Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2022 shares | |
Entity Addresses | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2022 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-38261 |
Entity Registrant Name | Kaixin Auto Holdings |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | 9/F, Tower A, Dongjin International Center |
Entity Address, Address Line Two | Huagong Road, |
Entity Address, Address Line Three | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Postal Zip Code | 100015 |
Entity Address, Country | CN |
Title of 12(b) Security | Ordinary shares, par value US$0.00005 per share |
Trading Symbol | KXIN |
Security Exchange Name | NASDAQ |
Entity Common Stock, Shares Outstanding | 228,250,210 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | No |
Entity Interactive Data Current | No |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Auditor Name | Marcum Asia CPAs LLP |
Auditor Firm ID | 5395 |
Auditor Location | New York, NY |
Entity Central Index Key | 0001713539 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Business Contact [Member] | |
Entity Addresses | |
Entity Address, Address Line One | 9/F, Tower A, Dongjin International Center |
Entity Address, Address Line Two | Huagong Road, |
Entity Address, Address Line Three | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Postal Zip Code | 100015 |
Entity Address, Country | CN |
Contact Personnel Name | Yi Yang |
City Area Code | 86 |
Local Phone Number | 10 6720 4948 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 7,102 | $ 5,263 |
Inventories | 31 | 404 |
Other receivables | 8,848 | |
Prepayment for vehicle purchase and other current assets, net | 26,321 | 53,270 |
TOTAL CURRENT ASSETS | 42,302 | 58,937 |
Property and equipment, net | 49 | 22 |
Intangible assets, net | 12,903 | 14,640 |
Operating lease right-of-use assets | 428 | 561 |
TOTAL NON-CURRENT ASSETS | 13,380 | 15,223 |
TOTAL ASSETS | 55,682 | 74,160 |
CURRENT LIABILITIES: | ||
Accounts payable | 295 | |
Advances from customers | 553 | |
Short-term borrowings | 2,000 | 6,277 |
Short-term operating lease liabilities | 119 | 85 |
Convertible notes | 4,305 | |
Income tax payable | 776 | 3,399 |
Amounts due to related parties | 1,627 | 3,943 |
Warrant liability | 24 | 340 |
Payable for sales incentive | 1,638 | |
Accrued expenses and other current liabilities | 9,379 | 14,491 |
TOTAL CURRENT LIABILITIES | 19,868 | 29,383 |
Long-term bank loan | 2,000 | |
Long-term lease liabilities | 311 | 431 |
Convertible notes | 2,022 | |
Payable for dealership settlement | 2,245 | |
TOTAL NON-CURRENT LIABILITIES | 311 | 6,698 |
TOTAL LIABILITIES | 20,179 | 36,081 |
COMMITMENT AND CONTIGENCIES | ||
SHAREHOLDERS' EQUITY | ||
Ordinary Shares (par value of $0.00005 per shares; 1,000,000,000 shares authorized, 163,129,655 and 238,368,861 shares issued as of December 31, 2021 and 2022, respectively. 163,129,655 and 228,250,210 shares issued and outstanding as of December 31, 2021 and 2022, respectively) | 11 | 8 |
Series D convertible preferred shares (par value of $0.0001, 6,000 and 6,000 shares authorized as of December 31, 2021 and 2022, respectively. 6,000 shares and 6,000 issued and outstanding as of December 31, 2021 and 2022 respectively.) Series F convertible preferred shares (par value of 0.00005, nil and 50,000 shares authorized as of December 31, 2021 and 2022, respectively. Nil and 50,000 issued and outstanding as of December 31, 2021 and 2022 respectively.) | 3 | 1 |
Additional paid-in capital | 312,831 | 227,310 |
Statutory reserve | 8 | 8 |
Accumulated deficit | (283,008) | (198,302) |
Accumulated other comprehensive income | 1,470 | 637 |
TOTAL KAIXIN AUTO HOLDINGS' SHAREHOLDERS' EQUITY | 31,315 | 29,662 |
Non-controlling interests | 4,188 | 8,417 |
TOTAL EQUITY | 35,503 | 38,079 |
TOTAL LIABILITIES AND EQUITY | $ 55,682 | $ 74,160 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Ordinary shares, par value (in dollars per share) | $ 0.00005 | $ 0.00005 |
Ordinary shares, authorized | 1,000,000,000 | 1,000,000,000 |
Ordinary shares, issued | 238,368,861 | 163,129,655 |
Ordinary shares outstanding | 228,250,210 | 163,129,655 |
Series D convertible preferred shares | ||
Preferred shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred shares, authorized | 6,000 | 6,000 |
Preferred shares, issued | 6,000 | 6,000 |
Preferred shares, outstanding | 6,000 | 6,000 |
Series F convertible preferred shares | ||
Preferred shares, par value (in dollars per share) | $ 0.00005 | $ 0.00005 |
Preferred shares, authorized | 50,000 | 0 |
Preferred shares, issued | 50,000 | 0 |
Preferred shares, outstanding | 50,000 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONSCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||
REVENUE, NET | $ 82,840 | $ 253,840 | $ 1,207 |
Cost of revenues | 82,194 | 248,583 | 1,207 |
GROSS PROFIT | 646 | 5,257 | |
Selling and marketing expenses | 2,097 | 481 | 11 |
General and administrative expenses | 46,488 | 43,734 | 265 |
Impairment of goodwill | 143,655 | ||
Total operating expenses | 48,585 | 187,870 | 276 |
LOSS FROM OPERATIONS | (47,939) | (182,613) | (276) |
Other income (expenses), net | 728 | (4) | 25 |
Foreign currency exchange gain (loss) | (139) | (432) | 86 |
Interest expense, net | (1,034) | (245) | (1) |
Gain on disposal of subsidiaries | 1,578 | ||
Change in fair value of warrants | 316 | 1,995 | |
Impairment of prepaid expenses and other current assets | (22,921) | (4,216) | |
Provision for dealership settlement | (15,134) | (11,142) | |
LOSS BEFORE INCOME TAX PROVISION | (84,545) | (196,657) | (166) |
Income tax benefit (expenses) | (74) | 729 | |
NET LOSS | (84,619) | (195,928) | (166) |
Less: net income attributable to non-controlling interests | 87 | 651 | |
NET LOSS ATTRIBUTABLE TO KAIXIN'S SHAREHOLDERS | (84,706) | (196,579) | (166) |
Other comprehensive income | |||
Foreign currency translation adjustment | 1,866 | 512 | 181 |
COMPREHENSIVE INCOME (LOSS) | (82,753) | (195,416) | 15 |
Less: comprehensive income attributable to non-controlling interest | (940) | 768 | |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO KAIXIN'S SHAREHOLDERS | $ (81,813) | $ (196,184) | $ 15 |
Net loss per share | |||
Net loss per share - basic | $ (0.0004) | $ (1.7181) | $ (0.0022) |
Net loss per share - diluted | $ (0.0004) | $ (1.7181) | $ (0.0022) |
Weighted average shares used in calculating net loss per share | |||
Weighted average shares used in calculating net loss per share - Basic | 200,167,152 | 114,416,353 | 74,035,502 |
Weighted average shares used in calculating net loss per share - Diluted | 200,167,152 | 114,416,353 | 74,035,502 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Ordinary shares | Preferred shares | Additional paid-in capital | Accumulated earnings (deficit) | Statutory reserves | Accumulated Other Comprehensive income (loss) | Total shareholders' equity | Non-controlling interest | Total |
Balance at beginning at Dec. 31, 2019 | $ 4,000 | $ 0 | $ 5,499,000 | $ (1,557,000) | $ 8,000 | $ 61,000 | $ 4,015,000 | $ 0 | $ 4,015,000 |
Balance at beginning (in shares) at Dec. 31, 2019 | 74,035,502 | 0 | |||||||
STATEMENTS OF CHANGES IN EQUITY | |||||||||
Shareholder investment | 8,096,000 | 8,096,000 | 8,096,000 | ||||||
Capital divestments | (5,963,000) | (5,963,000) | (5,963,000) | ||||||
Net loss | (166,000) | (166,000) | (166,000) | ||||||
Foreign currency translation adjustment | 181,000 | 181,000 | 181,000 | ||||||
Foreign currency translation adjustment, net of nil income taxes | 181,000 | 181,000 | 181,000 | ||||||
Balance at ending at Dec. 31, 2020 | $ 4,000 | 7,632,000 | (1,723,000) | 8,000 | 242,000 | 6,163,000 | 6,163,000 | ||
Balance at ending (in shares) at Dec. 31, 2020 | 74,035,502 | ||||||||
STATEMENTS OF CHANGES IN EQUITY | |||||||||
Net loss | (196,579,000) | (196,579,000) | 651,000 | (195,928,000) | |||||
Foreign currency translation adjustment | 395,000 | 395,000 | 117,000 | 512,000 | |||||
Reverse acquisition | $ 3,000 | $ 1,000 | 167,756,000 | 167,760,000 | 7,649,000 | 175,409,000 | |||
Reverse acquisition (in shares) | 69,424,993 | 6,000 | |||||||
Vesting of restricted shares award | $ 1,000 | 40,335,000 | 40,336,000 | 40,336,000 | |||||
Vesting of restricted shares award (in shares) | 18,580,015 | ||||||||
Share-based compensation-option | 1,254,000 | 1,254,000 | 1,254,000 | ||||||
Series A preferred shares conversion | $ 0 | $ 0 | 1,436,000 | 0 | 0 | 0 | 1,436,000 | 0 | 1,436,000 |
Series A preferred shares conversion (shares) | 1,089,145 | ||||||||
Contingent liabilities assumed by Renren Inc. | 8,897,000 | 8,897,000 | 8,897,000 | ||||||
Foreign currency translation adjustment, net of nil income taxes | 395,000 | 395,000 | 117,000 | 512,000 | |||||
Balance at ending at Dec. 31, 2021 | $ 8,000 | $ 1,000 | 227,310,000 | (198,302,000) | 8,000 | 637,000 | 29,662,000 | 8,417,000 | 38,079,000 |
Balance at ending (in shares) at Dec. 31, 2021 | 163,129,655 | 6,000 | |||||||
STATEMENTS OF CHANGES IN EQUITY | |||||||||
Shareholder investment | 665,000 | 665,000 | |||||||
Net loss | (84,706,000) | (84,706,000) | 87,000 | (84,619,000) | |||||
Issuance of ordinary shares and warrant for private placement | $ 1,000 | 4,243,000 | 4,244,000 | 4,244,000 | |||||
Issuance of ordinary shares and warrant for private placement (in shares) | 4,406,542 | ||||||||
Dispose subsidiaries | (2,060,000) | (2,060,000) | (3,954,000) | (6,014,000) | |||||
Issuance of preferred shares | $ 2,000 | 24,591,000 | 24,593,000 | 24,593,000 | |||||
Issuance of preferred shares (in shares) | 50,000 | ||||||||
Foreign currency translation adjustment | 2,893,000 | 2,893,000 | (1,027,000) | 1,866,000 | |||||
Vesting of restricted shares award | $ 1,000 | 39,309,000 | 39,310,000 | 39,310,000 | |||||
Vesting of restricted shares award (in shares) | 38,911,291 | ||||||||
Issuance of ordinary shares held in escrow | $ 1,000 | 17,378,000 | 17,379,000 | 17,379,000 | |||||
Issuance of ordinary shares held in escrow (in shares) | 21,802,722 | ||||||||
Foreign currency translation adjustment, net of nil income taxes | 2,893,000 | 2,893,000 | (1,027,000) | 1,866,000 | |||||
Balance at ending at Dec. 31, 2022 | $ 11,000 | $ 3,000 | $ 312,831,000 | $ (283,008,000) | $ 8,000 | $ 1,470,000 | $ 31,315,000 | $ 4,188,000 | $ 35,503,000 |
Balance at ending (in shares) at Dec. 31, 2022 | 228,250,210 | 56,000 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | ||
Foreign currency translation adjustment, tax | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ (84,619) | $ (195,928) | $ (166) |
Adjustments to reconcile net loss to net cash used in operating activities of continuing operations: | |||
Depreciation and amortization | 1,681 | 787 | 5 |
Impairment of goodwill | 143,655 | ||
Loss from the disposal of property and equipment | 8 | ||
Fair value change of warrants | (316) | (1,995) | |
Share-based compensation | 39,310 | 41,589 | |
Foreign currency exchange (gain) loss | (139) | 432 | (86) |
Impairment of prepaid expenses and other current assets | 22,921 | 4,216 | |
Provision for dealership settlement | 15,134 | 11,142 | |
Provision for sales incentive | 1,638 | ||
Gain on disposal of subsidiaries | (1,578) | ||
Financial expenses | 1,103 | ||
Interest expenses of convertible note in interest method | 683 | 22 | |
Changes in operating assets and liabilities: | |||
Inventories | 373 | (404) | |
Prepayment for vehicle purchase and other current assets | 355 | (6,121) | (437) |
Amount due from related parties | 326 | (509) | |
Accounts payable | (38) | (111) | |
Advances from customers | (390) | (318) | 326 |
Accrued expenses and other current liabilities | 1,984 | 1,287 | 1 |
Short-term lease liabilities | (98) | (31) | |
Amount due to related parties | 25 | (269) | |
Income tax payable | (398) | (684) | |
Net cash used in operating activities | (2,394) | (2,103) | (1,135) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of property and equipment, net | 59 | ||
Purchase of intangible assets | (32) | (290) | |
Cash acquired on reverse acquisition | 4,299 | ||
Cash disposed on disposal of subsidiaries | (97) | ||
Net cash (used in) provided by investing activities | (156) | 4,267 | (290) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of ordinary shares and warrant | 4,717 | ||
Proceeds from convertible note | 2,000 | 2,000 | |
Cash paid for offering cost | (1,976) | ||
Capital contribution | 665 | 8,095 | |
Capital divestment | (5,963) | ||
Net cash provided by financing activities | 5,406 | 2,000 | 2,132 |
Effect of exchange rate changes on cash and cash equivalents | (1,017) | 492 | (104) |
Net changes in cash and cash equivalents | 1,839 | 4,656 | 603 |
Cash and cash equivalents at beginning of year | 5,263 | 607 | 4 |
Cash and cash equivalents at end of year | 7,102 | 5,263 | $ 607 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||
Interest expense paid | (362) | (23) | |
Income tax paid | (26) | ||
NON-CASH ACTIVITIES: | |||
Net assets acquired on reverse acquisition | 161,760 | ||
Issuance of Series F preferred shares in connection a disposal of subsidiaries | $ (24,593) | ||
Vesting of restricted shares award | 1 | ||
Obtaining right-of-use assets in exchange for operating lease liabilities | $ 515 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES Kaixin Auto Holdings (“the Company” or “KAH”), was incorporated in the Cayman Islands in 2016. On June 25, 2021, KAH completed a business combination with Haitaoche Limited (“Haitaoche”, or “HTC”), resulting in KAH acquiring 100% of the share capital of Haitaoche in exchange for an aggregate of 74,035,502 ordinary shares, which was issued to several former shareholders of Haitaoche. The business combination was treated as a reverse acquisition of KAH under ASC 805, using the acquisition method of accounting, and Haitaoche was deemed to be the accounting acquirer. (See Note 3). Following the completion of the reverse acquisition, KAH is the consolidated parent of Haitaoche and the resulting company operates under the KAH corporate name. Haitaoche’s historical financial statements became the historical financial statements of the Company. The acquired assets and liabilities of KAH are included in the Company’s consolidated balance sheet since June 25, 2021 and the results of its operations and cash flows are included in the Company’s consolidated statement of operations and comprehensive income (loss) and cash flows for periods beginning after June 25, 2021. The Company and its consolidated subsidiaries, are collectively referred to as the “Group”. The Group is primarily engaged in sales of domestic automobiles and the used car sales business in the People’s Republic of China (“PRC”). The major subsidiaries of the Company as of December 31, 2022 are summarized as below: Later of date of incorporation or Place of % of Name of Subsidiaries acquisition Incorporation Ownership Principal activities Major subsidiaries: Kaixin Auto Group (“KAG”) January 25, 2018 Cayman Islands 100 % Investment holding Jet Sound Hong Kong Company Limited May 7, 2011 Hong Kong 100 % Investment holding Zhejiang Taohaoche Technology Co., Ltd. July 11, 2019 PRC 100 % New car trading business Zhejiang Kaixin Auto Co., Ltd April 4, 2021 PRC 100 % Used car trading business Chongqing Jieying Shangyue Automobile Sales Co., Ltd. July 3, 2017 PRC 100 % Used car trading business Wuhan Jieying Chimei Automobile Sales Co., Ltd. November 20, 2017 PRC 100 % Used car trading business Anhui Kaixin New Energy Vehicle Co., Ltd. January 25, 2022 PRC 100 % New energy vehicle trading business Effectively completed on October 27, 2022, the Group disposed all the shares it held in Renren Finance Inc, which holds all the Group’s VIEs and VIEs’ subsidiaries in China (collectively referred to as the “Disposal group”), to Stanley Star Group Inc. (“Stanley Star” or “the Buyer”), a third-party company incorporated in BVI. (See Note 4) 1. ORGANIZATION AND PRINCIPAL ACTIVITIES-CONTINUED PRC regulations currently limit direct foreign ownership of business entities providing value-added telecommunications services and internet services in the PRC where certain licenses are required for the provision of such services. To comply with the PRC laws and regulations, the Company used to primarily conduct such kind of business in China through the Company’s VIEs, i.e. Anhui Xin Jieying Automobile Sales Co., Ltd (“Anhui Xin Jieying”, formerly known as Zhejiang Jieying Automobile Sales Co., Ltd and Shanghai Jieying Automobile Sales Co., Ltd), Shanghai Qianxiang Changda Internet Information Technology Development Co.,Ltd. (“Shanghai Changda”), Ningbo Jiusheng Automobile Sales and Services Co., Ltd. (“Ningbo Jiusheng”) and Qingdao Shengmei lianhe Import Automobile Sales Co., Ltd. (“Qingdao Shengmei”) and their subsidiaries, based on a series of contractual arrangements by and among Zhejiang Kaixin Auto. Co., Ltd. (“Zhejiang Kaixin”), Shanghai Renren Automotive Technology Group Co., Ltd. (“Shanghai Auto”), Zhejiang Taohaoche Technology Co., Ltd. (“Zhejiang Taohaoche”, formerly known as Ningbo Taohaoche Technology Co., Ltd.), the Company’s VIEs and their nominee shareholders. The contractual arrangements include Shareholders’ Voting Rights Proxy Agreements, Executive Call Option Agreements, Equity Pledge Agreements and Exclusive Business Cooperation Agreements. With the disposition of Renren Finance Inc, all VIEs were disposed as of October 27, 2022 (“closing date”) (see Note 4). COVID -19 Risks and Uncertainties With the China’s nationwide loosening of COVID-19 policy since December 2022, management is currently evaluating the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position and results of its operations, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. (a) Basis of presentation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). (b) Principles of consolidation The consolidated financial statements include the financial statements of the Group, its subsidiaries, its VIEs, and subsidiaries of its VIE.s All inter-company transactions and balances have been eliminated upon consolidation. (c) Non-controlling interests Non-controlling interests in the subsidiaries of VIEs of the Group represent the portion of the equity (net assets) in the subsidiaries of VIEs that has not been pledged to the subsidiary of the Group, consequently not directly or indirectly attributable to the Group. Non-controlling interests are presented as a separate component of equity on the consolidated balance sheet and net income (loss) and other comprehensive income (loss) are attributed to controlling and non-controlling interests respectively. (d) Business combinations Business combinations are recorded using the acquisition method of accounting. The Group uses a screen to evaluate whether a transaction should be accounted for as an acquisition and/or disposal of a business versus assets. In order for a purchase to be considered an acquisition of a business, and receive business combination accounting treatment, the set of transferred assets and activities must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then the set of transferred assets and activities is not a business. 2. The purchase price of business acquisition is allocated to the tangible assets, liabilities, identifiable intangible assets acquired and noncontrolling interest, if any, based on their estimated fair values as of the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses and restructuring costs are expensed as incurred. Where the consideration in an acquisition includes contingent consideration and the payment of which depends on the achievement of certain specified conditions post-acquisition, the contingent consideration is recognized and measured at its fair value at the acquisition date and if recorded as a liability, it is subsequently carried at fair value with changes in fair value reflected in earnings. (e) Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses in the financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s consolidated financial statements include, but are not limited to, warrant liabilities, the valuation of prepaid expenses and other current assets, deferred tax valuation allowance, impairment assessment on goodwill and intangible assets, the valuation of preferred shares, the purchase price allocation associated with business combinations. (f) Fair value measurement Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: ● Level 1 — inputs are based upon unadjusted quoted prices for identical assets or liabilities traded in active markets. ● Level 2 — inputs are based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 — inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. (g) Warrants The Group accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Group’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. 2. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter with changes in fair value recognized in the statements of operations in the period of change. (h) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and cash in banks. The Group considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. (i) Prepayment for vehicle purchase and other assets Prepayment for vehicle purchase, other current assets and other non-current assets consist of prepayment for vehicle purchase to the dealership operators, advances to suppliers, deductible input VAT, other receivables and others. The Group reviews suppliers credit history and background information before advancing a payment. The Group maintains an allowance for doubtful accounts based on a variety of factors, including but not limited to the aging of prepayments, concentrations, credit-worthiness, historical and current economic trends and changes in delivery patterns. If the financial condition of its suppliers were to deteriorate, resulting in an impairment of their ability to deliver goods or provide services, the Group would provide allowance for such amount in the period when it is considered impaired. There was no allowance recognized for the prepayment for vehicle purchase, other current assets and other non-current assets for the years ended December 31, 2020. The Company recorded impairment loss of nil and $22,921 for prepayment for vehicle purchase and other current assets for the years ended December 31, 2021 and 2022, and recorded impairment loss of $4,216 and nil for other non-current assets for the years ended December 31, 2021 and 2022. (j) Inventory Inventory includes only the purchased new automobiles. Inventory is stated at the lower of cost or net realizable value. Inventory cost is determined by specific identification. Net realizable value is the estimated selling price less costs to complete, dispose and transport the vehicles. Selling prices are derived from historical data and trends, such as sales price and inventories turnover times of similar vehicles, as well as independent, market resources. Each reporting period the Group recognizes any necessary adjustments to reduce the cost of vehicle inventories to its net realizable value through cost of sales in the accompanying consolidated statements of operations. Vehicle inventories are considered slow moving if they have not been sold within a 90 days period since procurement. In estimating the level of inventories write-downs for slow moving vehicles, the Group considers historical data and forecasted customer demand, such as sales price and inventories turnover of similar vehicles with similar mileage and condition, as well as independent, market information. This valuation process requires management to make judgments, based on currently available information, and assumptions about future demand and market conditions, which are inherently uncertain. To the extent that there are significant changes to estimated vehicle selling prices or decreases in demand for used vehicles, there could be significant adjustments to reflect inventories at net realizable value. There were no write-downs of inventories recorded for the years ended December 31,2020, 2021 and 2022. (k) Convertible notes The Group accounts for its convertible notes under ASC 470 Debt, using the effective interest method, as a single debt instrument, from the issuance date to the maturity date. Interest expenses are recognized in the consolidated statement of operation in the period in which they are incurred. If the convertible notes are converted into equity, the company must extinguish the related debt liability. The Group should recognize any difference between the carrying amount of the liability and the fair value of the equity instruments issued as a gain or loss in the income statement. 