Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2021shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2021 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-39591 |
Entity Registrant Name | iHuman Inc. |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | Floor 8, Building 2 |
Entity Address, Adress Line Two | No. 1 Wangjing East Road |
Entity Address, Address Line Three | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Postal Zip Code | 100102 |
Entity Address, Country | CN |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
ICFR Auditor Attestation Flag | true |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Central Index Key | 0001814423 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | FY |
Auditor Name | Ernst & Young Hua Ming LLP |
Auditor Firm ID | 1408 |
Auditor Location | Beijing, the People’s Republic of China |
Class A ordinary shares | |
Document Information [Line Items] | |
Title of 12(b) Security | Class A ordinary shares,par value US$0.0001 per share* |
Security Exchange Name | NYSE |
Entity Common Stock, Shares Outstanding | 123,852,667 |
No Trading Symbol Flag | true |
Class B ordinary shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 144,000,000 |
American Depositary Shares | |
Document Information [Line Items] | |
Title of 12(b) Security | American Depositary Shares, each representing five Class A ordinary shares,par value US$0.0001 per share |
Trading Symbol | IH |
Security Exchange Name | NYSE |
Business Contact | |
Document Information [Line Items] | |
Contact Personnel Name | Vivien Weiwei Wang |
Contact Personnel Email Address | ir@ihuman.com |
City Area Code | +86 10 |
Local Phone Number | 5780-6606 |
Entity Address, Address Line One | Floor 8, Building 2 |
Entity Address, Adress Line Two | No. 1 Wangjing East Road |
Entity Address, Address Line Three | Chaoyang District |
Entity Address, City or Town | Beijing |
Entity Address, Postal Zip Code | 100102 |
Entity Address, Country | CN |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) |
Current assets | |||
Cash and cash equivalents | ¥ 855,362 | $ 134,225 | ¥ 861,682 |
Accounts receivable, net of allowance of RMB156 and RMB381 (US$60) as of December 31, 2020 and 2021, respectively | 56,132 | 8,808 | 77,965 |
Inventories, net | 28,054 | 4,402 | 16,873 |
Amounts due from related parties, current | 2,845 | 446 | 322 |
Prepayments and other current assets | 72,851 | 11,431 | 64,619 |
Total current assets | 1,015,244 | 159,312 | 1,021,461 |
Non-current assets | |||
Property and equipment, net | 12,286 | 1,928 | 6,390 |
Intangible assets, net | 27,287 | 4,282 | 11,789 |
Operating lease right-of-use assets (including amounts related to leases from a related party of RMB174 and RMB32,044 (US$5,170) as of December 31, 2020 and 2021, respectively) | 38,237 | 6,000 | 6,521 |
Amounts due from related parties | 4,223 | 663 | |
Other non-current assets | 3,604 | 566 | 784 |
Total non-current assets | 85,637 | 13,439 | 25,484 |
Total assets | 1,100,881 | 172,751 | 1,046,945 |
Current liabilities | |||
Accounts payable (including amounts of the consolidated VIE and VIE's subsidiaries without recourse to the primary beneficiary of RMB19,980 and RMB25,950 (US$4,072) as of December 31, 2020 and 2021, respectively) | 30,536 | 4,792 | 21,551 |
Deferred revenue and customer advances (including amounts of the consolidated VIE and VIE's subsidiaries without recourse to the primary beneficiary of RMB268,613 and RMB302,980 (US$47,544) as of December 31, 2020 and 2021, respectively) | 302,980 | 47,544 | 268,613 |
Amounts due to related parties (including amounts of the consolidated VIE and VIE's subsidiaries without recourse to the primary beneficiary of RMB485 and RMB3,879 (US$608) as of December 31, 2020 and 2021, respectively) | 8,853 | 1,389 | 485 |
Accrued expenses and other current liabilities (including amounts of the consolidated VIE and VIE's subsidiaries without recourse to the primary beneficiary of RMB95,200 and RMB88,053 (US$13,817) as of December 31, 2020 and 2021, respectively) | 115,895 | 18,186 | 107,029 |
Current operating lease liabilities (including amounts of the consolidated VIE and VIE's subsidiaries without recourse to the primary beneficiary of RMB1,544 and RMB11,735 (US$1,841) as of December 31, 2020 and 2021, respectively; including amounts related to leases from a related party of RMB183 and RMB23,270 (US$3,652) as of December 31, 2020 and 2021, respectively) | 24,669 | 3,871 | 1,544 |
