Cover
Cover | 6 Months Ended |
Jun. 30, 2021 | |
Cover [Abstract] | |
Document Type | 6-K |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2021 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2021 |
Current Fiscal Year End Date | --12-31 |
Entity File Number | 001-39167 |
Entity Registrant Name | Molecular Data Inc. |
Entity Central Index Key | 0001758736 |
Entity Address, Address Line One | 11/F, Building 15 |
Entity Address, Address Line Two | 2177 Shenkun Road |
Entity Address, Address Line Three | Minhang District |
Entity Address, City or Town | Shanghai |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 201106 |
CONSOLIDATED STATEMENTS OF BALA
CONSOLIDATED STATEMENTS OF BALANCE SHEET ¥ in Thousands, $ in Thousands | Jun. 30, 2021USD ($) | Jun. 30, 2021CNY (¥) | Dec. 31, 2020CNY (¥) |
Current assets: | |||
Cash and cash equivalents | $ 2,047 | ¥ 13,215 | ¥ 11,311 |
Restricted cash | 43 | 277 | 277 |
Accounts receivable, net | 1,224 | 7,902 | 5,963 |
Short-term investments | 52,046 | 336,038 | 336,038 |
Unbilled receivables | 8,804 | 56,842 | 51,825 |
Notes receivable | 3,513 | 22,679 | 24,761 |
Inventories, net | 662 | 4,275 | 2,821 |
Amounts due from related parties | 614 | 3,967 | 1,144 |
Prepayments and other current assets | 46,262 | 298,700 | 229,046 |
Total current assets | 115,215 | 743,893 | 663,186 |
Non-current assets: | |||
Long-term investment | 581 | 3,753 | 353 |
Property and equipment, net | 67 | 432 | 725 |
Intangible assets, net | 39 | 249 | 536 |
Deferred assets & deferred tax assets | 1,625 | 10,495 | 15,826 |
Right-of-use asset, net | 650 | 4,195 | 4,195 |
Total non-current assets | 2,962 | 19,124 | 21,635 |
Total assets | 118,177 | 763,017 | 684,821 |
Current liabilities: | |||
Short-term borrowings | 2,501 | 16,149 | 33,749 |
Accounts payable | 49,939 | 322,434 | 315,729 |
Deferred revenue | 10,639 | 68,693 | 81,636 |
Accrued expenses and other liabilities | 23,618 | 152,491 | 132,674 |
Income taxes payable | |||
Convertible notes | 10,013 | 64,653 | 16,096 |
Amounts due to related parties | 27,238 | 175,864 | 111,186 |
Operating lease liabilities-current | 238 | 1,536 | 1,536 |
Total current liabilities | 124,186 | 801,820 | 692,606 |
Non-current liabilities: | |||
Non-current portion of capital lease obligations | 2,641 | 17,052 | 17,052 |
Non-current portion of lease liability | 412 | 2,659 | 2,659 |
Contingency liability | 53 | 341 | 341 |
Total non-current liabilities | 3,106 | 20,052 | 20,052 |
Total liabilities | 127,292 | 821,872 | 712,658 |
Redeemable noncontrolling interests | 7 | 42 | 42 |
Shareholders’ equity/(deficit) | |||
Ordinary shares/paid-in capital | 22 | 142 | 114 |
Additional paid-in capital | 166,460 | 1,074,767 | 1,075,064 |
Accumulated other comprehensive gain/(loss) | (3,282) | (21,192) | (21,192) |
Accumulated deficit | (172,368) | (1,112,912) | (1,081,914) |
Total shareholders’ equity/(deficit) | (9,168) | (59,195) | (27,928) |
Non-controlling interest | 46 | 298 | 49 |
TOTAL EQUITY | (9,122) | (58,897) | (27,879) |
Total liabilities and shareholders’ equity/(deficit) | $ 118,177 | ¥ 763,017 | ¥ 684,821 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME ¥ in Thousands, $ in Thousands | 6 Months Ended | ||
Jun. 30, 2021USD ($) | Jun. 30, 2021CNY (¥) | Jun. 30, 2020CNY (¥) | |
Income Statement [Abstract] | |||
Total net revenues | $ 226,301 | ¥ 1,461,133 | ¥ 4,438,196 |
Cost of revenues | (224,423) | (1,449,007) | (4,433,591) |
Gross profit | 1,878 | 12,126 | 4,605 |
Operating expenses: | |||
Sales and marketing expenses | (1,851) | (11,948) | (47,968) |
General and administrative expenses | (4,557) | (29,423) | (36,376) |
Research and development expenses | (833) | (5,378) | (21,536) |
Total operating expenses | (7,241) | (46,749) | (105,880) |
Operating loss | (5,363) | (34,623) | (101,275) |
Interest expenses, net | (29) | (186) | (4,801) |
(Income)/Loss from equity investment | 5 | 30 | |
Foreign exchange gain/(loss) | 296 | 1,909 | (1,640) |
Other income, net | 58 | 375 | 3,770 |
Income before income tax | (5,033) | (32,495) | (103,946) |
Income tax expenses | (3) | (22) | (990) |
Net loss | (5,036) | (32,517) | (104,936) |
Net income attributable to non-controlling interest | 38 | 248 | |
Net loss attributable to Molecular Data Inc. | $ (5,074) | ¥ (32,765) | ¥ (104,936) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021USD ($) | Jun. 30, 2021CNY (¥) | Dec. 31, 2020CNY (¥) | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | $ (5,036) | ¥ (32,517) | ¥ (328,038) |
Adjustments to reconcile net loss to net cash generated from operating activities: | |||
Depreciation of property and equipment | 46 | 295 | 584 |
Amortization of intangible assets | 870 | 5,618 | 1,140 |
Loss (gain) on disposal of property and equipment | 3 | ||
Non-cash lease expense of right-of-use asset | 140 | ||
Allowance for doubtful accounts | 8,723 | ||
Deferred income taxes (benefit) expense | (5,116) | ||
Interest expense | 2,298 | ||
Impairment of long-term investment | 647 | ||
Share-based compensation expense | 44,526 | ||
Others | 278 | 1,793 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (300) | (1,939) | 13,155 |
Unbilled receivables | (777) | (5,017) | 10,703 |
Inventories | (225) | (1,455) | 1,530 |
Notes receivable | 322 | 2,082 | 99,415 |
Long-term deferred cost | (10,710) | ||
Prepayments and other current assets | (10,788) | (69,652) | (19,612) |
Amounts due from related parties | (437) | (2,822) | (316) |
Amounts due to related parties | 10,017 | 64,678 | (66,226) |
Accounts payable | 1,039 | 6,708 | 11,346 |
Deferred revenue | (2,005) | (12,944) | (25,544) |
Accrued expenses and other liabilities | 2,953 | 19,065 | 26,843 |
Income taxes payable | 116 | 752 | 461 |
Right-of-use asset | |||
Lease liabilities | |||
Net cash used in operating activities | (3,927) | (25,355) | (234,048) |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchases of property and equipment | (3) | 16,846 | |
Purchases of intangible assets | (116) | ||
Payments for short-term investments | (336,038) | ||
Payment for long-term investment | (527) | (3,400) | (1,000) |
Net cash used in investing activities | (527) | (3,403) | (320,308) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from issuance of ordinary shares | 419,955 | ||
Proceeds from mandatorily redeemable noncontrolling interests | 7,521 | 48,558 | 16,137 |
Deemed contribution to shareholders | 72,961 | ||
Capital contribution to equity by M.I. | 90 | ||
Proceeds from bank borrowings | 372 | 2,400 | 20,000 |
Repayment of bank borrowings | (3,098) | (20,000) | 0 |
Net cash generated from financing activities | 4,795 | 30,958 | 529,143 |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (46) | (296) | (20,873) |
Net increase/(decrease) in cash, cash equivalents and restricted cash | 295 | 1,904 | (46,086) |
Cash, cash equivalents and restricted cash at beginning of the period | 1,795 | 11,588 | 57,674 |
Cash, cash equivalents and restricted cash at end of the period | $ 2,090 | ¥ 13,492 | ¥ 11,588 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - 6 months ended Jun. 30, 2021 ¥ in Thousands, $ in Thousands | Common Stock [Member]USD ($)shares | Common Stock [Member]CNY (¥)shares | Additional Paid-in Capital [Member]USD ($) | Additional Paid-in Capital [Member]CNY (¥) | Retained Earnings [Member]USD ($) | Retained Earnings [Member]CNY (¥) | AOCI Attributable to Parent [Member]USD ($) | AOCI Attributable to Parent [Member]CNY (¥) | Noncontrolling Interest [Member]USD ($) | Noncontrolling Interest [Member]CNY (¥) | USD ($) | CNY (¥) |