2. (l) Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment if any. The depreciation is recognized on a straight-line basis over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its intended use. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income/loss in the year of disposition. Estimated useful lives are as follows: Estimated Useful Life Computer equipment and application software 2 - 3 Years Furniture and vehicles 5 Years (m) Intangible assets, net Intangible asset is stated at cost less accumulated amortization and impairment if any. Intangible asset is amortized in a method which reflects the pattern in which the economic benefits of the intangible asset are expected to be consumed or otherwise used up. When assets are retired or disposed of, the cost and accumulated amortization are removed from the accounts, and any resulting gains or losses are included in income/loss in the year of disposition. Estimated useful lives are as follows: Estimated Useful Life Software 10 Years Domain name 10 Years Trademark 10 Years In accordance with ASC Topic 360, the Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. Software and domain name are used for the business of Haitaoche and no impairment indicators was noted. The trademark recognized from the Reverse Acquisition were initial recognized using Relief-From-Royalty (“RFR”) method. The trademark was tested for impairment due to identification of impairment indicator. The amount of impairment is measured as the difference between the asset’s estimated fair value and its carrying amount. The Company did not record any impairment charge for the years ended December 31, 2020, 2021and 2022. (n) Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. The Group assesses goodwill for impairment on annual basis as of December 31 or if indicator noted for goodwill impairment. In accordance with ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) issued by the Financial Accounting Standards Board (“FASB”) guidance on testing of goodwill for impairment, the Group will first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test. If this is the case, the quantitative goodwill impairment test is required. If it is more likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the quantitative goodwill impairment test is not required. 2. Quantitative goodwill impairment test is used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired. If the fair value of the reporting unit is less than its carrying amount, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. For the goodwill recognized subsequent to the reverse acquisition on June 25, 2021, the management performed qualitative assessment and noted certain facts and circumstances indicated that it was more likely than not that the fair value of the reporting unit was less than its carrying value, which required the Group to perform a quantitative test, with the income approach using discounted cash flow (“DCF”), to determine the fair value of the KAH Group reporting unit. Based on the results of the quantitative goodwill impairment test, the Group fully impaired the goodwill generated through the reversed acquisition of $143,655 in 2021. (o) Impairment of long-lived assets In accordance with ASC Topic 360, the Group reviews long-lived assets or asset group for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be fully recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Group first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Any impairment write-downs would be treated as permanent reductions in the carrying amounts of the assets and a charge to operations would be recognized. Management has performed a review of all long-lived assets and has determined that no impairment loss for long-lived assets has occurred for the year ended December 31, 2020 and recorded impairment loss of $4,216 and nil for other long-lived assets for the years ended December 31, 2021 and 2022. (p) Operating lease right-of -use assets The Group leases premises for offices under non-cancellable operating leases. Prior to the adoption of Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) and subsequent amendments to the initial guidance including ASU No. 2017-13, ASU No. 2018-10, ASU No. 2018-11, ASU No. 2018-20, and ASU No. 2019-01 (collectively, “Topic 842”), operating leases were not recognized on the consolidated balance sheets, instead, rental expenses with fixed payments were recognized on a straight-line basis over the lease term. Effective January 1, 2021, the Group adopted Topic 842 using a modified retrospective transition approach for leases that exist at, or are entered into after January 1, 2021, and has not recast the comparative periods presented in the consolidated financial statements. Upon adoption of Topic 842 and the reverse acquisition, the lease liabilities are recognized upon lease commencement for operating leases based on the present value of lease payments over the lease term. The right-of-use assets are 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. As the rate implicit in the lease cannot be readily determined, the Group’s incremental borrowing rate at the lease commencement date is used in determining the imputed interest and present value of lease payments. The incremental borrowing rate was determined using a portfolio approach based on the rate of interest that the Group would have to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Group recognizes the single lease cost on a straight-line basis over the remaining lease term for operating leases. The Group has elected not to recognize right-of-use assets or lease liabilities for leases with an initial term of 12 months or less; expenses for these leases are recognized on a straight-line basis over the lease term. 2. (q) Value added tax Value-added tax (“VAT”) is reported as a deduction to revenue when incurred. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in accrued expense and other current liabilities on the consolidated balance sheets. In 2018, the Group entered into a series of ancillary agreements to facilitate its sale of used cars for value-added tax optimization purposes, which was still applicable in 2022. Under these ancillary agreements, when the Group sources a used car, the legal ownership of the car is transferred toZhejiang Kaixin Auto Co., Ltd’s executives, and the registration is normally under the name of one of the dealership’s employees. The Group viewed itself as a service provider for VAT purpose, and therefore is only subject to value-added tax on the difference between the original purchase price and the retail price of the used cars. The Group’s other affiliated entities in the PRC, including Zhejiang Taohaoche are subject to VAT for sales of automobiles at applicable tax rates, and subsequently paid to PRC tax authorities after netting input VAT on purchases. The Group reports revenue net of PRC’s VAT for all the periods presented in the consolidated statements of operations. (r) Revenue recognition The Group accounts for revenue using Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. The following five steps are applied to achieve core principle of ASC 606: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the Group satisfies a performance obligation The Group primarily sells automobiles to car dealers and individual customers through signing written sales contracts. The Group presents the revenue generated from its sales of automobiles on a gross basis as the Group is a principal based on the fact that the Group is primarily responsible for fulling the promise to deliver the specified used cars or new cars to the customers, the Group also has pricing discretion and obtains substantially all of the remaining benefits from the sale goods. Revenue is recognized at a point in time upon delivery, which usually coincide with the timing of the customer acceptance. The following table identifies the disaggregation of the revenue for the years ended December 31, 2020, 2021 and 2022, respectively: For the year ended December 31, 2020 2021 2022 Used-car sales $ — $ 251,054 $ 80,034 New-car wholesales 1,207 2,786 2,806 Total revenues $ 1,207 $ 253,840 $ 82,840 Advances from customers Advances from customers for sales of goods are payment from customers for purchase, and are deferred when corresponding performance obligation has not been satisfied. They are recognized as revenue upon the Group transfers the control of products to the customers. 2. (s) Cost of revenue Cost of revenue consists primarily of cost of goods purchased from domestic and overseas regions. (t) Income taxes The Group accounts for income taxes using the asset/liability method prescribed by ASC 740 Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Group records a valuation allowance to offset 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 as income or loss in the period that includes the enactment date. The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Group’s operating subsidiaries in PRC are subject to examination by the relevant tax authorities. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000 ($15,500). In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. As of December 31, 2021 and 2022, the Group did not have any significant unrecognized uncertain tax positions and the Group does not believe that its unrecognized tax benefits will change over the next twelve months. In addition, the Group did not have any interest or penalties associated with uncertain tax position for the years ended December 31, 2020, 2021 and 2022. (u) Foreign currency translation The reporting currency of the Group is the U.S. dollar (“USD” or “$”). The functional currency of subsidiaries, VIEs located in China is the Chinese Renminbi (“RMB”), the functional currency of subsidiaries located in Hong Kong is the Hong Kong dollars (“HK dollar” or “HK$”). For the entities whose functional currency is the RMB and HK$, result of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments are reported as foreign currency translation adjustment and are shown as a separate component of other comprehensive income (loss) in the consolidated statements of comprehensive income (loss). Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date. Both exchanges rates were published by the Federal Reserve Board. Any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are shown as foreign currency exchange (loss) gains in the consolidated statements of operations and comprehensive income (loss) as incurred. The consolidated balance sheets amount, with the exception of equity, on December 31, 2021 and December 31, 2022 were translated at RMB6.3726 to $1.00 and at RMB6.8972 to $1.00, respectively. Equity accounts were stated at their historical rates. The average translation rates applied to consolidated statements of operations and cash flows for the years ended December 31, 2020, 2021 and 2022 were RMB6.7434 to $1.00, RMB6.3914 to $1.00 and RMB6.7290 to $1.00, respectively. 2. (v) Share-based compensation Share-based payment transactions with employees, such as share options are measured based on the grant date fair value of the equity instrument. The Company recognizes the compensation costs net of estimated forfeitures using the straight-line method, over the applicable vesting period. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of stock compensation expense to be recognized in future periods. Share options granted to employees with market conditions attached are measured at fair value on the grant date and are recognized as the compensation costs over the estimated requisite service period, regardless of whether the market condition has been met. A change in any of the terms or conditions of share options is accounted for as a modification of stock options. The Company calculates the incremental compensation cost of a modification as the excess of the fair value of the modified option over the fair value of the original option immediately before its terms are modified, measured based on the share price and other pertinent factors at the modification date. For vested options, the Company recognizes incremental compensation cost in the period the modification occurred. For unvested options, the Company recognizes, over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date. (w) Loss per share Basic loss per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Potentially dilutive shares are excluded from the computation if their effect is anti-dilutive. (x) Comprehensive income (loss) Comprehensive income (loss) is comprised of the Group’s net income (loss) and other comprehensive income (loss). The components of other comprehensive income (loss) consist solely of foreign currency translation adjustments. (y) Commitments and contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, is disclosed. Legal costs incurred in connection with loss contingencies are expensed as incurred. 2. (z) Concentration of credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalent, prepayment for vehicle purchase and other receivable due from noncontrolling shareholders. The Group places its cash and cash equivalent with financial institutions with high-credit ratings and quality. Prepayment for vehicle purchase and other current assets are concentrated with noncontrolling shareholders (Note 6) as of December 31, 2022. With regard to the prepayment for used car purchase, the Group regularly monitor and performs inspection and counting on these noncontrolling shareholders’ cars inventory to ensure the prepayments are recoverable. Regarding the other receivable due from these noncontrolling shareholders, the Group has arrangement to hold the Company’s ordinary shares issued to these parties to ensure the repayment of majority of the balances. There were no customers that accounted for 10% or more of total revenues for the years ended December 31, 2020, 2021 and 2022. No supplier that accounted for 10% or more of total purchase for the years ended December 31, 2020, 2021 and 2022 or 10% or more of prepaid expenses and other current assets balance as December 31, 2020, 2021 and 2022. (aa) Segment reporting The Group uses the management approach to determine operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker (“CODM”) for making decisions, allocating resources, and assessing performance. The Group’s CODM has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group’s CODM reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Group as a whole and hence, the Group has only one reportable segment. The Group operates and manages its business as a single segment. As the Group’s long-lived assets are substantially all located in the PRC and substantially all of the Group’s revenue is derived from within the PRC, no geographical segments are presented. (bb) Recently Adopted Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses”, which will require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable 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 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02 to provide additional guidance on the credit losses standard, which defers the effective date of ASU No. 2016-13 for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since as of December 31, 2022 the Company no longer qualifies as an EGC, it no longer qualifies for the deferral of the effective date available for EGCs. As such the Company adopted the standard by using the modified retrospective method, effective as of January 1, 2022, and reflected the impact in its financial statements for the year ended December 31, 2022. The impact of the adoption on the consolidated balance sheets, statements of operations, and statements |
REVERSE ACQUISITION
REVERSE ACQUISITION | 12 Months Ended |
Dec. 31, 2022 | |
REVERSE ACQUISITION | |
REVERSE ACQUISITION | 3. REVERSE ACQUISITION On June 25, 2021, KAH issued (the “Issuance”) an aggregate of 74,035,502 ordinary shares through private placement to several former shareholders of Haitaoche in exchange of 100% of the share capital of Haitaoche, pursuant to the share purchase agreement (the “SPA”) entered into on December 31, 2020. Following the Issuance, Haitaoche became a wholly-owned subsidiary of KAH. Upon the consummation of the Issuance, KAH had a total of 143,460,495 outstanding ordinary shares, and former shareholders of Haitaoche accounted for 51.61%, became the controlling shareholders of KAH. Therefore, the shareholders of Haitaoche controlled the largest portion of the voting rights in the consolidated entity, and the management of Haitaoche became the management of the consolidated entity after the reverse acquisition. The transaction is a business combination under ASC 805, using acquisition method of accounting. The fair value of the consideration paid as part of the transaction as well as the fair value of identifiable assets and liabilities acquired are presented below. Amount $ Fair value of consideration transferred (1) 161,760 Fair value of the assets acquired and the liabilities assumed Cash and cash equivalents 4,299 Prepaid expense 46,708 Property plant and equipment 31 Trademark (Intangible Assets) 15,100 Right-of-use assets 47 Goodwill 143,655 Subtotal of total assets 209,840 Short-term bank loan (8,195) Accounts payable (406) Advance from customers (461) Short-term lease liabilities (32) Other payables (13,198) Amounts due to RPT (4,288) Income tax payable (4,079) Warrants (2,335) Mezzanine equity-Preferred shares (1,437) Subtotal of total liabilities (34,431) Less: Non-controlling interest (7,649) Less: Preferred shares (2) (6,000) Total net assets 161,760 (1) The fair value of 69,424,993 ordinary shares issued to pre-reverse acquisition KAH shareholders is $161,760 based on the quoted fair market value of $2.33 per ordinary share on June 25, 2021. (2) It represented Series D convertible preferred shares of KAH issued to Renren Inc. on April 8, 2021 (see Note 15) 3. The unaudited pro forma information for the periods set forth below gives effect to the reverse acquisition as if the reverse acquisition had occurred as of January 1, 2020. This pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the transactions been consummated as of that time. For the years ended December 31, 2020 2021 Unaudited Unaudited Revenue $ 34,367 $ 257,631 Net loss $ (5,486) $ (191,468) |
DISPOSAL OF SUBSIDIARIES
DISPOSAL OF SUBSIDIARIES | 12 Months Ended |
Dec. 31, 2022 | |
DISPOSAL OF SUBSIDIARIES. | |
DISPOSAL OF SUBSIDIARIES | 4. On August 5, 2022, KAG and Stanley Star entered into a shares transfer agreement (the “Agreement”). Pursuant to the Agreement, the Group sell all the shares it held in Renren Finance Inc and its subsidiaries and VIEs and VIEs’ subsidiaries to Stanley Star at a consideration of $1 and additional compensation shall be made if the net liabilities of the Disposal Group were different as of the closing date. On December 28, 2022, KAG and Stanley Star entered into a supplement agreement to issue $50,000 convertible preferred shares of the Company to Stanley Star as part of consideration to compensate the difference of net asset between the closing date and the agreement date. On March 24, 2023, KAG and Stanley Star entered into an amendment to the supplement agreement that modified specific terms of the $50 million preferred stock issued by the Company to Stanley Star. On October 27, 2022 the Company calculated a gain regarding the divestiture of Disposal group as follows: As of October 27, 2022 Fair value of preferred shares issued to Stanley Star $ (24,592) The carrying amount of any noncontrolling interest (3,954) Net liabilities (24,276) Gain on disposal of subsidiaries $ 3,638 Consideration received presents the fair value of the preferred shares issued to the Buyer as of the closing date and the fair value is approximately $24.6 million. When the Company deconsolidated subsidiaries, the amount of accumulated other comprehensive loss $2,060 is reclassified and partially offset the gain. 4. The divestiture of the Disposal Group did not constitute a strategic shift of the Company’s operations and did not have major effects on the Company’s operations and financial results; therefore, the transactions do not meet the discontinued operations criteria. The following table summarizes the carrying amounts of the major classes of assets and liabilities of the Disposal Group as of October 27, 2022: As of October 27, 2022 Cash and cash equivalents $ 97 Prepaid expenses and other current assets 1,983 Property and equipment, net 4 Intangible assets, net 20 TOTAL ASSETS $ 2,104 Accounts payable (257) Advance from customers (163) Long-term bank loan (5,476) Income tax payable (2,225) Amount due to Kaixin (8,848) VAT payable (3,340) Accrual expenses and other current liabilities (6,071) Total Liabilities $ (26,380) Net liabilities $ (24,276) |
OTHER RECEIVABLES
OTHER RECEIVABLES | 12 Months Ended |
Dec. 31, 2022 | |
OTHER RECEIVABLES | |