Total current liabilities | 482,933 | 75,782 | 399,222 |
Non-current liabilities | |||
Non-current operating lease liabilities (including amounts of the consolidated VIE and VIE's subsidiaries without recourse to the primary beneficiary of RMB5,070 and RMB6,501 (US$1,020) as of December 31, 2020 and 2021, respectively; including amounts related to leases from a related party of nil and RMB5,501 (US$863) as of December 31, 2020 and 2021, respectively) | 9,577 | 1,503 | 5,070 |
Total non-current liabilities | 9,577 | 1,503 | 5,070 |
Total liabilities | 492,510 | 77,285 | 404,292 |
Commitments and contingencies | |||
SHAREHOLDERS' EQUITY | |||
Ordinary shares | 185 | 29 | 184 |
Additional paid-in capital | 1,066,052 | 167,287 | 1,050,304 |
Treasury stock | (164) | (26) | |
Accumulated other comprehensive loss | (34,677) | (5,442) | (21,861) |
Accumulated deficit | (423,025) | (66,382) | (385,974) |
Total shareholders' equity | 608,371 | 95,466 | 642,653 |
Total liabilities and shareholders' equity | ¥ 1,100,881 | $ 172,751 | ¥ 1,046,945 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2021CNY (¥)shares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020CNY (¥)shares |
Accounts receivable, allowance | ¥ 381 | $ 60 | ¥ 156 |
Operating lease right-of-use assets, related party | 32,944 | 5,170 | 174 |
Accounts payable | 30,536 | 4,792 | 21,551 |
Deferred revenue and customer advances | 302,980 | 47,544 | 268,613 |
Amounts due to related parties | 8,853 | 1,389 | 485 |
Accrued expenses and other current liabilities | 115,895 | 18,186 | 107,029 |
Current operating lease liabilities | 24,669 | 3,871 | 1,544 |
Current operating lease liabilities - related party | 23,270 | 3,652 | 174 |
Noncurrent operating lease liabilities | 9,577 | 1,503 | 5,070 |
Non-current operating lease liabilities - related party | 5,501 | $ 863 | 0 |
Ordinary shares, par value | $ / shares | $ 0.0001 | ||
VIE | |||
Accounts receivable, allowance | 381 | $ 60 | 156 |
Accounts payable | 25,950 | 4,072 | 19,980 |
Deferred revenue and customer advances | 302,980 | 47,544 | 268,613 |
Amounts due to related parties | 12,289 | 1,928 | 485 |
Accrued expenses and other current liabilities | 88,053 | 13,817 | 95,200 |
Current operating lease liabilities | 11,735 | 1,841 | 1,544 |
Noncurrent operating lease liabilities | 6,501 | 1,020 | 5,070 |
VIEs excluding Group companies | |||
Amounts due to related parties | ¥ 3,879 | $ 608 | ¥ 485 |
Class A ordinary shares | |||
Ordinary shares, shares authorized | 700,000,000 | 700,000,000 | 700,000,000 |
Ordinary shares shares issued | 125,122,382 | 125,122,382 | 122,622,382 |
Ordinary shares, shares outstanding | 123,852,667 | 123,852,667 | 122,622,382 |
Class B ordinary shares | |||
Ordinary shares, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 |
Ordinary shares shares issued | 144,000,000 | 144,000,000 | 144,000,000 |
Ordinary shares, shares outstanding | 144,000,000 | 144,000,000 | 144,000,000 |
Undesignated | |||
Ordinary shares, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Ordinary shares shares issued | 0 | 0 | 0 |
Ordinary shares, shares outstanding | 0 | 0 | 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021CNY (¥)¥ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020CNY (¥)¥ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | |
Revenues (including transactions with a related party of RMB1,624, RMB1,326 and RMB2,157 (US$338) for the years ended December 31, 2019, 2020 and 2021, respectively) | ||||
Total revenues | ¥ 944,722 | $ 148,247 | ¥ 531,915 | ¥ 218,656 |
Cost of revenues (including transactions with a related party of RMB11, RMB87 and RMB1,524 (US$239) for the years ended December 31, 2019, 2020 and 2021, respectively) | ||||
Total cost of revenues | (284,098) | (44,581) | (166,472) | (84,163) |
Gross profit | 660,624 | 103,666 | 365,443 | 134,493 |
Operating expenses | ||||
Research and development expenses (including transactions with related parties of nil, RMB509 and RMB22,416 (US$3,517) for the years ended December 31, 2019, 2020 and 2021, respectively) | (415,334) | (65,175) | (199,510) | (170,155) |
Sales and marketing expenses (including transactions with a related party of nil, nil and RMB3,797 *YS$596) for the years ended December 31, 2019, 2020 and 2021, respectively) | (202,093) | (31,713) | (95,717) | (53,716) |
