Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2020 | |
Document Information [Line Items] | |
Document Type | 6-K |
Document Period End Date | Sep. 30, 2020 |
Entity Registrant Name | CooTek(Cayman)Inc. |
Entity Central Index Key | 0001734262 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 58,478,376 | $ 59,905,827 |
Restricted cash | 60,209 | 60,204 |
Short-term investments | 550,025 | 571,508 |
Accounts receivable, net of allowance for doubtful accounts of US$1,774,192 and US$1,961,728 as of December 31, 2019 and September 30, 2020, respectively | 29,083,216 | 27,254,634 |
Prepaid expenses and other current assets | 10,764,181 | 7,847,794 |
Total current assets | 98,936,007 | 95,639,967 |
Long term restricted cash | 2,472,998 | |
Property and equipment, net | 5,597,148 | 5,669,849 |
Intangible assets, net | 419,343 | 267,736 |
Long-term investments | 146,841 | |
Other non-current assets | 756,507 | 259,108 |
TOTAL ASSETS | 108,328,844 | 101,836,660 |
Current liabilities (including amounts of the consolidated VIEs without recourse to the Company. See Note 2(b)): | ||
Accounts payable | 64,805,107 | 37,877,800 |
Short-term bank borrowings | 14,822,161 | 9,012,645 |
Accrued salary and benefits | 7,747,460 | 5,598,425 |
Accrued expenses and other current liabilities | 10,215,400 | 5,955,956 |
Deferred revenue | 4,697,267 | 3,887,908 |
Total current liabilities | 102,287,395 | 62,332,734 |
Other non-current liabilities | 493,467 | 595,563 |
TOTAL LIABILITIES | 102,780,862 | 62,928,297 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Treasury shares (9,937,000 and 25,426,900 shares as of December 31, 2019 and September 30, 2020, respectively) | (3,322,668) | (1,063,547) |
Additional paid-in capital | 192,375,859 | 194,971,827 |
Accumulated deficit | (182,181,327) | (153,598,346) |
Accumulated other comprehensive loss | (1,354,788) | (1,432,833) |
Total Shareholders' Equity | 5,547,982 | 38,908,363 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 108,328,844 | 101,836,660 |
Class A | ||
Shareholders' equity: | ||
Ordinary shares | 28,444 | 28,800 |
Class B | ||
Shareholders' equity: | ||
Ordinary shares | $ 2,462 | $ 2,462 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Allowance for doubtful accounts | $ 1,961,728 | $ 1,774,192 |
Treasury stock, shares | 25,426,900 | 9,937,000 |
Class A | ||
Ordinary shares, par value | $ 0.00001 | $ 0.00001 |
Ordinary shares, shares authorized | 13,750,000,000 | 13,750,000,000 |
Ordinary shares, shares issued | 2,844,418,332 | 2,880,056,332 |
Ordinary shares, shares outstanding | 2,818,991,432 | 2,870,119,332 |
Class B | ||
Ordinary shares, par value | $ 0.00001 | $ 0.00001 |
Ordinary shares, shares authorized | 250,000,000 | 250,000,000 |
Ordinary shares, shares issued | 246,224,465 | 246,224,465 |
Ordinary shares, shares outstanding | 246,224,465 | 246,224,465 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Net revenues | $ 339,065,455 | $ 108,899,479 |
Cost of revenue (including share-based compensation of US$65,858 and US$198,402 in the nine months ended September 30, 2019 and 2020, respectively) | (17,056,483) | (11,435,005) |
Gross profit | 322,008,972 | 97,464,474 |
Operating expenses: | ||
General and administrative expenses (including share-based compensation of US$434,790 and US$1,281,380 in the nine months ended September 30, 2019 and 2020, respectively) | (11,144,938) | (13,504,075) |
Research and development expenses (including share-based compensation of US$2,564,606 and US$2,157,990 in the nine months ended September 30, 2019 and 2020, respectively) | (23,153,735) | (21,197,631) |
Sales and marketing expenses (including share-based compensation of US$151,444 and US$168,727 in the nine months ended September 30, 2019 and 2020, respectively) | (316,276,383) | (93,533,363) |
Other operating income (loss), net | (227,540) | 228,302 |
Total operating expenses | (350,802,596) | (128,006,767) |
Loss from operations | (28,793,624) | (30,542,293) |
Interest income, net | 227,348 | 708,370 |
Foreign exchange losses, net | (13,505) | (364,545) |
Loss before income taxes | (28,579,781) | (30,198,468) |
Income tax expense | (3,200) | (1,714) |
Net Loss attributable to ordinary shareholders | $ (28,582,981) | $ (30,200,182) |
Net Loss per ordinary share: | ||
Basic (in dollars per share) | $ (0.01) | $ (0.01) |
Diluted (in dollars per share) | $ (0.01) | $ (0.01) |
Weighted average shares used in calculating net loss per ordinary share: | ||
Basic (in shares) | 3,086,630,271 | 3,163,501,054 |
Diluted (in shares) | 3,086,630,271 | 3,163,501,054 |
ADS | ||
Net Loss per ordinary share: | ||
Basic (in dollars per share) | $ (0.46) | $ (0.48) |
Diluted (in dollars per share) | $ (0.46) | $ (0.48) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) | 9 Months Ended | |
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Class A | ||
ADS ratio | 50 | 50 |
Cost of revenue | ||
Share-based compensation expense | $ 198,402 | $ 65,858 |
General and administrative expenses | ||
Share-based compensation expense | 1,281,380 | 434,790 |
Research and development expenses | ||
Share-based compensation expense | 2,157,990 | 2,564,606 |
Sales and marketing expenses | ||
Share-based compensation expense | $ 168,727 | $ 151,444 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
Net Loss | $ (28,582,981) | $ (30,200,182) |
Other comprehensive (loss) income | ||
Foreign currency translation adjustments, net of tax of nil | 78,045 | (220,513) |
Comprehensive Loss | $ (28,504,936) | $ (30,420,695) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
Foreign currency translation adjustments, tax | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Ordinary sharesClass A | Ordinary sharesClass B | Treasury Stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive (loss) income | Class A | Class B | Total |
Beginning balance at Dec. 31, 2018 | $ 29,498 | $ 2,462 | $ (2,499,167) | $ 204,701,187 | $ (116,752,285) | $ (1,158,900) | $ 84,322,795 | ||
Beginning balance (in shares) at Dec. 31, 2018 | 2,949,757,236 | 246,224,465 | 15,550,500 | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | |||||||||
Net Loss | (30,200,182) | (30,200,182) | |||||||
Repurchase of ordinary shares | $ (9,741,378) | (9,741,378) | |||||||
Repurchase of ordinary shares (in shares) | 56,461,100 | ||||||||
Share-based compensation | 3,216,698 | 3,216,698 | |||||||
Issuance of ordinary shares upon vesting of restricted shares | $ 95 | (95) | |||||||
Issuance of ordinary shares upon vesting of restricted shares (in shares) | 9,397,592 | ||||||||
Exercise of share options | $ 84 | 277,838 | 277,922 | ||||||
Exercise of share options (in shares) | 8,330,150 | ||||||||
Cancellation of treasury shares | $ (323) | $ 5,737,950 | (5,737,627) | ||||||
Cancellation of treasury shares (in shares) | (32,268,350) | (32,268,350) | |||||||
Foreign currency translation adjustments | (220,513) | (220,513) | |||||||
Ending balance at Sep. 30, 2019 | $ 29,354 | $ 2,462 | $ (6,502,595) | 202,458,001 | (146,952,467) | (1,379,413) | 47,655,342 | ||
Ending balance (in shares) at Sep. 30, 2019 | 2,935,216,628 | 246,224,465 | 39,743,250 | ||||||
Beginning balance at Dec. 31, 2019 | $ 28,800 | $ 2,462 | $ (1,063,547) | 194,971,827 | (153,598,346) | (1,432,833) | 38,908,363 | ||
Beginning balance (in shares) at Dec. 31, 2019 | 2,880,056,332 | 246,224,465 | 9,937,000 | 2,870,119,332 | 246,224,465 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | |||||||||
Net Loss | (28,582,981) | (28,582,981) | |||||||
Repurchase of ordinary shares | $ (8,130,513) | (8,130,513) | |||||||
Repurchase of ordinary shares (in shares) | 64,770,700 | ||||||||
Cash settlement on vested share options and restricted shares | (823,226) | (823,226) | |||||||
Share-based compensation | 3,806,499 | 3,806,499 | |||||||
Issuance of ordinary shares upon vesting of restricted shares | $ 42 | (42) | |||||||
Issuance of ordinary shares upon vesting of restricted shares (in shares) | 4,227,200 | ||||||||
Exercise of share options | $ 94 | 291,701 | $ 291,795 | ||||||
Exercise of share options (in shares) | 9,415,600 | ||||||||
Cancellation of treasury shares | $ (492) | $ 5,871,392 | (5,870,900) | ||||||
Cancellation of treasury shares (in shares) | (49,280,800) | (49,280,800) | (135,205,550) | ||||||
Foreign currency translation adjustments | 78,045 | $ 78,045 | |||||||
Ending balance at Sep. 30, 2020 | $ 28,444 | $ 2,462 | $ (3,322,668) | $ 192,375,859 | $ (182,181,327) | $ (1,354,788) | $ 5,547,982 | ||
Ending balance (in shares) at Sep. 30, 2020 | 2,844,418,332 | 246,224,465 | 25,426,900 | 2,818,991,432 | 246,224,465 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | 9 Months Ended | |
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | |
Cash flows from operating activities: | ||
Net Loss | $ (28,582,981) | $ (30,200,182) |
Depreciation and amortization | 2,738,487 | 2,096,190 |
Provision for allowance of doubtful accounts | 322,361 | 4,665,322 |
Share-based compensation | 3,806,499 | 3,216,698 |
Loss on disposal of property and equipment | 15,124 | 91 |
Changes in assets and liabilities: | ||
Accounts receivable | (1,404,021) | (370,877) |
Prepaid expenses and other current assets | (3,421,313) | (1,612,532) |
Other non-current assets | (506,082) | 238,762 |
Accounts payable | 24,826,554 | 3,146,856 |
Accrued salary and benefits | 1,578,215 | (544,028) |
Accrued expenses and other current liabilities | 4,592,654 | 507,323 |
Deferred revenue | 2,105,852 | 242,373 |
Other non-current liabilities | (102,097) | (285,690) |
Net cash (used in) provided by operating activities | 5,969,252 | (18,899,694) |
Cash flows from investing activities: | ||
Purchases of property, equipment and intangible assets | (2,237,794) | (4,097,269) |
Purchases of short-term investments | (13,000,000) | |
Maturity of short-term investments | 13,022,268 | |
Purchases of long-term investments | (146,841) | |
Net cash (used in) investing activities | (2,362,367) | (4,097,269) |
Cash flows from financing activities: | ||
Proceeds from short-term bank borrowings | 15,240,004 | 5,040,813 |
Repayment of short-term bank borrowings | (9,515,198) | |
Proceeds from issuance of ordinary shares upon exercise of share options | 291,795 | 277,922 |
Cash paid to settle vested share options and restricted shares | (823,226) | |
Cash paid for deferred issuance costs | (809,952) | |
Payments of share repurchases | (8,130,513) | (9,741,378) |
Net cash (used in) financing activities | (2,937,138) | (5,232,595) |
Net (decrease) increase in cash, cash equivalents, and restricted cash | 669,747 | (28,229,558) |
Cash, cash equivalents, and restricted cash at beginning of period | 59,966,031 | 84,859,915 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 375,805 | (360,608) |
Cash, cash equivalents, and restricted cash at end of period | 61,011,583 | 56,269,749 |
Supplemental disclosure of cash flow information: | ||
Income taxes paid | 3,200 | 1,714 |
Interest paid | 417,882 | 42,691 |
Supplemental disclosure of noncash investing and financing activities: | ||
Purchases of property and equipment included in payables | 224,410 | 54,814 |
Reconciliation in amounts on consolidated balance sheets: | ||
Total cash, cash equivalents, and restricted cash | $ 61,011,583 | $ 56,269,749 |
Organization and Principal Acti
Organization and Principal Activities | 9 Months Ended |
Sep. 30, 2020 | |
Organization and Principal Activities | |