OTHER RECEIVABLES | 5. Borrower Interest rate Amount Shanghai Changda 0 % $ 6,858 Anhui Xin Jieying 0 % $ 1,990 Total $ 8,848 Other receivables comprised two interest-free borrowings to the former subsidiaries Shanghai Changda and Anhui Xin Jieying, which were disposed of in the disposal of subsidiaries during 2022, with a total balance of $8,848 as of the end of 2022. The Company expects that the Buyer is willing and able to repay the receivables within 1 year. The Company did not recognize any valuation allowance for the receivables. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6. As of December 31, 2021 and 2022, prepaid expenses and other current assets consisted of the following: As of December 31, 2021 2022 Prepayment for vehicle purchase (1) $ 32,091 $ 18,252 Other receivables from dealerships (2) 19,249 9,546 Deductible input VAT 545 7 Advance to suppliers 23 — Others (3) 1,362 191 Total 53,270 27,996 Less: valuation allowance — (1,675) Prepaid expenses and other current assets $ 53,270 $ 26,321 (1) The balance mainly represents pre-payments to the dealership operators who are operators of the used car dealership with whom the Company set up special purpose holding companies to operate the used car business, mainly to purchase used vehicles from the market. (2) The balance represents cash advances paid to the dealership operators for purchasing used vehicles historically and shall be repaid in cash, and the balance is secured using ordinary shares of the Company issued to them as agreed with the dealership operator (Note 10). (3) Others mainly included prepaid rent, staff advances, prepaid marketing fee, advertising fee, professional fee, and other receivables incurred for daily operations. (4) The Company recorded impairment loss of nil and $22,921 for prepayment for vehicle purchase and other current assets for the years ended December 31, 2021 and 2022. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2022 | |
INTANGIBLE ASSETS, NET | |
INTANGIBLE ASSETS, NET | 7. INTANGIBLE ASSETS, NET As of December 31, 2021 2022 Trademark (1) $ 14,983 $ 15,100 Software 445 72 Total 15,428 15,172 Less: Accumulated amortization (788) (2,269) Intangible assets, net $ 14,640 $ 12,903 (1) The trademark was identified due to the reverse acquisition of KAH with Haitaoche on June 25, 2021. It has remaining useful life of 8.5 years as of December 31, 2022. Amortization expense was $2, $785 and $1,531 for the years ended December 31, 2020, 2021 and 2022, respectively. |
OTHER NON-CURRENT ASSETS, NET
OTHER NON-CURRENT ASSETS, NET | 12 Months Ended |
Dec. 31, 2022 | |
OTHER NON-CURRENT ASSETS, NET | |
OTHER NON-CURRENT ASSETS, NET | 8. OTHER NON-CURRENT ASSETS, NET As of December 31, 2021 and 2022, other non-current assets consisted of the following: As of December 31, 2021 2022 Long-term receivables from suppliers (1) $ 4,112 $ — Legal deposit 104 — Other non-current assets, gross $ 4,216 $ — Less: impairment for uncollectible receivables (2) (4,216) — Other non-current assets, net — — (1) Other non-current assets mainly represented the receivable from a foreign supplier, Brueggmann Group (“BG”) in Germany for payment of automobiles purchase early in 2016. BG has never delivered the automobiles. The Gross prepayment amounts were $3,916 as of December 31, 2021, which were stripped off in conjunction with the disposal of the subsidiaries (Note 4). (2) As the Defendants have appealed against the judgement in January, 2022, the Company expects that Defendants are not willing to repay the receivables even if Defendants lose the lawsuit. The Company recognized impairment of $4,216 for the receivables from BG and the legal deposit as well as the other suppliers as of December 31, 2021. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9. As of December 31, 2021 2022 Loan payable (1) $ — $ 3,000 Accrued professional fee 2,698 2,215 Individual income tax payable 2,207 2,207 Used car services payables 3,333 419 Other taxes payable 5,120 181 Others 1,133 1,357 Total $ 14,491 $ 9,379 (1) Loan payable consisted of the following: Lender Interest rate Issuance Date Maturity Date December 31, 2022 Scytech Limited 0 % On September 21, 2022 December 31, 2023 $ 2,700 CPL Yellow stones Limited 5% per annum On December 21, 2022 March 31, 2023 $ 200 Yunfeiyang Limited 5% per annum On December 21, 2022 March 31, 2023 $ 100 The interest-free loan from Scytech Limited was as working capital for Zhejiang Taohaoche and collateralized by the net assets of Zhejiang Taohaoche. CPL Yellow stones Limited and Yunfeiyang Limited are the shareholders of the Company. |
DEALERSHIP SETTLEMENT
DEALERSHIP SETTLEMENT | 12 Months Ended |
Dec. 31, 2022 | |
DEALERSHIP SETTLEMENT | |
DEALERSHIP SETTLEMENT | 10. DEALERSHIP SETTLEMENT During 2017 and 2018, the Company entered into several equity purchase agreements (the “Equity Purchase Agreements”) with the Dealership Operators, to acquire 70% equity interest of the dealerships. According to the Equity Purchase Agreements, the Company agreed to provide certain payments of its ordinary shares to the Dealership Operators as part of the equity acquisition considerations, subject to certain payment triggers including the operating performance of the dealerships and service centers and KAH’s ordinary share price (“Contingent Consideration”). The Company recognized the Contingent Consideration as liability at fair value as of the acquisition date and the subsequent changes in fair value as gain/loss into earnings/(loss). In connection with the Company’s IPO on April 30, 2019, Renren Inc. (“Renren”) agreed to assume the Contingent Consideration from the Company, and the Company reclassified the Contingent Consideration from a liability to additional paid-in capital. Since 2019, due to disagreements with certain Dealership Operators on operational matters, the Company had disruptions in operations of several dealerships. After continuous negotiations with the Dealership Operators, the Company signed the amendments to Equity Purchase Agreement (the “Amendments”) with seven Dealership Operators in August 2021, to 1) confirm a total of 4,513,761 ordinary shares as the first batch and the first two tranches of second batch of the Contingent Consideration issuable to the Dealership Operators in accordance with the Equity Purchase Agreements subject to the operating performance of the dealerships and service centers before 2021; 2) provide a total of 7,172,529 ordinary shares (“Compensation Shares”) to the Dealership Operators, in the purpose of alleviation of losses and distress that occurred during the temporary halt of business in the Dealerships after the breakout of the pandemic and the historical dispute between the Company and the Dealership Operators. The number of Compensation Shares was determined through negotiation of the Company with each of the Dealership Operators while taking into consideration the hardships they experienced over the prior years and the need to make prompt resolution of the historical dispute with the Dealership Operators. The Company recognized the Compensation Shares as loss related to provision for dealership settlement based on fair value of the Compensation Shares by reference to share-based payment transactions pursuant to ASC 718. 10. DEALERSHIP SETTLEMENT-CONTINUED On November 30, 2021, Renren transferred 13,422,613 ordinary shares of the Company it held, to an escrow company to fully settle the Contingent Consideration shares of 8,219,510. In addition to the Contingent Consideration shares, there were 5,203,103 ordinary shares transferred toward settlement of the Compensation Shares, which are recognized by the Company as additional paid-in capital with a fair value of $8,897 based on the quoted price of Company’s ordinary share on the date of Renren’s transfer were treated by reference to a liability paid by the principal shareholder and thus recorded as the loss related to provision for dealership settlement in the Company’s financial statements with a corresponding credit to additional paid-in capital. The Company shall issue additional 1,969,425 shares to the Dealership Operators to fully satisfy the Compensation Shares, which was recognized as payables loss related to provision for dealership settlement with a corresponding accrual of for dealership settlement at the fair value by reference to the quoted price of Company’s ordinary share at the commitment date with subsequent changes in fair value reflected in provision for dealership settlement. The Company, Renren and Dealership Operators agreed that the transfer of shares by Renren to the escrow company shall be deemed as fulfilment of Renren’s obligations related to the Contingent Consideration. According to the Amendments, the Dealership Operators should honor their commitments, including paying off their outstanding payables and debts to the Company, in order to obtain the shares. Consequently, the 13,422,613 shares have been held by the escrow company since transferred from Renren, and were disclosed as issued and outstanding shares in the vesting of restricted shares award reverse acquisition item during 2021 in the Company’s Consolidated Statements of Changes in Equity. The escrow companies provide a pledge guarantee to fulfill dealership operators’ repayment obligations with shares it held. Proceeds from the sale of shares will be preferentially used to repay the outstanding payables and debts to Kaixin. The payables accrued for dealership settlement were $2,245 as of December 31, 2021. The total loss related to provision of the 7,172,529 Compensation Shares to the Dealership Operators for the dealership settlement was $11,142 for the year 2021. In May 2022, the Company signed supplemental agreements to Equity Purchase Agreement (the “Supplemental Agreements”) with seven Dealership Operators, to confirm a total of 21,566,328 ordinary shares as the remaining three tranches of the second batch of the Contingent Consideration will be issued to the Dealership Operators. Since then, the total of Consideration Shares and Compensation Shares were confirmed to be 33,748,772 ordinary shares. On May 26, 2022, the Company issued 20,326,159 ordinary shares to the Dealership Operators and then put the shares into an escrow account. The 20,326,159 shares are recognized by the Company as ordinary shares and additional paid-in capital with a total fair value of $17,379 based on the quoted price of Company’s ordinary share on the date of transfer. The payable for dealership settlement recognized as of December 31, 2021 amounting to $2,245 was also fully settled by the shares issued. As agreed with the Dealership Operators, the ordinary shares in the escrow companies were used to secure the repayment of the Dealership Operators’ outstanding payables to the Company. |
PAYABLE FOR SALES INCENTIVE
PAYABLE FOR SALES INCENTIVE | 12 Months Ended |
Dec. 31, 2022 | |
PAYABLE FOR SALES INCENTIVE | |
PAYABLE FOR SALES INCENTIVE | 11. PAYABLE FOR SALES INCENTIVE In 2022, the Company entered into a share grant agreement with dealership operators. In order to encourage the dealership operators to improve their sales performance, the Company agreed to provide sales incentives to the dealership operators based on their sales performance. As sales incentive, the Company will issue a total of 5,585,645 shares to dealership operators according to the sales performance for February 2022 to December 2022. The Company recognized these shares as selling expenses of $1,638 based on fair value of the Shares as of December 31, 2022 by reference to share-based payment transactions and the payable for sales incentive of $1,638 recognized as of December 31, 2022. |
LEASE
LEASE | 12 Months Ended |
Dec. 31, 2022 | |
LEASE | |
LEASE | 12. LEASE The weighted average remaining lease terms and discount rates for the operating lease as of December 31, 2022 were as follows: Remaining lease term and discount rate: Weighted average remaining lease term (years) 4 Weighted average discount rate 11.5 % For the years ended December 31, 2021 and 2022, $515 and nil newly operating lease asset was obtained in exchange for operating lease liabilities, cash prepaid for amounts included in the measurement of lease liabilities were nil, $31 and nil for the years ended December 31, 2020, 2021 and 2022. During the years ended December 31, 2020, 2021 and 2022, the Company incurred total operating lease expenses of $2, $29 and $133 respectively. As of December 31, 2022, the future minimum rent payable under non-cancelable operating leases were: 2023 $ 159 2024 129 2025 133 2026 100 2027 — Total lease payments 521 Less: imputed interest (91) Present value of lease liabilities $ 430 Lease liabilities - current 119 Lease liabilities – non-current 311 |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS AND BALANCES | |
RELATED PARTY TRANSACTIONS AND BALANCES | 13. RELATED PARTY TRANSACTIONS AND BALANCES The table below sets forth the major related parties and their relationships with the Group: Name Relationship (a) Mr. Lin Mingjun (“Mr. Lin”) A controlling shareholder and chief executive officer of the Group (b) Renren Inc. A non-controlling shareholder of the Company Amounts due to related parties As of December 31, 2021 and 2022, significant amounts due to related parties consisted of the following: As of December 31, 2021 2022 Renren and its subsidiaries(1) $ 3,943 $ 1,427 Mr. Lin — 200 Amounts due to related parties $ 3,943 $ 1,627 (1) The balance mainly represented the advance fund provided by Renren and its subsidiaries to finance the Group’s daily operations. The amount due to Renren and its subsidiaries of $ 2,516 were stripped off in conjunction with the disposal of the subsidiaries (Note 4). |
BANK BORROWING
BANK BORROWING | 12 Months Ended |
Dec. 31, 2022 | |
BANK BORROWING | |
BANK BORROWING | 14. BANK BORROWING As of December 31, 2021 2022 Short-term debt: East West Bank (1) $ 6,277 $ 2,000 Long-term debt: East West Bank (2) $ 2,000 $ — (1) The annum interest rate of borrowings from East West Bank was 6% . As of December 31, 2021, the Group’s short-term debt was with one-year maturity date. The loan with amount of $6,277 was guaranteed by a wholly-owned subsidiary of Renren Inc, Qianxiang Shiji Technology Development (Beijing) Co., Ltd., a related party of the Group, covered by irrevocable standby letter of credit issued by East West Bank to Renren with Renren’s restricted cash pledged as security. During the transaction of disposal of subsidiaries, the principal of the bank loan has been transferred to and assumed by the Buyer, and the interest will be paid by the Company on a monthly basis. (2) The annum interest rate of borrowings from East West Bank was 2.8%. The Group’s long-term debt matures on August 31, 2023 and was reclassed to current liability as of December 31, 2022. The loan was under an irrevocable standby letter of credit issued by East West Bank to Renren in April 2019 with Renren’s restricted cash pledged as security. Interest expenses were $1, $ 223 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 15. Cayman Islands The Group is incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Group is not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholdings tax in the Cayman Islands. Hong Kong On March 21, 2018, the Hong Kong Legislative Council passed The Inland Revenue (Amendment) (No. 7) Bill 2017 (the “Bill”) which introduces the two-tiered profits tax rates regime. The Bill was signed into law on March 28, 2018 and was announced on the following day. Under the two-tiered profits tax rates regime, the first 2 million Hong Kong Dollar (“HKD”) of profits of the qualifying group entity will be taxed at 8.25%, and profits above HKD 2 million will be taxed at 16.5%. The Group’s Hong Kong subsidiaries did not have assessable profits that were derived in Hong Kong for the years ended December 31, 2021 and 2022. Therefore, no Hong Kong profit tax has been provided for the years ended December 31, 2020, 2021 and 2022. PRC The Group’s PRC subsidiaries, VIEs and their subsidiaries are subject to the PRC Enterprise Income Tax Law (“EIT Law”) and are taxed at the statutory income tax rate of 25%, unless otherwise specified. 15. PRC-Continued The components of the income tax expense are as follows: For the years ended December 31, 2020 2021 2022 Current income tax benefit (expense) $ — $ 729 $ (74) Deferred income tax expense — — — Total income tax benefit (expense) $ — $ 729 $ (74) The reconciliations of the statutory income tax rate and the Group’s effective income tax rate are as follows: For the years ended December 31, 2020 2021 2022 Net loss before provision for income taxes $ 166 $ 196,657 $ 84,545 PRC statutory tax rate 25 % 25 % 25 % Income tax at statutory tax rate 42 49,164 21,136 Impairment of goodwill — (35,914) — Reversal of taxable deemed interest income from inter-company interest-free loans — 1,354 — Fair value change on warrants — 500 (79) Non-deductible loss and SBC expenses not deductible for tax purposes — (13,262) (13,427) Effect of income tax rate differences in jurisdictions other than the PRC — (437) (1,721) NOL not applicable for carryforward (56) (193) (288) Change in valuation allowance 14 (483) (5,339) Income tax benefit $ — $ 729 $ (74) Effective tax rates — % 0.38 % (0.00) % The tax effect of temporary difference under ASC Topic 740 “Accounting for Income Taxes” that gives rise to deferred tax asset as of December 31, 2021 and 2022 is as follows: 15. PRC-Continued The tax effect of temporary difference balance as of December 31, 2021 were mainly from KAH Group as a result of the reverse acquisition. As of December 31, 2020 2021 2022 Deferred tax assets: Write-down of Prepaid expenses and other current assets $ — $ 4,249 $ 477 Write-down of inventory — 3,874 — Provision for doubtful accounts — 2,315 — Write down of other non-current assets — 1,054 — Accrued expense — 207 — Accrued payroll and welfare — 61 — Advertising expense — 6 — Net operating loss carry forwards 388 13,474 584 Subtotal 388 25,240 1,061 Valuation allowance (388) (25,240) (1,061) Deferred tax assets, net $ — $ — $ — The Company had total deferred tax assets related to net operating loss carry forwards at $13,474 and $584 as of December 31, 2021 and 2022, respectively. The Company assessed the available evidence to estimate if sufficient future taxable income would be generated to use the existing deferred tax assets. As of December 31, 2021 and 2022, full valuation allowances were established because the Company believes that it is more likely than not that its deferred tax assets will not be utilized as it does not expect to generate sufficient taxable income in the near future. As of December 31, 2022, the Company had net operating losses from several of its PRC entities of $3,702, which can be carried forward to offset future taxable profit. The net operating loss of $72, $2,508, $933, $110 and $76 will expire by 2023, 2024, 2025, 2026 and 2027, respectively, if not utilized. As of December 31, 2022, the Company had net operating loss of $3 from Hong Kong subsidiaries which do not have an expiring date. 15. PRC-Continued The movements of the valuation allowance are as follows: As of December 31, 2020 2021 2022 Balance at the beginning of the year $ 402 $ 388 $ 25,240 Current year addition 63 1,454 5,267 Current year reversal — (753) (7,039) Reduction due to usage of NOL (21) (25) (42) Reduction due to statute expiration (56) (193) (288) Decrease in disposal of subsidiaries — — (22,077) Reverse acquisition — 23,843 — Exchange rate effect — 526 — Balance at the end of the year $ 388 $ 25,240 $ 1,061 Since January 1, 2008, the relevant tax authorities have not conducted a tax examination on the Company’s PRC entities. In accordance with relevant PRC tax administration laws, tax years from 2018 to present of the Company’s PRC subsidiaries and VIEs and VIEs’ subsidiaries remain subject to tax audits as of December 31, 2022 at the tax authority’s discretion. |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 12 Months Ended |
Dec. 31, 2022 | |
CONVERTIBLE NOTES | |
CONVERTIBLE NOTES | 16. CONVERTIBLE NOTES The Group issued and sold two Convertible Promissory Notes (“Note A” and “Note B”, or collectively as “Notes”) to streererville CAPITAL, LLC (the “Lender”) on November 19, 2021 and April 8, 2022, respectively. The principal amount of two Notes is both $2,180 and substantial contract terms of two Notes are the same. The purchase price of each Notes were $2,000, computed as follows: $2,180 principal, less discount at issuance of $160, less the transaction expense amount of $20 incurred in connection with the purchase and sale of the Securities. The Notes bears an interest at 8% per annum and is repayable in full in 18 months from issuance. According to the Securities Purchase Agreements of the Notes, the Group has right to repay the Notes until it received the conversion notice from Lender or repayment date. The Lender also has right to conversion the Notes into ordinary shares at any time following the 6-month The Company has not elected the fair value option for the convertible note. And the Note does not have any embedded conversion option and redemption feature which shall be bifurcated and separately accounted for as a derivative under ASC 815, nor does it contain a cash conversion feature or beneficial conversion feature. The Company accounts for two Notes as liabilities in its entirety following ASC 470 Debt and recorded interest expenses of $22 and $683 for the year ended December 31, 2021 and 2022. The balances of Note A are $2,022 and $2,244 as of December 31, 2021 and 2022, respectively. The balances of Note B are nil and $2,061 as of December 31, 2021 and 2022, respectively. |
MEZZANINE EQUITY AND WARRANT LI
MEZZANINE EQUITY AND WARRANT LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
MEZZANINE EQUITY AND WARRANT LIABILITIES | |
MEZZANINE EQUITY AND WARRANT LIABILITIES | 17. Insurance of convertible preferred shares and warrants On December 28, 2020, KAH entered into a definitive securities purchase agreement with U.S. based KX Ventures 4 LLC (the “Investor”) and completed the initial closing on December 29, 2020. Pursuant to the agreement, the Investor will invest $6,000 in newly designated Series A convertible preferred shares (the “Series A Preferred Shares”) of KAH. The first $3,000 of the investment closed on December 29, 2020 (the “First Closing”). The Series A Preferred Shares are convertible into 1,000,000 ordinary shares of KAH’s at a conversion price of $3.00, subject to customary adjustments. Pursuant to the Purchase Agreement, the Investor will also receive warrants to subscribe for KAH’s ordinary shares at an exercise price of $3.00 per share. In connection with the issuance of 3,000 convertible preferred shares at the First Closing, 1,500,000 Series A Warrants, 1,333,333, Series B Warrants and 2,000,000 Series C Warrants (collectively the “Warrants”) were issued to the Investor, with each warrant provided the holder the right to subscribe for KAH’s ordinary shares at an exercise price of $3.00 per share. Series A and Series B Warrants are immediately exercisable, and Series C Warrants are exercisable upon exercise and in proportion to the number of Series B Warrants exercised. Series A, B and C warrants expire on December 29, 2027, August 29, 2024 and June 29, 2028, respectively. The Series A Preferred Shares and Warrants are bundled transactions, which were considered as equity-linked instruments. The management has determined that there was beneficial conversion feature attributable to the preferred shares because the initial effective conversion prices of these preferred shares were lower than the fair value of KAH’s ordinary shares at the relevant commitment dates, and the effect of beneficial conversion feature was recognized in additional paid-in capital. The Group classified the Series A Preferred Shares as mezzanine equity instead of permanent equity on the consolidated balance sheets since they were contingently redeemable upon the occurrence of the redemption event, that is if the Volume-weighted average price is less than $3.00 on the 54-month anniversary of the applicable Original Issue Date (December 29, 2020) and expired in 2025, which is outside the Group’s control. The fair value allocated to the Series A Preferred Shares was $1,310 at the date of the First Closing. The Warrants are classified as a liability and the fair value allocated to warrants was $1,690 as of the date of the First Closing. The Group accrete changes in the redemption value over the period from the date of issuance to the earliest redemption date (June 1, 2025) of the instrument using the interest method. In August 2021, total Series A preferred Shares of $3,000 were converted at conversion price of $3.00 into 1,089,145 ordinary shares of the Company. The Warrants were classified as the warrant liability on the issuance date and as of December 31, 2020, 2021 and 2022, which was re-measured at fair value of $24 as of December 31, 2022, and will be re-measured at each reporting period until the warrants are exercised or expire and any changes will be recognized in the statement of operations. No warrants were exercised as of December 31, 2022. 17. MEZZANINE EQUITY AND WARRANT LIABILITIES-CONTINUED As of December 31, 2021 Series A Warrant Series B Warrant Series C Warrant Risk-free rate of return 1.41 % 0.24 % 1.46 % Estimated volatility rate 45.82 % 50.55 % 46.99 % Dividend yield — % — % — % Spot price of underling ordinary share 1.14 1.14 1.14 Exercise price $ 3 $ 3 $ 3 Fair value of warrant $ 335 $ 3 $ 2 As of December 31, 2022 Series A Warrant Series B Warrant Series C Warrant Risk-free rate of return 4.12 % 4.53 % 4.12 % Estimated volatility rate 55.29 % 54.43 % 54.38 % Dividend yield 0 % 0 % 0 % Spot price of underling ordinary share 0.29 0.29 0.29 Exercise price $ 3 $ 3 $ 3 Fair value of warrant $ 24 $ — $ — |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
