of other receivables in prepaid expenses and other current assets | Year ended December 31, 2021 2022 $ $ Balance as of January 1 13,992 11,327 Provisions for doubtful accounts - 133 Reversal of provision for doubtful accounts (1,926 ) - Write offs (764 ) - Changes due to foreign exchange 25 (77 ) Balance as of December 31 11,327 11,383 |
Schedule of future related to performance obligations | 2023 2024 2025 (US$ in thousands) Software development service 1,025 177 255 Hardware product sales 1,614 17 854 |
Concentration of Risks (Tables)
Concentration of Risks (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Concentration of Risks [Abstract] | |
Schedule of consolidated financial statements | As of December 31, 2021 2022 Balance sheet items, except for equity accounts 6.3757 6.9646 Years ended 2021 2022 Items in the statements of operations and comprehensive loss 6.8976 6.7261 |
Business Acquisitions and Dis_2
Business Acquisitions and Disposal (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Acquisitions and Disposal [Abstract] | |
Schedule of considered a business acquisition | Amount $ Net liabilities acquired $ (2,265 ) Amortizable intangible assets Developed Technology 4,492 Goodwill 12,208 Deferred tax liabilities (1,143 ) Noncontrolling interests (6,513 ) Total $ 6,779 Total purchase price consisted of: - cash consideration (paid in fiscal 2021) 3,250 - share-based consideration (219,296 of the Group’s ordinary shares) 1,860 - contingent considerations 1,669 Total $ 6,779 |
Schedule of carrying value of net assets disposed | Amount $ ’000 The fair value of the consideration received Cash received $ - * Less: Net assets of BWL derecognized on disposal 303 Loss on disposal $ (303 ) * According to the agreement, the cash consideration was RMB 1 Yuan. |
Schedule of assets and liabilities of HHE | Amount $ ’000 Assets Cash $ 4 Other current assets 332 Total Assets $ 336 Liabilities Other current liabilities $ 33 Total liabilities $ 33 |
Schedule of assets and liabilities of HHE | Amount $ ’000 The fair value of the consideration received $ - Carrying value of non-controlling interest prior to the deconsolidation 1,926 Less: Net assets of HHE derecognized on deconsolidation 7,317 Loss from deconsolidation (5,391 ) Derecognition of contingent liabilities recognized during the acquisition 1,781 Net loss on deconsolidation $ (3,610 ) |
Inventories, Net (Tables)
Inventories, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | As of December 31, 2021 2022 $ $ Raw materials 7,714 5,779 Work in process 1,198 301 Finished goods 103 79 9,015 6,159 Less: provision (2,255 ) (1,924 ) Inventories, net 6,760 4,235 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses and Other Current Assets, Net [Abstract] | |
Schedule of prepaid expenses and other current assets | As of December 31, 2021 2022 $ $ Staff advances 134 61 Prepayment for products 2,346 1,174 Advance to OEMs 16,939 14,285 Rental and other deposits 1,010 736 VAT recoverable 2,696 1,836 Receivable from an export/import agent 1,138 - Investment of convertible bond 238 338 Cash loan 100 100 Others 366 354 25,160 18,884 Less: provision (11,327 ) (11,383 ) 13,640 7,501 |
Lease (Tables)
Lease (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Text Block [Abstract] | |
Schedule of future lease payments under operating leases | As of 2022 $ 2023 604 2024 39 Total lease payments 643 Less: imputed interest 68 Present value of lease liabilities 575 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment, Net [Abstract] | |
Schedule of property and equipment | As of December 31, 2021 2022 $ $ At cost: Computer and network equipment 1,516 1,592 Office equipment 1,118 1,318 Motor vehicles 185 171 Production equipment 312 466 3,131 3,547 Less: accumulated depreciation (2,407 ) (2,523 ) 724 1,024 |
Schedule of depreciation expense | For the years ended December 31, 2020 2021 2022 $ $ $ Cost of revenues - - 145 Sales and marketing expenses 1 - 26 General and administrative expenses 13 44 155 Research and development expenses 65 70 20 79 114 346 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net [Abstract] | |
Schedule of presents the intangible asset | Software Capitalized software Total $ $ $ Balance as of January 1, 2021 6 3,532 3,538 Additions - - - Disposal - (554 ) (554 ) Amortization expense - (2,017 ) (2,017 ) Foreign currency translation difference (6 ) 17 11 Accumulated impairment loss - - - Foreign currency translation difference - - - Balance as of December 31, 2021 - 978 978 Additions - - - Amortization expense - (978 ) (978 ) Foreign currency translation difference - - - Accumulated impairment loss - - - Foreign currency translation difference - - - - - - Balance as of December 31, 2022 - - - |
Bank and Other Borrowings (Tabl
Bank and Other Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of bank and other borrowings | As of December 31, 2021 2022 $ $ Short-term bank and other borrowings (i) 361 - Long-term bank and other borrowings, current portion (ii) 1,250 - Subtotal 1,611 - Long-term bank and other borrowings, non-current portion (ii) - - Total borrowings 1,611 - (i) The short-term bank and other borrowings outstanding as of December 31, 2021 and 2022 bore a weighted average interest rate of 103.20% and 21.09% per annum, respectively, and were denominated in RMB. The borrowings was obtained from financial institution. (ii) The outstanding loans as of December 31, 2021 represented a loan from an individual shareholder. |
Accrued Expenses and Other Pa_2
Accrued Expenses and Other Payables (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other payables | As of December 31, 2021 2022 $ $ Payroll and welfare payable 2,853 2,356 VAT, and other taxes payable 492 514 Payables for office supply and utilities 226 124 Payables for purchase of property and equipment 53 49 Professional service fees 963 748 Payables for share purchase consideration (Note 10) 10,000 10,000 Payables for Samsung arbitration compensation (Note 20(e)) 3,749 1,958 Interest and penalty payable 1,137 159 Advance from customers 5,084 5,422 Payables to an export/import agent 924 959 Payable related to a lawsuit 2,108 1,593 Others 60 56 27,649 23,938 |
Convertible Notes (Tables)
Convertible Notes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Convertible Notes Abstract | |
Schedule of fair value of the warrants | Value Risk-free Expected Expected February 25, 2021 Warrants 1.76 0.60 % 5 years 170 % April 14, 2021 Warrants 1.25 0.86 % 5 years 168 % September 14, 2021 Warrants 0.72 0.78 % 5 years 160 % May 25, 2022 Warrants 0.17 2.73 % 5 years 152 % |
Schedule of fair values of the convertible notes | Coupon rate Risk-free Volatility Bond yield February 25, 2021 Notes ($6.67 million) 8 % 0.13 % 196 % 28 % April 14, 2021 Notes ($1 million) 8 % 0.16 % 196 % 29 % May 5, 2021 Notes ($13.33 million) 8 % 0.16 % 194 % 28 % May 5, 2021 Notes ($2 million) 8 % 0.16 % 193 % 28 % September 14, 2021 Notes ($13.575 million) 8 % 0.21 % 200 % 30 % May 25, 2022 Notes ($16.0 million) 10 % 2.50 % 153 % 33 % |
Schedule of proceeds to the notes and the warrants | As of December 31, 2021 2022 $ $ Principal amount 15,142 2,450 Less: unamortized discount and debt issuance costs (5,152 ) (759 ) Total 9,990 1,691 |
Schedule of principal amount and unamortized discount and debt issuance costs | Principal Less: unamortized $ $ US$20.0 million 8% note due 2023 ($18.4 million converted in fiscal 2021) 1,567 (463 ) US$3.0 million 8% note due 2023 (fully converted in fiscal 2021) - - US$13.58 million 8% note due 2023 13,575 (4,689 ) Total 15,142 (5,152 ) Principal Less: unamortized $ $ US$20.0 million 8% note due 2023 (fully converted in fiscal 2022) - - US$3.0 million 8% note due 2023 (fully converted in fiscal 2021) - - US$13.58 million 8% note due 2023 (fully converted in fiscal 2022) - - US$16.0 million 10% note due 2024 ($13.6 million converted in fiscal 2022) 2,450 (759 ) Total 2,450 (759 ) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accumulated Other Comprehensive Loss [Member] | |
Schedule of accumulated other comprehensive loss | Foreign currency Total $ $ Balance as of January 1, 2020 (1,904 ) (1,904 ) Current year other comprehensive income 661 661 Balance as of December 31, 2020 (1,243 ) (1,243 ) Current year other comprehensive income 152 152 Balance as of December 31, 2021 (1,091 ) (1,091 ) Current year other comprehensive loss (2,421 ) (2,421 ) Balance as of December 31, 2022 (3,512 ) (3,512 ) |
Share Based Compensation (Table
Share Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Group decided to cancel all the shares of options | Number of Weighted Weighted average Aggregate ($) (Years) ($) Outstanding, January 1, 2020 157,264 84.64 5.52 5,653 Granted 146,875 19.20 Forfeited (157,264 ) 81.92 Outstanding, December 31, 2020 146,875 19.20 2.39 4,828 Outstanding, January 1, 2021 146,875 19.20 2.39 4,828 Granted - - - - Forfeited - - - - Outstanding, December 31, 2021 146,875 19.20 1.22 - Outstanding, January 1, 2022 146,875 19.20 1.22 - Granted - - - - Forfeited - - - - Outstanding, December 31, 2022 146,875 19.20 1.22 - |
Schedule of estimated fair value of options | Year 2020 Risk-free interest rates 0.56%-0.57% Expected life (years) 3-7 years Expected volatility 70.6-72.2% Expected dividend yield 0% Exercise multiple 2.2 Post-vesting forfeit rate 0% Fair value of underlying ordinary shares $16.32-$20.00 Fair value of share option $8.80-$19.84 |
Taxation (Tables)
Taxation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Profit (loss) from continuing operations before income taxes | For the years ended December 31, 2020 2021 2022 $ $ $ Non-PRC (29,385 ) (44,550 ) (29,722 ) PRC (6,298 ) (11,105 ) 836 (35,683 ) (55,655 ) (28,886 ) |
Schedule of income tax benefit (expense) | For the years ended December 31, 2020 2021 2022 $ $ $ Current (1,410 ) - (343 ) Deferred 1,004 445 284 (406 ) 445 (59 ) |
Schedule of reconciliation of tax computed by applying the statutory income tax rate | For the years ended December 31, 2020 2021 2022 $ $ $ Loss before income taxes (35,683 ) (55,655 ) (28,886 ) Income tax income computed at the statutory income tax rate at 25% 4,594 13,914 7,220 Non-deductible expenses 380 (1,095 ) 71 Non-taxation income - - 19 Preferential rate (820 ) (935 ) 1,970 Current and deferred tax rate differences (291 (709 ) 299 Foreign rate differences (5 ) (3,316 ) (3,682 ) Change of valuation allowance (4,587 ) (8,024 ) (6,860 ) Statutory income - - - R&D super deduction 323 610 904 Income tax (expense) benefit (406 ) 445 (59 ) |
Schedule of significant components of deferred taxes | As of December 31, 2021 2022 $ $ Deferred tax assets Inventories provision 28 32 Accrued salary and welfare payable 214 217 Property, plant and equipment - 175 Tax losses 229 - Valuation allowance - - Others - - Total deferred tax assets 471 424 Deferred tax liabilities Intangible assets 671 15 Deferred cost of revenue 15 - Others 325 894 Total deferred tax liabilities 1,011 909 |
Schedule of roll-forward of unrecognized tax benefits | For the years ended December 31, 2020 2021 2022 $ $ $ Balance at beginning of year 1,987 2,124 2,174 Reversal based on tax positions related to prior years - - - Additions based on tax positions related to the current year - - - Foreign currency translation difference 137 50 (184 ) Balance at end of year 2,124 2,174 1,990 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of related parties | Names of related parties Relationship with the Group Bluecap A company controlled by a key management of the Group Hareesh Ramanna Executive Vice President and Co-General Manager of Connected Solutions Business Unit |