Organization and Principal Activities | 1. Organization and Principal Activities CooTek (Cayman) Inc. (the "Company") was incorporated in the Cayman Islands on March 5, 2012. The Company, its subsidiaries, its consolidated Variable Interest Entities ("VIEs") and VIEs’ subsidiaries (collectively referred to as the "Group") are a fast-growing mobile internet company with a global vision, offering mobile applications including a portfolio of content-rich mobile applications. History of the Group and reorganization The Group’s history began in August 2008 with the commencement of operations of Shanghai Han Xiang (CooTek) Information Technology Co., Ltd ("Han Xiang"), a limited liability company incorporated in the People’s Republic of China ("PRC") by certain individuals. In October 2010, three outside investors acquired an aggregate of 24.24% equity interest of Han Xiang. In 2012, Han Xiang and its shareholders undertook a reorganization which was conducted to establish a Cayman holding company for the existing business to obtain investment from outside investors and in preparation of an overseas initial public offering. The Group has recognized the net assets of Han Xiang on a historical cost with no change in basis in the consolidated financial statements upon the completion of the reorganization. The shareholders’ rights and obligations remained the same after the reorganization. On October 2, 2018 the Group completed its initial public offering ("IPO") and issued 4,350,000 American depositary shares representing 217,500,000 of the Group’s ordinary shares. Net proceeds from the IPO after deducting underwriting discount and offering costs were US$45.1 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies (a) Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and applicable rules and regulations of the Securities and Exchange Commission ("SEC"), regarding interim financial reporting, and include all normal and recurring adjustments that management of the Group considers necessary for a fair presentation of its financial position and operating results. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these financial statements should be read in conjunction with the Group’s annual consolidated financial statements and notes thereto, included in the Company’s 2019 Annual Report on Form 20-F filed with the SEC on April 20, 2020, referred to as the Company’s 2019 Annual Report. (b) Principles of Consolidation The consolidated financial statements include the financial information of the Company, its wholly owned subsidiaries, its consolidated VIEs and VIEs’ subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Applicable PRC laws and regulations currently limit foreign ownership of companies that provide internet content distribution services and any other restrictions. The Company is deemed a foreign legal person under PRC laws and accordingly subsidiaries owned by the Company are not eligible to engage in provisions of internet content or online services. The Group therefore conducts its online business through the following major consolidated VIEs: ● Shanghai Chu Bao (CooTek) Information Technology Co., Ltd. ("Chu Bao") ● Yingsun Information Technology (Ningbo) Co., Ltd. ("Yingsun") ● Shanghai Qiaohan Technology Co., Ltd. ("Qiaohan") ● Molihong (Shenzhen) Internet Technology Co., Ltd. ("Molihong") ● Shanghai Dengyong Information Technology Co., Ltd. ("Dengyong") 2. Summary of Significant Accounting Policies (Continued) (b) Principles of Consolidation (Continued) The following consolidated financial statement balances and amounts of the Group’s VIEs were included in the accompanying unaudited condensed consolidated financial statements after the elimination of intercompany balances and transactions among the Company, its subsidiaries and its VIEs. As of December 31, As of September 30, 2019 2020 US$ US$ ASSETS Cash and cash equivalents 13,714,304 23,294,883 Restricted cash 203 209 Short-term investments 21,502 — Accounts receivable, net 21,582,641 23,473,397 Prepaid expense and other assets 3,643,649 8,569,904 Long term restricted cash — 2,472,998 Long-term investments — 146,841 Property and equipment, net 496 9,231 Intangible assets, net 47,122 61,020 Other non-current assets — 2,131 Total Assets 39,009,917 58,030,614 LIABILITIES Accounts payable 35,002,827 57,304,063 Short-term bank borrowings 408,264 256,697 Accrued salary and benefits 275,091 604,020 Accrued expenses and other current liabilities 1,385,303 3,696,308 Deferred revenue 3,658,808 1,928,241 Total Liabilities 40,730,293 63,789,329 For the nine months ended September 30, 2019 2020 US$ US$ Net revenues 38,276,479 299,205,121 Loss from operations (18,841,315) (94,447) Net (loss) income (18,823,768) 150,325 Net cash (used in) provide by operating activities (6,560,184) 18,000,288 Net cash used in investing activities — (201,320) Net cash provided by (used in) financing activities 44,315 (179,412) The VIEs’ assets are comprised of recognized and unrecognized revenue-producing assets. The recognized revenue producing assets mainly include purchased servers and software, which are presented in the account of "Property and equipment, net" and "Intangible assets, net". The unrecognized revenue-producing assets mainly consist of the Internet Content Provider license ("ICP" license), trademarks, copyrights and registered patents, which are not recognized in the consolidated balance sheets. Revenues of VIEs included in the consolidated financial statements mainly include revenue of advertising services. The VIEs contributed 35% and 88% of the Group’s consolidated net revenues for the nine months ended September 30, 2019 and 2020, respectively. As of December 31, 2019 and September 30, 2020, the VIEs accounted for an aggregate of 38% and 54% respectively, of the consolidated total assets, and 65% and 62% respectively, of the consolidated total liabilities. 2. Summary of Significant Accounting Policies (Continued) (b) Principles of Consolidation (Continued) There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs were ever to need financial support, the Group may, at its option and subject to statutory limits and restrictions, provide financial support to its VIE through loans to the shareholders of the VIEs. The Group believes that there are no assets held in the VIEs that can be used only to settle obligations of the VIEs, except for registered capital and the PRC statutory reserves. As the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company for any of the liabilities of the VIEs. Relevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of its statutory reserve and its share capital, to the Company in the form of loans and advances or cash dividends. (c) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Group's financial statements including but not limited to allowance for doubtful accounts, valuation allowances of deferred tax assets, and valuation of share-based compensation. Actual results may differ materially from those estimates. ( d) Fair Value Fair value reflects 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 considers assumptions that market participants would use when pricing the assets or liabilities. The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. This guidance specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows: ● Level 1— Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. ● Level 2— Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. ● Level 3— Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The fair value guidance describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. 2. Summary of Significant Accounting Policies (Continued) ( d) Fair Value (Continued) When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. Beginning January 1, 2019, the Group’s equity investments without readily determinable fair values, which do not qualify for NAV practical expedient and over which the Group does not have the ability to exercise significant influence through the investments in common stock or in substance common stock, are accounted for under the measurement alternative upon the adoption of Accounting Standards Update ("ASU") 2016-01 Recognition and Measurement of Financial Assets and Liabilities Financial instruments not reported at fair value include cash and cash equivalents, restricted cash, short-term investments, accounts receivable, accounts payable, other current liabilities and short-term bank borrowings. The carrying amounts of these financial instruments as of December 31, 2019 and September 30, 2020 were considered representative of their fair values due to their short-term nature. (e) Foreign Currency Translation The functional currency of the Group is the United States Dollar ("US$"). The functional currency of the subsidiaries and the VIEs in the PRC is Renminbi ("RMB"). The functional currency of all the other subsidiaries is US$. Foreign currency transactions have been translated into the functional currency at the exchange rates prevailing on the date of transactions. Foreign currency denominated monetary assets and liabilities are re-measured into the functional currency at exchange rates prevailing on the balance sheet date. Exchange gains and losses have been included in the determination of net income. The Group has chosen the US$ as its reporting currency. Assets and liabilities have been translated using exchange rates prevailing on the balance sheet date. Equity accounts are translated at historical exchange rates. Income statement items have been translated using the average exchange rate for the year. Translation adjustments have been reported as cumulative translation adjustments and are shown as a component of other comprehensive income/loss in the consolidated statements of comprehensive (loss) income and consolidated statements of changes in shareholders’ equity. (f) Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash on hand, demand deposits and floating rate financial instruments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when purchased. The Group's current-portion restrict cash represents amounts held in Group's bank account as guarantee deposit for payments processing services provided by the bank. Certain bank accounts were frozen by the PRC local authority in connection with an ongoing investigation of alleged misconducts of third-party advertisers perpetrated on the Group's advertising platform. As of September 30, 2020, cash held in these frozen bank accounts amounted to US$2,472,998. These funds are presented as long-term restricted cash on the consolidated balance sheet as of September 30, 2020 as the Group cannot control the timing of its release. In October 2020, an additional US$18.4 million was deposited into these frozen bank accounts. The Group is still in the process of cooperating with the relevant authority on such investigation and expect the funds to be released upon the completion of such investigation. (g) Short-term Investments Short-term investments primarily comprises of the time deposits with banks maturities between three months and one year. The Group states the short-term investments at amortized cost. 2. Summary of Significant Accounting Policies (Continued) (h) Revenue Recognition Mobile Advertising The Group generates substantially all of its revenue through mobile advertising. As of January 1, 2019, the Group adopted ASU 2014-09 Revenue from Contracts with Customers - Topic 606 and all subsequent ASUs that modified ASC 606. The Group has elected to apply the ASU and all related ASUs under the modified retrospective method to all contracts that were not completed as of January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. The Group did not note any effects of applying the new revenue standard as an adjustment to the opening balance of retained earnings at the beginning of 2019. In order to achieve that core principle, the Company applies the following five-step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. The Group provides advertising services to customers for promotion of their brands and products through its mobile applications, including a portfolio of content-rich mobile applications. The Group has two general pricing models for its advertising products: cost over a time period and cost for performance basis including per impression basis. For advertising contracts over a time period, the Group generally recognizes revenue ratably over time, because the customer simultaneously receives and consumes the benefits as the Group performs throughout a fixed contract term. For contracts that are charged on the cost for performance basis, the Group charges an agreed-upon fee to its customers determined based on the effectiveness of advertising links, which is typically measured by clicks, transactions, installations, user registrations, and other actions originating from the Group’s mobile applications. Revenue is recognized at a point in time when there is an effective click, transaction, installations, user registrations, and other actions originating from the Group’s mobile applications. For contracts that are charged on the cost per impression basis, the Group recognizes the revenue at a point in time when the impressions are delivered. Revenue for performance-based advertising services is recognized at a point in time when all the revenue recognition criteria are met. The Group launched in-house developed advertising platform, CooTek Ads, to provide tailored advertising services from late 2019. Customers engaged through CooTek Ads are required to pay a deposit before using Group's services. The deposits received are recorded as deferred revenue on the consolidated balance sheets. The amounts due to the Group are deducted from the deposited amounts when performance criteria have been satisfied. Others The Group also generates other revenues through cloud call business, licensing of its Smart Inputs products and membership fee from the users. The revenue is recognized when service is rendered. 