EQUITY | |
EQUITY | 18. EQUITY Ordinary shares KAH issued 74,035,502 ordinary shares to the former shareholders of Haitaoche in the Reverse Acquisition. The shareholders’ structure as of December 31, 2021 reflects the equity structure of the KAH, including the equity interests KAH issued to effect the reverse acquisition. The shareholders’ equity structures as of December 31, 2020 were presented after giving retroactive effect to the reverse acquisition of the Group that was completed on June 25, 2021. The comparative share capital amounts as of December 31, 2020 have been retroactively adjusted to reflect the legal capital of KAH. Preferred shares 1) Series D Preferred Shares On March 31, 2021, KAH entered into a definitive securities purchase agreement with Renren Inc. (the “Holder”) and completed the closing on the same date. Pursuant to the agreement, the Holder will invest $6,000 in newly designated Series D convertible preferred shares (the “Series D Preferred Shares”) of KAH. Major terms of the Series D Preferred Shares are as follows: Conversion Rights: Series D preferred shares are convertible into 2,000,000 ordinary shares of KAH’s at a conversion price of $3.00, subject to customary adjustments. Each Preferred Share shall be convertible, at any time and from time to time from and after the applicable Issuance Date (April 8, 2021) at the option of the Holder into that number of ordinary shares. Redemption Rights: the redemption included optional redemption and redemption on triggering events. With respect to optional redemption, KAH may deliver a notice to the Holders of its irrevocable election to redeem some or all of the then outstanding Series D Preferred Shares at any time after March 30, 2022. With respect to redemption on several triggering events, upon the occurrence of a Triggering Event, each Holder shall have the right, exercisable at the sole option of such Holder, to require the Company to redeem all of the Series D Preferred Shares. The Series D Preferred Shares were considered as permanent equity since they were redeemable upon the occurrence of events that are within the Group’s control. The Group has issued 6,000 convertible preferred shares and received $6,000 as of April 8, 2021. 18. EQUITY-CONTINUED 2) Series F Preferred Shares On December 28, 2022, KAG entered into a definitive securities purchase agreement with Stanley Star Group Inc. (the “Holder”) and completed the closing on the same date. On March 24, 2023, KAG and Stanley Star entered into an amendment to the supplement agreement that modified specific terms of the $50 million preferred stock issued by the Company to Stanley Star. The Company issued $50,000,000 convertible preferred shares of the Company to Stanley Star as part of consideration of the divestment of the Disposal group (Note 4). Major terms of the Series F Preferred Shares are as follows: Conversion Rights: Series F preferred shares are convertible into 50,000,000 ordinary shares of the Company at a conversion price of $1.00, subject to customary adjustments. Each Preferred Share shall be convertible, at any time and from time to time from and after the applicable Issuance Date at the option of the Holder into that number of ordinary shares. Redemption Rights: the redemption included optional redemption and redemption on triggering events. With respect to optional redemption, the Company may deliver a notice to the Holders of its irrevocable election to redeem some or all of the then outstanding Series F Preferred Shares at any time after January 1, 2023. With respect to redemption on several triggering events, upon the occurrence of a Triggering Event, each Holder shall have the right, exercisable at the sole option of such Holder, to require the Company to redeem all of the Series F Preferred Shares. The Series F Preferred Shares were considered as permanent equity since they were redeemable upon the occurrence of events that are within the Group’s control. Warrants 1) Issuance of ordinary shares and 2022 warrants In January 2022, Suzhou government and its partners determined to invest RMB100 million (approximately $15.4 million) to subscribe for ordinary shares of the Company to support the electronic vehicles business and the first payment of RMB 30 million (approximately $4.6 million) of investment had been received in February 2022. In connection, on March 14, 2022, the Company issued 4,406,542 ordinary shares to Derong Group Limited (“Derong”), the entity designed by Suzhou government. The Company also committed and issued 6,500,000 warrant shares (“2022 Warrant) to Discover Flux Ltd, a warrant holder designated by Derong on July 3, 2022. Discover Flux Ltd has right to subscribe for the Company’s ordinary shares at an exercise price of $1.00 per share. The warrant shares were classified as equity and measured at relative fair value of $1,417 calculated using the Black-Scholes pricing model, which was recorded as warrant equity started from July 3, 2022. The portion of the proceeds of $3,298 was allocated to the issued ordinary shares. The Company paid issuance cost of amount $1,575 associated with the RMB 100 million investment after the first payment of RMB 30 million was received. $472 of the issuance cost was allocated to the warrant shares and ordinary shares based on assessed fair value of warrant shares and residual proceeds allocated to the ordinary shares, compared to total proceeds received. Issuance costs associated with warrant and ordinary shares were an offset to additional paid-in capital. The $1,103 of the issuance cost was presented as general and administrative expenses in the balance sheet statement as of December 31, 2022 due to the uncertainty of the remaining investment of RMB 70 million. 18. EQUITY-CONTINUED The fair value of the warrants as of July 3, 2022 were calculated using the Black-Scholes pricing model with the following assumptions: As of July 3, 2022 2022 Warrant Risk-free rate of return 2.60 % Estimated volatility rate 57.21 % Dividend yield 0 % Spot price of underling ordinary share 1.035 Exercise price $ 1 Fair value of warrant $ 2,027 2) 2019 warrants As of December 31, 2022, there were 11,957,008 warrants outstanding, which was issued by KAH and consist of 10,318,145 warrants which were issued with units in the initial public offering (“IPO”) of KAH in 2017, 1,000,000 warrants issued with units upon the conversion of convertible loan of Kunlun Tech Limited, 263,863 warrants issued to Shareholder Value Fund and 375,000 warrants issued with units for share subscription of E&A Callet Investment Limited (collective the “2019 Warrants”). Each whole warrant that was issued with units in the IPO and issued with units to the 2019 Warrants is exercisable for one ordinary share at a price of $11.50 per full share. The warrants may only be exercised for whole numbers of shares. The 2019 Warrants became exercisable on April 30, 2019 and have a term of five years from April 30, 2019. The Group may redeem the outstanding 2019 Warrants, in whole and not in part, at a price of $0.01 per warrant: ● at any time while the 2019 Warrants are exercisable, ● upon a minimum of 30 days ’ prior written notice of redemption, ● if, and only if, the last sales price of the ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a 30 - trading day period ending three business days before the Group sends the notice of redemption, and ● if, and only if, there is a current registration statement in effect with respect to the ordinary shares underlying such 2019 Warrants at the time of redemption and for the entire 30 -day trading period referred to above and continuing each day thereafter until the date of redemption. If the Group calls the 2019 Warrants for redemption as described above, the management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” The 2019 Warrants were recognized as an equity instrument as it meets all of the criteria for equity classification and is classified within equity as additional paid-in capital. 18. EQUITY-CONTINUED Options There was a call option purchased by the IPO underwriter of KAH in 2017, which is exercisable at $10.00 per Unit to purchase up to 900,000 Units (or an aggregate exercise price of $9,000,000). The option may be exercised for cash or on a cashless basis, at the holder’s option, and expires five years from the effective date of the registration statement related to the initial public offering of KAH (i.e., expires by October 2022). Statutory reserve and restricted net assets In accordance with the Regulations on Enterprises with Foreign Investment of China and their articles of association, the Group’s subsidiaries and VIE entities located in the PRC, are required to provide for certain statutory reserves. The statutory reserve fund required to reserve 10% of their net profit after income tax, as determined in accordance with the PRC accounting rules and regulations. Appropriation to the statutory reserve by the Group is based on profit arrived at under PRC accounting standards for business enterprises for each year. The profit arrived at must be set off against any accumulated losses sustained by the Group in prior years, before allocation is made to the statutory reserve. Appropriation to the statutory reserve must be made before distribution of dividends to shareholders. The appropriation is required until the statutory reserve reaches 50% of the registered capital. This statutory reserve is not distributable in the form of cash dividends. Relevant PRC statutory laws and regulations permit the payment of dividends by the Group’s PRC subsidiary only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Furthermore, registered share capital and capital reserve accounts are also restricted from distribution. As a result of these PRC laws and regulations, the Group’s PRC subsidiary is restricted in their ability to transfer a portion of their net assets to the Group either in the form of dividends, loans or advances. The Group’s restricted net assets, comprising of paid-in-capital and statutory reserve of Group’s PRC subsidiary, were $117,085 and $121,656 as of December 31, 2021 and December 31, 2022, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 19. Assets and liabilities measured or disclosed at fair value The Group measures its financial assets and liabilities, including warrant liability at fair value on a recurring basis as of December 31, 2021 and 2022. The Group measured its prepayment for vehicle purchase and other current assets, accounts payable, short-term debt, amounts due from and due to related parties at amortized cost. The carrying value of the short-term debt obligations approximate fair value, considering the borrowing rates are at the same level of the current market yield for the comparable debts. The carrying value of cash and cash equivalent, prepayment for vehicle purchase and other current assets, accounts payable, and amounts due from and due to related parties’ approximate fair value due to the relatively short maturity. The following table presents the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis: As of December 31, 2021 As of December 31, 2022 Fair Value Measurement at the Reporting Date using Fair Value Measurement at the Reporting Date using Quoted Quoted price in price in active active markets markets for Significant Significant for Significant Significant identical other unobservable identical other unobservable assets observable inputs assets observable inputs Level 1 inputs Level 3 Total Level 1 inputs Level 3 Total Warrant liabilities — — (340) (340) — — (24) (24) There have been no transfers between Level 1, Level 2, or Level 3 categories during the years ended December 31, 2021 and December 31, 2022. Assets measured at fair value on a nonrecurring basis The Group measures its property, equipment, and intangible assets at fair value on a nonrecurring basis whenever events or changes in circumstances indicate that the carrying value may no longer be recoverable. The Group measures the purchase price allocation at fair value on a nonrecurring basis as of the acquisition dates. Goodwill is evaluated for impairment annually or more frequently if events or conditions indicate the carrying value of a reporting unit may be greater than its fair value. Impairment testing compares the carrying amount of the reporting unit with its fair value. In 2021, the Group performed impairment tests for goodwill caused by the reverse acquisition using the discounted cash flow method. The fair value of goodwill is a Level 3 valuation based on certain unobservable inputs including projected cash flows, terminal growth rate of 2.5%, forecasted inflation rate of 2.5%, discount rate of 12% that would be utilized by market participants in valuing these assets or prices of similar assets. |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
LOSS PER SHARE | |
LOSS PER SHARE | 20. LOSS PER SHARE The following table sets forth the computation of basic and diluted net loss per ordinary share for the years ended: For the years ended December 31, 2020 2021 2022 Net loss attributable to Kaixin Auto Holdings’ shareholders $ (166) $ (196,579) $ (84,706) Weighted average number of ordinary shares outstanding used in computing net loss per ordinary share - basic and diluted, shares retroactively adjusted for the reverse acquisition on June 25, 2021) 74,035,502 114,416,353 200,167,152 Loss per share attributable to Kaixin Auto Holdings’ shareholders - basic and diluted $ (0.0022) $ (1.7181) $ (0.0004) Since the Group is in a net loss for the years ended December 31, 2020, 2021 and 2022 presented in these financial statements, the potential dilutive securities were not included in the calculation of dilutive net loss per share where their inclusion would be anti-dilutive. And no dilutive security was issued for the years ended December 31, 2020, 2021 and 2022, there was no difference between the Group’s basic and diluted net loss per share for the periods presented. The potential dilutive securities that were not included in the calculation of dilutive loss per share in those periods are nil, 167,151 and 167,151 respectively, for the years ended December 31, 2020, 2021 and 2022 , as inclusion would have been anti-dilutive. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 21. Kaixin incentive plans (a) Kaixin Auto Holdings Incentive Plan (the “Kaixin 2019 Plan”) On April 30, 2019, KAH adopted Kaixin 2019 Plan, whereby 4,715,700 ordinary shares of KAH are made available for future grant for employees of KAH share options or restricted shares. On May 3, 2019 (the “Replacement Date”), the Company’s board of directors approved a directive to replace all the outstanding share options granted during the year ended December 31, 2018 under the 2018 Plan to 144 employees with 2,186,364 options and 2,183,828 restricted shares. The exercise price of the options was reduced from $1.70 per share to $0.01 per share. The replacement options were subject to graded vesting over three years from the Replacement Date, in which 25% ~ 62.5% of the options granted to each individual vest on the grant date immediately and 1/36 1/4 1/36 21. (b) Kaixin Auto Holdings Incentive Plan (the “Kaixin 2020 Plan”) On November 17, 2020, the board of directors of KAH approved the Kaixin 2020 Plan, under which, up to 5,000,000 ordinary shares may be granted as awards in form of share options, restricted shares or restricted shares units. In the event of a change in control or another transaction having a similar effect, then any incentives granted under the 2020 Incentive Plan shall be deemed vested immediately. No such award has been granted during the year ended December 31, 2020. The Company has granted 5,181,778 restricted shares under the Kaixin 2020 Plan in 2021. (c) Kaixin Auto Holdings Incentive Plan (the “Kaixin 2021 Plan”) On July 12, 2021, the board of directors of KAH approved the Kaixin 2021 Plan. The maximum number of ordinary shares that may be delivered pursuant to awards granted under the Kaixin 2021 Plan is 26,596,000. As of December 31, 2021, the Company has granted 20,535,000 restricted shares under the Kaixin 2021 Plan. (d) Kaixin Auto Holdings Incentive Plan (the “Kaixin 2022 Plan”) On May 16, 2022, the board of directors of KAH approved the Kaixin 2022 Plan. The maximum number of ordinary shares that may be delivered pursuant to awards granted under the Kaixin 2022 Plan is 39,500,000. As of December 31, 2022, the Company has granted 38,500,000 restricted shares under the Kaixin 2022 Plan. In determining the fair value of share options in 2019, a binomial option pricing model is applied. Assumptions used to estimate the fair values of the share options granted or modified on grant date were as follows: Grant date Risk-free interest rate (1) 2.50-3.00 % Volatility (2) 45%-46 % Expected term (in years) (3) 10 Exercise price (4) $ 0.01 Dividend yield (5) — Fair value of underlying ordinary share (6) $ 2.12-$3.36 (1) Risk-free interest rate Risk-free interest rate was estimated based on the yield to maturity of treasury bonds of the United States with a maturity period close to the expected life of the options, and the country risk spread between China and United States was considered. (2) Volatility The volatility of the underlying ordinary shares during the life of the options was estimated based on the historical stock price volatility of listed comparable companies over a period comparable to the expected term of the options. (3) Expected term For the options granted to employees, the Company estimated the expected term based on the vesting and contractual terms and employee demographics. For the options granted to non-employees, the Company estimated the expected term as the original contractual term. (4) Exercise price The exercise price of the options was determined by the Company’s board of directors. (5) Dividend yield The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the options. 21. SHARE-BASED COMPENSATION-CONTINUED (6) Fair value of underlying ordinary shares Prior to the consummation of the listing, the estimated fair value of the ordinary shares underlying the options as of the valuation date was determined based on a contemporaneous valuation. When estimating the fair value of the ordinary shares on the valuation dates, management has considered a number of factors, including the result of a third-party appraisal of the Company, while taking into account standard valuation methods and the achievement of certain events. The fair value of the ordinary shares in connection with the option grants on the valuation date was determined with the assistance of an independent third-party appraiser. The fair values of the underlying ordinary shares on each date of the grant after April 30, 2019, were the closing prices of the Company’s ordinary shares traded in the Stock Exchange. The estimated fair value of restricted shares granted on each date of the grant under Kaixin 2020 Plan and Kaixin 2021 plan were the closing prices on the relevant grant date of the Company’s ordinary shares traded in the Stock Exchange. A summary of the Company’s share options activities held by the Company’s employees for the year ended December 31, 2022 was as follows: Weighted average Weighted Weighted grant day Average Average fair Remaining Aggregate Options Granted to Employees Number of Exercise Value per Contractual Intrinsic and Directors Shares Price shares Years value Outstanding as of December 31, 2021 167,151 0.02 3.17 0.99 1.12 Forfeited (145,478) 0.02 3.17 — — Granted — — — — — Exercised — — — — — Outstanding as of December 31, 2022 21,673 0.02 3.17 6.34 0.27 Expected to vest as of December 31, 2022 — — — — — Exercisable as of December 31, 2022 21,673 0.02 3.17 6.34 0.27 The aggregate intrinsic value was calculated as the difference between the exercise price of the underlying awards and the closing stock price of $0.29 of the Company’s ordinary share on December 31,2022. As of December 31, 2022, there was approximately $462 of total unrecognized compensation cost related to unvested share options. The unrecognized compensation costs are expected to be recognized over a weighted average period of 2.66 years. A summary of the nonvested restricted shares activity as of December 31, 2022 is as follows: Weighted average fair value Number of nonvested per ordinary share restricted shares at the grant dates Outstanding as of December 31, 2021 5,441,630 2.55 Forfeited (5,000,000) 0.94 Granted 43,500,000 0.87 Vested 38,911,292 1.03 Unvested as of December 31, 2022 5,030,339 1.34 As of December 31, 2022, there was approximately $7,308 of total unrecognized compensation cost related to unvested restricted shares. The unrecognized compensation costs are expected to be recognized over a weighted average period of 5.10 years. The total fair value of shares vested during the years ended December 31, 2020, 2021 and 2022 was nil, 38,669 and $40,078. 21. SHARE-BASED COMPENSATION-CONTINUED Total share-based compensation expense of share-based awards granted to employees and directors for the years ended December 31, 2020, 2021 and 2022 were as follows: For the Years ended December 31, 2020 2021 2022 Selling and marketing $ — $ 264 $ 239 Research and development — 55 44 General and administrative — 41,270 39,027 Total share-based compensation expense $ — $ 41,589 $ 39,310 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 22. The Group has performed an evaluation of subsequent events up to the date of the consolidated financial statements were issued, and determined that no events that would have required adjustment or disclosure in the consolidated financial statements other than those discussed in above. |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 12 Months Ended |