Schedule of significant related party transactions | For the years ended December 31, 2020 2021 2022 $ $ $ Software services provided to: Bluecap 507 - - |
Schedule of significant related party balances | For the years ended December 31, 2020 2021 2022 $ $ $ Loan from: Bluecap 2,695 1,834 - Interest expense on loan from: Bluecap 438 658 746 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities | December 31, 2021 Contingent consideration - current (1,392 ) Contingent consideration – non-current (389 ) Total (1,781 ) |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Loss Per Share [Abstract] | |
Schedule of basic and diluted loss per share | For the years ended December 31, 2020 2021 2022 $ $ $ Numerator: Net loss from continuing operations (36,089 ) (55,210 ) (28,945 ) Less: Net loss attributable to noncontrolling interest from continuing operation (1 ) (54 ) (190 ) Net loss from continuing operations attributable to Borqs Technologies, Inc. (36,088 ) (55,156 ) (28,755 ) Accretion to redemption value of preferred shares for continuing operations - - - Net loss from continuing operations attributable to Borqs Technologies, Inc.’s ordinary shareholders (36,088 ) (55,156 ) (28,755 ) Net income (loss) from discontinued operations 1,302 (1,392 ) (9,916 ) Less: Net income (loss) attributable to noncontrolling interest from discontinued operation 716 (683 ) (4,639 ) Net income (loss) from discontinued operations attributable to Borqs Technologies, Inc. 586 (709 ) (5,277 ) Net loss attributable to Borqs Technologies, Inc.’s ordinary shareholders (35,502 ) (55,865 ) (34,032 ) Denominator: Weighted-average number of ordinary shares—basic 2,782,188 7,370,719 22,951,092 Weighted-average number of ordinary shares—diluted 2,782,188 7,370,719 22,951,092 Weighted-average number of shares outstanding from discontinued operations—basic 2,782,188 7,370,719 22,951,092 Weighted-average number of shares outstanding from discontinued operations—diluted 2,782,188 7,370,719 22,951,092 Net loss per share from continuing operations attributable to Borqs Technologies, Inc. Loss per share—Basic: (12.97 ) (7.48 ) (1.25 ) Loss per share—Diluted: (12.97 ) (7.48 ) (1.25 ) Net earnings (loss) per share from discontinued operations attributable to Borqs Technologies, Inc. Earnings (loss) per share—Basic: 0.21 (0.10 ) (0.23 ) Earnings (loss) per share—Diluted: 0.21 (0.10 ) (0.23 ) Net loss per share attributable to Borqs Technologies, Inc. Loss per share—Basic: (12.76 ) (7.58 ) (1.48 ) Loss per share—Diluted: (12.76 ) (7.58 ) (1.48 ) |
Parent Company Only Condensed_2
Parent Company Only Condensed Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of condensed balance sheets | As of December 31, Note 2021 2022 $ $ ASSETS Current assets Prepaid expenses and other current assets - 1,514 Amount due from related parties 41,646 38,405 Total current assets 41,646 39,919 Non-current assets Investments in subsidiaries and Consolidated VIEs (33,781 ) (18,166 ) Total non-current assets (33,781 ) (18,166 ) Total assets 7,865 21,753 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accrued expenses and other payables 14,733 14,658 Total current liabilities 14,733 14,658 Total liabilities 14,733 14,658 Shareholders’ (deficit) equity Additional paid-in capital 262,271 310,267 Accumulated deficit (271,040 ) (305,073 ) Statutory reserve 1,901 1,901 Total shareholders’ (deficit) equity (6,868 ) 7,095 Total liabilities and shareholders’ equity 7,865 21,753 |
Schedule of condensed statements of operations | For the years ended December 31, 2020 2021 2022 $ $ $ Operating Expenses General and administrative expenses (2,125 ) (2,450 ) (1,653 ) Operating loss (2,125 ) (2,450 ) (1,653 ) Share of losses of subsidiaries and Consolidated VIEs (33,965 ) (54,152 ) (37,208 ) Loss before income taxes (36,090 ) (56,602 ) (38,861 ) Income tax expense - - - Net loss (36,090 ) (56,602 ) (38,861 ) |
Schedule of condensed statements of comprehensive income (loss) | For the years ended December 31, 2020 2021 2022 $ $ $ Net loss (36,090 ) (56,602 ) (38,861 ) Other comprehensive (loss) income, net of tax of nil: Foreign currency translation adjustments, net of tax of nil 1,498 507 (1,456 ) Other comprehensive income (loss), net of tax of nil: Comprehensive loss (34,592 ) (56,095 ) (40,317 ) Comprehensive loss attributable to the Company’s ordinary shareholders (34,633 ) (56,085 ) (40,393 ) |
Schedule of condensed statements of cash flows | For the years ended December 31, 2020 2021 2022 $ $ $ Net cash generated from operating activities - - - Net cash used in investing activities - - - Net cash generated from (used in) financing activities - - - Net increase (decrease) in cash and cash equivalent and restricted cash - - - Cash and cash equivalent and restricted cash at beginning of the year - - - Cash and cash equivalent and restricted cash at end of the year - - - Reconciliation of cash and cash equivalents and restricted cash Cash and cash equivalents at end of the year - - - Restricted cash at the end of the year - - - Total cash and cash equivalents and restricted cash at the end of year - - - |
Schedule of related party balances | As of December 31, 2021 2022 $ $ Amount due from (to) related parties - Borqs HK 17,472 17,280 - Borqs Beijing (83 ) (113 ) - Borqs USA 808 808 - Borqs International 23,449 20,430 |
Organization (Details)
Organization (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||||||
May 31, 2019 | Apr. 30, 2019 CNY (¥) | Nov. 30, 2018 | Feb. 28, 2018 CNY (¥) | Aug. 18, 2017 | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 | Dec. 31, 2022 CNY (¥) | |
Organization (Details) [Line Items] | ||||||||||
Equity interest, percentage | 75.05% | 10% | ||||||||
Consideration (in Yuan Renminbi) | ¥ | ¥ 22,000 | ¥ 50,000 | ||||||||
Power of attorney agreement, description | 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, description | 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, description | 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. | |||||||||
Operational reduction percentage | 20% | |||||||||
Revenues (in Dollars) | $ 52,537 | $ 29,561 | $ 26,751 | |||||||
Variable interest entity percentage, description | In May 2019, the Company also authorized Jinan Yuantel to actively seek for investors on behalf of the Company to sell 45% of the equity interest in Yuantel held by Big Cloud Network at a consideration which is based on the expected share valuation no less than RMB180 million by June 30, 2019, for which, Jinan Yuantel will be granted the option to purchase the remaining 10% of the equity interest in Yuantel held by Big Cloud Network at a consideration of RMB10 upon achievement of the sale. | The Consolidated VIEs contributed 29% and 52% of the Group’s consolidated revenues for the years ended December 31, 2019 and from January through October of 2020, respectively. As of December 31, 2020 and 2021, the Consolidated VIEs accounted for an aggregate of nil% and nil%, respectively, of the consolidated total assets, and nil% and nil%, respectively, of the consolidated total liabilities. | ||||||||
Cash (in Dollars) | $ 4,826 | |||||||||
Contingent liability (in Dollars) | $ 3,200 | |||||||||
Probable loss (in Dollars) | $ 3,200 | |||||||||
Owned percentage | 51% | |||||||||
Minimum [Member] | ||||||||||
Organization (Details) [Line Items] | ||||||||||
Estimated loss amount (in Dollars) | $ 3,200 | |||||||||
Maximum [Member] | ||||||||||
Organization (Details) [Line Items] | ||||||||||
Estimated loss amount (in Dollars) | $ 3,600 | |||||||||
China [Member] | ||||||||||
Organization (Details) [Line Items] | ||||||||||
Operational reduction percentage | 40% | |||||||||
Yuantel Investment [Member] | ||||||||||
Organization (Details) [Line Items] | ||||||||||
Equity interest, percentage | 20% | 79% | 21% | 79% | 45% | |||||
Gain on disposal (in Dollars) | $ 10,096 | |||||||||
Yuantel Investment [Member] | RMB [Member] | ||||||||||
Organization (Details) [Line Items] | ||||||||||
Consideration (in Yuan Renminbi) | ¥ | ¥ 25,000 | ¥ 21,050 | ||||||||
Yuantel Telecom [Member] | ||||||||||
Organization (Details) [Line Items] | ||||||||||
Equity interest, percentage | 95% | 95% | ||||||||
Beijing Big Cloud Network [Member] | ||||||||||
Organization (Details) [Line Items] | ||||||||||
Equity interest, percentage | 75.05% | |||||||||
Jinan Yuantel [Member] | ||||||||||
Organization (Details) [Line Items] | ||||||||||
Equity interest, percentage | 25% | |||||||||
Borqs International Holding Corp [Member] | ||||||||||
Organization (Details) [Line Items] | ||||||||||
Equity interest, percentage | 100% |
Organization (Details) - Schedu
Organization (Details) - Schedule of variable interest entities | 12 Months Ended |
Dec. 31, 2022 | |
BORQS International [Member] | |
Variable Interest Entity [Line Items] | |
Date of incorporation/ Acquisition | Jul. 27, 2007 |
Place of incorporation | Cayman |
indirect ownership by the Company Direct | 100% |
Principal activities | Holding company |
BORQS Hong Kong Limited (“Borqs HK”) [Member] | |
Variable Interest Entity [Line Items] | |
Date of incorporation/ Acquisition | Jul. 19, 2007 |
Place of incorporation | Hong Kong |
indirect ownership by the Company Direct | 100% |
Principal activities | Provision of software and service solutions and hardware products sales |
BORQS Beijing Ltd. (“Borqs Beijing”) [Member] | |
Variable Interest Entity [Line Items] | |
Date of incorporation/ Acquisition | Sep. 04, 2007 |
Place of incorporation | PRC |
indirect ownership by the Company Direct | 100% |
Principal activities | Provision of software and service solutions and hardware products sales |
BORQS Software Solutions Private Limited (“Borqs India”) [Member] | |
Variable Interest Entity [Line Items] | |
Date of incorporation/ Acquisition | Jul. 17, 2009 |
Place of incorporation | India |
indirect ownership by the Company Direct | 100% |
Principal activities | Provision of software and service solutions |
Organization (Details) - Sche_2
Organization (Details) - Schedule of consolidated VIEs and discontinued operation disclosures - VIE [Member] - USD ($) $ in Thousands | 10 Months Ended | 12 Months Ended | |
Oct. 29, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | |
Organization (Details) - Schedule of consolidated VIEs and discontinued operation disclosures [Line Items] | |||
Net revenues | $ 29,023 | $ 4,034 | |
Cost of revenues | (21,637) | (8,160) | |
Total gross profit | 7,386 | (4,126) | |
Operating expenses: | |||
Sales and marketing expenses | (4,598) | (142) | (51) |
General and administrative expenses | (540) | (4,044) | (1,066) |
Research and development expenses | (938) | ||
Total operating expenses | (6,076) | (4,186) | (1,117) |
Operating loss | 1,310 | (8,312) | (1,117) |
Interest expense, net | 4 | (343) | (275) |
Other expense | (12) | (1,261) | |
Loss from discontinued operation, before income taxes | 1,302 | (9,916) | (1,392) |
Income tax benefit (expense) | |||
Loss from discontinued operations | 1,302 | $ (9,916) | $ (1,392) |