General and administrative expenses (including transactions with a related party of RMB2,288, RMB1,328 and RMB3,164 (US$497) for the years ended December 31, 2019, 2020 and 2021, respectively) | (97,445) | (15,291) | (114,667) | (189,433) |
Total operating expenses | (714,872) | (112,179) | (409,894) | (413,304) |
Operating loss | (54,248) | (8,513) | (44,451) | (278,811) |
Other income, net | 17,052 | 2,676 | 7,441 | 4,578 |
Loss before income taxes | (37,196) | (5,837) | (37,010) | (274,233) |
Income tax benefits (expenses) | 145 | 23 | (466) | (1,364) |
Net loss | (37,051) | (5,814) | (37,476) | (275,597) |
Accretion to redemption value of contingently redeemable ordinary shares | ¥ | (10,792) | (821) | ||
Net loss attributable to ordinary shareholders | (37,051) | (5,814) | (48,268) | (276,418) |
Net loss | (37,051) | (5,814) | (37,476) | (275,597) |
Other comprehensive loss | ||||
Foreign currency translation adjustment | (12,816) | (2,011) | (21,861) | 0 |
Total other comprehensive loss | (12,816) | (2,011) | (21,861) | |
Total comprehensive loss | (49,867) | (7,825) | (59,337) | (275,597) |
Accretion of contingently redeemable ordinary shares | ¥ | (10,792) | (821) | ||
Comprehensive loss attributable to ordinary shareholders | ¥ (49,867) | $ (7,825) | ¥ (70,129) | ¥ (276,418) |
Loss per share: | ||||
Loss per share, basic | (per share) | ¥ (0.14) | $ (0.02) | ¥ (0.21) | ¥ (1.52) |
Loss per share, diluted | (per share) | (0.14) | (0.02) | (0.21) | (1.52) |
Loss per ADS (1 ADS represents 5 ordinary shares) | ||||
Earnings per ADS, basic | (per share) | (0.69) | (0.11) | (1.07) | (7.62) |
Earnings per ADS, diluted | (per share) | ¥ (0.69) | $ (0.11) | ¥ (1.07) | ¥ (7.62) |
Weighted average number of ordinary shares: | ||||
Weighted average number of shares outstanding, basic | shares | 266,631,802 | 266,631,802 | 226,339,320 | 181,427,603 |
Weighted average number of shares outstanding, diluted | shares | 266,631,802 | 266,631,802 | 226,339,320 | 181,427,603 |
Online subscriptions | ||||
Revenues (including transactions with a related party of RMB1,624, RMB1,326 and RMB2,157 (US$338) for the years ended December 31, 2019, 2020 and 2021, respectively) | ||||
Total revenues | ¥ 832,345 | $ 130,613 | ¥ 430,466 | ¥ 107,409 |
Cost of revenues (including transactions with a related party of RMB11, RMB87 and RMB1,524 (US$239) for the years ended December 31, 2019, 2020 and 2021, respectively) | ||||
Total cost of revenues | (209,625) | (32,895) | (107,904) | (25,793) |
Offline products and others | ||||
Revenues (including transactions with a related party of RMB1,624, RMB1,326 and RMB2,157 (US$338) for the years ended December 31, 2019, 2020 and 2021, respectively) | ||||
Total revenues | 112,377 | 17,634 | 101,449 | 111,247 |
Cost of revenues (including transactions with a related party of RMB11, RMB87 and RMB1,524 (US$239) for the years ended December 31, 2019, 2020 and 2021, respectively) | ||||
Total cost of revenues | ¥ (74,473) | $ (11,686) | ¥ (58,568) | ¥ (58,370) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021CNY (¥)shares | Dec. 31, 2021USD ($)shares | Dec. 31, 2020CNY (¥)shares | Dec. 31, 2019CNY (¥)shares | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Revenues with a related party | ¥ 2,157 | $ 338 | ¥ 1,326 | ¥ 1,624 |
Cost of revenues with a related party | 1,524 | 239 | 87 | 11 |
Research and development expenses with related parties | 22,416 | 3,517 | 509 | 0 |
Sales and marketing expenses with a related party | 3,797 | 596 | 0 | 0 |
General and administrative expenses with a related party | ¥ 3,164 | $ 497 | ¥ 1,328 | ¥ 2,288 |
Number of ordinary shares per ADS | 5 | 5 | 5 | 5 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) ¥ in Thousands, $ in Thousands | Ordinary sharesCNY (¥)shares | Ordinary sharesUSD ($)shares | Treasury StockCNY (¥)shares | Treasury StockUSD ($)shares | Additional paid-in capitalCNY (¥) | Additional paid-in capitalUSD ($) | Accumulated other comprehensive lossCNY (¥) | Accumulated other comprehensive lossUSD ($) | Accumulated deficitCNY (¥) | Accumulated deficitUSD ($) | CNY (¥)shares | USD ($)shares |
Balance as of beginning of year at Dec. 31, 2018 | ¥ 111 | ¥ 9,055 | ¥ (72,901) | ¥ (63,735) | ||||||||
Balance as of beginning of year (in shares) at Dec. 31, 2018 | shares | 160,000,000 | 160,000,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net loss | (275,597) | (275,597) | ||||||||||