Dec. 31, 2022 | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 23. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY The Group performed a test on the restricted net assets of consolidated subsidiaries and VIEs in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), “General Notes to Financial Statements” and concluded that the Group is required to disclose the financial statements for the parent Company. CONDENSED PARENT COMPANY BALANCE SHEETS As of December 31, 2021 2022 ASSETS Cash and cash equivalents — 171 Other receivables, net — 9,830 Amounts due from related parties — 3,726 Investment in subsidiaries and consolidated VIEs $ 29,662 $ 27,964 Total assets 29,662 41,691 LIABILITIES AND SHAREHOLDERS’ EQUITY Accrued expenses and other current liabilities — 4,257 Amounts due to related parties — 200 Convertible note — 4,305 Other liability — 1,614 Total liabilities — 10,376 Shareholders’ equity Ordinary Shares (par value of $0.00005 per shares; 1,000,000,000 shares authorized, 163,129,655 and 238,368,861 shares issued as of December 31, 2021 and 2022, respectively. 163,129,655 and 228,250,210 shares issued and outstanding as of December 31, 2021 and 2022, respectively) 8 11 Series D convertible preferred shares (par value of $0.0001, 6,000 shares authorized as of December 31, 2021 and 2022, respectively. 1 3 Additional paid-in capital 227,310 312,831 Accumulated deficit (198,294) (283,000) Accumulated other comprehensive income (loss) 637 1,470 Total shareholders’ equity 29,662 31,315 Total liabilities and shareholders’ equity $ 29,662 $ 41,691 CONDENSED PARENT COMPANY STATEMENTS OF OPERATIONS For the years ended December 31, 2020 2021 2022 Operating income: Share of loss of subsidiaries and VIEs $ (166) $ (196,579) $ (78,256) General and administrative expenses — — (5,897) Other income — — (465) Income before income tax expense (166) (196,579) (84,619) Income tax expense — — — Net income (166) (196,579) (84,619) CONDENSED PARENT COMPANY STATEMENTS OF CASH FLOW For the years ended December 31, 2020 2021 2022 Cash flows from operating activities $ — $ — $ (2,410) Cash flows from investing activities — — — Cash flows from financing activities — — (165) Net increase in cash, cash equivalents and restricted cash — — (2,575) Cash, cash equivalents and restricted cash, at beginning of year — — 2,746 Cash, cash equivalents and restricted cash, at end of year $ — $ — $ 171 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | (a) Basis of presentation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). |
Principles of consolidation | (b) Principles of consolidation The consolidated financial statements include the financial statements of the Group, its subsidiaries, its VIEs, and subsidiaries of its VIE.s All inter-company transactions and balances have been eliminated upon consolidation. |
Non-controlling interests | (c) Non-controlling interests Non-controlling interests in the subsidiaries of VIEs of the Group represent the portion of the equity (net assets) in the subsidiaries of VIEs that has not been pledged to the subsidiary of the Group, consequently not directly or indirectly attributable to the Group. Non-controlling interests are presented as a separate component of equity on the consolidated balance sheet and net income (loss) and other comprehensive income (loss) are attributed to controlling and non-controlling interests respectively. |
Business combinations | (d) Business combinations The purchase price of business acquisition is allocated to the tangible assets, liabilities, identifiable intangible assets acquired and noncontrolling interest, if any, based on their estimated fair values as of the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses and restructuring costs are expensed as incurred. Where the consideration in an acquisition includes contingent consideration and the payment of which depends on the achievement of certain specified conditions post-acquisition, the contingent consideration is recognized and measured at its fair value at the acquisition date and if recorded as a liability, it is subsequently carried at fair value with changes in fair value reflected in earnings. |
Use of estimates | (e) Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses in the financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s consolidated financial statements include, but are not limited to, warrant liabilities, the valuation of prepaid expenses and other current assets, deferred tax valuation allowance, impairment assessment on goodwill and intangible assets, the valuation of preferred shares, the purchase price allocation associated with business combinations. |
Fair value measurement | (f) Fair value measurement Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: ● Level 1 — inputs are based upon unadjusted quoted prices for identical assets or liabilities traded in active markets. ● Level 2 — inputs are based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 — inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. |
Warrants | (g) Warrants The Group accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Group’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter with changes in fair value recognized in the statements of operations in the period of change. |
Cash and cash equivalents | (h) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and cash in banks. The Group considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. |
Prepayment for vehicle purchase and other assets | (i) Prepayment for vehicle purchase and other assets Prepayment for vehicle purchase, other current assets and other non-current assets consist of prepayment for vehicle purchase to the dealership operators, advances to suppliers, deductible input VAT, other receivables and others. The Group reviews suppliers credit history and background information before advancing a payment. The Group maintains an allowance for doubtful accounts based on a variety of factors, including but not limited to the aging of prepayments, concentrations, credit-worthiness, historical and current economic trends and changes in delivery patterns. If the financial condition of its suppliers were to deteriorate, resulting in an impairment of their ability to deliver goods or provide services, the Group would provide allowance for such amount in the period when it is considered impaired. There was no allowance recognized for the prepayment for vehicle purchase, other current assets and other non-current assets for the years ended December 31, 2020. The Company recorded impairment loss of nil and $22,921 for prepayment for vehicle purchase and other current assets for the years ended December 31, 2021 and 2022, and recorded impairment loss of $4,216 and nil for other non-current assets for the years ended December 31, 2021 and 2022. |
Inventory | (j) Inventory Inventory includes only the purchased new automobiles. Inventory is stated at the lower of cost or net realizable value. Inventory cost is determined by specific identification. Net realizable value is the estimated selling price less costs to complete, dispose and transport the vehicles. Selling prices are derived from historical data and trends, such as sales price and inventories turnover times of similar vehicles, as well as independent, market resources. Each reporting period the Group recognizes any necessary adjustments to reduce the cost of vehicle inventories to its net realizable value through cost of sales in the accompanying consolidated statements of operations. Vehicle inventories are considered slow moving if they have not been sold within a 90 days period since procurement. In estimating the level of inventories write-downs for slow moving vehicles, the Group considers historical data and forecasted customer demand, such as sales price and inventories turnover of similar vehicles with similar mileage and condition, as well as independent, market information. This valuation process requires management to make judgments, based on currently available information, and assumptions about future demand and market conditions, which are inherently uncertain. To the extent that there are significant changes to estimated vehicle selling prices or decreases in demand for used vehicles, there could be significant adjustments to reflect inventories at net realizable value. There were no write-downs of inventories recorded for the years ended December 31,2020, 2021 and 2022. |
Convertible notes | (k) Convertible notes The Group accounts for its convertible notes under ASC 470 Debt, using the effective interest method, as a single debt instrument, from the issuance date to the maturity date. Interest expenses are recognized in the consolidated statement of operation in the period in which they are incurred. If the convertible notes are converted into equity, the company must extinguish the related debt liability. The Group should recognize any difference between the carrying amount of the liability and the fair value of the equity instruments issued as a gain or loss in the income statement. |
Property and equipment, net | (l) Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment if any. The depreciation is recognized on a straight-line basis over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its intended use. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income/loss in the year of disposition. Estimated useful lives are as follows: Estimated Useful Life Computer equipment and application software 2 - 3 Years Furniture and vehicles 5 Years |
Intangible assets, net | (m) Intangible assets, net Intangible asset is stated at cost less accumulated amortization and impairment if any. Intangible asset is amortized in a method which reflects the pattern in which the economic benefits of the intangible asset are expected to be consumed or otherwise used up. When assets are retired or disposed of, the cost and accumulated amortization are removed from the accounts, and any resulting gains or losses are included in income/loss in the year of disposition. Estimated useful lives are as follows: Estimated Useful Life Software 10 Years Domain name 10 Years Trademark 10 Years In accordance with ASC Topic 360, the Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. Software and domain name are used for the business of Haitaoche and no impairment indicators was noted. The trademark recognized from the Reverse Acquisition were initial recognized using Relief-From-Royalty (“RFR”) method. The trademark was tested for impairment due to identification of impairment indicator. The amount of impairment is measured as the difference between the asset’s estimated fair value and its carrying amount. The Company did not record any impairment charge for the years ended December 31, 2020, 2021and 2022. |
Goodwill | (n) Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. The Group assesses goodwill for impairment on annual basis as of December 31 or if indicator noted for goodwill impairment. In accordance with ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) issued by the Financial Accounting Standards Board (“FASB”) guidance on testing of goodwill for impairment, the Group will first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test. If this is the case, the quantitative goodwill impairment test is required. If it is more likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the quantitative goodwill impairment test is not required. 2. Quantitative goodwill impairment test is used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired. If the fair value of the reporting unit is less than its carrying amount, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. For the goodwill recognized subsequent to the reverse acquisition on June 25, 2021, the management performed qualitative assessment and noted certain facts and circumstances indicated that it was more likely than not that the fair value of the reporting unit was less than its carrying value, which required the Group to perform a quantitative test, with the income approach using discounted cash flow (“DCF”), to determine the fair value of the KAH Group reporting unit. Based on the results of the quantitative goodwill impairment test, the Group fully impaired the goodwill generated through the reversed acquisition of $143,655 in 2021. |
Impairment of long-lived assets | (o) Impairment of long-lived assets In accordance with ASC Topic 360, the Group reviews long-lived assets or asset group for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be fully recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Group first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Any impairment write-downs would be treated as permanent reductions in the carrying amounts of the assets and a charge to operations would be recognized. Management has performed a review of all long-lived assets and has determined that no impairment loss for long-lived assets has occurred for the year ended December 31, 2020 and recorded impairment loss of $4,216 and nil for other long-lived assets for the years ended December 31, 2021 and 2022. |
Operating lease right of -use assets | (p) Operating lease right-of -use assets The Group leases premises for offices under non-cancellable operating leases. Prior to the adoption of Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) and subsequent amendments to the initial guidance including ASU No. 2017-13, ASU No. 2018-10, ASU No. 2018-11, ASU No. 2018-20, and ASU No. 2019-01 (collectively, “Topic 842”), operating leases were not recognized on the consolidated balance sheets, instead, rental expenses with fixed payments were recognized on a straight-line basis over the lease term. Effective January 1, 2021, the Group adopted Topic 842 using a modified retrospective transition approach for leases that exist at, or are entered into after January 1, 2021, and has not recast the comparative periods presented in the consolidated financial statements. Upon adoption of Topic 842 and the reverse acquisition, the lease liabilities are recognized upon lease commencement for operating leases based on the present value of lease payments over the lease term. The right-of-use assets are 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. As the rate implicit in the lease cannot be readily determined, the Group’s incremental borrowing rate at the lease commencement date is used in determining the imputed interest and present value of lease payments. The incremental borrowing rate was determined using a portfolio approach based on the rate of interest that the Group would have to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Group recognizes the single lease cost on a straight-line basis over the remaining lease term for operating leases. The Group has elected not to recognize right-of-use assets or lease liabilities for leases with an initial term of 12 months or less; expenses for these leases are recognized on a straight-line basis over the lease term. |
Value added tax | (q) Value added tax Value-added tax (“VAT”) is reported as a deduction to revenue when incurred. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in accrued expense and other current liabilities on the consolidated balance sheets. In 2018, the Group entered into a series of ancillary agreements to facilitate its sale of used cars for value-added tax optimization purposes, which was still applicable in 2022. Under these ancillary agreements, when the Group sources a used car, the legal ownership of the car is transferred toZhejiang Kaixin Auto Co., Ltd’s executives, and the registration is normally under the name of one of the dealership’s employees. The Group viewed itself as a service provider for VAT purpose, and therefore is only subject to value-added tax on the difference between the original purchase price and the retail price of the used cars. The Group’s other affiliated entities in the PRC, including Zhejiang Taohaoche are subject to VAT for sales of automobiles at applicable tax rates, and subsequently paid to PRC tax authorities after netting input VAT on purchases. The Group reports revenue net of PRC’s VAT for all the periods presented in the consolidated statements of operations. |
Revenue recognition | (r) Revenue recognition The Group accounts for revenue using Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. The following five steps are applied to achieve core principle of ASC 606: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the Group satisfies a performance obligation The Group primarily sells automobiles to car dealers and individual customers through signing written sales contracts. The Group presents the revenue generated from its sales of automobiles on a gross basis as the Group is a principal based on the fact that the Group is primarily responsible for fulling the promise to deliver the specified used cars or new cars to the customers, the Group also has pricing discretion and obtains substantially all of the remaining benefits from the sale goods. Revenue is recognized at a point in time upon delivery, which usually coincide with the timing of the customer acceptance. The following table identifies the disaggregation of the revenue for the years ended December 31, 2020, 2021 and 2022, respectively: For the year ended December 31, 2020 2021 2022 Used-car sales $ — $ 251,054 $ 80,034 New-car wholesales 1,207 2,786 2,806 Total revenues $ 1,207 $ 253,840 $ 82,840 Advances from customers Advances from customers for sales of goods are payment from customers for purchase, and are deferred when corresponding performance obligation has not been satisfied. They are recognized as revenue upon the Group transfers the control of products to the customers. |
Cost of revenue | (s) Cost of revenue Cost of revenue consists primarily of cost of goods purchased from domestic and overseas regions. |
Income taxes | (t) Income taxes The Group accounts for income taxes using the asset/liability method prescribed by ASC 740 Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Group records a valuation allowance to offset 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 as income or loss in the period that includes the enactment date. The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Group’s operating subsidiaries in PRC are subject to examination by the relevant tax authorities. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000 ($15,500). In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. As of December 31, 2021 and 2022, the Group did not have any significant unrecognized uncertain tax positions and the Group does not believe that its unrecognized tax benefits will change over the next twelve months. In addition, the Group did not have any interest or penalties associated with uncertain tax position for the years ended December 31, 2020, 2021 and 2022. |
Foreign currency translation | (u) Foreign currency translation The reporting currency of the Group is the U.S. dollar (“USD” or “$”). The functional currency of subsidiaries, VIEs located in China is the Chinese Renminbi (“RMB”), the functional currency of subsidiaries located in Hong Kong is the Hong Kong dollars (“HK dollar” or “HK$”). For the entities whose functional currency is the RMB and HK$, result of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments are reported as foreign currency translation adjustment and are shown as a separate component of other comprehensive income (loss) in the consolidated statements of comprehensive income (loss). Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date. Both exchanges rates were published by the Federal Reserve Board. Any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are shown as foreign currency exchange (loss) gains in the consolidated statements of operations and comprehensive income (loss) as incurred. The consolidated balance sheets amount, with the exception of equity, on December 31, 2021 and December 31, 2022 were translated at RMB6.3726 to $1.00 and at RMB6.8972 to $1.00, respectively. Equity accounts were stated at their historical rates. The average translation rates applied to consolidated statements of operations and cash flows for the years ended December 31, 2020, 2021 and 2022 were RMB6.7434 to $1.00, RMB6.3914 to $1.00 and RMB6.7290 to $1.00, respectively. |
Share-based compensation | (v) Share-based compensation Share-based payment transactions with employees, such as share options are measured based on the grant date fair value of the equity instrument. The Company recognizes the compensation costs net of estimated forfeitures using the straight-line method, over the applicable vesting period. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of stock compensation expense to be recognized in future periods. Share options granted to employees with market conditions attached are measured at fair value on the grant date and are recognized as the compensation costs over the estimated requisite service period, regardless of whether the market condition has been met. A change in any of the terms or conditions of share options is accounted for as a modification of stock options. The Company calculates the incremental compensation cost of a modification as the excess of the fair value of the modified option over the fair value of the original option immediately before its terms are modified, measured based on the share price and other pertinent factors at the modification date. For vested options, the Company recognizes incremental compensation cost in the period the modification occurred. For unvested options, the Company recognizes, over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date. |
Loss per share | (w) Loss per share Basic loss per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Potentially dilutive shares are excluded from the computation if their effect is anti-dilutive. |
Comprehensive income (loss) | (x) Comprehensive income (loss) Comprehensive income (loss) is comprised of the Group’s net income (loss) and other comprehensive income (loss). The components of other comprehensive income (loss) consist solely of foreign currency translation adjustments. |
Commitments and contingencies | (y) Commitments and contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, is disclosed. Legal costs incurred in connection with loss contingencies are expensed as incurred. |