Less: net income (loss) attributable to noncontrolling interest | |||
Net (loss) income attributable to Borqs Technologies, Inc. | $ 1,302 |
Organization (Details) - Sche_3
Organization (Details) - Schedule of consolidated VIEs and cash flow disclosures - VIE [Member] - USD ($) $ in Thousands | 10 Months Ended | 12 Months Ended | ||
Oct. 29, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net (income) loss | $ 1,302 | $ (9,916) | $ (1,392) | |
Depreciation and amortization | 479 | 102 | ||
Impairment of doubtful debt | (300) | |||
MNVO BU management compensation | ||||
Deferred income tax benefits | ||||
Changes in operating assets and liabilities | (2,557) | 7,489 | (343) | |
Net cash used in operating activities | (1,555) | (1,948) | (1,633) | |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchases of property and equipment | (37) | (66) | ||
Purchases of intangible assets | (355) | |||
Proceeds from disposal of non-controlling interest | ||||
Payments to acquiring non-controlling interest | ||||
Net cash used in investing activities | (392) | (66) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from shareholders | 1,487 | 3,547 | ||
Proceeds from short-term and other borrowings | 155 | 200 | ||
Repayments of short-term and other borrowings | (218) | (527) | ||
Proceeds from long-term and other borrowings | 112 | |||
Repayments of long-term and other borrowings | (2) | (111) | ||
Net cash generated from financing activities | 1,534 | 3,109 | ||
Effect of foreign exchange rate changes on cash and short-term investment | 38 | |||
Net increase (decrease) in cash and cash equivalents and restricted cash | (1,910) | (480) | 1,476 | |
Cash and cash equivalents and restricted cash at beginning of year | 2,296 | 1,597 | 121 | $ 2,296 |
Cash and cash equivalents and restricted cash at end of year | $ 386 | $ 1,117 | $ 1,597 | $ 121 |
Organization (Details) - Sche_4
Organization (Details) - Schedule of financial information of HHE classified as discontinued operations - Other entities [Member] - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Carrying amounts of major classes of assets included as part of the assets held for sale | ||
Cash and cash equivalents | $ 1,117 | $ 1,597 |
Inventories, net | 973 | 430 |
Prepaid expenses and other current assets, net | 31 | 193 |
Current assets held for sale | 2,121 | 2,220 |
Property and equipment, net | 45 | 9 |
Intangible assets, net | 3,949 | 4,399 |
Goodwill | 12,208 | 12,208 |
Contract assets | 1,485 | |
Non-current assets held for sale | 16,202 | 18,101 |
Total assets of HHE classified as held for sale | 18,323 | 20,321 |
Carrying amounts of major classes of liabilities included as part of liabilities held for sale | ||
Accounts payable | 1,755 | 754 |
Accrued expenses and other payables | 218 | 287 |
Contract liabilities - current | 6,567 | 1,095 |
Amount due to related parties | 20 | |
Short-term borrowings | 851 | 914 |
Current liabilities held for sale | 9,391 | 3,070 |
Long-term borrowings | 472 | 661 |
Deferred tax liabilities | 1,143 | 1,143 |
Non-current liabilities held for sale | 1,615 | 1,804 |
Total liabilities of HHE classified as held for sale | $ 11,006 | $ 4,874 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 27, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Cash and cash equivalents | $ 11,305 | $ 6,117 | ||
Restricted cash | 30 | |||
Net loss from continuing operations | 28,900 | |||
Cash inflows for continuing operations | 3,400 | |||
Inventories provision | 2,255 | 1,924 | ||
Impairment loss of goodwill | $ 703 | |||
Revenue | 5,738 | |||
Deferred revenue recognized | 4,949 | |||
Advertising expenditures included in sales and marketing expenses | $ 1 | |||
Share-based compensation, percentage | 70% | |||
Maximum [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Reverse stock split, shares issued and oustanding (in Shares) | 298,406,545 | |||
Minimum [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Reverse stock split, shares issued and oustanding (in Shares) | 18,681,481 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives | 12 Months Ended |
Dec. 31, 2022 | |
Computer and network equipment [Member] | Minimum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, estimated useful life | 3 years |
Computer and network equipment [Member] | Maximum [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Office equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Motor vehicles [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Leasehold improvements [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful lives [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 Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets weighted average useful lives | 12 Months Ended |
Dec. 31, 2022 | |
Purchased software [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets weighted average useful lives [Line Items] | |
Intangible assets have weighted average useful lives | 4 years 6 months |
MVNO license [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets weighted average useful lives [Line Items] | |
Intangible assets have weighted average useful lives | 10 years |
Capitalized software development costs [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets weighted average useful lives [Line Items] | |
Intangible assets have weighted average useful lives | 3 years |
Internal-use software [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets weighted average useful lives [Line Items] | |
Intangible assets have weighted average useful lives | 5 years |
Developed technology [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of intangible assets weighted average useful lives [Line Items] | |
Intangible assets have weighted average useful lives | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of doubtful accounts for accounts receivable and contract assets - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Doubtful Accounts For Accounts Receivable And Contract Assets Abstract | ||
Balance as of January 1 | $ 13,049 | $ 12,883 |
Provisions (reversal of provision) for doubtful accounts | (153) | 169 |
Write offs | ||
Changes due to foreign exchange | (15) | (3) |
Balance as of December 31 | $ 12,881 | $ 13,049 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of other receivables in prepaid expenses and other current assets - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Other Receivables In Prepaid Expenses And Other Current Assets Abstract | ||
Balance as of January 1 | $ 11,327 | $ 13,992 |
Provisions for doubtful accounts | 133 | |
Reversal of provision for doubtful accounts | (1,926) | |
Write offs | (764) | |
Changes due to foreign exchange | (77) | 25 |
Balance as of December 31 | $ 11,383 | $ 11,327 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of future related to performance obligations - Forecast [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2025 | Dec. 31, 2024 | Dec. 31, 2023 | |
Summary of Significant Accounting Policies (Details) - Schedule of future related to performance obligations [Line Items] | |||
Software development service | $ 255 | $ 177 | $ 1,025 |
Hardware product sales | $ 854 | $ 17 | $ 1,614 |
Concentration of Risks (Details
Concentration of Risks (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Concentration of Risks (Details) [Line Items] | |||
Total cash and cash equivalents and restricted cash of continuing operations (in Dollars) | $ 11,337 | $ 6,328 | $ 3,081 |
Aggregate amount of cash and cash equivalents and restricted cash (in Dollars) | 1,930 | 1,443 | |
Financial institutions deposit (in Dollars) | $ 9,407 | $ 4,885 | |
Concentration risk percentage | 30.05% | ||
Revenue from Rights Concentration Risk [Member] | |||
Concentration of Risks (Details) [Line Items] | |||
Concentration risk percentage | 86.40% | 87.80% | 88.20% |
Revenue from Rights Concentration Risk [Member] | Product concentration and geography concentration risks [Member] | |||
Concentration of Risks (Details) [Line Items] | |||
Concentration risk percentage | 43.40% | 37.60% | 41.80% |
Accounts Receivable [Member] | |||
Concentration of Risks (Details) [Line Items] | |||
Concentration risk percentage | 43% | 77% | |
Five Suppliers [Member] | |||
Concentration of Risks (Details) [Line Items] | |||
Concentration risk percentage | 75.70% | 68.80% |
Concentration of Risks (Detai_2
Concentration of Risks (Details) - Schedule of consolidated financial statements - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule Of Consolidated Financial Statements Abstract | ||
Balance sheet items, except for equity accounts | $ 6.9646 | $ 6.3757 |
Items in the statements of operations and comprehensive loss | $ 6.7261 | $ 6.8976 |
Business Acquisitions and Dis_3
Business Acquisitions and Disposal (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Oct. 19, 2021 | Jul. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 15, 2021 | Feb. 17, 2021 | Jan. 10, 2019 | |
Business Acquisitions and Disposal (Details) [Line Items] | |||||||
Agreements percentage | 51% | ||||||
Ordinary shares issued (in Shares) | 877,183 | ||||||
Cash (in Dollars) | $ 6,750,000 | $ 1,823 | |||||
shares amount (in Shares) | 219,296 | 250,000 | 94,170,000,000 | 11,459 | |||
Ordinary shares issued (in Shares) | 657,887 | 219,296 | |||||
Additional shares issued (in Shares) | 5,000,000 | ||||||
Intangible assets acquisition date amount (in Dollars) | $ 4,492,000 | ||||||
Non-controlling interest amount (in Dollars) | $ 6,513,000 | ||||||
Internal rate | 11.20% | ||||||
Weighted average cost capital | 12% | ||||||
Weighted average return of assets | 12% | ||||||
Employees Percentage | 49% | ||||||
Remeasurement percentage | 5,391% | ||||||
Risk-free rate percentage | 4.10% | ||||||
HHE [Member] | |||||||
Business Acquisitions and Disposal (Details) [Line Items] | |||||||
Ownership percentage | 51% | ||||||
HHE [Member] | |||||||
Business Acquisitions and Disposal (Details) [Line Items] | |||||||
Cash (in Dollars) | $ 3,250,000 | ||||||
Internal rate | 2.40% | ||||||
Weighted average cost capital | 14% | ||||||
Business Combination [Member] | |||||||
Business Acquisitions and Disposal (Details) [Line Items] | |||||||
Acquisition, consideration amount (in Dollars) | $ 10,000,000 | $ 1,669,000 | |||||
Non-controlling interest amount (in Dollars) | $ 6,513,000 | ||||||
Transaction cost (in Dollars) | $ 538,000 | ||||||
Business Combination [Member] | Borqs Wireless Ltd. [Member] | |||||||
Business Acquisitions and Disposal (Details) [Line Items] | |||||||
Business combination, agreement to sell entire equity shares | 100% |
Business Acquisitions and Dis_4
Business Acquisitions and Disposal (Details) - Schedule of considered a business acquisition $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Schedule of considered a business acquisition [Abstract] | |
Net liabilities acquired | $ (2,265) |
Amortizable intangible assets | |
Developed Technology | 4,492 |
Goodwill | 12,208 |
Deferred tax liabilities | (1,143) |
Noncontrolling interests | (6,513) |
Total | 6,779 |
Total purchase price consisted of: | |
- cash consideration (paid in fiscal 2021) | 3,250 |
- share-based consideration (219,296 of the Group’s ordinary shares) | 1,860 |
- contingent considerations | 1,669 |
Total | $ 6,779 |
Business Acquisitions and Dis_5