Distribution to Hongen Education (Note 1) | (69,099) | (69,099) | ||||||||||
Shares issued for share-based awards (Note 15) (in shares) | shares | 55,053,763 | 55,053,763 | ||||||||||
Shares issued for share-based awards (Note 15) | ¥ 38 | 3,403 | 3,441 | |||||||||
Share-based compensation (Note15) | 270,541 | 270,541 | ||||||||||
Foreign currency translation adjustment | ¥ 0 | |||||||||||
Exercise of share-based awards (Note 15) (in shares) | shares | 0 | 0 | ||||||||||
Accretion of contingently redeemable ordinary shares to redemption value (Note 12) | (821) | ¥ (821) | ||||||||||
Balance as of ending of year at Dec. 31, 2019 | ¥ 149 | 213,079 | (348,498) | (135,270) | ||||||||
Balance as of ending of year (in shares) at Dec. 31, 2019 | shares | 215,053,763 | 215,053,763 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net loss | (37,476) | (37,476) | ||||||||||
Shares issued for share-based awards (Note 15) | 589,587 | |||||||||||
Share-based compensation (Note15) | 79,891 | 79,891 | ||||||||||
Foreign currency translation adjustment | ¥ (21,861) | ¥ (21,861) | ||||||||||
Exercise of share-based awards (Note 15) (in shares) | shares | 0 | 0 | ||||||||||
Share issuance upon IPO net of issuance cost (Note 13) | ¥ 27 | 589,560 | ||||||||||
Share issuance upon IPO net of issuance cost (Note 13) (in shares) | shares | 40,250,000 | 40,250,000 | ||||||||||
Conversion of contingently redeemable ordinary shares into Class A shares upon IPO (Note 12) | ¥ 8 | 171,572 | ¥ 171,580 | |||||||||
Conversion of contingently redeemable ordinary shares into Class A shares upon IPO (Note 12) (in shares) | shares | 11,318,619 | 11,318,619 | ||||||||||
Assets transferred under common control, net of tax (Note 17) | 6,994 | 6,994 | ||||||||||
Accretion of contingently redeemable ordinary shares to redemption value (Note 12) | (10,792) | (10,792) | ||||||||||
Balance as of ending of year at Dec. 31, 2020 | ¥ 184 | 1,050,304 | (21,861) | (385,974) | 642,653 | |||||||
Balance as of ending of year (in shares) at Dec. 31, 2020 | shares | 266,622,382 | 266,622,382 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net loss | (37,051) | (37,051) | $ (5,814) | |||||||||
Share-based compensation (Note15) | 15,175 | 15,175 | ||||||||||
Foreign currency translation adjustment | (12,816) | (12,816) | $ (2,011) | |||||||||
Repurchase of ordinary shares (Note 14) | ¥ (164) | (164) | ||||||||||
Repurchase of ordinary shares (Note 14) (in shares) | shares | (45,000) | (45,000) | ||||||||||
Exercise of share-based awards (Note 15) | ¥ 1 | 476 | ¥ 477 | |||||||||
Exercise of share-based awards (Note 15) (in shares) | shares | 1,275,285 | 1,275,285 | 1,275,285 | 1,275,285 | ||||||||
Assets transferred under common control, net of tax (Note 17) | 97 | ¥ 97 | ||||||||||
Balance as of ending of year at Dec. 31, 2021 | ¥ 185 | $ 29 | ¥ (164) | $ (26) | ¥ 1,066,052 | $ 167,287 | ¥ (34,677) | $ (5,442) | ¥ (423,025) | $ (66,382) | ¥ 608,371 | $ 95,466 |
Balance as of ending of year (in shares) at Dec. 31, 2021 | shares | 267,897,667 | 267,897,667 | (45,000) | (45,000) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net loss | ¥ (37,051) | $ (5,814) | ¥ (37,476) | ¥ (275,597) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Depreciation and amortization | 6,418 | 1,007 | 2,814 | 597 |
Share-based compensation | 15,175 | 2,381 | 79,891 | 270,541 |
Allowance (reversal of allowance) for doubtful accounts | 225 | 36 | (160) | 136 |
Provision for inventories | 1,443 | 226 | 1,589 | 113 |
Non-cash operating lease expenses | 21,755 | 3,414 | 11,297 | |
Changes in operating assets and liabilities: | ||||
Accounts receivable | 21,608 | 3,391 | (57,687) | (6,630) |
Amounts due from related parties | (6,746) | (1,059) | 545 | (867) |
Inventories | (12,624) | (1,981) | 2,203 | 8,850 |
Prepayments and other current assets | (8,249) | (1,294) | (48,430) | (8,580) |
Other non-current assets | 182 | 29 | 1,879 | (2,185) |
Accounts payable | 8,985 | 1,410 | 11,249 | (2,832) |
Amounts due to related parties | 8,368 | 1,313 | (2,946) | 2,326 |
Deferred revenue and customer advances | 34,367 | 5,393 | 196,782 | 43,678 |
Operating lease liabilities | (25,838) | (4,055) | (10,843) | |
Accrued expenses and other current liabilities | 10,196 | 1,599 | 72,279 | 13,077 |
Net cash provided by operating activities | 38,214 | 5,996 | 222,986 | 42,627 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchases of property and equipment and intangible assets | (32,283) | (5,066) | (15,906) | (2,391) |