Concentration of credit risk | (z) Concentration of credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalent, prepayment for vehicle purchase and other receivable due from noncontrolling shareholders. The Group places its cash and cash equivalent with financial institutions with high-credit ratings and quality. Prepayment for vehicle purchase and other current assets are concentrated with noncontrolling shareholders (Note 6) as of December 31, 2022. With regard to the prepayment for used car purchase, the Group regularly monitor and performs inspection and counting on these noncontrolling shareholders’ cars inventory to ensure the prepayments are recoverable. Regarding the other receivable due from these noncontrolling shareholders, the Group has arrangement to hold the Company’s ordinary shares issued to these parties to ensure the repayment of majority of the balances. There were no customers that accounted for 10% or more of total revenues for the years ended December 31, 2020, 2021 and 2022. No supplier that accounted for 10% or more of total purchase for the years ended December 31, 2020, 2021 and 2022 or 10% or more of prepaid expenses and other current assets balance as December 31, 2020, 2021 and 2022. |
Segment reporting | (aa) Segment reporting The Group uses the management approach to determine operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker (“CODM”) for making decisions, allocating resources, and assessing performance. The Group’s CODM has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group’s CODM reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Group as a whole and hence, the Group has only one reportable segment. The Group operates and manages its business as a single segment. As the Group’s long-lived assets are substantially all located in the PRC and substantially all of the Group’s revenue is derived from within the PRC, no geographical segments are presented. |
Recently Adopted Accounting Standards | (bb) Recently Adopted Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses”, which will require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable 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 2019-05, ASU 2019-10, ASU 2019-11 and ASU 2020-02 to provide additional guidance on the credit losses standard, which defers the effective date of ASU No. 2016-13 for smaller reporting companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since as of December 31, 2022 the Company no longer qualifies as an EGC, it no longer qualifies for the deferral of the effective date available for EGCs. As such the Company adopted the standard by using the modified retrospective method, effective as of January 1, 2022, and reflected the impact in its financial statements for the year ended December 31, 2022. The impact of the adoption on the consolidated balance sheets, statements of operations, and statements of cash flows was immaterial. In August 2020, the FASB amended guidance related to accounting for convertible instruments as part of ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Debts with Conversion and Other Options. The guidance amended the guidance on convertible debt instruments by removing accounting models for the instruments with beneficial conversion features and cash conversion features and amended the disclosure guidance on convertible debt instruments The ASU is effective for public Group for fiscal years, and interim periods within those fiscal years beginning after December 15, 2021. For all other entities including emerging growth companies, the ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2023. Since as of December 31, 2022 the Company no longer qualifies as an EGC, it no longer qualifies for the deferral of the effective date available for EGCs. As such the Company adopted the standard by using the modified retrospective method, effective as of January 1, 2022, and reflected the impact in its financial statements for the year ended December 31, 2022. The impact of the adoption on the consolidated balance sheets, statements of operations, and statements of cash flows was immaterial. (dd) Recent Accounting Standards In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU requires acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. This guidance is effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The impact of adopting this guidance on the Company’s consolidated financial statements will depend on business combinations occurring on or after the effective date. Recently issued ASUs by the FASB, except for the ones mentioned above, are not expected to have a significant impact on the Group’s consolidated results of operations or financial position. Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Group does not discuss recent standards that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures. |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Summary of major subsidiaries | The major subsidiaries of the Company as of December 31, 2022 are summarized as below: Later of date of incorporation or Place of % of Name of Subsidiaries acquisition Incorporation Ownership Principal activities Major subsidiaries: Kaixin Auto Group (“KAG”) January 25, 2018 Cayman Islands 100 % Investment holding Jet Sound Hong Kong Company Limited May 7, 2011 Hong Kong 100 % Investment holding Zhejiang Taohaoche Technology Co., Ltd. July 11, 2019 PRC 100 % New car trading business Zhejiang Kaixin Auto Co., Ltd April 4, 2021 PRC 100 % Used car trading business Chongqing Jieying Shangyue Automobile Sales Co., Ltd. July 3, 2017 PRC 100 % Used car trading business Wuhan Jieying Chimei Automobile Sales Co., Ltd. November 20, 2017 PRC 100 % Used car trading business Anhui Kaixin New Energy Vehicle Co., Ltd. January 25, 2022 PRC 100 % New energy vehicle trading business |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of estimated useful lives of property and equipment | Estimated Useful Life Computer equipment and application software 2 - 3 Years Furniture and vehicles 5 Years |
Schedule of estimated useful lives of intangible assets | Estimated Useful Life Software 10 Years Domain name 10 Years Trademark 10 Years |
Schedule of disaggregation of revenue | For the year ended December 31, 2020 2021 2022 Used-car sales $ — $ 251,054 $ 80,034 New-car wholesales 1,207 2,786 2,806 Total revenues $ 1,207 $ 253,840 $ 82,840 |
REVERSE ACQUISITION (Tables)
REVERSE ACQUISITION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
REVERSE ACQUISITION. | |
Schedule of allocation of the purchase prices | Amount $ Fair value of consideration transferred (1) 161,760 Fair value of the assets acquired and the liabilities assumed Cash and cash equivalents 4,299 Prepaid expense 46,708 Property plant and equipment 31 Trademark (Intangible Assets) 15,100 Right-of-use assets 47 Goodwill 143,655 Subtotal of total assets 209,840 Short-term bank loan (8,195) Accounts payable (406) Advance from customers (461) Short-term lease liabilities (32) Other payables (13,198) Amounts due to RPT (4,288) Income tax payable (4,079) Warrants (2,335) Mezzanine equity-Preferred shares (1,437) Subtotal of total liabilities (34,431) Less: Non-controlling interest (7,649) Less: Preferred shares (2) (6,000) Total net assets 161,760 (1) The fair value of 69,424,993 ordinary shares issued to pre-reverse acquisition KAH shareholders is $161,760 based on the quoted fair market value of $2.33 per ordinary share on June 25, 2021. (2) It represented Series D convertible preferred shares of KAH issued to Renren Inc. on April 8, 2021 (see Note 15) |
Schedule of pro forma information for the period | For the years ended December 31, 2020 2021 Unaudited Unaudited Revenue $ 34,367 $ 257,631 Net loss $ (5,486) $ (191,468) |
DISPOSAL OF SUBSIDIARIES (Table
DISPOSAL OF SUBSIDIARIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DISPOSAL OF SUBSIDIARIES. | |
Schedule of gain regarding divestiture of disposal group | As of October 27, 2022 Fair value of preferred shares issued to Stanley Star $ (24,592) The carrying amount of any noncontrolling interest (3,954) Net liabilities (24,276) Gain on disposal of subsidiaries $ 3,638 |
Summary of carrying amounts of the major classes of assets and liabilities of the disposal group | As of October 27, 2022 Cash and cash equivalents $ 97 Prepaid expenses and other current assets 1,983 Property and equipment, net 4 Intangible assets, net 20 TOTAL ASSETS $ 2,104 Accounts payable (257) Advance from customers (163) Long-term bank loan (5,476) Income tax payable (2,225) Amount due to Kaixin (8,848) VAT payable (3,340) Accrual expenses and other current liabilities (6,071) Total Liabilities $ (26,380) Net liabilities $ (24,276) |
OTHER RECEIVABLES (Tables)
OTHER RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
OTHER RECEIVABLES. | |
Schedule of other receivables | Borrower Interest rate Amount Shanghai Changda 0 % $ 6,858 Anhui Xin Jieying 0 % $ 1,990 Total $ 8,848 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Schedule of prepaid expenses and other current assets | As of December 31, 2021 2022 Prepayment for vehicle purchase (1) $ 32,091 $ 18,252 Other receivables from dealerships (2) 19,249 9,546 Deductible input VAT 545 7 Advance to suppliers 23 — Others (3) 1,362 191 Total 53,270 27,996 Less: valuation allowance — (1,675) Prepaid expenses and other current assets $ 53,270 $ 26,321 (1) The balance mainly represents pre-payments to the dealership operators who are operators of the used car dealership with whom the Company set up special purpose holding companies to operate the used car business, mainly to purchase used vehicles from the market. (2) The balance represents cash advances paid to the dealership operators for purchasing used vehicles historically and shall be repaid in cash, and the balance is secured using ordinary shares of the Company issued to them as agreed with the dealership operator (Note 10). (3) Others mainly included prepaid rent, staff advances, prepaid marketing fee, advertising fee, professional fee, and other receivables incurred for daily operations. (4) The Company recorded impairment loss of nil and $22,921 for prepayment for vehicle purchase and other current assets for the years ended December 31, 2021 and 2022. |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INTANGIBLE ASSETS, NET | |
Schedule of finite-lived intangible assets | As of December 31, 2021 2022 Trademark (1) $ 14,983 $ 15,100 Software 445 72 Total 15,428 15,172 Less: Accumulated amortization (788) (2,269) Intangible assets, net $ 14,640 $ 12,903 (1) The trademark was identified due to the reverse acquisition of KAH with Haitaoche on June 25, 2021. It has remaining useful life of 8.5 years as of December 31, 2022. |
OTHER NON-CURRENT ASSETS, NET (
OTHER NON-CURRENT ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other assets, noncurrent | |
Schedule of other non-current assets | As of December 31, 2021 2022 Long-term receivables from suppliers (1) $ 4,112 $ — Legal deposit 104 — Other non-current assets, gross $ 4,216 $ — Less: impairment for uncollectible receivables (2) (4,216) — Other non-current assets, net — — (1) Other non-current assets mainly represented the receivable from a foreign supplier, Brueggmann Group (“BG”) in Germany for payment of automobiles purchase early in 2016. BG has never delivered the automobiles. The Gross prepayment amounts were $3,916 as of December 31, 2021, which were stripped off in conjunction with the disposal of the subsidiaries (Note 4). (2) As the Defendants have appealed against the judgement in January, 2022, the Company expects that Defendants are not willing to repay the receivables even if Defendants lose the lawsuit. The Company recognized impairment of $4,216 for the receivables from BG and the legal deposit as well as the other suppliers as of December 31, 2021. |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | As of December 31, 2021 2022 Loan payable (1) $ — $ 3,000 Accrued professional fee 2,698 2,215 Individual income tax payable 2,207 2,207 Used car services payables 3,333 419 Other taxes payable 5,120 181 Others 1,133 1,357 Total $ 14,491 $ 9,379 (1) Loan payable consisted of the following: Lender Interest rate Issuance Date Maturity Date December 31, 2022 Scytech Limited 0 % On September 21, 2022 December 31, 2023 $ 2,700 CPL Yellow stones Limited 5% per annum On December 21, 2022 March 31, 2023 $ 200 Yunfeiyang Limited 5% per annum On December 21, 2022 March 31, 2023 $ 100 |
Schedule of loan payable | Lender Interest rate Issuance Date Maturity Date December 31, 2022 Scytech Limited 0 % On September 21, 2022 December 31, 2023 $ 2,700 CPL Yellow stones Limited 5% per annum On December 21, 2022 March 31, 2023 $ 200 Yunfeiyang Limited 5% per annum On December 21, 2022 March 31, 2023 $ 100 |
LEASE (Tables)
LEASE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASE | |
Summary of weighted average remaining lease terms and discount rates for the operating lease | The weighted average remaining lease terms and discount rates for the operating lease as of December 31, 2022 were as follows: Remaining lease term and discount rate: Weighted average remaining lease term (years) 4 Weighted average discount rate 11.5 % |
Schedule of future minimum rent payable under non-cancelable operating leases | As of December 31, 2022, the future minimum rent payable under non-cancelable operating leases were: 2023 $ 159 2024 129 2025 133 2026 100 2027 — Total lease payments 521 Less: imputed interest (91) Present value of lease liabilities $ 430 Lease liabilities - current 119 Lease liabilities – non-current 311 |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND BALANCES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS AND BALANCES | |
Schedule of related party transactions and balances | Name Relationship (a) Mr. Lin Mingjun (“Mr. Lin”) A controlling shareholder and chief executive officer of the Group (b) Renren Inc. A non-controlling shareholder of the Company As of December 31, 2021 2022 Renren and its subsidiaries(1) $ 3,943 $ 1,427 Mr. Lin — 200 Amounts due to related parties $ 3,943 $ 1,627 (1) The balance mainly represented the advance fund provided by Renren and its subsidiaries to finance the Group’s daily operations. The amount due to Renren and its subsidiaries of $ 2,516 were stripped off in conjunction with the disposal of the subsidiaries (Note 4). |
BANK BORROWING (Tables)
BANK BORROWING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
BANK BORROWING | |
Schedule of bank borrowing | As of December 31, 2021 2022 Short-term debt: East West Bank (1) $ 6,277 $ 2,000 Long-term debt: East West Bank (2) $ 2,000 $ — (1) The annum interest rate of borrowings from East West Bank was 6% . As of December 31, 2021, the Group’s short-term debt was with one-year maturity date. The loan with amount of $6,277 was guaranteed by a wholly-owned subsidiary of Renren Inc, Qianxiang Shiji Technology Development (Beijing) Co., Ltd., a related party of the Group, covered by irrevocable standby letter of credit issued by East West Bank to Renren with Renren’s restricted cash pledged as security. During the transaction of disposal of subsidiaries, the principal of the bank loan has been transferred to and assumed by the Buyer, and the interest will be paid by the Company on a monthly basis. (2) The annum interest rate of borrowings from East West Bank was 2.8%. The Group’s long-term debt matures on August 31, 2023 and was reclassed to current liability as of December 31, 2022. The loan was under an irrevocable standby letter of credit issued by East West Bank to Renren in April 2019 with Renren’s restricted cash pledged as security. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of current and deferred component of income tax expenses (benefit) | For the years ended December 31, 2020 2021 2022 Current income tax benefit (expense) $ — $ 729 $ (74) Deferred income tax expense — — — Total income tax benefit (expense) $ — $ 729 $ (74) |
Schedule of reconciliations of statutory income tax rate and the Group's effective income tax rate | For the years ended December 31, 2020 2021 2022 Net loss before provision for income taxes $ 166 $ 196,657 $ 84,545 PRC statutory tax rate 25 % 25 % 25 % Income tax at statutory tax rate 42 49,164 21,136 Impairment of goodwill — (35,914) — Reversal of taxable deemed interest income from inter-company interest-free loans — 1,354 — Fair value change on warrants — 500 (79) Non-deductible loss and SBC expenses not deductible for tax purposes — (13,262) (13,427) Effect of income tax rate differences in jurisdictions other than the PRC — (437) (1,721) NOL not applicable for carryforward (56) (193) (288) Change in valuation allowance 14 (483) (5,339) Income tax benefit $ — $ 729 $ (74) Effective tax rates — % 0.38 % (0.00) % |
Schedule of principal components of the deferred tax assets and liabilities | As of December 31, 2020 2021 2022 Deferred tax assets: Write-down of Prepaid expenses and other current assets $ — $ 4,249 $ 477 Write-down of inventory — 3,874 — Provision for doubtful accounts — 2,315 — Write down of other non-current assets — 1,054 — Accrued expense — 207 — Accrued payroll and welfare — 61 — Advertising expense — 6 — Net operating loss carry forwards 388 13,474 584 Subtotal 388 25,240 1,061 Valuation allowance (388) (25,240) (1,061) Deferred tax assets, net $ — $ — $ — |
Summary of movements of the valuation allowance | As of December 31, 2020 2021 2022 Balance at the beginning of the year $ 402 $ 388 $ 25,240 Current year addition 63 1,454 5,267 Current year reversal — (753) (7,039) Reduction due to usage of NOL (21) (25) (42) Reduction due to statute expiration (56) (193) (288) Decrease in disposal of subsidiaries — — (22,077) Reverse acquisition — 23,843 — Exchange rate effect — 526 — Balance at the end of the year $ 388 $ 25,240 $ 1,061 |
MEZZANINE EQUITY AND WARRANT _2
MEZZANINE EQUITY AND WARRANT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
MEZZANINE EQUITY AND WARRANT LIABILITIES | |
Schedule of fair value of the warrants calculated using the Black-Scholes pricing model | As of December 31, 2021 Series A Warrant Series B Warrant Series C Warrant Risk-free rate of return 1.41 % 0.24 % 1.46 % Estimated volatility rate 45.82 % 50.55 % 46.99 % Dividend yield — % — % — % Spot price of underling ordinary share 1.14 1.14 1.14 Exercise price $ 3 $ 3 $ 3 Fair value of warrant $ 335 $ 3 $ 2 As of December 31, 2022 Series A Warrant Series B Warrant Series C Warrant Risk-free rate of return 4.12 % 4.53 % 4.12 % Estimated volatility rate 55.29 % 54.43 % 54.38 % Dividend yield 0 % 0 % 0 % Spot price of underling ordinary share 0.29 0.29 0.29 Exercise price $ 3 $ 3 $ 3 Fair value of warrant $ 24 $ — $ — |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EQUITY | |
Schedule of fair value measurement inputs and valuation techniques | As of July 3, 2022 2022 Warrant Risk-free rate of return 2.60 % Estimated volatility rate 57.21 % Dividend yield 0 % Spot price of underling ordinary share 1.035 Exercise price $ 1 Fair value of warrant $ 2,027 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
Schedule of fair value hierarchy for assets and liabilities measured at fair value | As of December 31, 2021 As of December 31, 2022 Fair Value Measurement at the Reporting Date using Fair Value Measurement at the Reporting Date using Quoted Quoted price in price in active active markets markets for Significant Significant for Significant Significant identical other unobservable identical other unobservable assets observable inputs assets observable inputs Level 1 inputs Level 3 Total Level 1 inputs Level 3 Total Warrant liabilities — — (340) (340) — — (24) (24) |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LOSS PER SHARE | |
Schedule of computation of basic and diluted net loss per ordinary share | For the years ended December 31, 2020 2021 2022 Net loss attributable to Kaixin Auto Holdings’ shareholders $ (166) $ (196,579) $ (84,706) Weighted average number of ordinary shares outstanding used in computing net loss per ordinary share - basic and diluted, shares retroactively adjusted for the reverse acquisition on June 25, 2021) 74,035,502 114,416,353 200,167,152 Loss per share attributable to Kaixin Auto Holdings’ shareholders - basic and diluted $ (0.0022) $ (1.7181) $ (0.0004) |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SHARE-BASED COMPENSATION | |
Schedule of Assumptions used to estimate the fair values of the share options granted | Grant date Risk-free interest rate (1) 2.50-3.00 % Volatility (2) 45%-46 % Expected term (in years) (3) 10 Exercise price (4) $ 0.01 Dividend yield (5) — Fair value of underlying ordinary share (6) $ 2.12-$3.36 (1) Risk-free interest rate Risk-free interest rate was estimated based on the yield to maturity of treasury bonds of the United States with a maturity period close to the expected life of the options, and the country risk spread between China and United States was considered. (2) Volatility The volatility of the underlying ordinary shares during the life of the options was estimated based on the historical stock price volatility of listed comparable companies over a period comparable to the expected term of the options. (3) Expected term For the options granted to employees, the Company estimated the expected term based on the vesting and contractual terms and employee demographics. For the options granted to non-employees, the Company estimated the expected term as the original contractual term. (4) Exercise price The exercise price of the options was determined by the Company’s board of directors. (5) Dividend yield The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the options. (6) Fair value of underlying ordinary shares Prior to the consummation of the listing, the estimated fair value of the ordinary shares underlying the options as of the valuation date was determined based on a contemporaneous valuation. When estimating the fair value of the ordinary shares on the valuation dates, management has considered a number of factors, including the result of a third-party appraisal of the Company, while taking into account standard valuation methods and the achievement of certain events. The fair value of the ordinary shares in connection with the option grants on the valuation date was determined with the assistance of an independent third-party appraiser. The fair values of the underlying ordinary shares on each date of the grant after April 30, 2019, were the closing prices of the Company’s ordinary shares traded in the Stock Exchange. |
Kaixin Auto | |
SHARE-BASED COMPENSATION | |
Summary of share options activities | Weighted average Weighted Weighted grant day Average Average fair Remaining Aggregate Options Granted to Employees Number of Exercise Value per Contractual Intrinsic and Directors Shares Price shares Years value Outstanding as of December 31, 2021 167,151 0.02 3.17 0.99 1.12 Forfeited (145,478) 0.02 3.17 — — Granted — — — — — Exercised — — — — — Outstanding as of December 31, 2022 21,673 0.02 3.17 6.34 0.27 Expected to vest as of December 31, 2022 — — — — — Exercisable as of December 31, 2022 21,673 0.02 3.17 6.34 0.27 |
Schedule of Total share-based compensation expense of share-based awards granted to employees and directors | For the Years ended December 31, 2020 2021 2022 Selling and marketing $ — $ 264 $ 239 Research and development — 55 44 General and administrative — 41,270 39,027 Total share-based compensation expense $ — $ 41,589 $ 39,310 |
Kaixin Auto | Restricted Stock | |
SHARE-BASED COMPENSATION | |