Business Acquisitions and Disposal (Details) - Schedule of considered a business acquisition (Parentheticals) - shares | Dec. 31, 2022 | Oct. 19, 2021 |
Schedule of considered a business acquisition [Abstract] | ||
Share-based consideration of the Group’s ordinary shares | 219,296 | 657,887 |
Business Acquisitions and Dis_6
Business Acquisitions and Disposal (Details) - Schedule of carrying value of net assets disposed $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) | ||
The fair value of the consideration received | ||
Cash received | [1] | |
Less: Net assets of BWL derecognized on disposal | 303 | |
Loss on disposal | $ (303) | |
[1] According to the agreement, the cash consideration was RMB 1 Yuan. |
Business Acquisitions and Dis_7
Business Acquisitions and Disposal (Details) - Schedule of assets and liabilities of BWL as of disposal $ in Thousands | Dec. 31, 2022 USD ($) |
Assets | |
Cash | $ 4 |
Other current assets | 332 |
Total Assets | 336 |
Liabilities | |
Other current liabilities | 33 |
Total liabilities | $ 33 |
Business Acquisitions and Dis_8
Business Acquisitions and Disposal (Details) - Schedule of deconsolidation of HHE $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Schedule of deconsolidation of HHE [Abstract] | |
The fair value of the consideration received | |
Carrying value of non-controlling interest prior to the deconsolidation | 1,926 |
Less: Net assets of HHE derecognized on deconsolidation | 7,317 |
Loss from deconsolidation | (5,391) |
Derecognition of contingent liabilities recognized during the acquisition | 1,781 |
Net loss on deconsolidation | $ (3,610) |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Provisions increased due to obsolescence | $ 1,924 | $ 2,255 |
Inventories, Net (Details) - Sc
Inventories, Net (Details) - Schedule of inventories - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule Of Inventories Abstract | ||
Raw materials | $ 5,779 | $ 7,714 |
Work in process | 301 | 1,198 |
Finished goods | 79 | 103 |
Inventories, gross | 6,159 | 9,015 |
Less: provision | (1,924) | (2,255) |
Inventories, net | $ 4,235 | $ 6,760 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Prepaid Expenses and Other Current Assets, Net [Abstract] | ||
Provisions | $ 11,383 | $ 11,327 |
Prepaid Expenses and Other Cu_4
Prepaid Expenses and Other Current Assets, Net (Details) - Schedule of prepaid expenses and other current assets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Prepaid Expenses and Other Current Assets [Abstract] | ||
Staff advances | $ 61 | $ 134 |
Prepayment for products | 1,174 | 2,346 |
Advance to OEMs | 14,285 | 16,939 |
Rental and other deposits | 736 | 1,010 |
VAT recoverable | 1,836 | 2,696 |
Receivable from an export/import agent | 1,138 | |
Investment of convertible bond | 338 | 238 |
Cash loan | 100 | 100 |
Others | 354 | 366 |
Prepaid expenses and other current assets | 18,884 | 25,160 |
Less: provision | (11,383) | (11,327) |
Total | $ 7,501 | $ 13,640 |
Lease (Details)
Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Text Block [Abstract] | |||
Weighted average discount rate | 8.16% | 11.20% | |
Weighted-average remaining lease term | 2 years 9 months 29 days | 2 years 10 months 28 days | |
Operating lease cost | $ 592 | $ 537 | $ 899 |
Short-term lease cost | 480 | 379 | 223 |
Operating lease liabilities | $ 678 | $ 1,008 | |
Operating lease liabilities | $ 1,088 |
Lease (Details) - Schedule of f
Lease (Details) - Schedule of future lease payments under operating leases $ in Thousands | Dec. 31, 2022 USD ($) |
Schedule of Future Lease Payments Under Operating Leases [Abstract] | |
2023 | $ 604 |
2024 | 39 |
Total lease payments | 643 |
Less: imputed interest | 68 |
Present value of lease liabilities | $ 575 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property and Equipment, Net [Abstract] | |||
Depreciation expense | $ 346 | $ 114 | $ 79 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details) - Schedule of property and equipment - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
At cost: | ||
Property and equipment, gross | $ 3,547 | $ 3,131 |
Less: accumulated depreciation | (2,523) | (2,407) |
Property and equipment, net | 1,024 | 724 |
Computer and network equipment [Member] | ||
At cost: | ||
Property and equipment, gross | 1,592 | 1,516 |
Office equipment [Member] | ||
At cost: | ||
Property and equipment, gross | 1,318 | 1,118 |
Motor vehicles [Member] | ||
At cost: | ||
Property and equipment, gross | 171 | 185 |
Production equipment [Member] | ||
At cost: | ||
Property and equipment, gross | $ 466 | $ 312 |
Property and Equipment, Net (_3
Property and Equipment, Net (Details) - Schedule of depreciation expense - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property and Equipment, Net (Details) - Schedule of depreciation expense [Line Items] | |||
Depreciation expense, Total | $ 346 | $ 114 | $ 79 |
Cost of revenues [Member] | |||
Property and Equipment, Net (Details) - Schedule of depreciation expense [Line Items] | |||
Depreciation expense, Total | 145 | ||
Sales and marketing expenses [Member] | |||
Property and Equipment, Net (Details) - Schedule of depreciation expense [Line Items] | |||
Depreciation expense, Total | 26 | 1 | |
General and administrative expenses [Member] | |||
Property and Equipment, Net (Details) - Schedule of depreciation expense [Line Items] | |||
Depreciation expense, Total | 155 | 44 | 13 |
Research and development expenses [Member] | |||
Property and Equipment, Net (Details) - Schedule of depreciation expense [Line Items] | |||
Depreciation expense, Total | $ 20 | $ 70 | $ 65 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Minimum [Member] | |
Intangible Assets, Net (Details) [Line Items] | |
Estimated useful lives | 3 years |
Maximum [Member] | |
Intangible Assets, Net (Details) [Line Items] | |
Estimated useful lives | 10 years |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of presents the intangible asset - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Balance at beginning | $ 978 | $ 3,538 |
Additions | ||
Disposal | (554) | |
Amortization expense | (978) | (2,017) |
Foreign currency translation difference | 11 | |
Accumulated impairment loss | ||
Foreign currency translation difference | ||
Balance at ending | 978 | |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance at beginning | 6 | |
Additions | ||
Disposal | ||
Amortization expense | ||
Foreign currency translation difference | (6) | |
Accumulated impairment loss | ||
Foreign currency translation difference | ||
Balance at ending | ||
Capitalized software development costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Balance at beginning | 978 | 3,532 |
Additions | ||
Disposal | (554) | |
Amortization expense | (978) | (2,017) |
Foreign currency translation difference | 17 | |
Accumulated impairment loss | ||
Foreign currency translation difference | ||
Balance at ending | $ 978 |
Long-Term Investments (Details)
Long-Term Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 18, 2018 | Dec. 31, 2018 | |
Long-Term Investments (Details) [Line Items] | ||
Long-term debt, description | the Company agreed to issue 11,459 additional shares to the Selling Shareholders if the aggregate value of the ordinary shares initially issued at the closing to the Selling Shareholders was less than $3,000 in fair value as of August 18, 2018. The board of directors approved and 11,459 shares that were issued on January 10, 2019. | |
Impairment loss | $ 13,000 | |
Colmei Technology International Ltd [Member] | ||
Long-Term Investments (Details) [Line Items] | ||
Ordinary fair value | $ 3,000 | |
Business Combination [Member] | Crave Communication Co., Ltd [Member] | ||
Long-Term Investments (Details) [Line Items] | ||
Agreed to acquire equity percentage | 13.80% | |
Business Combination [Member] | Colmei Technology International Ltd [Member] | ||
Long-Term Investments (Details) [Line Items] | ||
Agreed to acquire equity percentage | 13.80% | |
Ordinary shares issued to selling shareholders (in Shares) | 29,607 | |
Ordinary shares to selling shareholders value | $ 10,000 |
Bank and Other Borrowings (Deta
Bank and Other Borrowings (Details) - USD ($) | 12 Months Ended | |||
Mar. 03, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2020 | |
Bank and Other Borrowings (Details) [Line Items] | ||||
Weighted average interest rate | 103.20% | 21.09% | ||
Loans amount (in Dollars) | $ 361 | |||
Loan an individual shareholder (in Dollars) | $ 1,250 | |||
Agreement shares (in Shares) | 338,968 | |||
American West Pacific International Investment Corporation [Member] | ||||
Bank and Other Borrowings (Details) [Line Items] | ||||
Bearing interest rate | 6% | |||
Short term bank term | $1,250 |
Bank and Other Borrowings (De_2
Bank and Other Borrowings (Details) - Schedule of bank and other borrowings - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Schedule Of Bank And Other Borrowings Abstract | |||
Short-term bank and other borrowings | [1] | $ 361 | |
Long-term bank and other borrowings, current portion | [2] | 1,250 | |
Subtotal | [2] | 1,611 | |
Long-term bank and other borrowings, non-current portion | [2] | ||
Total borrowings | $ 1,611 | ||
[1] The short-term bank and other borrowings outstanding as of December 31, 2021 and 2022 bore a weighted average interest rate of 103.20% and 21.09% per annum, respectively, and were denominated in RMB. The borrowings was obtained from financial institution. The outstanding loans as of December 31, 2021 represented a loan from an individual shareholder. |
Accrued Expenses and Other Pa_3
Accrued Expenses and Other Payables (Details) - Schedule of accrued expenses and other payables - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Schedule of Accrued Expenses and Other Payables [Abstract] | ||
Payroll and welfare payable | $ 2,356 | $ 2,853 |
VAT, and other taxes payable | 514 | 492 |
Payables for office supply and utilities | 124 | 226 |
Payables for purchase of property and equipment | 49 | 53 |
Professional service fees | 748 | 963 |
Payables for share purchase consideration (Note 10) | 10,000 | 10,000 |
Payables for Samsung arbitration compensation (Note 20(e)) | 1,958 | 3,749 |
Interest and penalty payable | 159 | 1,137 |
Advance from customers | 5,422 | 5,084 |
Payables to an export/import agent | 959 | 924 |
Payable related to a lawsuit | 1,593 | 2,108 |
Others | 56 | 60 |
Accrued expenses and other payables | $ 23,938 | $ 27,649 |
Convertible Notes (Details)
Convertible Notes (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Sep. 14, 2021 | May 05, 2021 | May 25, 2022 | Feb. 25, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Convertible Notes (Details) [Line Items] | ||||||
Exercise price of warrants (in Dollars per share) | $ 24.64 | |||||
Percentage of number of ordinary shares | 9.90% | |||||
Exercise price (in Dollars per share) | $ 35.55 | |||||
Warrants price per share (in Dollars per share) | $ 24.64 | |||||
Convertible notes (in Dollars) | $ 16,000,000 | $ 1,570 | ||||
Converted ordinary shares | 1,496,271 | |||||
Ordinary shares | 88,240 | |||||
Warrants shares | 128,418 | |||||