Beginning balance, value at Dec. 31, 2020 | ¥ 114 | ¥ 1,075,064 | ¥ (1,081,914) | ¥ (21,192) | ¥ 49 | ¥ (27,879) | ||||||
Balance at beginning of period (in shares) at Dec. 31, 2020 | shares | 359,308,050 | 359,308,050 | ||||||||||
Consolidated net (loss) profit | (32,765) | 248 | $ (5,036) | (32,517) | ||||||||
Share issuance | ¥ 25 | 25 | ||||||||||
Share issuance (in shares) | shares | 77,665,768 | 77,665,768 | ||||||||||
Debt-to-equity | ¥ 3 | 3 | ||||||||||
Debt-to-equity (in shares) | shares | 8,646,651 | 8,646,651 | ||||||||||
Capitalized initial public offering expenses | ||||||||||||
Foreign exchange Difference | (297) | (297) | ||||||||||
Share based compensation | ||||||||||||
Debt-to-equity | ||||||||||||
Restricted shares units vested | ||||||||||||
Others | 1,767 | 1,767 | ||||||||||
Balance as of June 30, 2021 in US$ at Jun. 30, 2021 | $ 22 | ¥ 142 | $ 166,460 | ¥ 1,074,767 | $ (172,368) | ¥ (1,112,912) | $ (3,282) | ¥ (21,192) | $ 46 | ¥ 298 | $ (9,122) | ¥ (58,897) |
Balance at ending of period (in shares) at Jun. 30, 2021 | shares | 445,620,469 | 445,620,469 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies (a) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). The management believes the Company has the ability to fulfill its financial obligations and will continue as a going concern As a result, it is appropriate for the consolidated financial statements to be prepared on a going concern basis. (b) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and the subsidiary of the VIE. All significant inter-company transactions and balances between the Company, its subsidiaries, the VIEs and subsidiary of the VIE have been eliminated upon consolidation. (c) Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and revenues and expenses during the reporting periods. Significant accounting estimates reflected in the Company’s consolidated financial statements include, but not limited to, estimating variable consideration, the useful lives of long- lived assets and intangible assets, determining the provision for accounts receivable and prepayments, determining the provision for inventories, impairment assessment for long-term investment and long-lived assets, accounting for share-based compensation, valuation allowance for deferred tax assets, measurement of right-of-use assets and lease liabilities. Changes in facts and circumstances may result in revised estimates. Actual results could materially differ from those estimates. (d) Foreign currency The functional currency of the Company and its Hong Kong subsidiary is the United States dollars (“US$”). The Company’s PRC subsidiaries, the VIEs and the subsidiary of the VIE determined their functional currency to be the Chinese Renminbi (“RMB”). The determination of functional currency is based on the criteria of ASC 830 , Foreign Currency Matters . The financial statements of the Company and its Hong Kong subsidiary are translated from the functional currency to the reporting currency, RMB. Monetary assets and liabilities of the subsidiaries are translated into RMB using the exchange rate in effect at each balance sheet date. Income and expense items are translated at the average exchange rate prevailing during the fiscal year. Translation gains and losses are accumulated in other comprehensive loss, as a component of shareholders’ deficit in the consolidated financial statements. Transactions denominated in other than the functional currencies are remeasured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Financial assets and liabilities denominated in other than the functional currency are re-measured into the functional currency at the exchange rates prevailing at the balance sheet date. The foreign exchange differences are recorded in the consolidated statements of comprehensive loss. This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.4566 to US$1.00, the rate in effect as of June 30, 2021 published by the Federal Reserve Board. (e) Convenience translation Amounts in US$ are presented for the convenience of the readers and are translated at the noon buying rate of US$1.00 to RMB 6.4566 (f) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. The Company considers all highly liquid investments that are readily convertible to known amounts of cash and with original maturities from the date of purchase of three months or less to be cash equivalents. (g) Restricted cash Restricted cash mainly represents cash held in escrow as security for financial service and related party’s credit facilities. The Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (h) Accounts receivable and allowance for doubtful debt Accounts receivable are carried at net realizable value. An allowance for doubtful debt is recorded in the period when loss is probable based on an assessment of specific evidence indicating troubled collection, historical experience, accounts aging and other factors. An accounts receivable is written off when it is deemed uncollectible. (i) Promissory Note On June 15, 2020, the Company purchased a US$ 51.5 June 15, 2023 6.25 14 (j) Prepayments and other current assets Prepayments and other current assets mainly represent deposits with suppliers. Prepayments and other current assets increased by 30.4 229.0 298.7 (k) Inventories Inventories of the Company are chemical products. Inventories are stated at the lower of cost or net realizable value. Costs of inventory are determined using the weighted average method. Adjustments to reduce the cost of inventories are made, if required, for decreases in sales prices, obsolescence or similar reductions in the estimated net realizable value. (l) Property and equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets as follows: Summary of estimated useful lives of property and equipment Category Estimated useful life Office equipment 1 3 Leasehold improvements 5 Repair and maintenance costs are charged to expenses as incurred. (m) Intangible assets Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets with finite useful lives are amortized using a straight-line method. The amortization method reflects the estimated pattern in which the economic benefits of the respective intangible assets are to be consumed. Intangible assets have estimated economic lives from the date of purchase as follows: Summary of estimated economic lives of intangible assets from the date of purchase Category Estimated economic life Purchased software 3 The Company does not have any indefinite-lived intangible assets. (n) Long-term investment The Company’s long-term investment represents an equity method investment. Investments in equity investees represent investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC 323-10, Investments-Equity Method and Joint Ventures Overall (o) Impairment of long-lived assets The Company evaluates its long-lived assets or asset group, including intangible assets with finite lives, for impairment whenever events or changes in circumstances, such as a significant adverse change to market conditions that will impact the future use of the assets, indicate that the carrying amount of an asset or a group of long-lived assets may not be recoverable. When these events occur, the Company evaluates for impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available for the long-lived assets. (p) Fair value measurements of financial instruments The Company’s financial instruments include cash and cash equivalents, restricted cash, accounts receivable, notes receivable, unbilled receivables, amounts