Summary of share options activities | Weighted average fair value Number of nonvested per ordinary share restricted shares at the grant dates Outstanding as of December 31, 2021 5,441,630 2.55 Forfeited (5,000,000) 0.94 Granted 43,500,000 0.87 Vested 38,911,292 1.03 Unvested as of December 31, 2022 5,030,339 1.34 |
CONDENSED FINANCIAL INFORMATI_2
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | |
Schedule of CONDENSED PARENT COMPANY BALANCE SHEETS | As of December 31, 2021 2022 ASSETS Cash and cash equivalents — 171 Other receivables, net — 9,830 Amounts due from related parties — 3,726 Investment in subsidiaries and consolidated VIEs $ 29,662 $ 27,964 Total assets 29,662 41,691 LIABILITIES AND SHAREHOLDERS’ EQUITY Accrued expenses and other current liabilities — 4,257 Amounts due to related parties — 200 Convertible note — 4,305 Other liability — 1,614 Total liabilities — 10,376 Shareholders’ equity Ordinary Shares (par value of $0.00005 per shares; 1,000,000,000 shares authorized, 163,129,655 and 238,368,861 shares issued as of December 31, 2021 and 2022, respectively. 163,129,655 and 228,250,210 shares issued and outstanding as of December 31, 2021 and 2022, respectively) 8 11 Series D convertible preferred shares (par value of $0.0001, 6,000 shares authorized as of December 31, 2021 and 2022, respectively. 1 3 Additional paid-in capital 227,310 312,831 Accumulated deficit (198,294) (283,000) Accumulated other comprehensive income (loss) 637 1,470 Total shareholders’ equity 29,662 31,315 Total liabilities and shareholders’ equity $ 29,662 $ 41,691 |
Schedule of CONDENSED PARENT COMPANY STATEMENTS OF OPERATIONS | For the years ended December 31, 2020 2021 2022 Operating income: Share of loss of subsidiaries and VIEs $ (166) $ (196,579) $ (78,256) General and administrative expenses — — (5,897) Other income — — (465) Income before income tax expense (166) (196,579) (84,619) Income tax expense — — — Net income (166) (196,579) (84,619) |
CONDENSED PARENT COMPANY STATEMENTS OF CASH FLOW | For the years ended December 31, 2020 2021 2022 Cash flows from operating activities $ — $ — $ (2,410) Cash flows from investing activities — — — Cash flows from financing activities — — (165) Net increase in cash, cash equivalents and restricted cash — — (2,575) Cash, cash equivalents and restricted cash, at beginning of year — — 2,746 Cash, cash equivalents and restricted cash, at end of year $ — $ — $ 171 |
ORGANIZATION AND PRINCIPAL AC_3
ORGANIZATION AND PRINCIPAL ACTIVITIES - Additional Information (Details) - USD ($) $ in Thousands | Jun. 25, 2021 | Dec. 31, 2022 | Dec. 31, 2021 |
Short-term borrowing | $ 2,000 | $ 6,277 | |
Haitaoche | |||
Issuance of shares through private placement | 74,035,502 | ||
Equity interest subscribed | 100% |
ORGANIZATION AND PRINCIPAL AC_4
ORGANIZATION AND PRINCIPAL ACTIVITIES - Summary of major subsidiaries (Details) | Dec. 31, 2022 |
Kaixin Auto Group ("KAG") | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Percentage of ownership | 100% |
Jet Sound Hong Kong Company Limited | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Percentage of ownership | 100% |
Zhejiang Taohaoche Technology Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Percentage of ownership | 100% |
Zhejiang Kaixin Auto Co., Ltd | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Percentage of ownership | 100% |
Chongqing Jieying Shangyue Automobile Sales Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Percentage of ownership | 100% |
Wuhan Jieying Chimei Automobile Sales Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Percentage of ownership | 100% |
Anhui Kaixin New Energy Vehicle Co., Ltd. | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Percentage of ownership | 100% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment net, Goodwill and Intangible assets, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Impairment expense | $ 143,655 | |
Software | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Estimated useful life of Intangible assets | 10 years | |
Domain name | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Estimated useful life of Intangible assets | 10 years | |
Trademark | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Estimated useful life of Intangible assets | 10 years | |
Computer equipment and application software | Minimum | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Estimated useful lives | 2 years | |
Computer equipment and application software | Maximum | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Estimated useful lives | 3 years | |
Furniture and vehicles | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Estimated useful lives | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
REVENUE, NET | $ 82,840 | $ 253,840 | $ 1,207 | |
Advances from customers | 553 | |||
Income Tax Expense (Benefit) | $ 74 | (729) | ||
PRC | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Income Tax Limitations Extended Period | 5 years | 5 years | ||
Income Tax Expense (Benefit) | $ 15,500 | ¥ 100,000 | ||
Used-car sales | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
REVENUE, NET | 80,034 | 251,054 | ||
New-car wholesales | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
REVENUE, NET | $ 2,806 | $ 2,786 | $ 1,207 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Others (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment ¥ / $ | Dec. 31, 2021 USD ($) ¥ / $ | Dec. 31, 2020 USD ($) ¥ / $ | |
Inventories | |||
Period for considering vehicle as slow moving | 90 days | ||
Write down of inventory | $ 0 | $ 0 | $ 0 |
Prepaid expenses, other current assets and other non-current assets | |||
Allowance recognized during the year | 0 | 4,216 | 0 |
Impairment loss for prepayment for vehicle purchase and other current assets | 22,921 | 0 | |
Impairment loss for other non-current asset | $ 0 | $ 4,216 | $ 0 |
Foreign currency translation | |||
Foreign currency exchange rate | ¥ / $ | 6.8972 | 6.3726 | |
Foreign currency, average translation rate | ¥ / $ | 6.7290 | 6.3914 | 6.7434 |
Segment reporting | |||
Number of geographical segments | segment | 0 | ||
Impairment of long-lived assets | |||
Impairment loss for other non-current asset | $ 0 | $ 4,216 | $ 0 |
REVERSE ACQUISITION - Narrative
REVERSE ACQUISITION - Narratives (Details) - shares | Jun. 25, 2021 | Dec. 31, 2022 | Dec. 31, 2021 |
REVERSE ACQUISITION | |||
Common stock, shares outstanding | 228,250,210 | 163,129,655 | |
Former shareholders of Haitaoche | Kaixin auto holdings | |||
REVERSE ACQUISITION | |||
Percentage of ownership interest | 51.61% | ||
Haitaoche | |||
REVERSE ACQUISITION | |||
Issuance of shares through private placement | 74,035,502 | ||
Equity interest subscribed | 100% | ||
Common stock, shares outstanding | 143,460,495 |
REVERSE ACQUISITION - Fair valu
REVERSE ACQUISITION - Fair value of equity consideration - Haitaoche (Details) $ / shares in Units, $ in Thousands | Jun. 25, 2021 USD ($) $ / shares shares |
Fair value of the assets acquired and the liabilities assumed | |
Cash and cash equivalents | $ 4,299 |
Prepaid expense | 46,708 |
Property plant and equipment | 31 |
Trademark (Intangible Assets) | 15,100 |
Right-of-use assets | 47 |
Goodwill | 143,655 |
Subtotal of total assets | 209,840 |
Short-term bank loan | (8,195) |
Accounts payable | (406) |
Advance from customers | (461) |
Short-term lease liabilities | (32) |
Other payables | (13,198) |
Amounts due to RPT | (4,288) |
Income tax payable | (4,079) |
Warrants | (2,335) |
Mezzanine equity-Preferred shares | (1,437) |
Subtotal of total liabilities | (34,431) |
Less: Non-controlling interest | (7,649) |
Less: Preferred shares | (6,000) |
Total net assets | 161,760 |
Haitaoche | |
The purchase price comprised of: | |
Fair value of consideration transferred | $ 161,760 |
Fair value of the assets acquired and the liabilities assumed | |
Shares issued to pre-reverse acquisition | shares | 69,424,993 |
Fair value of shares issued for pre-reverse the acquisition | $ 161,760 |
Issuance price | $ / shares | $ 2.33 |
REVERSE ACQUISITION - Pro forma
REVERSE ACQUISITION - Pro forma information for the periods (Details) - HKD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business acquisition, pro forma information | ||
Revenue | $ 257,631 | $ 34,367 |
Net loss | $ (191,468) | $ (5,486) |
DISPOSAL OF SUBSIDIARIES - Narr
DISPOSAL OF SUBSIDIARIES - Narrative Information (Details) - USD ($) $ in Thousands | Mar. 24, 2023 | Dec. 31, 2022 | Dec. 28, 2022 | Oct. 27, 2022 | Aug. 05, 2022 | Dec. 31, 2021 |
DISPOSAL OF SUBSIDIARIES | ||||||
Fair value of preferred shares issued | $ 24,592 | |||||
Accumulated other comprehensive loss | $ 1,470 | 2,060 | $ 637 | |||
Stanley Star | ||||||
DISPOSAL OF SUBSIDIARIES | ||||||
Total consideration | $ 1 | |||||
Convertible preferred shares issued | 50,000 | |||||
Preferred stock, outstanding | $ 50,000 | |||||
Fair value of preferred shares issued | $ 24,600 |
DISPOSAL OF SUBSIDIARIES - Gain
DISPOSAL OF SUBSIDIARIES - Gain regarding divestiture of disposal group (Details) $ in Thousands | Oct. 27, 2022 USD ($) |
DISPOSAL OF SUBSIDIARIES. | |
Fair value of preferred shares issued to Stanley Star | $ (24,592) |
The carrying amount of any noncontrolling interest | (3,954) |
Net liabilities | (24,276) |
Gain on disposal of subsidiaries | $ 3,638 |
DISPOSAL OF SUBSIDIARIES - Carr
DISPOSAL OF SUBSIDIARIES - Carrying amounts of the major classes of assets and liabilities of the Disposal Group (Details) - Disposal Group - Stanley Star $ in Thousands | Oct. 27, 2022 USD ($) |
DISPOSAL OF SUBSIDIARIES | |
Cash and cash equivalents | $ 97 |
Prepaid expenses and other current assets | 1,983 |
Property and equipment, net | 4 |
Intangible assets, net | 20 |
TOTAL ASSETS | 2,104 |
Accounts payable | (257) |
Advance from customers | (163) |
Long-term bank loan | (5,476) |
Income tax payable | (2,225) |
Amount due to Kaixin | (8,848) |
VAT payable | (3,340) |
Accrual expenses and other current liabilities | (6,071) |
Total Liabilities | (26,380) |
Net liabilities | $ (24,276) |
OTHER RECEIVALBES - Other Recei
OTHER RECEIVALBES - Other Receivables (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
OTHER RECEIVABLES | |
Other receivables, total amount | $ 8,848 |
Shanghai Changda | |
OTHER RECEIVABLES | |
Interest rate (as a percent) | 0% |
Other receivables, total amount | $ 6,858 |
Anhui Xin Jieying | |
OTHER RECEIVABLES | |
Interest rate (as a percent) | 0% |
Other receivables, total amount | $ 1,990 |
OTHER RECEIVABLES (Details)
OTHER RECEIVABLES (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
OTHER RECEIVABLES. | |
Other receivables, total amount | $ 8,848 |
Repat receivables | 1 year |
Valuation allowance for receivables | $ 0 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |||
Prepayment for vehicle purchase | $ 18,252 | $ 32,091 | |
Other receivables from dealerships | 9,546 | 19,249 | |
Deductible input VAT | 7 | 545 | |
Advance to suppliers | 0 | 23 | |
Others | [1] | 191 | 1,362 |
Total | 27,996 | 53,270 | |
Less: valuation allowance | (1,675) | 0 | |
Prepaid expenses and other current assets | 26,321 | 53,270 | |
Impairment loss | $ (22,921) | $ 0 | |
[1] Others mainly included prepaid rent, staff advances, prepaid marketing fee, advertising fee, professional fee, and other receivables incurred for daily operations. |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets, Net | |||
Intangible assets gross | $ 15,172 | $ 15,428 | |
Less: Accumulated amortization | (2,269) | (788) | |
Intangible assets, net | 12,903 | 14,640 | |
Amortization expense | 1,531 | 785 | $ 2 |
Trademark | |||
Finite-Lived Intangible Assets, Net | |||
Intangible assets gross | $ 15,100 | 14,983 | |
Remaining useful life | 8 years 6 months | ||
Software | |||
Finite-Lived Intangible Assets, Net | |||
Intangible assets gross | $ 72 | $ 445 |
OTHER NON-CURRENT ASSETS, NET_2
OTHER NON-CURRENT ASSETS, NET (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
OTHER NON-CURRENT ASSETS, NET | |
Long-term receivables from suppliers | $ 4,112 |
Legal deposit | 104 |
Other non-current assets, gross | 4,216 |
Less: impairment for uncollectible receivables | (4,216) |
Prepayment amounts purchase of automobiles | $ 3,916 |
OTHER NON-CURRENT ASSETS, NET -
OTHER NON-CURRENT ASSETS, NET - Additional Information (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
OTHER NON-CURRENT ASSETS, NET | |
Impairment | $ 4,216 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Loan payable | $ 3,000 | |
Accrued professional fee | 2,215 | $ 2,698 |
Individual income tax payable | 2,207 | 2,207 |
Used car services payables | 419 | 3,333 |
Other taxes payable | 181 | 5,120 |
Others | 1,357 | 1,133 |
Total | $ 9,379 | $ 14,491 |
ACCRUED EXPENSES AND OTHER CU_4
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES - Loan payable (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Convertible Notes | |
Loan payable | $ 3,000 |
Scytech Limited | |
Convertible Notes | |
Loan payable, interest rate | 0% |
Loan payable, issuance date | Sep. 21, 2022 |
Loan payable, maturity date | Dec. 31, 2023 |
Loan payable | $ 2,700 |
CPL Yellow stones Limited | |
Convertible Notes | |
Loan payable, interest rate | 5% |
Loan payable, issuance date | Dec. 21, 2022 |
Loan payable, maturity date | Mar. 31, 2023 |
Loan payable | $ 200 |
Yunfeiyang Limited | |
Convertible Notes | |
Loan payable, interest rate | 5% |
Loan payable, issuance date | Dec. 21, 2022 |
Loan payable, maturity date | Mar. 31, 2023 |
Loan payable | $ 100 |
DEALERSHIP SETTLEMENT - Additio
DEALERSHIP SETTLEMENT - Additional information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Aug. 19, 2022 | May 26, 2022 | Nov. 30, 2021 | May 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | |
Dealership Operators | |||||||
Dealership Settlement | |||||||
Shares issued to pre-reverse acquisition | 7,172,529 | 1,969,425 | 7,172,529 | ||||
Accrued payables | $ 2,245 | ||||||
Dealership settlement amount | 11,142 | ||||||
R e n r e n Inc. | |||||||
Dealership Settlement | |||||||
Shares issued to pre-reverse acquisition | 13,422,613 | 13,422,613 | |||||
Equity purchase agreements | |||||||
Dealership Settlement | |||||||
Contingent consideration shares | 33,748,772 | ||||||
Equity purchase agreements | Dealership Operators | |||||||
Dealership Settlement | |||||||
Equity interest subscribed | 70% | ||||||
Shares issued to pre-reverse acquisition | 4,513,761 | 20,326,159 | 8,219,510 | 21,566,328 | |||
Contingent consideration shares | 20,326,159 | 5,203,103 | |||||
Additional paid-in capital with a fair value | $ 17,379 | $ 8,897 | |||||
Provision for dealership settlement | $ 2,245 |
PAYABLE FOR SALES INCENTIVE (De
PAYABLE FOR SALES INCENTIVE (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) shares | |
Payable for Sales Incentive | |
Payable for sales incentive | $ 1,638 |
Dealership Operators | |
Payable for Sales Incentive | |
Shares issued as consideration | shares | 5,585,645 |
Selling expenses | $ 1,638 |
Payable for sales incentive | $ 1,638 |
LEASE - Summary of weighted ave
LEASE - Summary of weighted average remaining lease terms and discount rates for the operating lease (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
LEASE | |||
Weighted-average remaining lease terms | 4 years | ||
Weighted-average discount rate: | 11.50% | ||
Operating lease asset | $ 0 | $ 515 | |
Cash prepaid for the operating lease asset | 0 | 31 | $ 0 |
Operating lease expense | $ 133 | $ 29 | $ 2 |
LEASE - Summary of future minim
LEASE - Summary of future minimum rent payable under non-cancellable operating leases (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2023 | $ 159 | |
2024 | 129 | |
2025 | 133 | |
2026 | 100 | |
Total lease payments | 521 | |
Less: Imputed interest | (91) | |
Present value of lease liabilities | 430 | |
Lease liabilities - current | 119 | |
Lease liabilities - non-current | $ 311 | $ 431 |
RELATED PARTY TRANSACTIONS AN_3
RELATED PARTY TRANSACTIONS AND BALANCES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Related party transactions and balances | ||
Amounts due to related parties | $ 1,627 | $ 3,943 |
Intercompany balances | 2,516 | |
Renren And Its Subsidiaries | ||
Related party transactions and balances | ||
Amounts due to related parties | 1,427 | $ 3,943 |
Mr. Lin | ||
Related party transactions and balances | ||
Amounts due to related parties | $ 200 |
BANK BORROWING (Details)
BANK BORROWING (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Short-term debt: | ||
Short-term borrowings | $ 2,000 | $ 6,277 |
Long-term debt: | ||
Long-term bank loan | 2,000 | |
East West Bank | ||
Short-term debt: | ||
Short-term borrowings | $ 2,000 | 6,277 |
Long-term debt: | ||
Long-term bank loan | $ 2,000 |
BANK BORROWING - Additional inf
BANK BORROWING - Additional information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Borrowing | |||
Amount of loan secured by wholly owned subsidiary Renren Inc. | $ 2,000 | ||
Interest Expense | $ 1,034 | 245 | $ 1 |
East West Bank | |||
Borrowing | |||
Amount of loan secured by wholly owned subsidiary Renren Inc. | $ 2,000 | ||
Loan One | East West Bank | |||
Borrowing | |||
Annual interest rate | 6% | ||
Loan One | Qianxiang Shiji Technology Development (Beijing) Co | |||
Borrowing | |||
Amount of loan secured by wholly owned subsidiary Renren Inc. | $ 6,277 | ||
Loan Two | East West Bank | |||
Borrowing | |||
Annual interest rate | 2.80% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |||
Mar. 21, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income taxes | ||||
Profits tax rate | 25% | 25% | 25% | |
Income tax expense | $ 74,000 | $ (729,000) | ||
Other Subsidiaries | ||||
Income taxes | ||||
Profits tax rate | 25% | |||
2022 | ||||
Income taxes | ||||
Operating loss carryforwards | $ 72,000 | |||
2023 | ||||
Income taxes | ||||
Operating loss carryforwards | 2,508,000 | |||
2024 | ||||
Income taxes | ||||
Operating loss carryforwards | 933,000 | |||
2025 | ||||
Income taxes | ||||
Operating loss carryforwards | 110,000 | |||
2026 | ||||
Income taxes | ||||
Operating loss carryforwards | 76,000 | |||
Hong Kong | ||||
Income taxes | ||||
Income tax expense | 0 | $ 0 | $ 0 | |
Operating loss carryforwards | 3,000 | |||
Hong Kong | Corporate profits of first HKD 2 million | ||||
Income taxes | ||||
Corporate Profits | $ 2,000,000 | |||
Profits tax rate | 8.25% | |||
Hong Kong | Corporate profits exceeds HKD 2 million | ||||
Income taxes | ||||
Corporate Profits | $ 2,000,000 | |||
Profits tax rate | 16.50% | |||
PRC | ||||
Income taxes | ||||
Operating loss carryforwards | $ 3,702,000 |
INCOME TAXES - Components of in
INCOME TAXES - Components of income tax expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | ||
Current income tax benefit (expense) | $ (74) | $ 729 |
Total income tax benefit (expense) | $ (74) | $ 729 |
INCOME TAXES - Reconciliation (
INCOME TAXES - Reconciliation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | |||
Net loss before provision for income taxes | $ 84,545,000 | $ 196,657,000 | $ 166,000 |
PRC statutory tax rate | 25% | 25% | 25% |
Income tax at statutory tax rate | $ 21,136,000 | $ 49,164,000 | $ 42,000 |
Impairment of goodwill | $ (35,914,000) | ||
Reversal of taxable deemed interest income from inter-company interest-free loans | 1,354% | ||
Fair value change on warrants | (79.00%) | 500% | |
Non-deductible loss and SBC expenses not deductible for tax purposes | $ (13,427,000) | $ (13,262,000) | |
Effect of income tax rate differences in jurisdictions other than the PRC | $ (1,721,000) | $ (437,000) | |
NOL not applicable for carryforward | (288.00%) | (193.00%) | (56.00%) |
Changes in valuation allowance | $ (5,339) | $ (483) | $ 14 |
Income tax benefit (expenses) | $ (74,000) | $ 729,000 | |
Effective tax rates | 0% | 0.38% |
INCOME TAXES - Principal compon
INCOME TAXES - Principal components of the deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||||
Write-down of Prepaid expenses and other current assets | $ 477 | $ 4,249 | ||
Write-down of inventory | 3,874 | |||
Provision for doubtful accounts | 2,315 | |||
Write down of other non-current assets | 1,054 | |||
Accrued expense | 207 | |||
Accrued payroll and welfare | 61 | |||
Advertising expense | 6 | |||
Net operating loss carry forwards | 584 | 13,474 | $ 388 | |
Subtotal | 1,061 | 25,240 | 388 | |
Valuation allowance | $ (1,061) | $ (25,240) | $ (388) | $ (402) |
INCOME TAXES - Movements of val
INCOME TAXES - Movements of valuation allowances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Rollforward of valuation allowances of deferred tax assets | |||
Balance as of beginning of year | $ 25,240 | $ 388 | $ 402 |
Current year addition | 5,267 | 1,454 | 63 |
Current year reversal | (7,039) | (753) | |
Reduction due to usage of NOL | (42) | (25) | (21) |
Reduction due to statute expiration | (288) | (193) | (56) |
Decrease in disposal of subsidiaries | (22,077) | ||
Reverse acquisition | 23,843 | ||
Exchange rate effect | 526 | ||
Balance as of the end of the year | $ 1,061 | $ 25,240 | $ 388 |
CONVERTIBLE NOTES (Details)
CONVERTIBLE NOTES (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Nov. 19, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 08, 2022 | |
Convertible Notes | ||||
Proceeds from convertible loan | $ 2,000 | $ 2,000 | ||
Convertible Promissory Notes A | ||||
Convertible Notes | ||||
Interest expenses | 2,244 | 2,022 | ||
Convertible Promissory Notes B | ||||
Convertible Notes | ||||
Interest expenses | 2,061 | 0 | ||
Convertible Debt | ||||
Convertible Notes | ||||
Aggregate principal amount | $ 2,180 | |||
Principal amount | 160 | |||
Transaction expense amount | 20 | |||
Proceeds from convertible loan | $ 2,000 | |||
Interest rate (as a percent) | 8% | |||
Loan period | 18 months | |||
Convertible threshold period | 6 months | |||
Principal amount converted | $ 200,000 | |||
Conversion price | $ 3 | |||
Interest expenses | $ 683 | $ 22 | ||
Convertible Debt | Convertible Promissory Notes A | ||||
Convertible Notes | ||||
Principal amount | $ 2,180 | |||
Convertible Debt | Convertible Promissory Notes B | ||||
Convertible Notes | ||||
Principal amount | $ 2,180 |
MEZZANINE EQUITY AND WARRANT _3
MEZZANINE EQUITY AND WARRANT LIABILITIES (Details) | Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares | Jul. 03, 2020 |
Risk-free rate | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 0.0260 | ||
Risk-free rate | Series A Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 4.12 | 1.41 | |
Risk-free rate | Series B Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 4.53 | 0.24 | |
Risk-free rate | Series C Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 4.12 | 1.46 | |
Volatility | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 0.5721 | ||
Volatility | Series A Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 55.29 | 45.82 | |
Volatility | Series B Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 54.43 | 50.55 | |
Volatility | Series C Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 54.38 | 46.99 | |
Expected dividend rate | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 0 | ||
Expected dividend rate | Series A Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 0 | ||
Expected dividend rate | Series B Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 0 | ||
Expected dividend rate | Series C Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 0 | ||