Warrants, description | The Warrants are exercisable immediately for a period of five years for cash, at an exercise price of $13.89 per ordinary share, subject to adjustment in the event of stock dividends and splits, or sales or grants of ordinary shares or ordinary share equivalents in certain transactions at less than the then current exercise price, or where the exercise price is higher than the then-current market price of the ordinary shares, on a cashless exercise basis, using the Black Scholes Value. The Warrants held by a particular holder will not be exercisable to the extent such conversion would result in such holder owning more than 9.9% of the number of ordinary shares outstanding after giving effect to the issuance of ordinary shares issuable upon exercise of such warrants calculated in accordance with Section 13(d) of the Exchange Act. | |||||
Warrants exercised | 88,240 | |||||
Ordinary shares exercised | 128,418 | |||||
Debt discount (in Dollars) | $ 6,994 | $ 15,097 | ||||
Convertible notes | 19,324,628 | 1,496,271 | ||||
Interest expense (in Dollars) | $ 11,387 | $ 9,945 | ||||
Warrant [Member] | ||||||
Convertible Notes (Details) [Line Items] | ||||||
Warrants shares | 3,829,109 | |||||
Warrants shares | 2,782,471 | |||||
Prior Private Placement Warrants [Member] | ||||||
Convertible Notes (Details) [Line Items] | ||||||
Amount of group sold (in Dollars) | $ 15,300 | |||||
Conversion price per share (in Dollars per share) | $ 15.55 | |||||
Accrued Interest percentage | 8% | |||||
Percentage of number of ordinary shares | 9.90% | |||||
Amount of issued additional (in Dollars) | $ 15,300 | |||||
Convertible notes (in Dollars) | $ 1,570 | |||||
Warrants shares | 1,080,406 | 1,770,838 | ||||
February 25 Warrants [Member] | ||||||
Convertible Notes (Details) [Line Items] | ||||||
Exercise price of warrants (in Dollars per share) | $ 35.55 | |||||
April 14 Notes [Member] | ||||||
Convertible Notes (Details) [Line Items] | ||||||
Amount of group sold (in Dollars) | $ 1,000 | |||||
February 25 Notes [Member] | ||||||
Convertible Notes (Details) [Line Items] | ||||||
Amount of group sold (in Dollars) | $ 6,670 | |||||
Warrants shares | 730,994 | |||||
Converted ordinary shares | 1,496,271 | |||||
Warrants shares | 421,339 | |||||
April 14 Notes [Member] | ||||||
Convertible Notes (Details) [Line Items] | ||||||
Warrants shares | 157,563 | |||||
Ordinary shares | 888,083 | |||||
Warrants shares | 421,339 | |||||
May 5 Notes [Member] | ||||||
Convertible Notes (Details) [Line Items] | ||||||
Warrants shares | 421,339 | 1,770,838 | ||||
September 2021 Notes [Member] | ||||||
Convertible Notes (Details) [Line Items] | ||||||
Amount of group sold (in Dollars) | $ 13,575,000 | |||||
Accrued Interest percentage | 8% | |||||
Percentage of number of ordinary shares | 9.90% | |||||
Amount of issued additional (in Dollars) | $ 13,575,000 | |||||
Warrants shares | 3,588,307 | |||||
September 14 Warrants [Member] | ||||||
Convertible Notes (Details) [Line Items] | ||||||
Warrants shares | 2,337,293 | |||||
Ordinary shares | 1,080,406 | |||||
September 2021 Private Placement Notes and Warrants [Member] | ||||||
Convertible Notes (Details) [Line Items] | ||||||
September 2021 private placement notes and warrants description | The September 2021 Notes have a two year term and are convertible into ordinary shares at the lower of (i) $10.45 per share, (ii) 90% of the closing price of the ordinary shares on the date that the registration statement registering the underlying shares is declared effective, or (iii) in the event that the registration statement registering the underlying shares is not declared effective by the date that the shares underlying the September 2021 Notes are eligible to be sold, assigned or transferred under Rule 144, 90% of the closing price of the ordinary shares on such date. | |||||
May 2022 [Member] | ||||||
Convertible Notes (Details) [Line Items] | ||||||
Exercise price of warrants (in Dollars per share) | $ 3.34 | |||||
Convertible notes (in Dollars) | $ 13,550 | |||||
Ordinary shares | 3,829,109 | |||||
Warrants shares | 15,314,982 | |||||
Warrants, description | The notes are due in two years, have an annual interest rate of 10% and are convertible into ordinary shares at 90% of the closing bid price on the day of closing, or 90% of the closing bid price of the ordinary shares on the date that such shares are first eligible to be sold, assigned or transferred under Rule 144 or Regulation S, as applicable, whichever is lower but in no event at less than $0.1 per ordinary share, which was $1.476 per shares. | |||||
Purchase an aggregate shares | 6,049,607 | |||||
May 2022 [Member] | Ordinary shares [Member] | ||||||
Convertible Notes (Details) [Line Items] | ||||||
Warrants shares | 14,578,181 |
Convertible Notes (Details) - S
Convertible Notes (Details) - Schedule of fair value of the warrants | 12 Months Ended |
Dec. 31, 2021 $ / shares | |
February 25 Warrants [Member] | |
Convertible Notes (Details) - Schedule of fair value of the warrants [Line Items] | |
Value per share (in Dollars per share) | $ 1.76 |
Risk-free interest rate | 0.60% |
Expected warrant life | 5 years |
Expected volatility | 170% |
April 14 Warrants [Member] | |
Convertible Notes (Details) - Schedule of fair value of the warrants [Line Items] | |
Value per share (in Dollars per share) | $ 1.25 |
Risk-free interest rate | 0.86% |
Expected warrant life | 5 years |
Expected volatility | 168% |
September 14 Warrants [Member] | |
Convertible Notes (Details) - Schedule of fair value of the warrants [Line Items] | |
Value per share (in Dollars per share) | $ 0.72 |
Risk-free interest rate | 0.78% |
Expected warrant life | 5 years |
Expected volatility | 160% |
May 25 Warrants [Member] | |
Convertible Notes (Details) - Schedule of fair value of the warrants [Line Items] | |
Value per share (in Dollars per share) | $ 0.17 |
Risk-free interest rate | 2.73% |
Expected warrant life | 5 years |
Expected volatility | 152% |
Convertible Notes (Details) -_2
Convertible Notes (Details) - Schedule of fair values of the convertible notes | 12 Months Ended |
Dec. 31, 2022 | |
February 25 Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Coupon rate | 8% |
Risk-free interest rate | 0.13% |
Volatility | 196% |
Bond yield | 28% |
April 14 Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Coupon rate | 8% |
Risk-free interest rate | 0.16% |
Volatility | 196% |
Bond yield | 29% |
May 5 Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Coupon rate | 8% |
Risk-free interest rate | 0.16% |
Volatility | 194% |
Bond yield | 28% |
May 5 Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Coupon rate | 8% |
Risk-free interest rate | 0.16% |
Volatility | 193% |
Bond yield | 28% |
September 14 Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Coupon rate | 8% |
Risk-free interest rate | 0.21% |
Volatility | 200% |
Bond yield | 30% |
May 25 Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Coupon rate | 10% |
Risk-free interest rate | 2.50% |
Volatility | 153% |
Bond yield | 33% |
Convertible Notes (Details) -_3
Convertible Notes (Details) - Schedule of fair values of the convertible notes (Parentheticals) $ in Thousands | Dec. 31, 2022 USD ($) |
February 25 Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Valuation of convertible debt | $ 6,670 |
April 14 Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Valuation of convertible debt | 1,000 |
May 5 Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Valuation of convertible debt | 13,330 |
May 5 Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Valuation of convertible debt | 2,000 |
September 14 Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Valuation of convertible debt | 13,575 |
May 25 Notes [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Valuation of convertible debt | $ 16,000 |
Convertible Notes (Details) -_4
Convertible Notes (Details) - Schedule of proceeds to the notes and the warrants - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule Of Proceeds To The Notes And The Warrants Abstract | ||
Principal amount | $ 2,450 | $ 15,142 |
Less: unamortized discount and debt issuance costs | (759) | (5,152) |
Total | $ 1,691 | $ 9,990 |
Convertible Notes (Details) -_5
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs [Line Items] | ||
Principal | $ 2,450 | $ 15,142 |
Less: unamortized discount and debt issuance costs | (759) | (5,152) |
US$20.0 million 8% note due 2023 ($18.4 million converted in fiscal 2021) [Member] | ||
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs [Line Items] | ||
Principal | 1,567 | |
Less: unamortized discount and debt issuance costs | (463) | |
US$3.0 million 8% note due 2023 (fully converted in fiscal 2021) [Member] | ||
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs [Line Items] | ||
Principal | ||
Less: unamortized discount and debt issuance costs | ||
US$13.58 million 8% note due 2023 [Member] | ||
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs [Line Items] | ||
Principal | 13,575 | |
Less: unamortized discount and debt issuance costs | $ (4,689) | |
US$20.0 million 8% note due 2023 (fully converted in fiscal 2022) [Member] | ||
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs [Line Items] | ||
Principal | ||
Less: unamortized discount and debt issuance costs | ||
US$13.58 million 8% note due 2023 (fully converted in fiscal 2022) [Member] | ||
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs [Line Items] | ||
Principal | ||
Less: unamortized discount and debt issuance costs | ||
US$16.0 million 10% note due 2024 ($13.6 million converted in fiscal 2022) [Member] | ||
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs [Line Items] | ||
Principal | 2,450 | |
Less: unamortized discount and debt issuance costs | $ (759) |
Convertible Notes (Details) -_6
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs (Parentheticals) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Mar. 03, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Feb. 28, 2018 CNY (¥) | |
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs (Parentheticals) [Line Items] | |||||
Convertible notes payable | $ 217 | ||||
Due date | 2023 | ||||
Convertible notes payable amount | ¥ | ¥ 50,000 | ¥ 22,000 | |||
US$20.0 million 8% note due 2023 ($18.4 million converted in fiscal 2021) [Member] | |||||
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs (Parentheticals) [Line Items] | |||||
Convertible notes payable | $ 20,000 | ||||
Interest percentage | 8% | ||||
Due date | 2023 | ||||
Convertible notes payable amount | $ 18,400 | ||||
US$3.0 million 8% note due 2023 (fully converted in fiscal 2021) [Member] | |||||
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs (Parentheticals) [Line Items] | |||||
Convertible notes payable | $ 3,000 | $ 3,000 | |||
Interest percentage | 8% | 8% | |||
Due date | 2023 | ||||
US$13.58 million 8% note due 2023 [Member] | |||||
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs (Parentheticals) [Line Items] | |||||
Convertible notes payable | $ 13,580 | ||||
Interest percentage | 8% | ||||
Due date | 2023 | ||||
US$20.0 million 8% note due 2023 (fully converted in fiscal 2022) [Member] | |||||
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs (Parentheticals) [Line Items] | |||||
Convertible notes payable | $ 20,000 | ||||
Interest percentage | 8% | ||||
Due date | 2023 | ||||
US$13.58 million 8% note due 2023 (fully converted in fiscal 2022) [Member] | |||||
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs (Parentheticals) [Line Items] | |||||
Convertible notes payable | $ 13,580 | ||||