2. Summary of Significant Accounting Policies (Continued) (h) Revenue Recognition (Continued) Sales Incentives The Group provides sales incentives to certain customers on the CooTek Ads in the form of sales rebates which entitle them to receive reductions in the price by meeting certain cumulative consumption requirement or replenishing required amount of deposit. The Group accounts for these incentives granted to customers as variable consideration and records it as reduction of revenue. The amount of variable consideration is measured based on the most likely amount of incentives to be. For the nine months ended September 30, 2019 and 2020, the rebates recorded by the Group were nil and US$48,491,685, respectively. Disaggregation of Revenue In the following table, revenue is disaggregated by revenue streams and geographic location of customers’ headquarters. For the nine months ended September 30, 2019 2020 US$ US$ Revenue: Advertising revenue 106,575,374 337,037,822 Other revenue 2,324,105 2,027,633 Total 108,899,479 339,065,455 For the nine months ended September 30, 2019 2020 US$ US$ USA 51,314,113 11,161,631 PRC 55,423,779 325,246,386 Others 2,161,587 2,657,438 Total 108,899,479 339,065,455 Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represent amounts invoiced, and revenue recognized prior to invoicing when the Group has satisfied its performance obligations and has the unconditional right to payment. 2. Summary of Significant Accounting Policies (Continued) (h) Revenue Recognition (Continued) Contract liabilities include payments received in advance of performance under the contract or for differences between the amount billed to a customer and the revenue recognized for the completed performance obligation which is presented as deferred revenue on the consolidated balance sheets. Due to the generally short-term duration of the Group’s contracts, the majority of the performance obligations are satisfied in one year. The movements of the Group’s accounts receivable and deferred revenue are as follows: Accounts Receivable Deferred Revenue US$ US$ Opening Balance at January 1, 2019 23,373,969 344,361 (Decrease) Increase, net (3,966,005) 239,404 Ending Balance at September 30, 2019 19,407,964 583,765 Opening Balance at January 1, 2020 27,254,634 3,887,908 Increase, net 1,828,582 809,359 Ending Balance at September 30, 2020 29,083,216 4,697,267 The Group recognized revenue of US$263,383 and US$3,637,328 by the reducing the balance of deferred revenue in the nine months ended September 30, 2019 and 2020, respectively, which were included in the balance of deferred revenue at the beginning of the each period. ( i) Sales and Marketing Expenses Sales and marketing expenses primarily consist of advertising expenses, salaries and benefits of sales and marketing personnel and fees paid to mobile device manufacturers to pre-install the Group’s Smart Input products. Advertising expenses represent payment to the third parties for online user acquisition of the Group’s products via social media and demand-side platforms. Advertising expenses are expensed as sales and marketing expenses when the services are received. Such expenses amounted to US$86,189,395 and US$310,602,100 for the nine months ended September 30, 2019 and 2020, respectively. (j) Concentration and Risks Financial instruments that potentially expose the Group to concentration of credit risk consist primarily of cash and cash equivalents, short-term investments, accounts receivable and prepayments. The Group places its cash and cash equivalents and short-term investments with financial institutions with high-credit ratings and quality. The Group conducts credit evaluations of customers, and generally does not require collateral or other security from its customers. The Group establishes an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers. With respect to prepayments, the Group performs on-going credit evaluations of the financial condition of these suppliers and has noted no significant credit risk. 2. Summary of Significant Accounting Policies (Continued) (j) Concentration and Risks (Continued) Concentration of Customers The following customers accounted for 10% or more of revenue: For the nine months ended September 30, 2019 2020 US$ % US$ % Company A 21,335,698 20 % * * Company B 21,731,172 20 % * * Company C 11,088,217 10 % * * Company D 16,873,890 16 % * * Company E * * 91,588,390 27 % The following customers accounted for 10% or more of accounts receivable: As of December 31, As of September 30, 2019 2020 US$ % US$ % Company B 17,944,840 62 % * * Company C 4,142,638 14 % * * Company D 3,840,005 13 % * * Company E * * 12,354,156 40 % Company F * * 9,824,384 32 % Concentration of Vendors The Group uses certain vendors to acquire users and those cost are recorded as sales and marketing expenses. Vendors accounted for 10% or more are listed as below: For the nine months ended September 30, 2019 2020 US$ % US$ % Company G 11,080,305 12 % * * Company H 10,853,930 12 % * * Company I * * 41,804,056 13 % The following vendors accounted for 10% or more of accounts payable: As of December 31, As of September 30, 2019 2020 US$ % US$ % Company H * * 8,433,642 13 % Company J * * 7,378,433 11 % * Less than 10%. 2. Summary of Significant Accounting Policies (Continued) (j) Concentration and Risks (Continued) Business and Economic Risks The Group participates in the dynamic and competitive high technology industry and believes that changes in any of the following areas could have a material adverse effect on the Group's future financial position, results of operations and cash flows: changes in the overall demand for services and products; competitive pressures due to existing and new entrants; advances and new trends in new technologies and industry standards; changes in certain strategic relationships or customer relationships; regulatory considerations; copyright regulations; brand maintenance and enhancement; and risks associated with the Company's ability to attract and retain employees necessary to support its growth. The Group's operations could be adversely affected by significant political, economic and social uncertainties in the PRC. Foreign Currency Risk The RMB is not a freely convertible currency. The State Administration for Foreign Exchange in the PRC, under the authority of the Peoples Bank of China, controls the conversion of RMB into other currencies. The value of the RMB is subject to changes in central government policies, international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The Group's cash and cash equivalents and restricted cash denominated in RMB amounted to RMB139,905,845 (amounted to US$20,054,735) and RMB292,519,950 (amounted to US$42,953,841) as of December 31, 2019 and September 30, 2020, respectively. (k) Recent Accounting Pronouncements New accounting pronouncements recently adopted In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810) 2. Summary of Significant Accounting Policies (Continued) (l) Recent Accounting Pronouncements (Continued) New accounting pronouncements not yet adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), In June 2016, the FASB issued ASU 2016-13, Credit Losses, Measurement of Credit Losses on Financial Instruments |
Accounts Receivable, net
Accounts Receivable, net | 9 Months Ended |
Sep. 30, 2020 | |
Accounts Receivable, net | |
Accounts receivable, net | 3. Accounts Receivable, net Accounts receivable, net, consisted of the following: As of December 31, As of September 30, 2019 2020 US$ US$ Accounts receivable 29,028,826 31,044,944 Allowance for doubtful accounts: Balance at beginning of the year/period (1,286,120) (1,774,192) Additions charged to bad debt expense (4,104,458) (322,361) Write-off 3,616,076 141,266 Foreign exchange effect 310 (6,441) Balance at end of the year/period (1,774,192) (1,961,728) Accounts receivable, net 27,254,634 29,083,216 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 30, 2020 | |
Prepaid Expenses and Other Current Assets | |
Prepaid expenses and other current assets | 4. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: As of December 31, As of September 30, 2019 2020 US$ US$ Value added tax recoverable 3,750,491 4,649,736 Other receivables 1,575,467 3,856,326 Advance to suppliers 1,545,793 952,760 Others 976,043 1,305,359 Prepaid expenses and other current assets 7,847,794 10,764,181 |
Property and Equipment, net
Property and Equipment, net | 9 Months Ended |
Sep. 30, 2020 | |
Property and Equipment, net | |
Property and Equipment, net | 5. Property and Equipment, net Property and equipment, net, consisted of the following: As of December 31, As of September 30, 2019 2020 US$ US$ Electronic equipment 9,622,184 12,045,523 Office equipment and furniture 334,452 346,181 Motor vehicles 82,470 82,470 Leasehold improvements 1,410,105 1,561,612 Construction in progress 76,200 — Total 11,525,411 14,035,786 Less: Accumulated depreciation (5,855,562) (8,438,638) Property and equipment, net 5,669,849 5,597,148 For the nine months ended September 30, 2019 and 2020 depreciation expenses were US$2,077,516 and US$2,656,359, respectively. |
Short-term Bank Borrowings
Short-term Bank Borrowings | 9 Months Ended |
Sep. 30, 2020 | |
Short-term Bank Borrowings | |
Short-term Bank Borrowings | 6. Short-term Bank Borrowings The Group’s bank borrowings consisted of the following: As of December 31, As of September 30, 2019 2020 US$ US$ Short-term borrowings 9,012,645 14,822,161 In July 2016, the Group entered into a credit facility agreement with a commercial bank under which the Group can draw-down up to US$6.0 million by October, 2018. In October 2019, the Group renewed the bank credit facility under which the Group can borrow up to US$6.0 million collateralized by its accounts receivable by October, 2020. In 2019, the Group has aggregately drawn down the credit facility of US$7.7 million and repaid US$1.9 million. The weighted average interest rate for borrowings drawn under such credit facility was 5.53% for the year ended December 31, 2019. In June 2020, the Group renewed the bank credit facility under which the Group can borrow up to US$11.0 million collateralized by its accounts receivable by June 2021. The interest rate for this credit facility is the LPR base interest rate plus 1.30%. For the nine months ended September 30, 2020, the Group has aggregately drawn down the credit facility of US$11.1million and repaid US$6.3 million, and the weighted average interest rate for borrowings drawn under such credit facility was 5.15%. The loan contains maximum quarterly net loss as financial covenants which the Group failed to fulfill as of September 30, 2020. The Group is negotiating for the waiver of the financial covenants with the bank. 6. Short-term Bank Borrowings (Continued) In July 2018, the Group entered into a credit facility agreement with a commercial bank under which the Group can draw-down up to US$4.0 million by July, 2019. In October 2019, the Group renewed the bank credit facility under which the Group can borrow up to US$4.0 million collateralized by its accounts receivable by October 2020. In 2019, the Group has aggregately drawn down the credit facility of US$6.4 million and repaid US$3.2 million. The weighted average interest rate for borrowings drawn under such credit facility was 6.12% for the year ended December 31, 2019. In June 2020, the Group renewed the bank credit facility under which the Group can borrow up to US$4.0 million collateralized by its accounts receivable by June 2021. The interest rate for this credit facility is Libor plus 3.5%, determined on the draw-down date. For the nine months ended September 30, 2020, the Group has aggregately drawn down the credit facility of US$4 million and repaid US$3.2million, and the weighted average interest rate for borrowings drawn under such credit facility was 3.84%. The loan contains maximum quarterly net loss as financial covenants which the Group failed to fulfill as of September 30, 2020. The Group is negotiating for the waiver of the financial covenants with the bank. As of September 30, 2020, the Group has fully utilized the credit facility. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | 7. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: As of December 31, As of September 30, 2019 2020 US$ US$ Other tax payables (Note 1) 3,239,430 4,564,615 Accrued expenses (Note 2) 2,106,993 4,665,599 Others 609,533 985,186 Total 5,955,956 10,215,400 Note 1: Other tax payables as of September 30, 2020, mainly consisted of value-added tax payable of US $4.6 million and other taxes such as individual income tax and stamp duty tax. Note 2: Accrued expenses mainly consisted of accrued professional service fees and other miscellaneous accrued marketing and operation expenses. |