due from related parties, other receivables, accounts payable, other payables, amounts due to related parties, and short-term borrowings. Other than the non-current amounts due to related parties, the carrying values of these financial instruments approximate to their fair values due to their short-term maturities, which are categorized in level 1. The Company applies ASC 820, Fair Value Measurements and Disclosures ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: ● Level 1 —Observable inputs that reflect quoted prices in active markets for identical assets or liabilities. ● Level 2 —Include other inputs that are directly or indirectly observable in the marketplace. ● Level 3 —Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. (q) Revenue recognition Effective January 1, 2017, the Company elected to early adopt the requirements of Accounting Standards Update (ASU) 2014-09, Revenue from contracts with Customers Chemical trading — direct sales model The Company sells chemical products to customers through an online platform or sales representatives. Sales contracts are entered into with each individual customer. The Company is the principal under the chemical direct sales model as the Company controls the chemical products with the ability to direct the use of, and obtain substantially all the remaining benefits from the chemical products before they are sold to its customers. The Company has a single performance obligation to sell chemical products to the buyers. The Company estimates the amount of variable consideration including sales return using the expected value method and includes variable consideration in the transaction price to the extent that it is probable that a significant reversal will not occur. Revenue for chemical trading under direct sales model is recognized at a point in time when the single performance obligation is satisfied when the chemical products are delivered to the customer. Chemical trading — marketplace model The Company matches product suppliers and platform buyers through its vendor-supplier matching recommendation system. The Company charges a commission fee to either the buyer or seller, depending on which party requests the matching services based on the commission agreements signed. The Company has a single performance obligation to provide the matching service. As the Company is a service provider and does not control the goods prior to transfer to the end customer, the Company recognizes commission fee as an agent on a net basis. The Company considers both the buyer and end customer to be its customers in the transaction. The Company estimates the amount of variable consideration including payment contingent on product delivery to platform buyer using the most likely amount method and includes in the transaction price to the extent that it is probable that a significant reversal will not occur. Revenue for chemical trading under marketplace model is recognized at a point in time when the performance obligation is satisfied upon the completion of the matching service. Online membership service The Company provides access to the users who subscribed for its online membership service to upload their product information on its online platform for promotion purpose and to attend the online trainings and marketing activities organized by the Company during the membership period. The Company typically charges a fixed fee over the membership period. The Company has a single performance obligation to stand ready to perform the membership services during the membership period. As the users simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs, revenue for online membership service is recognized ratably over the contract period. Prior to July 2019, for certain transactions under the direct sales model and marketplace model, the Company provides guarantee on the customers’ loan repayments to certain financial institutions. The guarantees are within the scope of ASC 460, Guarantees, which is accounted for at fair value at inception. The Company first allocates the fair value of the guarantee obligation from the total transaction price and allocates the remaining transaction price to the performance obligation under ASC 606. Subsequently, the Company amortizes the guarantee obligation into revenue outside the scope of ASC 606 as the Company is released from risk under the guarantee. The Company subsequently accounts for the contingent loss arising from the arrangement in accordance with ASC 450, Contingencies. Financial service Starting from July 2019, the Company enters into financial service contracts with its suppliers, customers, and financing providers, including banks and non-bank financial institutions, to facilitate lending arrangements between the financing providers and the customers and suppliers who use the Company’s online platforms. In addition to the loan facilitation service, the Company provides a guarantee to the financing providers on the loan repayments. The guarantees are within the scope of ASC 460, Guarantees. The Company typically charges its customers and suppliers a fixed fee based on a percentage of the loan amount for the facilitation service and the guarantee. The Company first allocates the transaction price to the guarantee obligation at fair value and allocates the remaining transaction price to the facilitation service under ASC 606. The Company recognizes revenue generated from the facilitation service when the Company successfully matches the customers or suppliers with the financing providers. The Company amortizes the guarantee obligation into revenue outside the scope of ASC 606 as the Company is released from risk under the guarantee. The Company subsequently accounts for the contingent loss arising from the guarantee arrangement in accordance with ASC 450, Contingencies. When the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, and the right to consideration is conditioned only on the passage of time, the Company recognizes an unbilled receivable on the consolidated balance sheets. Contract assets, which arise when revenue is recognized prior to invoicing and the right to the amount due from customers is conditioned on something other than the passage of time, such as the completion of a related performance obligation. When a customer pays consideration before the Company transfers goods or services, the Company records its obligation as a contract liability, which is classified as deferred revenue. (r) Cost of revenues Cost of revenue consists primarily of cost of chemical products sold. (s) Research and development expenses Research and development expenses consist primarily of personnel-related expenses and rental expenses incurred for the development of, enhancement to, and maintenance of the Company’s technology infrastructure to support its business operations. Research and development costs are expensed as incurred unless such costs qualify for capitalization as software development costs. In order to qualify for capitalization, (i) the preliminary project should be completed, (ii) management has committed to funding the project and it is probable that the project will be completed and the software will be used to perform the function intended, and (iii) it will result in significant additional functionality in the Company’s services. The amount of costs qualifying for capitalization has been immaterial during the periods presented, and as a result, all development costs were expensed as incurred. (t) Leases Leases are classified as operating leases or finance leases in accordance with ASC 842. The Company do not assume renewals in our determination of the lease term unless the renewals are reasonably certain to be exercised at lease commencement. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company adopted ASU No. 2016-02, Leases (Topic 842 The Company determines if an arrangement is a lease or contains a lease at the inception. For operating leases, the Company recognizes a right-of-use asset (“ROU asset”) and a lease liability based on the present value of the lease payments over the lease term in the consolidated balance sheets at the lease commencement date. For finance leases, assets are included in property and equipment in the consolidated balance sheets. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s leases often include options to extend and lease terms include such extended terms when the Company is reasonably certain to exercise those options. Lease terms also include periods covered by options to terminate the leases when the Company is reasonably certain not to exercise those options. (u) Government grants Government grants are provided by the relevant PRC municipal government authorities to subsidize the cost of certain research and development projects. The amount of such government grants are determined solely at the discretion of the relevant government authorities. The government grants of non-operating nature with no further conditions to be met are recorded as non-operating income in “Other income, net” when received. The government subsidies with certain operating conditions are recorded as liabilities when received and will be recorded as operating income when the conditions are met. (v) Income taxes The Company follows the liability method of accounting for income taxes in accordance with ASC 740 Accounting for Income Taxes , to account for uncertainty in income taxes The Company evaluates its uncertain tax positions using the provisions of ASC 740, which prescribes a recognition threshold that a tax position is required to meet before being recognized in the consolidated financial statements. The Company recognizes in the consolidated financial statements the benefit of a tax position which is “more likely than not” to be sustained under examination based solely on the technical merits of the position assuming a review by tax authorities having all relevant information. Tax positions that meet the recognition threshold are measured using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. It is the Company’s policy to recognize interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense. Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain arising in the Cayman Islands. Additionally, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed. Hong Kong MKD HK is incorporated in Hong Kong and is subject to Hong Kong profits tax rate of 16.5 PRC The Company’s subsidiaries and VIEs in the PRC are subject to the statutory rate of 25 In October 2016, Shanghai MOLBASE qualified as High and New Technology Enterprise (“HNTE”) and was eligible for 15 The Company’s loss before income tax consisted of: Schedule of loss before income tax For the As of June 30, 2020 2021 RMB RMB US$ Unaudited Non-PRC (192,799 ) (15,830 ) (2,452 ) PRC (132,781 ) (16,665 ) (2,581 ) (325,580 ) (32,495 ) (5,033 ) The current and deferred portions of income tax expenses included in the consolidated statements of comprehensive loss were as follows: Schedule of income tax expenses For the As of June 30, 2020 2021 RMB RMB US$ Unaudited Current 2,458 22 3 Deferred — — — Income tax expenses 2,458 22 3 (w) Share-Based Compensation The Company applies ASC 718, Compensation — Stock Compensation Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting The Company, with the assistance of an independent third-party valuation firm, determined the fair value of the stock options granted to employees. The binominal option pricing model was applied in determining the estimated fair value of the options granted to employees. (x) Comprehensive income (loss) Comprehensive income (loss) is defined as the changes in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive Income, (y) Loss per share In accordance with ASC 260, Earnings per Share (z) Segment reporting The Company’s Chief Executive Officer as the chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole. In accordance with ASC 280, Segment Reporting (aa) Value added taxes (“VAT”), business related tax and surcharges The Company is subject to VAT at the rate of 17%, 16%, 13%, 6%, 5% or 3%, depending on whether the entity is a general taxpayer or small-scale taxpayer, and related surcharges on revenue generated from providing services. The Company is also subject to certain government surcharges on the VAT payable in the PRC, which is recorded as cost of revenues. (bb) Deferred initial public offering (“IPO”) costs Direct and incremental costs incurred by the Company attributable to its proposed IPO of ordinary shares in the U.S. is deferred and recorded as deferred IPO costs in the consolidated balance sheets and will be charged against the gross proceeds received from such offering. (cc) Commitments and contingencies The Company records liabilities for contingencies when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. (dd) Comparatives Certain items reported in the prior year’s consolidated financial statements have been reclassified to conform with the current year’s presentation. (ee) Recent accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments 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 December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Concentration of Risks
Concentration of Risks | 6 Months Ended |
Jun. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risks | 3. Concentration of Risks (a) Concentration of credit risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, restricted cash and accounts receivable. The Company places its cash and cash equivalents and restricted cash with reputable financial institutions with high-credit ratings. There has been no recent history of default in relation to these financial institutions. The Company continues to monitor the financial strength of the financial institutions. Accounts receivable are typically unsecured and derived from revenue earned from customers in the PRC, which are exposed to credit risk. The risk is mitigated by credit evaluations the Company performs on its customers and its ongoing monitoring process of outstanding balances. (b) Concentration of suppliers and customers The success of the Company’s business going forward will rely in part on the Company’s ability to continue to obtain and expand business from existing suppliers and customers while also attracting new suppliers and customers. No supplier accounted for 10 10 (c) Current vulnerability due to certain other concentrations The Company participates in a dynamic and competitive high technology industry and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations or cash flows: changes in the overall demand for services; competitive pressures due to new entrants; advances and new trends in new technology; strategic relationships or customer relationships; regulatory considerations; and risks associated with the Company’s ability to attract and retain employees necessary to support its growth. The Company’s operations could be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than 20 years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC political, economic and social conditions. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective. (d) Currency convertibility risk The Company transacts all of its business in RMB, which is not freely convertible into foreign currencies. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China (the ‘‘PBOC’’). However, the unification of the exchange rates does not imply that the RMB may be readily convertible into US$ or other foreign currencies. All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approval of foreign currency payments by the PBOC or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. (e) Foreign currency exchange rate risk The functional currency and the reporting currency of the Company and its Hong Kong subsidiary are the US$ and the RMB, respectively. Most of the Company’s PRC subsidiaries, the VIEs and subsidiary of the VIE’s revenues and costs are denominated in RMB, while a portion of cash and cash equivalents is denominated in U.S. dollars. Any significant revaluation of RMB may materially and adversely affect the Company’s cash flows, revenues, earnings and financial position in U.S. dollars. |