Proceeds from disposal of property and equipment | 332 | 52 | ||
Net cash used in investing activities | (31,951) | (5,014) | (15,906) | (2,391) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Distribution to Hongen Education | (66,000) | (3,099) | ||
Net proceeds from issuance of contingently redeemable ordinary shares | 39,967 | 120,000 | ||
Proceeds from the issuance of IPO shares, net of issuance cost | 589,587 | |||
Repurchase of ordinary shares | (164) | (26) | ||
Proceeds from assets transferred under common control | 97 | 15 | 8,405 | |
Proceeds received from issuance of shares for share-based awards and exercise of share options | 477 | 75 | 3,441 | |
Proceeds from loans from related parties | 2,000 | |||
Repayments of loans from related parties | (63,819) | |||
Net cash provided by financing activities | 410 | 64 | 571,959 | 58,523 |
Effective of exchange rate changes on cash and cash equivalents | (12,993) | (2,038) | (22,240) | |
Net change in cash and cash equivalents | (6,320) | (992) | 756,799 | 98,759 |
Cash and cash equivalents at the beginning of the year | 861,682 | 135,217 | 104,883 | 6,124 |
Cash and cash equivalents at the end of the year | 855,362 | 134,225 | 861,682 | 104,883 |
Supplemental disclosures of cash flow information: | ||||
Cash paid for income taxes | 459 | 72 | 15 | |
Supplemental disclosures of non-cash information: | ||||
Consideration for acquisition under common control included in amounts due to related parties | 66,000 | |||
Purchase of property and equipment, and intangible assets included in accrued expenses and other current liabilities | 1,867 | 293 | 4,222 | ¥ 769 |
Operating lease right-of-use assets obtained in exchange for operating lease liabilities from new leases | ¥ 50,500 | $ 7,925 | ¥ 17,030 |
ORGANIZATION, CONSOLIDATION AND
ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2021 | |
ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES iHuman Inc. (the “Company”) is an exempted company incorporated in the Cayman Islands in September 2019. The Company, its subsidiaries, variable interest entity (“VIE”), and subsidiaries of the VIE are hereinafter collectively referred to as the “Group”. The Group is principally engaged in offering an integrated suite of tech-powered, intellectual development products and is committed to making the child-rearing experience easier for parents and transforming cognitive development into a fun journey for children. The Group generates its revenue from its self-directed and interactive online applications and from offline products and others (the “Offline Business”) in the intellectual development technology industry in the People’s Republic of China (the “PRC”). Restructuring The Group underwent a series of restructurings in 2019 and 2020 to reorganize the Offline Business into the Group (the “Onshore Restructuring”) and to establish the Company as the parent company and Tianjin Hongen Perfect Future Education Technology Co., Ltd. (“Tianjin Hongen”, or the “VIE”) as the VIE of the Company (the “Offshore Restructuring”). The Onshore Restructuring and Offshore Restructuring are hereinafter collectively referred to as the “Restructuring”. Onshore Restructuring Tianjin Hongen was established to carry out the Group’s online application offerings and commenced operations in March 2016. Prior to the Onshore Restructuring, the operation of the Offline Business was carried out by Hongen Education & Technology Co., Ltd. and certain of its subsidiaries (collectively, “Hongen Education”). In November 2019, Tianjin Hongen, through its wholly-owned subsidiary, Beijing Jinhongen Education Technology Co., Ltd. (“Beijing Jinhongen”), acquired certain operating assets and liabilities relating to the Offline Business for a cash consideration of RMB66,000 from Hongen Education, which was fully paid in 2020. Upon the completion of the Onshore Restructuring, Tianjin Hongen succeeded all of the Offline Business of Hongen Education. As Tianjin Hongen and Hongen Education were under common control of Mr. Michael Yufeng Chi (the “Controlling Shareholder”) through an act-in-concert agreement with his brother, Mr. Hanfeng Chi, for all the periods presented, the Onshore Restructuring was accounted for in a manner similar to a pooling of interest with acquired assets