Other Operating Income (Loss),
Other Operating Income (Loss), net | 9 Months Ended |
Sep. 30, 2020 | |
Other Operating Income (Loss), net | |
Other Operating Income (Loss), net | 8. Other Operating Income (Loss), net Other operating loss, net for the nine months ended September 30, 2020, primarily consisted of government subsidies received by the Group, compensation payment of US $1.6 |
Income Taxes Expense
Income Taxes Expense | 9 Months Ended |
Sep. 30, 2020 | |
Income Taxes Expense | |
Income Taxes Expense | 9. Income Taxes Expense The current and deferred portion of income tax expenses included in the consolidated statements of operations are as follows: For the nine months ended September 30, 2019 2020 Current tax expenses 1,714 3,200 Deferred tax benefits — — Total 1,714 3,200 The Group’s effective tax rates were nil for the nine months ended September 30, 2019 and 2020, respectively. The Group recorded a full valuation allowance against deferred tax assets of all its consolidated entities because all entities were in a cumulative loss position as of December 31, 2019 and September 30, 2020. No unrecognized tax benefits and related interest and penalties |
Treasury Shares
Treasury Shares | 9 Months Ended |
Sep. 30, 2020 | |
Treasury Shares | |
Treasury Shares | 10. Treasury Shares Treasury shares represent shares repurchased by the Group that are no longer outstanding and are held by the Group. For the nine months ended September 30, 2020, under the repurchase plan, the Group had repurchased an aggregate of 64,770,700 ordinary shares on the open market for a total cash consideration of US$8,130,513, which were accounted for as the cost of the treasury shares. As of September 30, 2020, 135,205,550 treasury shares have been cancelled. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-Based Compensation | |
Share-Based Compensation | 11. Share-Based Compensation Share Options The options have a contractual term of ten years. The vesting date starts on the grant date or the commencement date of a participant’s employment agreement. The options vest 20% on each of the five anniversary dates of the vesting date and upon continued employment. In the event of termination of a participant’s employment, the unvested options shall be terminated immediately. The participant’s right to exercise the vested options shall be terminated 2 or 3 months after the termination of the employment. The Group uses the binomial option pricing model and the following assumptions to estimate the fair value of the options at the date of granted: Nine Months ended Year ended December 31 September 30 2019 2020 Average risk-free rate of interest 1.67% 0.67% Expected volatility 42.50%-43.22% 43.18%-43.38% Dividend yield 0% 0% Contractual term 10 years 10 years Fair value of the underlying shares on the date of option grants 0.09-0.10 0.10-0.13 On November 6, 2018, the Board of Directors approved an option modification to reduce the exercise price of certain options granted to employees. All other terms of the share options granted remain unchanged. The modification resulted in incremental compensation cost of US$285,661, of which US$68,530 and US$42,867 was recorded during the nine months ended September 30, 2019 and the nine months ended September 30, 2020, respectively. The remaining US$141,977 will be amortized over the remaining vesting period of the modified options, ranging from the remaining of 2020 to 2021. 11. Share-Based Compensation (Continued) Share Options (Continued) The risk-free rate of interest is based on the US Treasury yield curve as of valuation date. Volatility is estimated based on annualized standard deviation of daily stock price return of comparable companies for the period before valuation date and with similar span as the expected expiration term. The Group has never declared or paid any cash dividends on its capital stock, and the Group does not anticipate any dividend payments in the foreseeable future. A summary of the aggregate option activity and information regarding options outstanding as of September 30, 2020 is as follows: Weighted Number of average exercise options price US$ Outstanding on January 1, 2020 160,800,982 0.05 Granted 145,572,500 0.0002 Forfeited (7,108,508) 0.03 Expired — — Exercised (15,220,000) 0.04 Outstanding on September 30, 2020 284,044,974 0.02 Options exercisable on September 30, 2020 128,681,130 0.05 Vested or expected to vest as of September 30, 2020 284,044,974 0.02 The weighted average grant date fair values of options granted during the nine months ended September 30, 2019 and the nine months ended September 30, 2020 were US$0.10 and US$0.10, respectively. For the nine months ended September 30, 2020, 15,220,000 of options were exercised with an aggregate intrinsic value of US$944,105. For the nine months ended September 30, 2019, 8,330,150 of options were exercised with an aggregate intrinsic value of US$545,013. For the nine months ended September 30, 2019 and 2020 excluding the incremental compensation cost resulted from the modification discussed above, the Group recognized share-based compensation expense of US$439,601 and US$2,292,252, respectively. As of September 30, 2020, there was US$12,686,969 in total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of 3.28 years. Restricted Share Units In the nine months ended September 30, 2020, the Group granted to certain employees 1,578,500 Restricted Share Units ("RSUs"). The RSUs have a contractual term of ten years and vest 25% on each anniversary over four years from the grant date. The vesting of these RSUs is conditioned on continued employment. Compensation expense based on fair value is amortized over the requisite service period of award using the straight line vesting attribution method. 11. Share-Based Compensation (Continued) Restricted Share Units (Continued) A summary of the RSUs activity for the nine months ended September 30, 2020 is as follows: Weighted average Number of grant date restricted shares fair value Unvested restricted shares outstanding at January 1, 2020 50,725,912 0.20 Granted 1,578,500 0.10 Vested (11,331,332) 0.22 Forfeited (11,779,000) 0.17 Unvested restricted shares outstanding at September 30, 2020 29,194,080 0.19 Expected to vest at September 30, 2020 29,194,080 0.19 The share-based compensation expense related to RSUs of US$2,708,567 and US$1,471,380 were recognized by the Group for the nine months ended September 30, 2019 and 2020, respectively. As of September 30, 2020, there was US$4,477,292 in unrecognized compensation costs, net of actual forfeitures, related to unvested restricted shares, which is expected to be recognized over a weighted-average period of 2.30 years. In June 2020, the Group cash settled certain vested share options and RSUs at fair value amounted to US$ 823,226 . Given the transaction is an one-time transaction, negotiated after the award is vested, and not pursuant to a pre-existing right of the Group, the Group accounted for it as a repurchase of equity with amount of cash paid recorded as additional paid in capital. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Net Loss Per Share | |
Net Loss Per Share | 12. Net Loss Per Share Net loss per share was computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the nine months ended September 30, 2019 and 2020: For the nine months ended September 30, 2019 2020 US$ US$ Numerator: Net loss—basic and diluted (30,200,182) (28,582,981) Net loss attributable to ordinary shareholders (30,200,182) (28,582,981) Shares (Denominator): Weighted average number of ordinary shares outstanding Basic 3,163,501,054 3,086,630,271 Diluted 3,163,501,054 3,086,630,271 Net loss earnings per share—basic and diluted (0.01) (0.01) 12. Net Loss Per Share (Continued) As a result of the Group’s net loss for the nine months ended September 30, 2019 and 2020, diluted net loss per share does not include the following instruments as their inclusion would be antidilutive: For the nine months ended September 30, 2019 2020 Share options 160,139,359 284,044,974 Restricted shares units 60,108,963 29,194,080 Total 220,248,322 313,239,054 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 13. Commitments and Contingencies Lease Commitments The Group leases certain office premises under operating leases. The term of each lease agreement vary and may contain renewal options. Rental payments under operating leases are charged to operating expenses on a straight-line basis over the period of the lease based on contract terms. Rental expenses under operating leases for the nine months ended September 30, 2019 and 2020 were US$1,338,427, and US$1,096,762, respectively. Future lease payments under operating leases as of September 30, 2020 were as follows: Year ending December 31 US$ The remaining of 2020 494,753 2021 1,590,357 2022 741,411 2023 60,455 Total 2,886,976 The Group did not have other significant capital commitments or significant guarantees as of December 31, 2019 and September 30, 2020, respectively. Contingencies From time to time, the Group is a party to various legal actions arising in the ordinary course of business. The Group accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Group's management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate would have a material adverse impact on the Group's consolidated financial position, results of operations and cash flows. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Information | |
Segment Information | 14. Segment Information The Group has only one reportable segment since the Group does not distinguish revenues, costs and expenses between segments in its internal reporting, and reports costs and expenses by nature as a whole. The Group’s chief operating decision maker, who has been identified as the Chief Executive Officer, reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole. The Group does not distinguish among markets or segments for the purpose of internal reports. 14. Segment Information (Continued) Information about the Group’s non-current assets is presented based on the geographical location of the assets as follows: As of December 31, As of September 30, 2019 2020 US$ US$ PRC 2,655,953 4,258,416 USA 3,540,740 2,661,423 Total 6,196,693 6,919,839 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Event | |
Subsequent Event | 15. Subsequent Event Pursuant to the repurchase shares program announced on May 18, 2020, 5,486,350 shares (equivalent to 109,727 ADSs) of the Group’s Class A ordinary shares were purchased from October 1, 2020 through December 14, 2020 for a total cash consideration of US$0.5 million from the public market. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | (a) Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and applicable rules and regulations of the Securities and Exchange Commission ("SEC"), regarding interim financial reporting, and include all normal and recurring adjustments that management of the Group considers necessary for a fair presentation of its financial position and operating results. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these financial statements should be read in conjunction with the Group’s annual consolidated financial statements and notes thereto, included in the Company’s 2019 Annual Report on Form 20-F filed with the SEC on April 20, 2020, referred to as the Company’s 2019 Annual Report. |