Interest percentage | 8% | ||||
Due date | 2023 | ||||
US$16.0 million 10% note due 2024 ($13.6 million converted in fiscal 2022) [Member] | |||||
Convertible Notes (Details) - Schedule of principal amount and unamortized discount and debt issuance costs (Parentheticals) [Line Items] | |||||
Convertible notes payable | $ 16,000 | ||||
Interest percentage | 10% | ||||
Due date | 2024 | ||||
Convertible notes payable amount | $ 13,600 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - Schedule of accumulated other comprehensive loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $ (1,091) | $ (1,243) | $ (1,904) |
Current year other comprehensive loss income (loss) | (2,421) | 152 | 661 |
Ending balance | (3,512) | (1,091) | (1,243) |
Foreign currency translation [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | (1,091) | (1,243) | (1,904) |
Current year other comprehensive loss income (loss) | (2,421) | 152 | 661 |
Ending balance | $ (3,512) | $ (1,091) | $ (1,243) |
Mainland China Employee Contr_2
Mainland China Employee Contribution Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Total expenses for employee contribution plan | $ 803 | $ 1,026 | $ 721 |
Discontinued operations expense | $ 172 |
Share Based Compensation (Detai
Share Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Mar. 19, 2020 | May 18, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation (Details) [Line Items] | |||||
Purchase of aggregate shares (in Shares) | 146,875 | ||||
Aggregate intrinsic value | |||||
General and administrative expenses | 7,186 | $ 23,558 | $ 33,304 | ||
General and administrative expenses | 2,291 | 17,308 | |||
Selling and marketing expenses | 47 | ||||
Research and development expenses | $ 1,048 | $ 225 | |||
Ordinary shares issued (in Shares) | 3,945,572 | ||||
Director [Member] | |||||
Share Based Compensation (Details) [Line Items] | |||||
Exercise price (in Dollars per share) | $ 643,194 | ||||
Option Issued | |||||
Share Based Compensation (Details) [Line Items] | |||||
Purchase of aggregate shares (in Shares) | 146,875 | ||||
Aggregate intrinsic value | $ 4,828 | ||||
Ordinary Shares Issued in 2017 Plan [Member] | |||||
Share Based Compensation (Details) [Line Items] | |||||
Ordinary shares were fully vested (in Shares) | 873,946 | ||||
General and administrative expenses | $ 18,220 | ||||
Selling and marketing expenses | 87 | ||||
Research and development expenses | $ 1,687 | ||||
Three Non-Employees [Member] | |||||
Share Based Compensation (Details) [Line Items] | |||||
Options granted (in Shares) | 140,625 | ||||
Exercise price (in Dollars per share) | $ 20 | ||||
Advisory Company [Member] | |||||
Share Based Compensation (Details) [Line Items] | |||||
Options granted (in Shares) | 6,250 | ||||
Exercise price (in Dollars per share) | $ 0.16 |
Share Based Compensation (Det_2
Share Based Compensation (Details) - Schedule of Group decided to cancel all the shares of options - Stock Options [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation (Details) - Schedule of Group decided to cancel all the shares of options [Line Items] | |||
Number of options, Beginning | 146,875 | 146,875 | 157,264 |
Weighted average exercise price, Beginning | $ 19.2 | $ 19.2 | $ 84.64 |
Weighted average remaining contractual term (Years), Beginning | 1 year 2 months 19 days | 2 years 4 months 20 days | 5 years 6 months 7 days |
Aggregate intrinsic value, Beginning | $ 4,828 | $ 5,653 | |
Number of options, Granted | 146,875 | ||
Weighted average exercise price, Granted | $ 19.2 | ||
Weighted average remaining contractual term (Years), Granted | |||
Aggregate intrinsic value, Granted | |||
Number of options, Forfeited | (157,264) | ||
Weighted average exercise price, Forfeited | $ 81.92 | ||
Weighted average remaining contractual term (Years), Forfeited | |||
Aggregate intrinsic value, Forfeited | |||
Number of options, Ending | 146,875 | 146,875 | 146,875 |
Weighted average exercise price, Ending | $ 19.2 | $ 19.2 | $ 19.2 |
Weighted average remaining contractual term (Years), Ending | 1 year 2 months 19 days | 1 year 2 months 19 days | 2 years 4 months 20 days |
Aggregate intrinsic value, Ending | $ 4,828 |
Share Based Compensation (Det_3
Share Based Compensation (Details) - Schedule of estimated fair value of options | 12 Months Ended |
Dec. 31, 2020 $ / shares | |
Share Based Compensation (Details) - Schedule of estimated fair value of options [Line Items] | |
Expected dividend yield | 0% |
Exercise multiple (in Dollars per share) | $ 2.2 |
Post-vesting forfeit rate | 0% |
Minimum [Member] | |
Share Based Compensation (Details) - Schedule of estimated fair value of options [Line Items] | |
Risk-free interest rates | 0.56% |
Expected life (years) | 3 years |
Expected volatility | 70.60% |
Fair value of underlying ordinary shares (in Dollars per share) | $ 16.32 |
Fair value of share option (in Dollars per share) | $ 8.8 |
Maximum [Member] | |
Share Based Compensation (Details) - Schedule of estimated fair value of options [Line Items] | |
Risk-free interest rates | 0.57% |
Expected life (years) | 7 years |
Expected volatility | 72.20% |
Fair value of underlying ordinary shares (in Dollars per share) | $ 20 |
Fair value of share option (in Dollars per share) | $ 19.84 |
Taxation (Details)
Taxation (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 01, 2008 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Taxation (Details) [Line Items] | ||||
Unrecognized tax benefits | $ 1,990 | $ 2,174 | ||
Deferred tax assets related to tax loss carry forwards | $ 2,394 | 1,947 | ||
Unrecognized tax benefits ultimately recognized | $ 227 | |||
Borqs HK [Member] | ||||
Taxation (Details) [Line Items] | ||||
Profits tax rate | 16.50% | 16.50% | 16.50% | |
Net tax operating loss from subsidiaries | $ 76,963 | |||
Borqs India [Member] | ||||
Taxation (Details) [Line Items] | ||||
Income tax rate | 25.17% | 25.17% | 25.17% | |
Income tax expense | $ 59 | $ 445 | $ 691 | |
PRC [Member] | ||||
Taxation (Details) [Line Items] | ||||
Statutory income tax rate | 25% | 25% | 25% | 25% |
Withholding tax rate | 10% | |||
Net tax operating loss from subsidiaries | $ 18,657 | |||
Taxable losses expiration term | The PRC taxable losses will expire from 2022 to 2031 if not utilized. | |||
Unrecognized tax benefit income tax expense | ||||
Borqs Beijing [Member] | ||||
Taxation (Details) [Line Items] | ||||
Income tax preferential rate, description | BORQS Beijing was qualified for a High and New Technology Enterprises (“HNTE”) since 2012 and was eligible for a 15% preferential tax rate from 2012 to 2014. In July 2015, BORQS Beijing obtained a new HNTE certificate. BORQS Beijing has successfully renewed the HNTE certificate in December 2021 with effective term of three years until 2023. 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, 2020, 2021 and 2022, 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 until 2019. In accordance with the PRC Income Tax Laws, an enterprise awarded with the HNTE status may enjoy a reduced EIT rate of 15%. | |||
Yuantel Telecom [Member] | ||||
Taxation (Details) [Line Items] | ||||
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 until 2019. 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 period from January 1 through October 29, 2020, Yuantel Telecom enjoyed a preferential tax rate of 15%. | |||
EIT [Member] | ||||
Taxation (Details) [Line Items] | ||||
Statutory income tax rate | 25% |
Taxation (Details) - Schedule o
Taxation (Details) - Schedule of profit (loss) from continuing operations before income taxes - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Profit Loss from Continuing Operations Before Income Taxes [Abstract] | |||
Non-PRC | $ (29,722) | $ (44,550) | $ (29,385) |
PRC | 836 | (11,105) | (6,298) |
Profit before income taxes | $ (28,886) | $ (55,655) | $ (35,683) |
Taxation (Details) - Schedule_2
Taxation (Details) - Schedule of income tax benefit (expense) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Income Tax Benefit Expense [Abstract] | |||
Current | $ (343) | $ (1,410) | |
Deferred | 284 | 445 | 1,004 |
Income tax expense | $ (59) | $ 445 | $ (406) |
Taxation (Details) - Schedule_3
Taxation (Details) - Schedule of reconciliation of tax computed by applying the statutory income tax rate - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Reconciliation of Tax Computed by Applying the Statutory Income Tax Rate [Abstract] | |||
Loss before income taxes | $ (28,886) | $ (55,655) | $ (35,683) |
Income tax income computed at the statutory income tax rate at 25% | 7,220 | 13,914 | 4,594 |
Non-deductible expenses | 71 | (1,095) | 380 |
Non-taxation income | 19 | ||
Preferential rate | 1,970 | (935) | (820) |
Current and deferred tax rate differences | 299 | (709) | 291 |
Foreign rate differences | (3,682) | (3,316) | (5) |
Change of valuation allowance | (6,860) | (8,024) | (4,587) |
Statutory income | |||
R&D super deduction | 904 | 610 | 323 |
Income tax (expense) benefit | $ (59) | $ 445 | $ (406) |
Taxation (Details) - Schedule_4
Taxation (Details) - Schedule of significant components of deferred taxes - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets | ||
Inventories provision | $ 32 | $ 28 |
Accrued salary and welfare payable | 217 | 214 |
Property, plant and equipment | 175 | |
Tax losses | 229 | |
Valuation allowance | ||
Others | ||
Total deferred tax assets | 424 | 471 |
Deferred tax liabilities | ||
Intangible assets | 15 | 671 |
Deferred cost of revenue | 15 | |
Others | 894 | 325 |
Total deferred tax liabilities | $ 909 | $ 1,011 |
Taxation (Details) - Schedule_5
Taxation (Details) - Schedule of roll-forward of unrecognized tax benefits - Unrecognized Tax Benefits [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Taxation (Details) - Schedule of roll-forward of unrecognized tax benefits [Line Items] | |||
Balance at beginning of year | $ 2,174 | $ 2,124 | $ 1,987 |
Reversal based on tax positions related to prior years | |||
Additions based on tax positions related to the current year | |||
Foreign currency translation difference | (184) | 50 | 137 |
Balance at end of year | $ 1,990 | $ 2,174 | $ 2,124 |
Related Party Transactions (Det
Related Party Transactions (Details) - Bluecap Mobile Private Limited [Member] - USD ($) $ in Thousands | Dec. 31, 2022 | Jul. 31, 2018 |
Related Party Transactions (Details) [Line Items] | ||
Short-term loan | $ 1,325 | |
Interest rate | 8% | |
Outstanding principal balance |
Related Party Transactions (D_2
Related Party Transactions (Details) - Schedule of related parties | 12 Months Ended |
Dec. 31, 2022 | |
Bluecap [Member] | |
Related Party Transactions (Details) - Schedule of related parties [Line Items] | |
Relationship with the Group | A company controlled by a key management of the Group |
Hareesh Ramanna [Member] | |
Related Party Transactions (Details) - Schedule of related parties [Line Items] | |
Relationship with the Group | Executive Vice President and Co-General Manager of Connected Solutions Business Unit |
Related Party Transactions (D_3
Related Party Transactions (Details) - Schedule of significant related party transactions - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Software services provided to: | |||
Bluecap | $ 507 |
Related Party Transactions (D_4