Share Capital
Share Capital | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Share Capital | 4. Share Capital The Company historically operated its business through its subsidiaries, VIEs and the subsidiary of the VIE. The Company, through a series of transactions which are accounted for as a reorganization of entities under common control, became the ultimate parent entity of these subsidiaries, VIEs and the subsidiary of the VIE on December 21, 2018. Accordingly, these consolidated financial statements reflect the historical operations of the Company as if the current organization structure had been in existence throughout the periods presented. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | 5. Share-Based Compensation On November 27, 2018, the Board of Directors of the Company approved the 2018 Share Plan (the “Plan”) for the purpose of providing incentives and rewards to employees and executives. As of December 31, 2019, the Company had options outstanding to purchase an aggregate of 39,512,055 As of June 30, 2021, the Company had options outstanding to purchase an aggregate of 31,414,057 33,343 The Company recognized share-based compensation expense for the years ended December 31, 2020 and June 30, 2021 as follows: Schedule of share-based compensation expense For the years ended As of June 30, 2020 2021 RMB RMB US$ Sales and marketing expenses 14,856 2,851 442 General and administrative expenses 120,699 10,890 1,687 Research and development expenses 4,246 864 134 Total 139,801 14,605 2,262 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 6. Subsequent Events In September 2021, MKD received USD 2.8 15 |
Impact of COVID-19 on Our Opera
Impact of COVID-19 on Our Operations and Financial Performance | 6 Months Ended |
Jun. 30, 2021 | |
Impact Of Covid-19 On Our Operations And Financial Performance | |
Impact of COVID-19 on Our Operations and Financial Performance | 7. Impact of COVID-19 on Our Operations and Financial Performance Substantially all of our revenues and workforce are concentrated in China. In response to the intensifying efforts to contain the spread of COVID-19, the Chinese government took a number of actions, which included quarantining individuals suspected of having COVID-19, asking residents in China to stay at home and to avoid public gathering, among other things. During the year of 2020, COVID-19 caused temporary closure of many business operations across China, and put significant strain on our platform. Primarily as a result of the COVID-19 pandemic, our revenue decreased by 67.1 4.4 1.4 0.2 While we have resumed business operations, there remain significant uncertainties surrounding the COVID-19 outbreak and its further development as a global pandemic. Hence, the extent of the business disruption and the related impact on our financial results and outlook for 2021 cannot be reasonably estimated at this time. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | (a) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). The management believes the Company has the ability to fulfill its financial obligations and will continue as a going concern As a result, it is appropriate for the consolidated financial statements to be prepared on a going concern basis. |
Principles of consolidation | (b) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and the subsidiary of the VIE. All significant inter-company transactions and balances between the Company, its subsidiaries, the VIEs and subsidiary of the VIE have been eliminated upon consolidation. |
Use of estimates | (c) Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and revenues and expenses during the reporting periods. Significant accounting estimates reflected in the Company’s consolidated financial statements include, but not limited to, estimating variable consideration, the useful lives of long- lived assets and intangible assets, determining the provision for accounts receivable and prepayments, determining the provision for inventories, impairment assessment for long-term investment and long-lived assets, accounting for share-based compensation, valuation allowance for deferred tax assets, measurement of right-of-use assets and lease liabilities. Changes in facts and circumstances may result in revised estimates. Actual results could materially differ from those estimates. |
Foreign currency | (d) Foreign currency The functional currency of the Company and its Hong Kong subsidiary is the United States dollars (“US$”). The Company’s PRC subsidiaries, the VIEs and the subsidiary of the VIE determined their functional currency to be the Chinese Renminbi (“RMB”). The determination of functional currency is based on the criteria of ASC 830 , Foreign Currency Matters . The financial statements of the Company and its Hong Kong subsidiary are translated from the functional currency to the reporting currency, RMB. Monetary assets and liabilities of the subsidiaries are translated into RMB using the exchange rate in effect at each balance sheet date. Income and expense items are translated at the average exchange rate prevailing during the fiscal year. Translation gains and losses are accumulated in other comprehensive loss, as a component of shareholders’ deficit in the consolidated financial statements. Transactions denominated in other than the functional currencies are remeasured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Financial assets and liabilities denominated in other than the functional currency are re-measured into the functional currency at the exchange rates prevailing at the balance sheet date. The foreign exchange differences are recorded in the consolidated statements of comprehensive loss. This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.4566 to US$1.00, the rate in effect as of June 30, 2021 published by the Federal Reserve Board. |
Convenience translation | (e) Convenience translation Amounts in US$ are presented for the convenience of the readers and are translated at the noon buying rate of US$1.00 to RMB 6.4566 |
Cash and cash equivalents | (f) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. The Company considers all highly liquid investments that are readily convertible to known amounts of cash and with original maturities from the date of purchase of three months or less to be cash equivalents. |