Principles of Consolidation | (b) Principles of Consolidation The consolidated financial statements include the financial information of the Company, its wholly owned subsidiaries, its consolidated VIEs and VIEs’ subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Applicable PRC laws and regulations currently limit foreign ownership of companies that provide internet content distribution services and any other restrictions. The Company is deemed a foreign legal person under PRC laws and accordingly subsidiaries owned by the Company are not eligible to engage in provisions of internet content or online services. The Group therefore conducts its online business through the following major consolidated VIEs: ● Shanghai Chu Bao (CooTek) Information Technology Co., Ltd. ("Chu Bao") ● Yingsun Information Technology (Ningbo) Co., Ltd. ("Yingsun") ● Shanghai Qiaohan Technology Co., Ltd. ("Qiaohan") ● Molihong (Shenzhen) Internet Technology Co., Ltd. ("Molihong") ● Shanghai Dengyong Information Technology Co., Ltd. ("Dengyong") 2. Summary of Significant Accounting Policies (Continued) (b) Principles of Consolidation (Continued) The following consolidated financial statement balances and amounts of the Group’s VIEs were included in the accompanying unaudited condensed consolidated financial statements after the elimination of intercompany balances and transactions among the Company, its subsidiaries and its VIEs. As of December 31, As of September 30, 2019 2020 US$ US$ ASSETS Cash and cash equivalents 13,714,304 23,294,883 Restricted cash 203 209 Short-term investments 21,502 — Accounts receivable, net 21,582,641 23,473,397 Prepaid expense and other assets 3,643,649 8,569,904 Long term restricted cash — 2,472,998 Long-term investments — 146,841 Property and equipment, net 496 9,231 Intangible assets, net 47,122 61,020 Other non-current assets — 2,131 Total Assets 39,009,917 58,030,614 LIABILITIES Accounts payable 35,002,827 57,304,063 Short-term bank borrowings 408,264 256,697 Accrued salary and benefits 275,091 604,020 Accrued expenses and other current liabilities 1,385,303 3,696,308 Deferred revenue 3,658,808 1,928,241 Total Liabilities 40,730,293 63,789,329 For the nine months ended September 30, 2019 2020 US$ US$ Net revenues 38,276,479 299,205,121 Loss from operations (18,841,315) (94,447) Net (loss) income (18,823,768) 150,325 Net cash (used in) provide by operating activities (6,560,184) 18,000,288 Net cash used in investing activities — (201,320) Net cash provided by (used in) financing activities 44,315 (179,412) The VIEs’ assets are comprised of recognized and unrecognized revenue-producing assets. The recognized revenue producing assets mainly include purchased servers and software, which are presented in the account of "Property and equipment, net" and "Intangible assets, net". The unrecognized revenue-producing assets mainly consist of the Internet Content Provider license ("ICP" license), trademarks, copyrights and registered patents, which are not recognized in the consolidated balance sheets. Revenues of VIEs included in the consolidated financial statements mainly include revenue of advertising services. The VIEs contributed 35% and 88% of the Group’s consolidated net revenues for the nine months ended September 30, 2019 and 2020, respectively. As of December 31, 2019 and September 30, 2020, the VIEs accounted for an aggregate of 38% and 54% respectively, of the consolidated total assets, and 65% and 62% respectively, of the consolidated total liabilities. 2. Summary of Significant Accounting Policies (Continued) (b) Principles of Consolidation (Continued) There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs were ever to need financial support, the Group may, at its option and subject to statutory limits and restrictions, provide financial support to its VIE through loans to the shareholders of the VIEs. The Group believes that there are no assets held in the VIEs that can be used only to settle obligations of the VIEs, except for registered capital and the PRC statutory reserves. As the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company for any of the liabilities of the VIEs. Relevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of its statutory reserve and its share capital, to the Company in the form of loans and advances or cash dividends. |
Use of Estimates | (c) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Group's financial statements including but not limited to allowance for doubtful accounts, valuation allowances of deferred tax assets, and valuation of share-based compensation. Actual results may differ materially from those estimates. |
Fair Value | ( d) Fair Value Fair value reflects 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 considers assumptions that market participants would use when pricing the assets or liabilities. The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. This guidance specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows: ● Level 1— Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. ● Level 2— Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. ● Level 3— Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The fair value guidance describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. 2. Summary of Significant Accounting Policies (Continued) ( d) Fair Value (Continued) When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. Beginning January 1, 2019, the Group’s equity investments without readily determinable fair values, which do not qualify for NAV practical expedient and over which the Group does not have the ability to exercise significant influence through the investments in common stock or in substance common stock, are accounted for under the measurement alternative upon the adoption of Accounting Standards Update ("ASU") 2016-01 Recognition and Measurement of Financial Assets and Liabilities Financial instruments not reported at fair value include cash and cash equivalents, restricted cash, short-term investments, accounts receivable, accounts payable, other current liabilities and short-term bank borrowings. The carrying amounts of these financial instruments as of December 31, 2019 and September 30, 2020 were considered representative of their fair values due to their short-term nature. |
Foreign Currency Translation | (e) Foreign Currency Translation The functional currency of the Group is the United States Dollar ("US$"). The functional currency of the subsidiaries and the VIEs in the PRC is Renminbi ("RMB"). The functional currency of all the other subsidiaries is US$. Foreign currency transactions have been translated into the functional currency at the exchange rates prevailing on the date of transactions. Foreign currency denominated monetary assets and liabilities are re-measured into the functional currency at exchange rates prevailing on the balance sheet date. Exchange gains and losses have been included in the determination of net income. The Group has chosen the US$ as its reporting currency. Assets and liabilities have been translated using exchange rates prevailing on the balance sheet date. Equity accounts are translated at historical exchange rates. Income statement items have been translated using the average exchange rate for the year. Translation adjustments have been reported as cumulative translation adjustments and are shown as a component of other comprehensive income/loss in the consolidated statements of comprehensive (loss) income and consolidated statements of changes in shareholders’ equity. |
Cash, Cash Equivalents and Restricted Cash | (f) Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash on hand, demand deposits and floating rate financial instruments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when purchased. The Group's current-portion restrict cash represents amounts held in Group's bank account as guarantee deposit for payments processing services provided by the bank. Certain bank accounts were frozen by the PRC local authority in connection with an ongoing investigation of alleged misconducts of third-party advertisers perpetrated on the Group's advertising platform. As of September 30, 2020, cash held in these frozen bank accounts amounted to US$2,472,998. These funds are presented as long-term restricted cash on the consolidated balance sheet as of September 30, 2020 as the Group cannot control the timing of its release. In October 2020, an additional US$18.4 million was deposited into these frozen bank accounts. The Group is still in the process of cooperating with the relevant authority on such investigation and expect the funds to be released upon the completion of such investigation. |
Short-term Investments | (g) Short-term Investments Short-term investments primarily comprises of the time deposits with banks maturities between three months and one year. The Group states the short-term investments at amortized cost. |
Revenue Recognition | (h) Revenue Recognition Mobile Advertising The Group generates substantially all of its revenue through mobile advertising. As of January 1, 2019, the Group adopted ASU 2014-09 Revenue from Contracts with Customers - Topic 606 and all subsequent ASUs that modified ASC 606. The Group has elected to apply the ASU and all related ASUs under the modified retrospective method to all contracts that were not completed as of January 1, 2019. Results for reporting periods beginning after January 1, 2019 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. The Group did not note any effects of applying the new revenue standard as an adjustment to the opening balance of retained earnings at the beginning of 2019. In order to achieve that core principle, the Company applies the following five-step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. The Group provides advertising services to customers for promotion of their brands and products through its mobile applications, including a portfolio of content-rich mobile applications. The Group has two general pricing models for its advertising products: cost over a time period and cost for performance basis including per impression basis. For advertising contracts over a time period, the Group generally recognizes revenue ratably over time, because the customer simultaneously receives and consumes the benefits as the Group performs throughout a fixed contract term. For contracts that are charged on the cost for performance basis, the Group charges an agreed-upon fee to its customers determined based on the effectiveness of advertising links, which is typically measured by clicks, transactions, installations, user registrations, and other actions originating from the Group’s mobile applications. Revenue is recognized at a point in time when there is an effective click, transaction, installations, user registrations, and other actions originating from the Group’s mobile applications. For contracts that are charged on the cost per impression basis, the Group recognizes the revenue at a point in time when the impressions are delivered. Revenue for performance-based advertising services is recognized at a point in time when all the revenue recognition criteria are met. The Group launched in-house developed advertising platform, CooTek Ads, to provide tailored advertising services from late 2019. Customers engaged through CooTek Ads are required to pay a deposit before using Group's services. The deposits received are recorded as deferred revenue on the consolidated balance sheets. The amounts due to the Group are deducted from the deposited amounts when performance criteria have been satisfied. Others The Group also generates other revenues through cloud call business, licensing of its Smart Inputs products and membership fee from the users. The revenue is recognized when service is rendered. 