Related Party Transactions (Details) - Schedule of significant related party balances - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Loan from: | |||
Bluecap | $ 1,834 | $ 2,695 | |
Interest expense on loan from: | |||
Bluecap | $ 746 | $ 658 | $ 438 |
Restricted Net Assets (Details)
Restricted Net Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Net Assets (Details) [Line Items] | ||
Income tax, description | A foreign-invested enterprise is required to allocate at least 10% of its annual net profit to the general reserve until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. | |
Statutory reserves | $ 1,901 | $ 1,901 |
Restricted net assets | 82,072 | |
Subsidiaries [Member] | ||
Restricted Net Assets (Details) [Line Items] | ||
Statutory reserves | $ 1,901 | $ 1,901 |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
Mar. 03, 2023 | Oct. 29, 2020 | Jun. 08, 2020 | May 07, 2020 | Mar. 03, 2020 | May 20, 2019 | Apr. 18, 2019 | Dec. 15, 2018 | Nov. 27, 2018 | Feb. 28, 2018 | Jan. 10, 2018 | Feb. 28, 2022 | Oct. 20, 2021 | Jun. 15, 2021 | Oct. 21, 2020 | May 31, 2020 | Jan. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | May 25, 2022 | Oct. 19, 2021 | Feb. 17, 2021 | Feb. 10, 2021 | Jan. 10, 2019 | |||
Equity (Details) [Line Items] | |||||||||||||||||||||||||||
Repurchase of ordinary shares (in Shares) | 60,384 | ||||||||||||||||||||||||||
Aggregate purchase price | $ 10,070 | ||||||||||||||||||||||||||
Purchase price per share (in Dollars per share) | $ 166.4 | ||||||||||||||||||||||||||
Purchase amount paid | $ 10,048 | ||||||||||||||||||||||||||
Cancelled ordinary shares (in Shares) | 60,384 | ||||||||||||||||||||||||||
Settlement of arbitration related, description | the Secretariat of the International Court of Arbitration for the International Chamber of Commerce issued a final award to Samsung Electronics Co., Ltd. (“Samsung”) that constituted the final decision on the Group’s dispute with Samsung over a sales contract. The court order required the Group to pay to Samsung total payments of $4,650 including: i) $4,280 as the “Principal Amount”, plus (ii) accrued interest of $370 computed from March 31, 2019 on the outstanding balance of the Principal Amount at a simple interest rate of 9% per annum (together with the Principal Amount, collectively referred to as the “Settlement Payment”). On April 26, 2019, the Group entered into a settlement agreement with Samsung according to which, the Group shall pay the full and total amount of the Settlement Payment in equal monthly installments over a period of twenty-four months beginning on March 31, 2019. In addition, a total of 138,108 ordinary shares were issued to Samsung as escrow shares in the year 2019 as security for the payments. The Group recorded the fair value of the shares issued in an aggregate of $6,401 in additional paid-in capital, with a corresponding amount included in subscription receivable. Due to cash constraints, particularly due to the COVID-19 pandemic, the Group has not made monthly installments to Samsung since the fourth quarter of 2019, and Samsung has not pursued alternative means of repayment from the Group.In April 2022, the Group executed a settlement agreement with Samsung regarding the payments. The total amount of principal and accrued interest as of the end of May 2022 is approximately $4.4 million less $1.6 million paid in cash on May 27, 2022, equaling a net amount of approximately $2.8 million. According to the agreement, the Group shall pay the full and total amount of the payments in equal monthly installments over a period of eighteen months beginning on July 2022. In addition, a total of 1,003,593 ordinary shares were issued to Samsung as escrow shares as security for the payments. The Group recorded the fair value of the shares issued in an aggregate of $2,760 in additional paid-in capital, with a corresponding amount included in subscription receivable. | ||||||||||||||||||||||||||
Ordinary shares issued (in Shares) | 250,000 | 219,296 | 94,170,000,000 | 11,459 | |||||||||||||||||||||||
Gain on debt settlement | $ 484 | $ 217 | $ (17,199) | $ 26 | |||||||||||||||||||||||
Issuance value of ordinary shares | 1,988 | ||||||||||||||||||||||||||
General and administrative expense | 937 | ||||||||||||||||||||||||||
Financing expense | 182 | ||||||||||||||||||||||||||
Repay of principal amount | $ 1 | 111 | |||||||||||||||||||||||||
Shares issued (in Shares) | 32,943 | 14,578,181 | |||||||||||||||||||||||||
Stock price (in Dollars per share) | $ 15.38 | ||||||||||||||||||||||||||
Purchase | $ 18,000 | $ 17,870 | |||||||||||||||||||||||||
Sale of common shares (in Shares) | 57,182,633 | 10,209,481 | 1,420,000 | ||||||||||||||||||||||||
Settlement of debt | $ 1,000 | $ 16,580 | $ 1,270 | ||||||||||||||||||||||||
Debt | 19,140 | ||||||||||||||||||||||||||
Principal loan amount | $ 1,000 | ||||||||||||||||||||||||||
Interest rate | 12% | ||||||||||||||||||||||||||
Loan principal with shares (in Shares) | 99,206 | ||||||||||||||||||||||||||
Loss on Debt settlement | 619 | ||||||||||||||||||||||||||
loans | $ 1,250 | $ 3,669 | [1] | ||||||||||||||||||||||||
Shares issued (in Shares) | 338,968 | ||||||||||||||||||||||||||
Debt settlements | $ 217 | ||||||||||||||||||||||||||
Loan principal payment | $ 1,000 | ||||||||||||||||||||||||||
Principal shares (in Shares) | 99,206 | ||||||||||||||||||||||||||
Compensation for service future project shares (in Shares) | 150,794 | ||||||||||||||||||||||||||
Convertible notes | $ 1,570 | $ 16,000,000 | |||||||||||||||||||||||||
Converted ordinary shares (in Shares) | 1,496,271 | ||||||||||||||||||||||||||
Warrants shares (in Shares) | 128,418 | ||||||||||||||||||||||||||
Ordinary shares (in Shares) | 88,240 | ||||||||||||||||||||||||||
Capital amount | $ 297 | $ 438 | |||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||
Equity (Details) [Line Items] | |||||||||||||||||||||||||||
Ordinary shares issued (in Shares) | 60,679 | ||||||||||||||||||||||||||
Per shares (in Dollars per share) | $ 24.96 | ||||||||||||||||||||||||||
Shares issued (in Shares) | 19,324,628 | ||||||||||||||||||||||||||
Loan principal with shares (in Shares) | 2,782,471 | ||||||||||||||||||||||||||
loans | [1] | ||||||||||||||||||||||||||
Warrant [Member] | |||||||||||||||||||||||||||
Equity (Details) [Line Items] | |||||||||||||||||||||||||||
Shares issued (in Shares) | 877,183 | ||||||||||||||||||||||||||
Warrants shares (in Shares) | 2,782,471 | ||||||||||||||||||||||||||
Warrants (in Shares) | 3,829,109 | ||||||||||||||||||||||||||
Private Placement Warrants [Member] | |||||||||||||||||||||||||||
Equity (Details) [Line Items] | |||||||||||||||||||||||||||
Convertible notes | $ 1,570 | ||||||||||||||||||||||||||
Warrants shares (in Shares) | 1,080,406 | 1,770,838 | |||||||||||||||||||||||||
Share Purchase Agreement [Member] | |||||||||||||||||||||||||||
Equity (Details) [Line Items] | |||||||||||||||||||||||||||
Investment agreement, description | the Group entered into a Share Purchase Agreement (“Purchase Agreement”) with Shanghai KADI Machinery Technology Co., Ltd. (“KADI SH”), KADI Technologies Limited (“KADI HK”) (collectively, “KADI”) and Lin Hu and Shou Huajun, the sole shareholders of KADI SH and KADI HK (the “KADI’s Selling Shareholders”), for the purchase of 60% of the issued and outstanding ordinary shares of KADI SH (“KADI SH Shares”) and 60% of the issued and outstanding ordinary shares of KADI HK (“KADI HK Shares”, together with the KADI SH Shares, the “KADI Shares”). The transaction with KADI consists of total cash consideration of $4,600 in installments and share consideration equivalent to $9,750 in installments upon achievement of earn-outs by KADI SH from 2018 to 2021. As of December 31, 2018, $600 was prepaid to KADI SH. The transaction did not close as of December 31, 2019 due to KADI not able to present audited financial statements as required by the earn-out provisions of the agreement and that KADI has not performed the ownership change registration at the local jurisdiction. Although KADI was not able to present audited financial statements as required by the earn-out provisions of the agreement and has not performed the ownership change registration, 102,035 of Borqs’ ordinary shares were issued to KADI on January 9, 2019, for which the Group recorded the fair value of these shares in an aggregate of $5,217 in additional paid-in capital, with a corresponding amount included in subscription receivable. As a result, future capital commitments for KADI has been voided due to KADI’s breach of provisions of the agreements. As of the filing of this annual report, the Group has cancelled all the ordinary shares of 36,813 shares, which were issued into escrow account with KADI. Also, the Group is in negotiation with KADI for a reduced ownership of KADI or a recission of the acquisition. | ||||||||||||||||||||||||||
KADI Agreement [Member] | |||||||||||||||||||||||||||
Equity (Details) [Line Items] | |||||||||||||||||||||||||||
Investment agreement, description | i) a payment of $600 in cash previously paid to KADI, ii) the return of 65,222 ordinary shares of Borqs previously issued to the owners of KADI, and iii) payment in cash for loss of profit from KADI’s projected business in the amount of $5.3 million. As of the filing of this annual report, the arbitration is in its initial stages and there is no assurance that the outcome of the proceedings will be in favor of Borqs. | ||||||||||||||||||||||||||
Equity Financing Agreement [Member] | |||||||||||||||||||||||||||
Equity (Details) [Line Items] | |||||||||||||||||||||||||||
Equity financing agreement, description | the Group entered into an equity financing agreement with Chongqing Youtong owned by the Chongqing Government in the PRC. According to the agreement, Chongqing Youtong purchased 9.9 % equity interest of the Company equivalent to 233,392 ordinary shares with a total purchase consideration of $13,865 on May 16, 2019, for which 75% of the total purchase consideration amounting to $10,399 in cash was received. The remaining 25% of the total purchase consideration amounting to $3,466 will be contributed in the form of real property and equipment (the “Property Investment”) by Chongqing Youtong within six months from May 16, 2019 the date that the cash investment portion was completed. However, the Property Investment has not yet been completed.In February 2023, the Group entered into a settlement agreement with Chongqing Youtong on the settlement of the equity financing. For the cash consideration with the amount of $10,399, the Group agreed to repay Chongqing Youtong the principal plus 8% annually interest with its ordinary shares. Besides, both parties agreed to not proceed with the remainder 25% investment and the related previous issued 58,348 shares will not withdraw. Also, to compensate Youtong’s investment loss from the share price decline, the Group issued additional 56,024,444 ordinary shares in February 2023 equal to approximately $13.46 million including interest expense from May 2019 to February 2023, with annual interest rate of 8%. By entering into the agreement not to proceed with the remainder 25% investment in the form of real property and equipment, the amount was released from subscriptions receivable, and a loss related to equity financing recognized during the year ended December 31, 2022. | ||||||||||||||||||||||||||