Restricted cash | (g) Restricted cash Restricted cash mainly represents cash held in escrow as security for financial service and related party’s credit facilities. The Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash |
Accounts receivable and allowance for doubtful debt | (h) Accounts receivable and allowance for doubtful debt Accounts receivable are carried at net realizable value. An allowance for doubtful debt is recorded in the period when loss is probable based on an assessment of specific evidence indicating troubled collection, historical experience, accounts aging and other factors. An accounts receivable is written off when it is deemed uncollectible. |
Promissory Note | (i) Promissory Note On June 15, 2020, the Company purchased a US$ 51.5 June 15, 2023 6.25 14 |
Prepayments and other current assets | (j) Prepayments and other current assets Prepayments and other current assets mainly represent deposits with suppliers. Prepayments and other current assets increased by 30.4 229.0 298.7 |
Inventories | (k) Inventories Inventories of the Company are chemical products. Inventories are stated at the lower of cost or net realizable value. Costs of inventory are determined using the weighted average method. Adjustments to reduce the cost of inventories are made, if required, for decreases in sales prices, obsolescence or similar reductions in the estimated net realizable value. |
Property and equipment | (l) Property and equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets as follows: Summary of estimated useful lives of property and equipment Category Estimated useful life Office equipment 1 3 Leasehold improvements 5 Repair and maintenance costs are charged to expenses as incurred. |
Intangible assets | (m) Intangible assets Intangible assets are carried at cost less accumulated amortization and any recorded impairment. Intangible assets with finite useful lives are amortized using a straight-line method. The amortization method reflects the estimated pattern in which the economic benefits of the respective intangible assets are to be consumed. Intangible assets have estimated economic lives from the date of purchase as follows: Summary of estimated economic lives of intangible assets from the date of purchase Category Estimated economic life Purchased software 3 The Company does not have any indefinite-lived intangible assets. |
Long-term investment | (n) Long-term investment The Company’s long-term investment represents an equity method investment. Investments in equity investees represent investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC 323-10, Investments-Equity Method and Joint Ventures Overall |
Impairment of long-lived assets | (o) Impairment of long-lived assets The Company evaluates its long-lived assets or asset group, including intangible assets with finite lives, for impairment whenever events or changes in circumstances, such as a significant adverse change to market conditions that will impact the future use of the assets, indicate that the carrying amount of an asset or a group of long-lived assets may not be recoverable. When these events occur, the Company evaluates for impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available for the long-lived assets. |
Fair value measurements of financial instruments | (p) Fair value measurements of financial instruments The Company’s financial instruments include cash and cash equivalents, restricted cash, accounts receivable, notes receivable, unbilled receivables, amounts due from related parties, other receivables, accounts payable, other payables, amounts due to related parties, and short-term borrowings. Other than the non-current amounts due to related parties, the carrying values of these financial instruments approximate to their fair values due to their short-term maturities, which are categorized in level 1. The Company applies ASC 820, Fair Value Measurements and Disclosures ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: ● Level 1 —Observable inputs that reflect quoted prices in active markets for identical assets or liabilities. ● Level 2 —Include other inputs that are directly or indirectly observable in the marketplace. ● Level 3 —Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach; and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. |
Revenue recognition | (q) Revenue recognition Effective January 1, 2017, the Company elected to early adopt the requirements of Accounting Standards Update (ASU) 2014-09, Revenue from contracts with Customers Chemical trading — direct sales model The Company sells chemical products to customers through an online platform or sales representatives. Sales contracts are entered into with each individual customer. The Company is the principal under the chemical direct sales model as the Company controls the chemical products with the ability to direct the use of, and obtain substantially all the remaining benefits from the chemical products before they are sold to its customers. The Company has a single performance obligation to sell chemical products to the buyers. The Company estimates the amount of variable consideration including sales return using the expected value method and includes variable consideration in the transaction price to the extent that it is probable that a significant reversal will not occur. Revenue for chemical trading under direct sales model is recognized at a point in time when the single performance obligation is satisfied when the chemical products are delivered to the customer. Chemical trading — marketplace model The Company matches product suppliers and platform buyers through its vendor-supplier matching recommendation system. The Company charges a commission fee to either the buyer or seller, depending on which party requests the matching services based on the commission agreements signed. The Company has a single performance obligation to provide the matching service. As the Company is a service provider and does not control the goods prior to transfer to the end customer, the Company recognizes commission fee as an agent on a net basis. The Company considers both the buyer and end customer to be its customers in the transaction. The Company estimates the amount of variable consideration including payment contingent on product delivery to platform buyer using the most likely amount method and includes in the transaction price to the extent that it is probable that a significant reversal will not occur. Revenue for chemical trading under marketplace model is recognized at a point in time when the performance obligation is satisfied upon the completion of the matching service. Online membership service The Company provides access to the users who subscribed for its online membership service to upload their product information on its online platform for promotion purpose and to attend the online trainings and marketing activities organized by the Company during the membership period. The Company typically charges a fixed fee over the membership period. The Company has a single performance obligation to stand ready to perform the membership services during the membership period. As the users simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs, revenue for online membership service is recognized ratably over the contract period. Prior to July 2019, for certain transactions under the direct sales model and marketplace model, the Company provides guarantee on the customers’ loan repayments to certain financial institutions. The guarantees are within the scope of ASC 460, Guarantees, which is accounted for at fair value at inception. The