2. Summary of Significant Accounting Policies (Continued) (h) Revenue Recognition (Continued) Sales Incentives The Group provides sales incentives to certain customers on the CooTek Ads in the form of sales rebates which entitle them to receive reductions in the price by meeting certain cumulative consumption requirement or replenishing required amount of deposit. The Group accounts for these incentives granted to customers as variable consideration and records it as reduction of revenue. The amount of variable consideration is measured based on the most likely amount of incentives to be. For the nine months ended September 30, 2019 and 2020, the rebates recorded by the Group were nil and US$48,491,685, respectively. Disaggregation of Revenue In the following table, revenue is disaggregated by revenue streams and geographic location of customers’ headquarters. For the nine months ended September 30, 2019 2020 US$ US$ Revenue: Advertising revenue 106,575,374 337,037,822 Other revenue 2,324,105 2,027,633 Total 108,899,479 339,065,455 For the nine months ended September 30, 2019 2020 US$ US$ USA 51,314,113 11,161,631 PRC 55,423,779 325,246,386 Others 2,161,587 2,657,438 Total 108,899,479 339,065,455 Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represent amounts invoiced, and revenue recognized prior to invoicing when the Group has satisfied its performance obligations and has the unconditional right to payment. 2. Summary of Significant Accounting Policies (Continued) (h) Revenue Recognition (Continued) Contract liabilities include payments received in advance of performance under the contract or for differences between the amount billed to a customer and the revenue recognized for the completed performance obligation which is presented as deferred revenue on the consolidated balance sheets. Due to the generally short-term duration of the Group’s contracts, the majority of the performance obligations are satisfied in one year. The movements of the Group’s accounts receivable and deferred revenue are as follows: Accounts Receivable Deferred Revenue US$ US$ Opening Balance at January 1, 2019 23,373,969 344,361 (Decrease) Increase, net (3,966,005) 239,404 Ending Balance at September 30, 2019 19,407,964 583,765 Opening Balance at January 1, 2020 27,254,634 3,887,908 Increase, net 1,828,582 809,359 Ending Balance at September 30, 2020 29,083,216 4,697,267 The Group recognized revenue of US$263,383 and US$3,637,328 by the reducing the balance of deferred revenue in the nine months ended September 30, 2019 and 2020, respectively, which were included in the balance of deferred revenue at the beginning of the each period. |
Sales and Marketing Expenses | ( i) Sales and Marketing Expenses Sales and marketing expenses primarily consist of advertising expenses, salaries and benefits of sales and marketing personnel and fees paid to mobile device manufacturers to pre-install the Group’s Smart Input products. Advertising expenses represent payment to the third parties for online user acquisition of the Group’s products via social media and demand-side platforms. Advertising expenses are expensed as sales and marketing expenses when the services are received. Such expenses amounted to US$86,189,395 and US$310,602,100 for the nine months ended September 30, 2019 and 2020, respectively. |
Concentration and Risks | (j) Concentration and Risks Financial instruments that potentially expose the Group to concentration of credit risk consist primarily of cash and cash equivalents, short-term investments, accounts receivable and prepayments. The Group places its cash and cash equivalents and short-term investments with financial institutions with high-credit ratings and quality. The Group conducts credit evaluations of customers, and generally does not require collateral or other security from its customers. The Group establishes an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers. With respect to prepayments, the Group performs on-going credit evaluations of the financial condition of these suppliers and has noted no significant credit risk. 2. Summary of Significant Accounting Policies (Continued) (j) Concentration and Risks (Continued) Concentration of Customers The following customers accounted for 10% or more of revenue: For the nine months ended September 30, 2019 2020 US$ % US$ % Company A 21,335,698 20 % * * Company B 21,731,172 20 % * * Company C 11,088,217 10 % * * Company D 16,873,890 16 % * * Company E * * 91,588,390 27 % The following customers accounted for 10% or more of accounts receivable: As of December 31, As of September 30, 2019 2020 US$ % US$ % Company B 17,944,840 62 % * * Company C 4,142,638 14 % * * Company D 3,840,005 13 % * * Company E * * 12,354,156 40 % Company F * * 9,824,384 32 % Concentration of Vendors The Group uses certain vendors to acquire users and those cost are recorded as sales and marketing expenses. Vendors accounted for 10% or more are listed as below: For the nine months ended September 30, 2019 2020 US$ % US$ % Company G 11,080,305 12 % * * Company H 10,853,930 12 % * * Company I * * 41,804,056 13 % The following vendors accounted for 10% or more of accounts payable: As of December 31, As of September 30, 2019 2020 US$ % US$ % Company H * * 8,433,642 13 % Company J * * 7,378,433 11 % * Less than 10%. 2. Summary of Significant Accounting Policies (Continued) (j) Concentration and Risks (Continued) Business and Economic Risks The Group participates in the dynamic and competitive high technology industry and believes that changes in any of the following areas could have a material adverse effect on the Group's future financial position, results of operations and cash flows: changes in the overall demand for services and products; competitive pressures due to existing and new entrants; advances and new trends in new technologies and industry standards; changes in certain strategic relationships or customer relationships; regulatory considerations; copyright regulations; brand maintenance and enhancement; and risks associated with the Company's ability to attract and retain employees necessary to support its growth. The Group's operations could be adversely affected by significant political, economic and social uncertainties in the PRC. Foreign Currency Risk The RMB is not a freely convertible currency. The State Administration for Foreign Exchange in the PRC, under the authority of the Peoples Bank of China, controls the conversion of RMB into other currencies. The value of the RMB is subject to changes in central government policies, international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The Group's cash and cash equivalents and restricted cash denominated in RMB amounted to RMB139,905,845 (amounted to US$20,054,735) and RMB292,519,950 (amounted to US$42,953,841) as of December 31, 2019 and September 30, 2020, respectively. |
Recent Accounting Pronouncements | (k) Recent Accounting Pronouncements New accounting pronouncements recently adopted In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810) 2. Summary of Significant Accounting Policies (Continued) (l) Recent Accounting Pronouncements (Continued) New accounting pronouncements not yet adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), In June 2016, the FASB issued ASU 2016-13, Credit Losses, Measurement of Credit Losses on Financial Instruments |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of consolidated financial statement balances and amounts of the Group's VIEs | As of December 31, As of September 30, 2019 2020 US$ US$ ASSETS Cash and cash equivalents 13,714,304 23,294,883 Restricted cash 203 209 Short-term investments 21,502 — Accounts receivable, net 21,582,641 23,473,397 Prepaid expense and other assets 3,643,649 8,569,904 Long term restricted cash — 2,472,998 Long-term investments — 146,841 Property and equipment, net 496 9,231 Intangible assets, net 47,122 61,020 Other non-current assets — 2,131 Total Assets 39,009,917 58,030,614 LIABILITIES Accounts payable 35,002,827 57,304,063 Short-term bank borrowings 408,264 256,697 Accrued salary and benefits 275,091 604,020 Accrued expenses and other current liabilities 1,385,303 3,696,308 Deferred revenue 3,658,808 1,928,241 Total Liabilities 40,730,293 63,789,329 For the nine months ended September 30, 2019 2020 US$ US$ Net revenues 38,276,479 299,205,121 Loss from operations (18,841,315) (94,447) Net (loss) income (18,823,768) 150,325 Net cash (used in) provide by operating activities (6,560,184) 18,000,288 Net cash used in investing activities — (201,320) Net cash provided by (used in) financing activities 44,315 (179,412) |
Schedule of revenue based on revenue streams | For the nine months ended September 30, 2019 2020 US$ US$ Revenue: Advertising revenue 106,575,374 337,037,822 Other revenue 2,324,105 2,027,633 Total 108,899,479 339,065,455 |
Schedule of revenues generated by geographic location of customers' headquarters | For the nine months ended September 30, 2019 2020 US$ US$ USA 51,314,113 11,161,631 PRC 55,423,779 325,246,386 Others 2,161,587 2,657,438 Total 108,899,479 339,065,455 |
Schedule of movements in accounts receivable and deferred revenue | Accounts Receivable Deferred Revenue US$ US$ Opening Balance at January 1, 2019 23,373,969 344,361 (Decrease) Increase, net (3,966,005) 239,404 Ending Balance at September 30, 2019 19,407,964 583,765 Opening Balance at January 1, 2020 27,254,634 3,887,908 Increase, net 1,828,582 809,359 Ending Balance at September 30, 2020 29,083,216 4,697,267 |
Schedule of concentration risk | Concentration of Customers The following customers accounted for 10% or more of revenue: For the nine months ended September 30, 2019 2020 US$ % US$ % Company A 21,335,698 20 % * * Company B 21,731,172 20 % * * Company C 11,088,217 10 % * * Company D 16,873,890 16 % * * Company E * * 91,588,390 27 % The following customers accounted for 10% or more of accounts receivable: As of December 31, As of September 30, 2019 2020 US$ % US$ % Company B 17,944,840 62 % * * Company C 4,142,638 14 % * * Company D 3,840,005 13 % * * Company E * * 12,354,156 40 % Company F * * 9,824,384 32 % Concentration of Vendors The Group uses certain vendors to acquire users and those cost are recorded as sales and marketing expenses. Vendors accounted for 10% or more are listed as below: For the nine months ended September 30, 2019 2020 US$ % US$ % Company G 11,080,305 12 % * * Company H 10,853,930 12 % * * Company I * * 41,804,056 13 % The following vendors accounted for 10% or more of accounts payable: As of December 31, As of September 30, 2019 2020 US$ % US$ % Company H * * 8,433,642 13 % Company J * * 7,378,433 11 % * Less than 10%. |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounts Receivable, net | |
Schedule of accounts receivable, net | As of December 31, As of September 30, 2019 2020 US$ US$ Accounts receivable 29,028,826 31,044,944 Allowance for doubtful accounts: Balance at beginning of the year/period (1,286,120) (1,774,192) Additions charged to bad debt expense (4,104,458) (322,361) Write-off 3,616,076 141,266 Foreign exchange effect 310 (6,441) Balance at end of the year/period (1,774,192) (1,961,728) Accounts receivable, net 27,254,634 29,083,216 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Prepaid Expenses and Other Current Assets | |
Schedule of prepaid expenses and other current assets | As of December 31, As of September 30, 2019 2020 US$ US$ Value added tax recoverable 3,750,491 4,649,736 Other receivables 1,575,467 3,856,326 Advance to suppliers 1,545,793 952,760 Others 976,043 1,305,359 Prepaid expenses and other current assets 7,847,794 10,764,181 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property and Equipment, net | |
Schedule of property and equipment, net | As of December 31, As of September 30, 2019 2020 US$ US$ Electronic equipment 9,622,184 12,045,523 Office equipment and furniture 334,452 346,181 Motor vehicles 82,470 82,470 Leasehold improvements 1,410,105 1,561,612 Construction in progress 76,200 — Total 11,525,411 14,035,786 Less: Accumulated depreciation (5,855,562) (8,438,638) Property and equipment, net 5,669,849 5,597,148 |
Short-term bank borrowings (Tab
Short-term bank borrowings (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Short-term Bank Borrowings | |
Schedule of bank borrowings | As of December 31, As of September 30, 2019 2020 US$ US$ Short-term borrowings 9,012,645 14,822,161 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Expenses and Other Current Liabilities | |