Coming Technologies Limited [Member] | |||||||||||||||||||||||||||
Equity (Details) [Line Items] | |||||||||||||||||||||||||||
Total amount | $ 1,998 | ||||||||||||||||||||||||||
Amount payable for product | 880 | ||||||||||||||||||||||||||
Amount of settlement | 880 | ||||||||||||||||||||||||||
Purchase amount | $ 937 | ||||||||||||||||||||||||||
Liable for total amount | 937 | ||||||||||||||||||||||||||
Compensation settlement amount | $ 182 | ||||||||||||||||||||||||||
Value of share issued, percentage | 10% | ||||||||||||||||||||||||||
TianFu [Member] | |||||||||||||||||||||||||||
Equity (Details) [Line Items] | |||||||||||||||||||||||||||
Repayment amount | 658 | ||||||||||||||||||||||||||
Accounts payable | 658 | ||||||||||||||||||||||||||
EPIC [Member] | |||||||||||||||||||||||||||
Equity (Details) [Line Items] | |||||||||||||||||||||||||||
Repayment amount | $ 222 | ||||||||||||||||||||||||||
Accounts payable | $ 222 | ||||||||||||||||||||||||||
American West Pacific International Investment Corporation [Member] | |||||||||||||||||||||||||||
Equity (Details) [Line Items] | |||||||||||||||||||||||||||
Repay of principal amount | $ 400 | ||||||||||||||||||||||||||
Collateral restricted ordinary shares (in Shares) | 250,000 | ||||||||||||||||||||||||||
Collateral restricted ordinary shares, description | The Group has been offered a term loan for 6 months with interest at 12% per annum. According to the agreement, the Group issued 250,000 restricted ordinary shares to be held in escrow at Continental Stock Transfer & Trust Company as collateral. The Group recorded the fair value of the shares issued in an aggregate of $4,080 in additional paid-in capital, with a corresponding amount included in subscription receivable. | ||||||||||||||||||||||||||
Beijing Zhongpeng Law Firm [Member] | |||||||||||||||||||||||||||
Equity (Details) [Line Items] | |||||||||||||||||||||||||||
Consulting legal fees and costs | $ 1,200 | ||||||||||||||||||||||||||
Debts repayments with ordinary shares, description | On October 29, 2020, the Court issued an agreed order for the settlement of the claim and approved the issuance of 98,808 common shares of the Company in exchange for the settlement. The shares issued on November 4, 2020 at the closing price of the Company stock of $15.92 per share. The Company recognized loss of $356 in loss on debt settlement during fiscal year 2020. Significantly affected by the pandemic during 2020 when business activities dropped over 70% from the prior year, operational cash flow was severely challenged and we could not payback these back-due fees in cash. | ||||||||||||||||||||||||||
[1] Refer to Note 20(c) for information regarding settlement of equity financing. |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
Internal rate of return | 11.20% | |
Weighted average cost of capital | 12% | |
Weighted average return of assets | 12% | |
Contingent consideration (in Dollars) | $ 1,669 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details) - Schedule of financial assets and liabilities $ in Thousands | Dec. 31, 2021 USD ($) |
2021 | |
Contingent consideration - current | $ (1,392) |
Contingent consideration – non-current | (389) |
Total | $ (1,781) |
Debt Forgiveness (Details)
Debt Forgiveness (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Debt Forgiveness Abstract | |
Account payable | $ 2.1 |
Other income | $ 2.1 |
Loss Per Share (Details)
Loss Per Share (Details) | Feb. 28, 2023 shares |
Subsequent Event [Member] | |
Loss Per Share (Details) [Line Items] | |
Ordinary shares, issued | 56,024,444 |
Loss Per Share (Details) - Sche
Loss Per Share (Details) - Schedule of basic and diluted loss per share - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net loss from continuing operations | $ (28,945) | $ (55,210) | $ (36,089) |
Less: Net loss attributable to noncontrolling interest from continuing operation | (190) | (54) | (1) |
Net loss from continuing operations attributable to Borqs Technologies, Inc. | (28,755) | (55,156) | (36,088) |
Accretion to redemption value of preferred shares for continuing operations | |||
Net loss from continuing operations attributable to Borqs Technologies, Inc.’s ordinary shareholders | (28,755) | (55,156) | (36,088) |
Net income (loss) from discontinued operations | (9,916) | (1,392) | 1,302 |
Less: Net income (loss) attributable to noncontrolling interest from discontinued operation | (4,639) | (683) | 716 |
Net income (loss) from discontinued operations attributable to Borqs Technologies, Inc. | (5,277) | (709) | 586 |
Net loss attributable to Borqs Technologies, Inc.’s ordinary shareholders | $ (34,032) | $ (55,865) | $ (35,502) |
Denominator: | |||
Weighted-average number of ordinary shares—basic (in Shares) | 22,951,092 | 7,370,719 | 2,782,188 |
Weighted-average number of ordinary shares—diluted (in Shares) | 22,951,092 | 7,370,719 | 2,782,188 |
Weighted-average number of shares outstanding from discontinued operations—basic (in Shares) | 22,951,092 | 7,370,719 | 2,782,188 |
Weighted-average number of shares outstanding from discontinued operations—diluted (in Shares) | 22,951,092 | 7,370,719 | 2,782,188 |
Net loss per share from continuing operations attributable to Borqs Technologies, Inc. | |||
Loss per share—Basic: (in Dollars per share) | $ (1.25) | $ (7.48) | $ (12.97) |
Loss per share—Diluted: (in Dollars per share) | (1.25) | (7.48) | (12.97) |
Net earnings (loss) per share from discontinued operations attributable to Borqs Technologies, Inc. | |||
Earnings (loss) per share—Basic: (in Dollars per share) | (0.23) | (0.1) | 0.21 |
Earnings (loss) per share—Diluted: (in Dollars per share) | (0.23) | (0.1) | 0.21 |
Net loss per share attributable to Borqs Technologies, Inc. | |||
Loss per share—Basic: (in Dollars per share) | (1.48) | (7.58) | (12.76) |
Loss per share—Diluted: (in Dollars per share) | $ (1.48) | $ (7.58) | $ (12.76) |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies (Details) [Line Items] | |||
Recognized accrual | $ 1,990 | $ 2,174 | |
Contingent liability | $ 3,200 | ||
Accrued amount | 400 | ||
Reversed contingent liability | $ 3,200 | ||
Minimum [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Estimated loss | 3,200 | ||
Maximum [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Estimated loss | $ 3,600 |
Parent Company Only Condensed_3
Parent Company Only Condensed Financial Information (Details) - Schedule of condensed balance sheets - Parent Company [Member] - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Prepaid expenses and other current assets | $ 1,514 | |
Amount due from related parties | 38,405 | $ 41,646 |
Total current assets | 39,919 | 41,646 |
Non-current assets | ||
Investments in subsidiaries and Consolidated VIEs | (18,166) | (33,781) |
Total non-current assets | (18,166) | (33,781) |
Total assets | 21,753 | 7,865 |
Current liabilities | ||
Accrued expenses and other payables | 14,658 | 14,733 |
Total current liabilities | 14,658 | 14,733 |
Total liabilities | 14,658 | 14,733 |
Shareholders’ (deficit) equity | ||
Additional paid-in capital | 310,267 | 262,271 |
Accumulated deficit | (305,073) | (271,040) |
Statutory reserve | 1,901 | 1,901 |
Total shareholders’ (deficit) equity | 7,095 | (6,868) |
Total liabilities and shareholders’ equity | $ 21,753 | $ 7,865 |
Parent Company Only Condensed_4
Parent Company Only Condensed Financial Information (Details) - Schedule of condensed statements of operations - Parent Company [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Expenses | |||
General and administrative expenses | $ (1,653) | $ (2,450) | $ (2,125) |
Operating loss | (1,653) | (2,450) | (2,125) |
Share of losses of subsidiaries and Consolidated VIEs | (37,208) | (54,152) | (33,965) |
Loss before income taxes | (38,861) | (56,602) | (36,090) |
Income tax expense | |||
Net loss | $ (38,861) | $ (56,602) | $ (36,090) |
Parent Company Only Condensed_5
Parent Company Only Condensed Financial Information (Details) - Schedule of condensed statements of comprehensive income (loss) - Parent Company [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Statement of Income Captions [Line Items] | |||
Net loss | $ (38,861) | $ (56,602) | $ (36,090) |
Other comprehensive (loss) income, net of tax of nil: | |||
Foreign currency translation adjustments, net of tax of nil | (1,456) | 507 | 1,498 |
Other comprehensive income (loss), net of tax of nil: | |||
Comprehensive loss | (40,317) | (56,095) | (34,592) |
Comprehensive loss attributable to the Company’s ordinary shareholders | $ (40,393) | $ (56,085) | $ (34,633) |
Parent Company Only Condensed_6
Parent Company Only Condensed Financial Information (Details) - Schedule of condensed statements of cash flows - Parent Company [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net cash generated from operating activities | |||
Net cash used in investing activities | |||
Net cash generated from (used in) financing activities | |||
Net increase (decrease) in cash and cash equivalent and restricted cash | |||
Cash and cash equivalent and restricted cash at beginning of the year | |||
Cash and cash equivalent and restricted cash at end of the year | |||
Cash and cash equivalents at end of the year | |||
Restricted cash at the end of the year | |||
Total cash and cash equivalents and restricted cash at the end of year |
Parent Company Only Condensed_7
Parent Company Only Condensed Financial Information (Details) - Schedule of related party balances - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Borqs HK [Member] | ||
Amount due from (to) related parties | ||
Amount due from (to) related parties | $ 17,280 | $ 17,472 |
Borqs Beijing [Member] | ||
Amount due from (to) related parties | ||
Amount due from (to) related parties | (113) | (83) |
Borqs USA [Member] | ||
Amount due from (to) related parties | ||
Amount due from (to) related parties | 808 | 808 |
Borqs International [Member] | ||
Amount due from (to) related parties | ||
Amount due from (to) related parties | $ 20,430 | $ 23,449 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | May 03, 2023 | Mar. 14, 2023 | Dec. 31, 2022 | Oct. 19, 2021 |
Subsequent Events (Details) [Line Items] | ||||
Cash balance | $ 1,823 | $ 6,750,000 | ||
Forecast [Member] | ||||
Subsequent Events (Details) [Line Items] | ||||
Other Subsequent Events description | the Group received written notification from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Group has not regained compliance with the minimum bid price of $1 required for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”).The Group has engaged an advisory firm to request a hearing which will stay the suspension or delisting action pending the hearing and the expiration of any extension period granted by the Panel following the hearing. Consequently, the Group’s ordinary shares are expected to remain listed on The Nasdaq Capital Market at least until the Panel renders a decision following the hearing. There can be no assurance that the Panel will determine to continue the Company’s listing on the Nasdaq Capital Market or that the Group will timely evidence compliance with the terms of any extension that may be granted by the Panel following the hearing. | |||
Hong Kong [Member] | ||||
Subsequent Events (Details) [Line Items] | ||||
Left amont | $ 400 |