Company first allocates the fair value of the guarantee obligation from the total transaction price and allocates the remaining transaction price to the performance obligation under ASC 606. Subsequently, the Company amortizes the guarantee obligation into revenue outside the scope of ASC 606 as the Company is released from risk under the guarantee. The Company subsequently accounts for the contingent loss arising from the arrangement in accordance with ASC 450, Contingencies. Financial service Starting from July 2019, the Company enters into financial service contracts with its suppliers, customers, and financing providers, including banks and non-bank financial institutions, to facilitate lending arrangements between the financing providers and the customers and suppliers who use the Company’s online platforms. In addition to the loan facilitation service, the Company provides a guarantee to the financing providers on the loan repayments. The guarantees are within the scope of ASC 460, Guarantees. The Company typically charges its customers and suppliers a fixed fee based on a percentage of the loan amount for the facilitation service and the guarantee. The Company first allocates the transaction price to the guarantee obligation at fair value and allocates the remaining transaction price to the facilitation service under ASC 606. The Company recognizes revenue generated from the facilitation service when the Company successfully matches the customers or suppliers with the financing providers. The Company amortizes the guarantee obligation into revenue outside the scope of ASC 606 as the Company is released from risk under the guarantee. The Company subsequently accounts for the contingent loss arising from the guarantee arrangement in accordance with ASC 450, Contingencies. When the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, and the right to consideration is conditioned only on the passage of time, the Company recognizes an unbilled receivable on the consolidated balance sheets. Contract assets, which arise when revenue is recognized prior to invoicing and the right to the amount due from customers is conditioned on something other than the passage of time, such as the completion of a related performance obligation. When a customer pays consideration before the Company transfers goods or services, the Company records its obligation as a contract liability, which is classified as deferred revenue. |
Cost of revenues | (r) Cost of revenues Cost of revenue consists primarily of cost of chemical products sold. |
Research and development expenses | (s) Research and development expenses Research and development expenses consist primarily of personnel-related expenses and rental expenses incurred for the development of, enhancement to, and maintenance of the Company’s technology infrastructure to support its business operations. Research and development costs are expensed as incurred unless such costs qualify for capitalization as software development costs. In order to qualify for capitalization, (i) the preliminary project should be completed, (ii) management has committed to funding the project and it is probable that the project will be completed and the software will be used to perform the function intended, and (iii) it will result in significant additional functionality in the Company’s services. The amount of costs qualifying for capitalization has been immaterial during the periods presented, and as a result, all development costs were expensed as incurred. |
Leases | (t) Leases Leases are classified as operating leases or finance leases in accordance with ASC 842. The Company do not assume renewals in our determination of the lease term unless the renewals are reasonably certain to be exercised at lease commencement. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company adopted ASU No. 2016-02, Leases (Topic 842 The Company determines if an arrangement is a lease or contains a lease at the inception. For operating leases, the Company recognizes a right-of-use asset (“ROU asset”) and a lease liability based on the present value of the lease payments over the lease term in the consolidated balance sheets at the lease commencement date. For finance leases, assets are included in property and equipment in the consolidated balance sheets. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s leases often include options to extend and lease terms include such extended terms when the Company is reasonably certain to exercise those options. Lease terms also include periods covered by options to terminate the leases when the Company is reasonably certain not to exercise those options. |
Government grants | (u) Government grants Government grants are provided by the relevant PRC municipal government authorities to subsidize the cost of certain research and development projects. The amount of such government grants are determined solely at the discretion of the relevant government authorities. The government grants of non-operating nature with no further conditions to be met are recorded as non-operating income in “Other income, net” when received. The government subsidies with certain operating conditions are recorded as liabilities when received and will be recorded as operating income when the conditions are met. |
Income taxes | (v) Income taxes The Company follows the liability method of accounting for income taxes in accordance with ASC 740 Accounting for Income Taxes , to account for uncertainty in income taxes The Company evaluates its uncertain tax positions using the provisions of ASC 740, which prescribes a recognition threshold that a tax position is required to meet before being recognized in the consolidated financial statements. The Company recognizes in the consolidated financial statements the benefit of a tax position which is “more likely than not” to be sustained under examination based solely on the technical merits of the position assuming a review by tax authorities having all relevant information. Tax positions that meet the recognition threshold are measured using a cumulative probability approach, at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. It is the Company’s policy to recognize interest and penalties related to unrecognized tax benefits, if any, as a component of income tax expense. Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain arising in the Cayman Islands. Additionally, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed. Hong Kong MKD HK is incorporated in Hong Kong and is subject to Hong Kong profits tax rate of 16.5 PRC The Company’s subsidiaries and VIEs in the PRC are subject to the statutory rate of 25 In October 2016, Shanghai MOLBASE qualified as High and New Technology Enterprise (“HNTE”) and was eligible for 15 The Company’s loss before income tax consisted of: Schedule of loss before income tax For the As of June 30, 2020 2021 RMB RMB US$ Unaudited Non-PRC (192,799 ) (15,830 ) (2,452 ) PRC (132,781 ) (16,665 ) (2,581 ) (325,580 ) (32,495 ) (5,033 ) The current and deferred portions of income tax expenses included in the consolidated statements of comprehensive loss were as follows: Schedule of income tax expenses For the As of June 30, 2020 2021 RMB RMB US$ Unaudited Current 2,458 22 3 Deferred — — — Income tax expenses 2,458 22 3 |
Share-Based Compensation | (w) Share-Based Compensation The Company applies ASC 718, Compensation — Stock Compensation Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting The Company, with the assistance of an independent third-party valuation firm, determined the fair value of the stock options granted to employees. The binominal option pricing model was applied in determining the estimated fair value of the options granted to employees. |