Schedule of accrued expenses and other current liabilities | As of December 31, As of September 30, 2019 2020 US$ US$ Other tax payables (Note 1) 3,239,430 4,564,615 Accrued expenses (Note 2) 2,106,993 4,665,599 Others 609,533 985,186 Total 5,955,956 10,215,400 Note 1: Other tax payables as of September 30, 2020, mainly consisted of value-added tax payable of US $4.6 million and other taxes such as individual income tax and stamp duty tax. Note 2: Accrued expenses mainly consisted of accrued professional service fees and other miscellaneous accrued marketing and operation expenses. |
Income Taxes Expense (Tables)
Income Taxes Expense (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Income Taxes Expense | |
Summary of current and deferred portion of income tax expenses | For the nine months ended September 30, 2019 2020 Current tax expenses 1,714 3,200 Deferred tax benefits — — Total 1,714 3,200 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-Based Compensation | |
Schedule of assumptions used to estimate the fair value of options at the date of granted | Nine Months ended Year ended December 31 September 30 2019 2020 Average risk-free rate of interest 1.67% 0.67% Expected volatility 42.50%-43.22% 43.18%-43.38% Dividend yield 0% 0% Contractual term 10 years 10 years Fair value of the underlying shares on the date of option grants 0.09-0.10 0.10-0.13 |
Summary of aggregate option activity and information regarding options outstanding | A summary of the aggregate option activity and information regarding options outstanding as of September 30, 2020 is as follows: Weighted Number of average exercise options price US$ Outstanding on January 1, 2020 160,800,982 0.05 Granted 145,572,500 0.0002 Forfeited (7,108,508) 0.03 Expired — — Exercised (15,220,000) 0.04 Outstanding on September 30, 2020 284,044,974 0.02 Options exercisable on September 30, 2020 128,681,130 0.05 Vested or expected to vest as of September 30, 2020 284,044,974 0.02 |
Summary of the RSU activity | A summary of the RSUs activity for the nine months ended September 30, 2020 is as follows: Weighted average Number of grant date restricted shares fair value Unvested restricted shares outstanding at January 1, 2020 50,725,912 0.20 Granted 1,578,500 0.10 Vested (11,331,332) 0.22 Forfeited (11,779,000) 0.17 Unvested restricted shares outstanding at September 30, 2020 29,194,080 0.19 Expected to vest at September 30, 2020 29,194,080 0.19 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Net Loss Per Share | |
Schedule of computation of basic and diluted net loss per share | For the nine months ended September 30, 2019 2020 US$ US$ Numerator: Net loss—basic and diluted (30,200,182) (28,582,981) Net loss attributable to ordinary shareholders (30,200,182) (28,582,981) Shares (Denominator): Weighted average number of ordinary shares outstanding Basic 3,163,501,054 3,086,630,271 Diluted 3,163,501,054 3,086,630,271 Net loss earnings per share—basic and diluted (0.01) (0.01) |
Schedule of instruments excluded from calculation of diluted net loss per share | For the nine months ended September 30, 2019 2020 Share options 160,139,359 284,044,974 Restricted shares units 60,108,963 29,194,080 Total 220,248,322 313,239,054 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies. | |
Schedule of future lease payments under operating leases | Future lease payments under operating leases as of September 30, 2020 were as follows: Year ending December 31 US$ The remaining of 2020 494,753 2021 1,590,357 2022 741,411 2023 60,455 Total 2,886,976 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Information | |
Schedule of non-current assets based on geographical location of the assets | As of December 31, As of September 30, 2019 2020 US$ US$ PRC 2,655,953 4,258,416 USA 3,540,740 2,661,423 Total 6,196,693 6,919,839 |
Organization and Principal Ac_2
Organization and Principal Activities (Details) $ in Millions | Oct. 02, 2018USD ($)shares | Oct. 31, 2010item |
Organization and Principal Activities | ||
Proceeds from initial public offering, net of offering cost of US$2,615,726 | $ | $ 45.1 | |
IPO | Ordinary shares | ||
Organization and Principal Activities | ||
Number of shares issued during the period | 217,500,000 | |
IPO | American depositary shares | ||
Organization and Principal Activities | ||
Number of shares issued during the period | 4,350,000 | |
Han Xiang | ||
Organization and Principal Activities | ||
Number of Investors | item | 3 | |
Three Investors | Han Xiang | ||
Organization and Principal Activities | ||
Percentage of interest acquired by outside investors | 24.24% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Consolidated financial statement balances and amounts of the Group's VIEs (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
ASSETS | |||
Cash and cash equivalents | $ 58,478,376 | $ 56,269,749 | $ 59,905,827 |
Restricted cash | 60,209 | 60,204 | |
Short-term investments | 550,025 | 571,508 | |
Accounts receivable, net | 29,083,216 | 27,254,634 | |
Prepaid expense and other assets | 10,764,181 | 7,847,794 | |
Long term restricted cash | 2,472,998 | ||
Long-term Investments | 146,841 | ||
Property and equipment, net | 5,597,148 | 5,669,849 | |
Intangible assets, net | 419,343 | 267,736 | |
Other noncurrent assets | 756,507 | 259,108 | |
Assets | 108,328,844 | 101,836,660 | |
LIABILITIES | |||
Accounts payable | 64,805,107 | 37,877,800 | |
Short-term bank borrowings | 14,822,161 | 9,012,645 | |
Accrued salary and benefits | 7,747,460 | 5,598,425 | |
Accrued expenses and other current liabilities | 10,215,400 | 5,955,956 | |
Deferred revenue | 4,697,267 | 3,887,908 | |
TOTAL LIABILITIES | 102,780,862 | 62,928,297 | |
Net revenues | 339,065,455 | 108,899,479 | |
Loss from operations | (28,793,624) | (30,542,293) | |
Net (loss) income | (28,582,981) | (30,200,182) | |
Net cash (used in) provided by operating activities | 5,969,252 | (18,899,694) | |
Net cash used in investing activities | (2,362,367) | (4,097,269) | |
Net cash provided by (used in) financing activities | (2,937,138) | (5,232,595) | |
VIEs | |||
ASSETS | |||
Cash and cash equivalents | 23,294,883 | 13,714,304 | |
Restricted cash | 209 | 203 | |
Short-term investments | 21,502 | ||
Accounts receivable, net | 23,473,397 | 21,582,641 | |
Prepaid expense and other assets | 8,569,904 | 3,643,649 | |
Long term restricted cash | 2,472,998 | ||
Long-term Investments | 146,841 | ||
Property and equipment, net | 9,231 | 496 | |
Intangible assets, net | 61,020 | 47,122 | |
Other noncurrent assets | 2,131 | ||
Assets | 58,030,614 | 39,009,917 | |
LIABILITIES | |||
Accounts payable | 57,304,063 | 35,002,827 | |
Short-term bank borrowings | 256,697 | 408,264 | |
Accrued salary and benefits | 604,020 | 275,091 | |
Accrued expenses and other current liabilities | 3,696,308 | 1,385,303 | |
Deferred revenue | 1,928,241 | 3,658,808 | |
TOTAL LIABILITIES | 63,789,329 | $ 40,730,293 | |
Net revenues | 299,205,121 | 38,276,479 | |
Loss from operations | (94,447) | (18,841,315) | |
Net (loss) income | 150,325 | (18,823,768) | |
Net cash (used in) provided by operating activities | 18,000,288 | (6,560,184) | |
Net cash used in investing activities | (201,320) | ||
Net cash provided by (used in) financing activities | $ (179,412) | $ 44,315 | |
Percentage of consolidated net revenues | 88.00% | 35.00% | |
Percentage of consolidated total assets | 54.00% | 38.00% | |
Percentage of consolidated total liabilities | 62.00% | 65.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) | 1 Months Ended | |
Oct. 31, 2020 | Sep. 30, 2020 | |
Cash, Cash Equivalents and Restricted Cash | ||
Cash held in these frozen bank accounts | $ 2,472,998 | |
Subsequent event | ||
Cash, Cash Equivalents and Restricted Cash | ||
Addition in restricted cash | $ 18,400,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Revenue Recognition (Details) | 9 Months Ended | |
Sep. 30, 2020USD ($)item | Sep. 30, 2019USD ($) | |
Revenue Recognition | ||
Number of general pricing models | item | 2 | |
Sales rebates | $ | $ 48,491,685 | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 339,065,455 | $ 108,899,479 |
USA | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 11,161,631 | 51,314,113 |
PRC | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 325,246,386 | 55,423,779 |
Others | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 2,657,438 | 2,161,587 |
Advertising revenue | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 337,037,822 | 106,575,374 |
Other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 2,027,633 | $ 2,324,105 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Contract Balances (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Accounts Receivable | ||
Beginning balance | $ 27,254,634 | $ 23,373,969 |
(Decrease) Increase, net | 1,828,582 | (3,966,005) |
Ending balance | 29,083,216 | 19,407,964 |
Deferred Revenue | ||
Beginning balance | 3,887,908 | 344,361 |
(Decrease) Increase, net | 809,359 | 239,404 |
Ending balance | 4,697,267 | 583,765 |
Revenue recognized included in contract liability at beginning of quarter | $ 3,637,328 | $ 263,383 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Sales and Marketing Expenses (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Summary of Significant Accounting Policies | ||
Advertising expenses | $ 310,602,100 | $ 86,189,395 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Concentration and risks (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Concentration and risks | |||
Revenues | $ 339,065,455 | $ 108,899,479 | |
Accounts receivable, net | 29,083,216 | $ 27,254,634 | |
Sales and marketing expenses | 316,276,383 | 93,533,363 | |
Accounts payable | 64,805,107 | $ 37,877,800 | |
Customer concentration risk | Revenue | Company A | |||
Concentration and risks | |||
Revenues | $ 21,335,698 | ||
Concentration risk (as a percent) | 20.00% | ||
Customer concentration risk | Revenue | Company B | |||
Concentration and risks | |||
Revenues | $ 21,731,172 | ||
Concentration risk (as a percent) | 20.00% | ||
Customer concentration risk | Revenue | Company C | |||
Concentration and risks | |||
Revenues | $ 11,088,217 | ||
Concentration risk (as a percent) | 10.00% | ||
Customer concentration risk | Revenue | Company D | |||
Concentration and risks | |||
Revenues | $ 16,873,890 | ||
Concentration risk (as a percent) | 16.00% | ||
Customer concentration risk | Revenue | Company E | |||
Concentration and risks | |||
Revenues | $ 91,588,390 | ||
Concentration risk (as a percent) | 27.00% | ||
Customer concentration risk | Accounts receivables | Company B | |||
Concentration and risks | |||
Concentration risk (as a percent) | 62.00% | ||
Accounts receivable, net | $ 17,944,840 | ||
Customer concentration risk | Accounts receivables | Company C | |||
Concentration and risks | |||
Concentration risk (as a percent) | 14.00% | ||
Accounts receivable, net | $ 4,142,638 | ||
Customer concentration risk | Accounts receivables | Company D | |||
Concentration and risks | |||
Concentration risk (as a percent) | 13.00% | ||
Accounts receivable, net | $ 3,840,005 | ||
Customer concentration risk | Accounts receivables | Company E | |||
Concentration and risks | |||
Concentration risk (as a percent) | 40.00% | ||
Accounts receivable, net | $ 12,354,156 | ||
Customer concentration risk | Accounts receivables | Company F | |||
Concentration and risks | |||
Concentration risk (as a percent) | 32.00% | ||
Accounts receivable, net | $ 9,824,384 | ||
Vendor concentration risk | Sales and marketing expenses | Company G | |||
Concentration and risks | |||
Concentration risk (as a percent) | 12.00% | ||
Sales and marketing expenses | $ 11,080,305 | ||
Vendor concentration risk | Sales and marketing expenses | Company H | |||
Concentration and risks | |||
Concentration risk (as a percent) | 12.00% | ||
Sales and marketing expenses | $ 10,853,930 | ||
Vendor concentration risk | Sales and marketing expenses | Company I | |||
Concentration and risks | |||
Concentration risk (as a percent) | 13.00% | ||
Sales and marketing expenses | $ 41,804,056 | ||
Vendor concentration risk | Accounts payable | Company H | |||
Concentration and risks | |||
Concentration risk (as a percent) | 13.00% | ||
Accounts payable | $ 8,433,642 | ||
Vendor concentration risk | Accounts payable | Company J | |||
Concentration and risks | |||
Concentration risk (as a percent) | 11.00% | ||