Spot price of underling ordinary share | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 0.01035 | ||
Spot price of underling ordinary share | Series A Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 0.29 | 1.14 | |
Spot price of underling ordinary share | Series B Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 0.29 | 1.14 | |
Spot price of underling ordinary share | Series C Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 0.29 | 1.14 | |
Exercise price | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 0.01 | ||
Exercise price | Series A Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 3 | 3 | |
Exercise price | Series B Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 3 | 3 | |
Exercise price | Series C Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 3 | 3 | |
Fair value of warrant | Series A Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 24 | 335 | |
Fair value of warrant | Series B Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 3 | ||
Fair value of warrant | Series C Warrants | |||
Mezzanine equity and warrant liabilities | |||
Warrants and Rights Outstanding | 2 |
MEZZANINE EQUITY AND WARRANT _4
MEZZANINE EQUITY AND WARRANT LIABILITIES - Additional information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Apr. 08, 2021 | Dec. 29, 2020 | Aug. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 28, 2020 | |
Mezzanine equity and warrant liabilities | ||||||
Conversion price | $ 3 | |||||
Exercise price of warrants | $ 3 | |||||
Volume-weighted average price | $ 3 | |||||
Fair value allocated to warrrants | $ 1,690,000 | |||||
Converted stocks | 1,089,145 | |||||
Re-measurement of warrants | $ 24,000 | |||||
Number of warrants exercised | 0 | |||||
Series A Preferred Stock | ||||||
Mezzanine equity and warrant liabilities | ||||||
Fair value allocated to preferred shares | $ 1,310,000 | |||||
Conversion of outstanding shares | 3,000 | |||||
Purchase Agreement | ||||||
Mezzanine equity and warrant liabilities | ||||||
Total amount of investment agreed | $ 6,000,000 | |||||
Preferred shares, issued | 3,000 | |||||
Proceeds from issuance of convertible preferred stock | $ 3,000,000 | |||||
Exercise price of warrants | $ 3 | |||||
Kaixin Auto Holdings | ||||||
Mezzanine equity and warrant liabilities | ||||||
Total amount of investment agreed | $ 6,000,000 | |||||
Preferred shares, issued | 6,000 | |||||
Proceeds from issuance of convertible preferred stock | $ 6,000,000 | |||||
Conversion price | $ 3 | |||||
Kaixin Auto Holdings | Purchase Agreement | ||||||
Mezzanine equity and warrant liabilities | ||||||
Preferred shares, authorized | 1,000,000 | |||||
Conversion price | $ 3 | |||||
Series A Warrants | ||||||
Mezzanine equity and warrant liabilities | ||||||
Warrants issued/granted | $ 1,500,000 | |||||
Series B Warrants | ||||||
Mezzanine equity and warrant liabilities | ||||||
Warrants issued/granted | 1,333,333 | |||||
Series C Warrants | ||||||
Mezzanine equity and warrant liabilities | ||||||
Warrants issued/granted | $ 2,000,000 |
EQUITY (Details)
EQUITY (Details) | Jun. 25, 2021 shares |
Haitaoche | |
Equity | |
Issuance of shares through private placement | 74,035,502 |
EQUITY - Preferred shares (Deta
EQUITY - Preferred shares (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Apr. 08, 2021 | Mar. 31, 2021 | Dec. 31, 2022 | Mar. 24, 2023 | Aug. 31, 2021 | |
Equity | |||||
Conversion price | $ 3 | ||||
Percentage of after-tax profits required to be allocated to general reserve | 10% | ||||
General reserve as a percentage of registered capital up to which after-tax profit of PRC subsidiaries and VIEs shall be transferred | 50% | ||||
Stanley Star | |||||
Equity | |||||
Preferred stock, outstanding | $ 50,000 | ||||
Kaixin Auto Holdings | |||||
Equity | |||||
Total amount of investment agreed | $ 6,000 | ||||
Number of ordinary shares consisted by units | 2,000,000 | ||||
Preferred Stock, Shares Issued | 6,000 | ||||
Proceeds from investment in convertible preferred shares | $ 6,000 |
EQUITY - Warrants (Details)
EQUITY - Warrants (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2017 | Dec. 31, 2021 | Dec. 29, 2020 | |
Equity | ||||
Warrants outstanding | 263,863 | |||
Exercise price of warrants | $ 3 | |||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price | $ 0.02 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Weighted Average Grant Date Fair Value | $ 3.17 | |||
Restricted net assets | $ 121,656,000 | $ 117,085,000 | ||
Underwriters call option | ||||
Equity | ||||
Price Per Unit | $ 10 | |||
Number of units exercisable | 900,000 | |||
Aggregate exercise price | $ 9,000,000 | |||
Expiration period | 5 years | |||
2019 warrants | ||||
Equity | ||||
Warrants outstanding | 1,000,000 | |||
Exercise price of warrants | $ 11.50 | |||
Class Of Warrant Or Right, Redemption Of Warrants Or Rights, Stock Price Trigger | $ 0.01 | |||
Minimum threshold written notice period for redemption of warrants | 30 days | |||
Closing price of share for threshold trading days | 20 days | |||
Closing price of share for threshold consecutive trading days | 3 days | |||
Class Of Warrant Or Right, Redemption Of Warrants Or Rights, Last Sales Price of the Ordinary Shares | $ 18 | |||
Issued With Units In The IPO | ||||
Equity | ||||
Warrants outstanding | 10,318,145 | |||
Issued To E&A Callet | ||||
Equity | ||||
Warrants outstanding | 375,000 | |||
Kaixin Auto Holdings | 2019 warrants | ||||
Equity | ||||
Warrants outstanding | 11,957,008 |
EQUITY - Series F Preferred Sha
EQUITY - Series F Preferred Shares (Details) $ / shares in Units, $ in Thousands, ¥ in Millions | 1 Months Ended | 12 Months Ended | |||||||||
Dec. 28, 2022 USD ($) $ / shares shares | Mar. 14, 2022 USD ($) $ / shares shares | Jan. 31, 2022 USD ($) | Jan. 31, 2022 CNY (¥) | Dec. 31, 2022 USD ($) shares | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) | Dec. 31, 2022 CNY (¥) shares | Jan. 31, 2022 CNY (¥) | Dec. 29, 2020 $ / shares | |
Class of Stock [Line Item] | |||||||||||
Ordinarty shares subscribed | $ 11 | $ 8 | |||||||||
Ordinary shares, issued | shares | 238,368,861 | 163,129,655 | 238,368,861 | ||||||||
Warrants exercise price | $ / shares | $ 3 | ||||||||||
Paid issuance cost | $ 1,976 | ||||||||||
General and administrative expenses | 46,488 | $ 43,734 | $ 265 | ||||||||
Stanley Star Group | |||||||||||
Class of Stock [Line Item] | |||||||||||
Total amount of investment agreed | $ 50,000,000 | ||||||||||
Number of ordinary shares consisted by units | shares | 50,000,000 | ||||||||||
Conversion price | $ / shares | $ 1 | ||||||||||
Derong Group | |||||||||||
Class of Stock [Line Item] | |||||||||||
Ordinarty shares subscribed | $ 15,400 | ¥ 100 | |||||||||
Ordinary shares, issued | shares | 4,406,542 | ||||||||||
Warrant share issued | shares | 6,500,000 | ||||||||||
Warrants exercise price | $ / shares | $ 1 | ||||||||||
Warrant shares classified as equity measured at fair value | $ 1,417 | 472 | |||||||||
Proceeds allocated to issued ordinary shares | $ 3,298 | ||||||||||
Paid issuance cost | 1,575 | ¥ 100 | |||||||||
Payment received from investment | $ 4,600 | ¥ 30 | ¥ 30 | ||||||||
General and administrative expenses | $ 1,103 | ||||||||||
Uncertainty of Remaining Investment. | ¥ | ¥ 70 |
EQUITY - Calculation of warrant
EQUITY - Calculation of warrants using Black-Scholes pricing model (Details) | Jul. 03, 2020 |
Risk-free rate | |
Measurement Inputs | |
Fair value of warrants | 0.0260 |
Volatility | |
Measurement Inputs | |
Fair value of warrants | 0.5721 |
Expected dividend rate | |
Measurement Inputs | |
Fair value of warrants | 0 |
Spot price of underling ordinary share | |
Measurement Inputs | |
Fair value of warrants | 0.01035 |
Exercise price | |
Measurement Inputs | |
Fair value of warrants | 0.01 |
Fair value of warrant | |
Measurement Inputs | |
Fair value of warrants | 20.27 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair value hierarchy for assets and liabilities measured at fair value (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value Measurements | ||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | $ 0 | $ 0 |
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | 0 |
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | $ 0 | 0 |
Significant Other Unobservable Inputs (Level 3) | Terminal growth rate | ||
Fair Value Measurements | ||
Goodwill measurement input | 2.50% | |
Significant Other Unobservable Inputs (Level 3) | Forecasted inflation rate | ||
Fair Value Measurements | ||
Goodwill measurement input | 2.50% | |
Significant Other Unobservable Inputs (Level 3) | Discount rate | ||
Fair Value Measurements | ||
Goodwill measurement input | 12% | |
Recurring | ||
Fair Value Measurements | ||
Total | $ (24) | (340) |
Recurring | Significant Other Unobservable Inputs (Level 3) | ||
Fair Value Measurements | ||
Warrant liability | $ (24) | $ (340) |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net loss: | |||
NET LOSS ATTRIBUTABLE TO KAIXIN'S SHAREHOLDERS | $ (84,706) | $ (196,579) | $ (166) |
Weighted average shares used in calculating net loss per share - Basic | 200,167,152 | 114,416,353 | 74,035,502 |
Weighted average number of ordinary shares outstanding used in computing net loss per ordinary share - diluted shares retroactively adjusted for the reverse acquisition on June 25, 2021) | 200,167,152 | 114,416,353 | 74,035,502 |
Net (loss) income per ordinary share attributable to Kaixin Auto Holdings' shareholders - basic: | |||
Net loss per share - basic | $ (0.0004) | $ (1.7181) | $ (0.0022) |
Net loss per share - diluted | $ (0.0004) | $ (1.7181) | $ (0.0022) |
Dilutive security issued shares | 0 | 0 | 0 |
Potential dilutive securities that were not included in the calculation of dilutive loss per share | 167,151 | 167,151 | 0 |
SHARE-BASED COMPENSATION - Kaix
SHARE-BASED COMPENSATION - Kaixin Auto 2019 Plan (Details) | May 03, 2019 employee $ / shares shares | Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares | Apr. 30, 2019 shares |
SHARE-BASED COMPENSATION | ||||
Weighted average exercise price | $ / shares | $ 0.02 | $ 0.02 | ||
Kaixin 2019 Plan | ||||
SHARE-BASED COMPENSATION | ||||
Ordinary shares of KAH for future grant | 4,715,700 | |||
Options granted | 2,186,364 | |||
Number of employees for option | employee | 144 | |||
Kaixin 2019 Plan | Vests immediately on grant date | ||||
SHARE-BASED COMPENSATION | ||||
Weighted average exercise price | $ / shares | $ 1.70 | |||
Vesting percentage | 25% | |||
Kaixin 2019 Plan | Vests monthly subsequent to replacement date | ||||
SHARE-BASED COMPENSATION | ||||
Weighted average exercise price | $ / shares | $ 0.01 | |||
Vesting period | 3 years | |||
Vesting percentage | 62.50% | |||
Kaixin 2019 Plan | Restricted shares | ||||
SHARE-BASED COMPENSATION | ||||
Granted | 2,183,828 | |||
Kaixin 2019 Plan | Replacement restricted shares | Shares granted to certain employees | ||||
SHARE-BASED COMPENSATION | ||||
Granted | 205,215 | |||
Kaixin 2019 Plan | Replacement restricted shares were subject to graded vesting | ||||
SHARE-BASED COMPENSATION | ||||
Vesting percentage | 0.25% | |||
Kaixin 2019 Plan | Replacement restricted shares were subject to graded vesting | Vests monthly subsequent to replacement date | ||||
SHARE-BASED COMPENSATION | ||||
Granted | 917,738 | |||
Kaixin 2019 Plan | Restricted shares were subject to graded vesting | ||||
SHARE-BASED COMPENSATION | ||||
Vesting period | 3 years | |||
Kaixin 2019 Plan | Restricted shares were subject to graded vesting | Vests immediately on grant date | ||||
SHARE-BASED COMPENSATION | ||||
Vesting percentage | 62.50% | |||
Kaixin 2019 Plan | Restricted shares were subject to graded vesting | Vests monthly subsequent to replacement date | ||||
SHARE-BASED COMPENSATION | ||||
Vesting percentage | 0.0278% |
SHARE-BASED COMPENSATION - Ka_2
SHARE-BASED COMPENSATION - Kaixin Auto 2020 Plan (Details) - Kaixin Auto Group 2020 Plan - shares | 12 Months Ended | ||
Nov. 17, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
SHARE-BASED COMPENSATION | |||
Granted | 5,000,000 | ||
Number of shares granted | 0 | ||
Restricted shares | |||
SHARE-BASED COMPENSATION | |||
Options granted | 5,181,778 |
SHARE-BASED COMPENSATION - Ka_3
SHARE-BASED COMPENSATION - Kaixin Auto Group 2021 Plan (Details) | Dec. 31, 2022 shares |
Kaixin Auto Group 2021 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Aggregate number of shares to be issued | 26,596,000 |
SHARE-BASED COMPENSATION - Ka_4
SHARE-BASED COMPENSATION - Kaixin Auto 2022 Plan (Details) - Kaixin 2022 Plan | 12 Months Ended |
Dec. 31, 2022 USD ($) shares | |
SHARE-BASED COMPENSATION | |
Aggregate number of shares to be issued | shares | 39,500,000 |
Consideration for shares granted | $ | $ 38,500,000 |
SHARE-BASED COMPENSATION - Assu
SHARE-BASED COMPENSATION - Assumptions used in determining the fair value of share options granted (Details) - Kaixin Auto Group 2021 Plan | 12 Months Ended |
Dec. 31, 2022 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate, minimum | 2.50% |
Risk-free interest rate, maximum | 3% |
Volatility, minimum | 45% |
Volatility, maximum | 46% |
Expected term (in years) | 10 years |
Exercise price | $ 0.01 |
Dividend yield | 0% |
Fair value of the shares | $ 0.29 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of the shares | 2.12 |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of the shares | $ 3.36 |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of share options outstanding (Details) - USD ($) | 12 Months Ended | ||
May 03, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of shares | |||
Balance at the beginning of period | 167,151 | ||
Forfeited | 145,478 | ||
Balance at the end of period | 21,673 | 167,151 | |
Exercisable, at the end of period | 21,673 | ||
Weighted average exercise price | |||
Balance at the beginning of period | $ 0.02 | ||
Balance at the end of period | 0.02 | $ 0.02 | |
Exercisable, at the end of period | 0.02 | ||
Weighted Average grant date fair value per share | |||
Balance at the beginning of period | 3.17 | ||
Balance at the end of period | 3.17 | $ 3.17 | |
Exercisable | $ 3.17 | ||
Weighted average remaining contractual years | |||
Outstanding at the end of the period (in years) | 6 years 4 months 2 days | 11 months 26 days | |
Expected to vest at the end of the period (in years) | 0 years | ||
Exercisable at the end of the period (in years) | 6 years 4 months 2 days | ||
Weighted average intrinsic value | |||
Outstanding at the end of the period (in dollars) | $ 0.27 | $ 1.12 | |
Exercisable at the end of the period (in dollars) | $ 0.27 | ||
Kaixin Auto 2019 Plan | |||
Number of shares | |||
Granted | 2,186,364 |
SHARE-BASED COMPENSATION - Fair
SHARE-BASED COMPENSATION - Fair value of share options granted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
May 03, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Kaixin Auto 2019 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted | 2,186,364 | |||
Kaixin Auto Group 2021 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Closing stock price | $ 0.29 | |||
Unrecognized share-based compensation expense | $ 462 | |||
Unrecognized share-based compensation expense, expected recognition period | 2 years 7 months 28 days | |||
Kaixin Auto Group 2021 Plan | Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options granted | 20,535,000 | |||
Unrecognized share-based compensation expense, expected recognition period | 5 years 1 month 6 days | |||
Fair value of options vested | $ 40,078 | $ 38,669 | $ 0 |
SHARE-BASED COMPENSATION - Nonv
SHARE-BASED COMPENSATION - Nonvested Restricted Shares (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
May 03, 2019 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Kaixin Auto Group 2021 Plan | ||||
Weighted average fair value per ordinary shares at the granted dates | ||||
Weighted average period for unrecognized compensation cost | 2 years 7 months 28 days | |||
Restricted Stock [Member] | Kaixin Auto 2019 Plan | ||||
Number of nonvested restricted shares | ||||
Granted | 2,183,828 | |||
Restricted Stock [Member] | Kaixin Auto Group 2021 Plan | ||||
Number of nonvested restricted shares | ||||
Balance at the beginning of period | 5,441,630 | |||
Granted | 43,500,000 | |||
Vested | 38,911,292 | |||
Forfeited | 5,000,000 | |||
Balance at the end of period | 5,030,339 | 5,441,630 | ||
Weighted average fair value per ordinary shares at the granted dates | ||||
Balance at the beginning of period | $ 2.55 | |||
Granted | 0.87 | |||
Vested | 1.03 | |||
Forfeited | 0.94 | |||
Balance at the end of period | $ 1.34 | $ 2.55 | ||
Total unrecognized compensation cost | $ 7,308 | |||
Weighted average period for unrecognized compensation cost | 5 years 1 month 6 days | |||
Total fair value of shares vested | $ 40,078 | $ 38,669 | $ 0 |
SHARE-BASED COMPENSATION - Shar
SHARE-BASED COMPENSATION - Share-based compensation expense (Details) - Kaixin Auto Group 2021 Plan - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | $ 39,310 | $ 41,589 |
Selling and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 239 | 264 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 44 | 55 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | $ 39,027 | $ 41,270 |
CONDENSED FINANCIAL INFORMATI_3
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - BALANCE SHEETS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Oct. 27, 2022 | Dec. 31, 2021 |
ASSETS | |||
Cash and cash equivalents | $ 7,102 | $ 5,263 | |
Other receivables | 8,848 | ||
TOTAL ASSETS | 55,682 | 74,160 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Accrued expenses and other current liabilities | 9,379 | 14,491 | |
Amounts due to related parties | 1,627 | 3,943 | |
TOTAL LIABILITIES | 20,179 | 36,081 | |
SHAREHOLDERS' EQUITY | |||
Ordinary Shares (par value of $0.00005 per shares; 1,000,000,000 shares authorized, 163,129,655 and 238,368,861 shares issued as of December 31, 2021 and 2022, respectively. 163,129,655 and 228,250,210 shares issued and outstanding as of December 31, 2021 and 2022, respectively) | 11 | 8 | |
Series D convertible preferred shares (par value of $0.0001, 6,000 and 6,000 shares authorized as of December 31, 2021 and 2022, respectively. 6,000 shares and 6,000 issued and outstanding as of December 31, 2021 and 2022 respectively.) Series F convertible preferred shares (par value of 0.00005, nil and 50,000 shares authorized as of December 31, 2021 and 2022, respectively. Nil and 50,000 issued and outstanding as of December 31, 2021 and 2022 respectively.) | 3 | 1 | |
Additional paid-in capital | 312,831 | 227,310 | |
Accumulated deficit | (283,008) | (198,302) | |
Accumulated other comprehensive loss | 1,470 | $ 2,060 | 637 |
TOTAL KAIXIN AUTO HOLDINGS' SHAREHOLDERS' EQUITY | 31,315 | 29,662 | |
TOTAL LIABILITIES AND EQUITY | 55,682 | 74,160 | |
Legal entities | Parent | |||
ASSETS | |||
Cash and cash equivalents | 171 | ||
Other receivables | 9,830 | ||
Amounts due from related parties | 3,726 | ||
Investment in subsidiaries and consolidated VIEs | 27,964 | 29,662 | |
TOTAL ASSETS | 41,691 | 29,662 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Accrued expenses and other current liabilities | 4,257 | ||
Amounts due to related parties | 200 | ||
Convertible note | 4,305 | ||
Other liability | 1,614 | ||
TOTAL LIABILITIES | 10,376 | ||
SHAREHOLDERS' EQUITY | |||
Ordinary Shares (par value of $0.00005 per shares; 1,000,000,000 shares authorized, 163,129,655 and 238,368,861 shares issued as of December 31, 2021 and 2022, respectively. 163,129,655 and 228,250,210 shares issued and outstanding as of December 31, 2021 and 2022, respectively) | 11 | 8 | |
Series D convertible preferred shares (par value of $0.0001, 6,000 and 6,000 shares authorized as of December 31, 2021 and 2022, respectively. 6,000 shares and 6,000 issued and outstanding as of December 31, 2021 and 2022 respectively.) Series F convertible preferred shares (par value of 0.00005, nil and 50,000 shares authorized as of December 31, 2021 and 2022, respectively. Nil and 50,000 issued and outstanding as of December 31, 2021 and 2022 respectively.) | 3 | 1 | |
Additional paid-in capital | 312,831 | 227,310 | |
Accumulated deficit | (283,000) | (198,294) | |
Accumulated other comprehensive loss | 1,470 | 637 | |
TOTAL KAIXIN AUTO HOLDINGS' SHAREHOLDERS' EQUITY | 31,315 | 29,662 | |
TOTAL LIABILITIES AND EQUITY | $ 41,691 | $ 29,662 |
CONDENSED FINANCIAL INFORMATI_4
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - BALANCE SHEETS (Parenthetical) (Details) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
CONDENSED PARENT COMPANY BALANCE SHEETS | ||
Ordinary shares, par value (in dollars per share) | $ 0.00005 | $ 0.00005 |
Ordinary shares, authorized | 1,000,000,000 | 1,000,000,000 |
Ordinary shares, issued | 238,368,861 | 163,129,655 |
Ordinary shares outstanding | 228,250,210 | 163,129,655 |
Parent | Legal entities | ||
CONDENSED PARENT COMPANY BALANCE SHEETS | ||
Ordinary shares, par value (in dollars per share) | $ 0.00005 | $ 0.00005 |
Ordinary shares, authorized | 1,000,000,000 | 1,000,000,000 |
Ordinary shares, issued | 238,368,861 | 163,129,655 |
Ordinary shares outstanding | 228,250,210 | 163,129,655 |
Preferred shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred shares, authorized | 6,000 | 6,000 |
Preferred shares, issued | 6,000 | 6,000 |
Preferred shares, outstanding | 6,000 | 6,000 |
CONDENSED FINANCIAL INFORMATI_5
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY- STATEMENTS OF OPERATIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONDENSED PARENT COMPANY STATEMENTS OF OPERATIONS | |||
General and administrative expenses | $ 46,488 | $ 43,734 | $ 265 |
Other income | 728 | (4) | 25 |
Income before income tax expense | (84,545) | (196,657) | (166) |
Income tax expense | 74 | (729) | |
Net loss | (84,619) | (195,928) | (166) |
Legal entities | Parent | |||
CONDENSED PARENT COMPANY STATEMENTS OF OPERATIONS | |||
Share of loss of subsidiaries and VIEs | (78,256) | (196,579) | (166) |
General and administrative expenses | (5,897) | ||
Other income | (465) | ||
Income before income tax expense | (84,619) | (196,579) | (166) |
Net loss | $ (84,619) | $ (196,579) | $ (166) |
CONDENSED FINANCIAL INFORMATI_6
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY- STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Changes in operating assets and liabilities: | |||
Cash flows from operating activities | $ (2,394) | $ (2,103) | $ (1,135) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Cash flows from investing activities | (156) | 4,267 | (290) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Cash flows from financing activities | 5,406 | 2,000 | 2,132 |
Cash and cash equivalents at beginning of year | 5,263 | 607 | 4 |
Cash and cash equivalents at end of year | 7,102 | 5,263 | $ 607 |
Parent | |||
Changes in operating assets and liabilities: | |||
Cash flows from operating activities | (2,410) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Cash flows from financing activities | (165) | ||
Net increase in cash, cash equivalents and restricted cash | (2,575) | ||
Cash and cash equivalents at beginning of year | 2,746 | ||
Cash and cash equivalents at end of year | $ 171 | $ 2,746 |