Comprehensive income (loss) | (x) Comprehensive income (loss) Comprehensive income (loss) is defined as the changes in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive Income, |
Loss per share | (y) Loss per share In accordance with ASC 260, Earnings per Share |
Segment reporting | (z) Segment reporting The Company’s Chief Executive Officer as the chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole. In accordance with ASC 280, Segment Reporting |
Value added taxes (“VAT”), business related tax and surcharges | (aa) Value added taxes (“VAT”), business related tax and surcharges The Company is subject to VAT at the rate of 17%, 16%, 13%, 6%, 5% or 3%, depending on whether the entity is a general taxpayer or small-scale taxpayer, and related surcharges on revenue generated from providing services. The Company is also subject to certain government surcharges on the VAT payable in the PRC, which is recorded as cost of revenues. |
Deferred initial public offering (“IPO”) costs | (bb) Deferred initial public offering (“IPO”) costs Direct and incremental costs incurred by the Company attributable to its proposed IPO of ordinary shares in the U.S. is deferred and recorded as deferred IPO costs in the consolidated balance sheets and will be charged against the gross proceeds received from such offering. |
Commitments and contingencies | (cc) Commitments and contingencies The Company records liabilities for contingencies when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. |
Comparatives | (dd) Comparatives Certain items reported in the prior year’s consolidated financial statements have been reclassified to conform with the current year’s presentation. |
Recent accounting pronouncements | (ee) Recent accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments 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 December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of estimated useful lives of property and equipment | Summary of estimated useful lives of property and equipment Category Estimated useful life Office equipment 1 3 Leasehold improvements 5 |
Summary of estimated economic lives of intangible assets from the date of purchase | Summary of estimated economic lives of intangible assets from the date of purchase Category Estimated economic life Purchased software 3 |
Schedule of loss before income tax | Schedule of loss before income tax For the As of June 30, 2020 2021 RMB RMB US$ Unaudited Non-PRC (192,799 ) (15,830 ) (2,452 ) PRC (132,781 ) (16,665 ) (2,581 ) (325,580 ) (32,495 ) (5,033 ) |
Schedule of income tax expenses | Schedule of income tax expenses For the As of June 30, 2020 2021 RMB RMB US$ Unaudited Current 2,458 22 3 Deferred — — — Income tax expenses 2,458 22 3 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of share-based compensation expense | Schedule of share-based compensation expense For the years ended As of June 30, 2020 2021 RMB RMB US$ Sales and marketing expenses 14,856 2,851 442 General and administrative expenses 120,699 10,890 1,687 Research and development expenses 4,246 864 134 Total 139,801 14,605 2,262 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 6 Months Ended |
Jun. 30, 2021 | |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Minimum [Member] | Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 1 year |
Maximum [Member] | Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 6 Months Ended |
Jun. 30, 2021 | |
Computer Software, Intangible Asset [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated economic life | 3 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) ¥ in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021USD ($) | Jun. 30, 2021CNY (¥) | Dec. 31, 2020CNY (¥) | |
Operating Loss Carryforwards [Line Items] | |||
Loss before income tax | $ (5,033) | ¥ (32,495) | ¥ (325,580) |
Domestic Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Loss before income tax | (2,452) | (15,830) | (192,799) |
Foreign Tax Authority [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Loss before income tax | $ (2,581) | ¥ (16,665) | ¥ (132,781) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) ¥ in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021USD ($) | Jun. 30, 2021CNY (¥) | Jun. 30, 2020CNY (¥) | Dec. 31, 2020CNY (¥) | |
Accounting Policies [Abstract] | ||||
Current | $ 3 | ¥ 22 | ¥ 2,458 | |
Deferred | ||||
Income tax expenses | $ 3 | ¥ 22 | ¥ 990 | ¥ 2,458 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details Narrative) ¥ in Thousands, $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020CNY (¥) | Jun. 30, 2021CNY (¥) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Translation rate (CNY/USD) | 6.4566 | 6.4566 | |||
Debt Instrument, Maturity Date | Jun. 15, 2023 | ||||
Prepayments and other current assets increase percentage | 30.40% | ||||
Prepayments and other current assets | $ 46,262 | ¥ 229,046 | ¥ 298,700 | ||
Statutory rate | 25.00% | ||||
Molecular Data Hk Limited Mkd Hk [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Statutory rate | 16.50% | ||||
Shanghai Molbase Technology Co. Ltd. Shanghai Molbase [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Percentage of enterprise income tax. | 15.00% | ||||
Strategic Global Investments [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Note fair value | $ 51,500 | $ 51,500 | |||
Interest rate | 6.25% | 6.25% | |||
Threshold prior written notice for redemption | 14 days |
Concentration of Risks (Details
Concentration of Risks (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cost of Sales [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | 10.00% | 10.00% |
Revenue Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | 10.00% | 10.00% |
Share-Based Compensation (Detai
Share-Based Compensation (Details) ¥ in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021USD ($) | Jun. 30, 2021CNY (¥) | Dec. 31, 2020CNY (¥) | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | $ 2,262 | ¥ 14,605 | ¥ 139,801 |
Selling and Marketing Expense [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | 442 | 2,851 | 14,856 |
General and Administrative Expense [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | 1,687 | 10,890 | 120,699 |
Research and Development Expense [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation expense | $ 134 | ¥ 864 | ¥ 4,246 |
Share-Based Compensation (Det_2
Share-Based Compensation (Details Narrative) - Share Plan 2018 [Member] - Board Of Directors [Member] - shares | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of options purchase | 31,414,057 | 39,512,055 |
Number of options forfeited | 33,343 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] $ in Thousands | 1 Months Ended |
Sep. 30, 2021USD ($) | |
Subsequent Event [Line Items] | |
Proceeds from direct offering | $ 15,000 |
Waichun Logistics Technology [Member] | |
Subsequent Event [Line Items] | |
Proceeds from related party | $ 2,800 |
Impact of COVID-19 on Our Ope_2
Impact of COVID-19 on Our Operations and Financial Performance (Details Narrative) ¥ in Thousands, $ in Thousands | 6 Months Ended | ||
Jun. 30, 2021USD ($) | Jun. 30, 2021CNY (¥) | Jun. 30, 2020CNY (¥) | |
Impact Of Covid-19 On Our Operations And Financial Performance | |||
Percentage of revenue decreased | 67.10% | 67.10% | |
Revenues | $ 200,000 | ¥ 1,400,000 | ¥ 4,400,000 |