Accounts payable | $ 7,378,433 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Foreign Currency Risk (Details) | Sep. 30, 2020USD ($) | Sep. 30, 2020CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Foreign Currency Risk [Line Items] | ||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 61,011,583 | $ 59,966,031 | ¥ 139,905,845 | $ 56,269,749 | $ 84,859,915 | |
RMB | ||||||
Foreign Currency Risk [Line Items] | ||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 42,953,841 | ¥ 292,519,950 | $ 20,054,735 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) | Sep. 30, 2020USD ($) |
Summary of Significant Accounting Policies | |
Future minimum operating lease commitments | $ 2,886,976 |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Accounts Receivable, net | |||
Accounts receivable | $ 31,044,944 | $ 29,028,826 | |
Allowance for doubtful accounts: | |||
Balance at beginning of the year/period | (1,774,192) | $ (1,286,120) | (1,286,120) |
Additions charged to bad debt expense | (322,361) | $ (4,665,322) | (4,104,458) |
Write-off | 141,266 | 3,616,076 | |
Foreign exchange effect | (6,441) | 310 | |
Balance at end of the year/period | (1,961,728) | (1,774,192) | |
Accounts receivable, net | $ 29,083,216 | $ 27,254,634 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Prepaid Expenses and Other Current Assets | ||
Value added tax recoverable | $ 4,649,736 | $ 3,750,491 |
Other receivables | 3,856,326 | 1,575,467 |
Advance to suppliers | 952,760 | 1,545,793 |
Others | 1,305,359 | 976,043 |
Prepaid expenses and other current assets | $ 10,764,181 | $ 7,847,794 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment, Net | |||
Total | $ 14,035,786 | $ 11,525,411 | |
Less: Accumulated depreciation | (8,438,638) | (5,855,562) | |
Property and equipment, net | 5,597,148 | 5,669,849 | |
Depreciation expenses | 2,656,359 | $ 2,077,516 | |
Electronic equipment | |||
Property, Plant and Equipment, Net | |||
Total | 12,045,523 | 9,622,184 | |
Office equipment and furniture | |||
Property, Plant and Equipment, Net | |||
Total | 346,181 | 334,452 | |
Motor vehicles | |||
Property, Plant and Equipment, Net | |||
Total | 82,470 | 82,470 | |
Leasehold improvements | |||
Property, Plant and Equipment, Net | |||
Total | $ 1,561,612 | 1,410,105 | |
Construction in Progress | |||
Property, Plant and Equipment, Net | |||
Total | $ 76,200 |
Short-term Bank Borrowings (Det
Short-term Bank Borrowings (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | Jul. 31, 2018 | Jun. 30, 2018 | Jul. 31, 2016 | |
Credit facility | |||||||
Short-term bank borrowings | $ 14,822,161 | $ 9,012,645 | |||||
Credit facility, 2016 | |||||||
Credit facility | |||||||
Total credit available under this facility | $ 6,000,000 | $ 11,000,000 | $ 6,000,000 | ||||
Amount borrowed | 11,100,000 | 7,700,000 | |||||
Amount repaid | $ 6,300,000 | $ 1,900,000 | |||||
Variable interest rate (as a percent) | 5.15% | ||||||
Weighted average interest rate of short-term borrowings (as a percent) | 5.53% | ||||||
Credit facility, 2018 | |||||||
Credit facility | |||||||
Total credit available under this facility | $ 4,000,000 | $ 4,000,000 | $ 4,000,000 | $ 4,000,000 | |||
Amount borrowed | $ 6,400,000 | ||||||
Amount repaid | $ 3,200,000 | $ 3,200,000 | |||||
Weighted average interest rate of short-term borrowings (as a percent) | 3.84% | 6.12% | |||||
PBOC rate, one year | Credit facility, 2016 | |||||||
Credit facility | |||||||
Variable interest rate (as a percent) | 1.30% | ||||||
PBOC rate, one year | Credit facility, 2018 | |||||||
Credit facility | |||||||
Variable interest rate (as a percent) | 3.50% |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Other tax payables | $ 4,564,615 | $ 3,239,430 |
Accrued expenses | 4,665,599 | 2,106,993 |
Others | 985,186 | 609,533 |
Total | 10,215,400 | $ 5,955,956 |
Value-added tax payable | $ 4,600,000 |
Other Operating Income (Loss)_2
Other Operating Income (Loss), net (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Other Operating Income (Loss), net | |
Compensation made to local authority in relation to advertisement campaigns | $ 1.6 |
Income Taxes Expense - Current
Income Taxes Expense - Current and deferred portion of income tax expenses (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Current and deferred portion of income tax expenses | ||
Current tax expenses | $ 3,200 | $ 1,714 |
Total | $ 3,200 | $ 1,714 |
Income Taxes Expense (Details)
Income Taxes Expense (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Taxes Expense | ||
Effective tax rate (as a percent) | 0.00% | 0.00% |
Unrecognized tax benefits | $ 0 | |
Unrecognized tax benefits, interest and penalties | $ 0 |
Treasury Shares (Details)
Treasury Shares (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Repurchase of ordinary shares | $ 8,130,513 | $ 9,741,378 |
Cancellation of treasury shares | 135,205,550 | |
Repurchase Plan, Group | ||
Number of shares repurchased | 64,770,700 |
Share-Based Compensation - Shar
Share-Based Compensation - Share options (Details) | 9 Months Ended | |
Sep. 30, 2020USD ($)item$ / sharesshares | Sep. 30, 2019USD ($)$ / shares | |
Stock options | ||
Share-Based Compensation | ||
Granted (in dollars per share) | $ / shares | $ 0.10 | $ 0.10 |
Options granted (in shares) | shares | 145,572,500 | |
Share-based compensation expense | $ | $ 2,292,252 | $ 439,601 |
Stock options | 2012 Option Plan | ||
Share-Based Compensation | ||
Contractual term | 10 years | |
Annual vesting percentage | 20.00% | |
Vesting number of anniversaries | item | 5 | |
Stock options | 2012 Option Plan | Minimum | ||
Share-Based Compensation | ||
Participant right to exercise options cease period after termination of employment | 2 months | |
Stock options | 2012 Option Plan | Maximum | ||
Share-Based Compensation | ||
Participant right to exercise options cease period after termination of employment | 3 months | |
Restricted shares units | ||
Share-Based Compensation | ||
Granted (in shares) | shares | 1,578,500 | |
Contractual term | 10 years | |
Annual vesting percentage | 25.00% | |
Vesting number of anniversaries | item | 4 | |
Share-based compensation expense | $ | $ 1,471,380 | $ 2,708,567 |
Share-Based Compensation - Assu
Share-Based Compensation - Assumptions to estimate the fair value of the options (Details) - USD ($) | Nov. 06, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2021 |
Share-Based Compensation | |||||
Average risk-free rate of interest | 0.67% | 1.67% | |||
Dividend yield (as a percent) | 0.00% | 0.00% | |||
Incremental compensation cost | $ 285,661 | $ 42,867 | $ 68,530 | $ 141,977 | |
Stock options | |||||
Share-Based Compensation | |||||
Expected volatility, minimum (as a percent) | 43.18% | 42.50% | |||
Expected volatility, maximum (as a percent) | 43.38% | 43.22% | |||
Contractual term | 10 years | 10 years | |||
Fair value of the underlying shares on the date of option grants, minimum (in dollars per share) | $ 0.10 | $ 0.09 | |||
Fair value of the underlying shares on the date of option grants, maximum (in dollars per share) | $ 0.13 | $ 0.10 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of aggregate option activity (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Stock options | ||
Number of options | ||
Outstanding at beginning of the year (in shares) | 160,800,982 | |
Granted (in shares) | 145,572,500 | |
Forfeited (in shares) | (7,108,508) | |
Options exercised (in shares) | 15,220,000 | 8,330,150 |
Outstanding at end of the year (in shares) | 284,044,974 | |
Exercisable on end of the year (in shares) | 128,681,130 | |
Vested or expected to vest (in shares) | 284,044,974 | |
Weighted average exercise price | ||
Outstanding at beginning of the year (in dollars per share) | $ 0.05 | |
Granted (in dollars per share) | 0.0002 | |
Forfeited (in dollars per share) | 0.03 | |
Exercised (in dollars per share) | 0.04 | |
Outstanding at end of the year (in dollars per share) | 0.02 | |
Exercisable on end of the year (in dollars per share) | 0.05 | |
Vested or expected to vest (in dollars per share) | $ 0.02 | |
Aggregate intrinsic value | ||
Options exercised aggregate intrinsic value (in dollars) | $ 944,105 | $ 545,013 |
Weighted average grant date fair value | ||
Granted (in dollars per share) | $ 0.10 | $ 0.10 |
Unrecognized compensation cost related to non-vested stock options | $ 12,686,969 | |
Weighted-average recognition period for unrecognized compensation cost | 3 years 3 months 10 days | |
Share-based compensation expense | $ 2,292,252 | $ 439,601 |
Restricted shares units | ||
Number of options | ||
Vested or expected to vest (in shares) | 29,194,080 | |
Weighted average exercise price | ||
Vested or expected to vest (in dollars per share) | $ 0.19 | |
Weighted average grant date fair value | ||
Weighted-average recognition period for unrecognized compensation cost | 2 years 3 months 18 days | |
Share-based compensation expense | $ 1,471,380 | $ 2,708,567 |
Share-Based Compensation - RSU
Share-Based Compensation - RSU Activity (Details) - Restricted shares units - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Jun. 30, 2020 | |
Number of restricted shares | ||
Unvested restricted shares outstanding at beginning of the year (in shares) | 50,725,912 | |
Granted (in shares) | 1,578,500 | |
Vested (in shares) | 11,331,332 | |
Forfeited (in shares) | 11,779,000 | |
Unvested restricted shares outstanding at end of the year (in shares) | 29,194,080 | |
Vested or expected to vest (in shares) | 29,194,080 | |
Weighted average grant date fair value | ||
Unvested restricted shares outstanding at beginning of the year (in dollars per share) | $ 0.20 | |
Granted (in dollars per share) | 0.10 | |
Vested (in dollars per share) | 0.22 | |
Forfeited (in dollars per share) | 0.17 | |
Unvested restricted shares outstanding at end of the year (in dollars per share) | 0.19 | |
Vested or expected to vest (in dollars per share) | $ 0.19 | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 4,477,292 | $ 823,226 |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of basic and diluted net loss per share (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||
Net Loss | $ (28,582,981) | $ (30,200,182) |
Net loss attributable to ordinary shareholders | $ (28,582,981) | $ (30,200,182) |
Shares (Denominator): | ||
Weighted average number of ordinary shares outstanding, Basic (in shares) | 3,086,630,271 | 3,163,501,054 |
Weighted average number of ordinary shares outstanding, Diluted (in shares) | 3,086,630,271 | 3,163,501,054 |
Net loss earnings per share-basic and diluted | $ (0.01) | $ (0.01) |
Net Loss Per Share - Shares out
Net Loss Per Share - Shares outstanding were excluded from the calculation of diluted net loss per ordinary share (Details) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of anti-dilutive securities | 313,239,054 | 220,248,322 |
Share options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of anti-dilutive securities | 284,044,974 | 160,139,359 |
Restricted shares units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of anti-dilutive securities | 29,194,080 | 60,108,963 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Commitments and Contingencies. | ||
Rental expenses under operating leases | $ 1,096,762 | $ 1,338,427 |
Future lease payments under operating leases | ||
The remaining of 2020 | 494,753 | |
2021 | 1,590,357 | |
2022 | 741,411 | |
2023 | 60,455 | |
Total | $ 2,886,976 |
Segment Information (Details)
Segment Information (Details) | 9 Months Ended | |
Sep. 30, 2020USD ($)segment | Dec. 31, 2019USD ($) | |
Segment Information | ||
Number of reportable segments | segment | 1 | |
Non-current assets | $ 6,919,839 | $ 6,196,693 |
PRC | ||
Segment Information | ||
Non-current assets | 4,258,416 | 2,655,953 |
USA | ||
Segment Information | ||
Non-current assets | $ 2,661,423 | $ 3,540,740 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Millions | Dec. 31, 2020 | May 18, 2020 |
Subsequent event | ||
Subsequent Event | ||
Total cash consideration authorized to be repurchased | $ 0.5 | |
ADS | ||
Subsequent Event | ||
Number of shares authorized to be repurchased | 109,727 | |
Class A | ||
Subsequent Event | ||
Number of shares authorized to be repurchased | 5,486,350 |
Uncategorized Items - _IXDS
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 2,533,207 |