and liabilities recognized at their historical amount in the consolidated financial statements. Accordingly, the Company retrospectively adjusted its consolidated financial statements to include the related assets, liabilities and operations for the year ended December 31 2019. The difference between the cash consideration and the net book value of acquired net assets has been accounted for as a distribution to Hongen Education in the consolidated statements of changes in shareholders’ equity (deficit). Offshore Restructuring In September 2019, the Company issued a total of 215,053,763 ordinary shares to the shareholders of Tianjin Hongen as consideration in exchange for their respective equity interests in Tianjin Hongen. In October 2019, the Company incorporated a wholly-owned subsidiary, iHuman Online Limited (“iHuman Online”) in Hong Kong, and in November 2019, the Company incorporated another wholly-owned subsidiary, Hongen Perfect Future (Tianjin) Investment Co., Ltd. (“Hongen Investment”, or the “WFOE”) in the PRC. In June 2020, the Company, Hongen Investment, Tianjin Hongen and its registered shareholders entered into a series of contractual agreements (the “Contractual Agreements”) pursuant to which the Company became the primary beneficiary of Tianjin Hongen. 1. ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES (Continued) As the Company and Tianjin Hongen were under common control of the Controlling Shareholder, the Offshore Restructuring was also accounted for in a manner similar to a pooling of interest as if the corporate structure of the Company had been in existence since the beginning of the periods presented. Furthermore, the ordinary shares of the Company were recorded at their original issue price, and have been retrospectively presented to reflect the historical equity transactions of the Group. On October 8, 2020, the Company completed its initial public offering (“IPO”) on the New York Stock Exchange (Note 13). The Company’s principal subsidiaries, VIE and the VIE’s subsidiaries are as follows: Percentage of equity interest Date of Place of attributable to Name establishment establishment the Company Principal activities Subsidiaries iHuman Online October 2, 2019 HK 100 % Investment holding Hongen Investment November 11, 2019 PRC 100 % Management and technical consulting Hongen Perfect (Beijing) Education Technology Development Co., Ltd. May 19, 2020 PRC 100 % Research and development Variable interest entity: Tianjin Hongen March 30, 2016 PRC Nil Operation of online applications Subsidiaries of the VIE: Beijing Hongen Perfect Future Education Technology Co., Ltd. July 1, 2016 PRC Nil Research and development Tianjin Hongen Perfect Technology Development Co., Ltd. August 26, 2019 PRC Nil Operation of online applications Beijing Jinhongen September 4, 2019 PRC Nil Offerings of products and other services To comply with PRC laws and regulations which has certain limitation of foreign control of companies that engage in value-added telecommunication services and certain other businesses, the Group primarily conducts its business in the PRC through its VIE and the VIE’s subsidiaries. The equity interests of the VIE are legally held by the PRC shareholders (the “Nominee Shareholders”). Despite the lack of technical majority ownership, there exists a parent-subsidiary relationship between the Company and the VIE through the Company’s effective control of the VIE through the Contractual Agreements. Through the Contractual Agreements, the Nominee Shareholders effectively assigned all of their voting rights underlying their equity interests in the VIE to the WFOE, who immediately assigned the voting rights underlying their equity interests in the VIE to the Company. Therefore, the Company has the power to direct the activities of the VIE that most significantly impact its economic performance. The Company also has the ability and obligation to absorb substantially all of the profits and all the expected losses of the VIE that potentially could be significant to the VIE. Based on the above, the Company consolidates the VIE in accordance with SEC Regulation SX-3A-02 and Accounting Standards Codification (“ASC”) 810, Consolidation 1. ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES (Continued) The following is a summary of the Contractual Agreements: Powers of Attorneys Pursuant to the powers of attorneys executed by the Nominee Shareholders, the Nominee Shareholders agreed to entrust to Hongen Investment an irrevocable proxy to exercise all of their rights as shareholders of Tianjin Hongen, the VIE, and to approve, on behalf of the Nominee Shareholders, all related legal documents pertinent to the exercise of their rights in their capacity as the shareholders of Tianjin Hongen. Hongen Investment is also entitled to transfer or assign its voting rights to any other person or entity at its own discretion and without giving prior notice to the Nominee Shareholders or obtaining their consent. The powers of attorneys remain valid until the exclusive management services and business cooperation agreement expires or terminates. Exclusive Call Option Agreement Pursuant to the exclusive call option agreement among Hongen Investment, Tianjin Hongen and its Nominee Shareholders, the Nominee Shareholders irrevocably granted Hongen Investment or its designee(s) an exclusive call option to purchase, when and to the extent permitted under PRC laws, all or part of the equity interests in Tianjin Hongen. Hongen Investment has the sole discretion to decide when to exercise the option, whether in part or full. The exercise price of the call option to purchase all or part of the equity interests in Tianjin Hongen or assets held by Tianjin Hongen will be the minimum amount of consideration permitted under the then-applicable PRC laws. Without the prior consent of Hongen Investment, Tianjin Hongen and its Nominee Shareholders shall not: (i) amend the articles of association, (ii) increase or decrease the registered capital, (iii) sell or otherwise dispose of their assets or beneficial interest, (iv) create or allow any encumbrance on their assets or other beneficial interests, (v) extend any loans to third parties, (vi) enter into any material contracts (except those contracts entered into in the ordinary course of business), (vii) merge with or acquire any other persons or make any investments, or (viii) distribute dividends to their shareholders. The exclusive call option agreement will remain in effect until all the equity interests held by Nominee Shareholders or the assets held by Tianjin Hongen are transferred to Hongen Investment or its designee(s). Hongen Investment may terminate the exclusive call option agreement at its sole discretion, whereas under no circumstances may Tianjin Hongen or its Nominee Shareholders terminate this agreement. Any proceeds received by the Nominee Shareholders from the exercise of the option and distribution of profits or dividends, shall be remitted to Hongen Investment or its designee(s), to the extent permitted under PRC laws. Exclusive Management Services and Business Cooperation Agreement Pursuant to the exclusive management services and business cooperation agreement between Hongen Investment, Tianjin Hongen and the Nominee Shareholders, Hongen Investment has the exclusive right to provide technical and consulting services to Tianjin Hongen and its subsidiaries, including but not limited to management consultancy services, permission of intellectual property rights, technical support and business support. Without the prior written consent of Hongen Investment, Tianjin Hongen may not accept any services subject to this exclusive management services and business cooperation agreement from any third party, while Hongen Investment has the right to designate any party to provide such services. In return, Tianjin Hongen agrees to pay a service fee to Hongen Investment. Hongen Investment has the right to unilaterally adjust the service fee. The exclusive management services and business cooperation agreement is effective within the operating period of Tianjin Hongen. Hongen Investment may terminate this agreement unilaterally, whereas under no circumstances can Tianjin Hongen and the Nominee Shareholders terminate this agreement. 1. ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES (Continued) Equity Interest Pledge Agreement Under the equity interest pledge agreement among Hongen Investment, Tianjin Hongen and its Nominee Shareholders, the Nominee Shareholders have pledged all of their equity interests in Tianjin Hongen to Hongen Investment to guarantee the performance of Tianjin Hongen and their obligations under the Contractual Agreements described above. During the term of the equity interest pledge agreement, Hongen Investment has the right to receive all of Tianjin Hongen’s dividends and profits distributed on the pledged equity. In the event of a breach by Tianjin Hongen or any of its Nominee Shareholders of the contractual obligations under the equity interest pledge agreement, Hongen Investment or its designee(s), as pledgee, will have the right to purchase, auction or sell all or part of the pledged equity interests in Tianjin Hongen and will have priority in receiving the proceeds from such disposal. Tianjin Hongen and its Nominee Shareholders, undertake that, without the prior written consent of Hongen Investment, they will not transfer, create or allow any encumbrance on the pledged equity interests. The equity interest pledge agreement will be valid until Tianjin Hongen and its Nominee Shareholders fulfill all contractual obligations under the Contractual Agreements. Financial Support Letter Pursuant to the financial support letter, the Company is obligated and hereby undertakes to provide unlimited financial support to Tianjin Hongen, to the extent permissible under the applicable PRC laws and regulations. The Company agrees to forego the right to seek repayment in the event if Tianjin Hongen is unable to repay such funding. Resolution of the Company’s board of directors The Company’s board of directors resolved that the rights under the powers of attorneys and the exclusive call option agreement were assigned to any officer authorized by the Company’s board of directors. In the opinion of the Company’s legal counsel, (i) the ownership structures of the VIE and WFOE are not in violation of applicable PRC laws and regulations currently in effect; and (ii) the Contractual Agreements are valid, binding and enforceable, and will not result in any violation of applicable PRC laws and regulations currently in effect; (iii) the financial support letter issued by the Company to the VIE, and the resolutions are valid in accordance with the articles of association of the Company. However, uncertainties in the PRC legal system could cause relevant regulatory authorities to find the current Contractual Agreements and businesses to be in violation of any existing or future PRC laws or regulations and could limit the Company’s ability to enforce its rights under these Contractual Agreements. Furthermore, the Nominee Shareholders of the VIE may have interests that are different from those of the Company, which could potentially increase the risk that they would seek to act contrary to the terms of the Contractual Agreements with the VIE. In addition, if the Nominee Shareholders will not remain the shareholders of the VIE, breach, or cause the VIE to breach, or refuse to renew, the existing Contractual Agreements the Company has with them and the VIE, the Company may not be able to effectively control the VIE and receive economic benefits from it, which may result in deconsolidation of the VIE. In addition, if the current structure or any of the Contractual Agreements were found to be in violation of any existing or future PRC laws or regulations, the Company may be subject to penalties, including but not be limited to, revocation of business and operating licenses, discontinuing or restricting business operations, restricting the Company’s right to collect revenues, temporary or permanent blocking of the Company’s internet platforms, restructuring of the Company’s operations, imposition of additional conditions or requirements with which the Company may not be able to comply, or other regulatory or enforcement actions against the Company. 1. ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES (Continued) As of December 31, 2020 and 2021, there were no pledge or collateralization of the VIE and its subsidiaries’ assets that can only be used to settle their obligations. All liabilities of the VIE and its subsidiaries are without recourse to the Company. The table sets forth the assets and liabilities of the VIE and VIE’s subsidiaries included in the Group’s consolidated balance sheets: As of December 31, 2020 2021 2021 RMB RMB US$ ASSETS Current assets Cash and cash equivalents 247,253 315,775 49,552 Accounts receivable, net of allowance of RMB156 and RMB381 (US$60) as of December 31, 2020 and 2021, respectively 77,965 56,132 8,808 Inventories, net 16,873 28,054 4,402 Amounts due from related parties (including amounts due from Group companies of RMB5,141 and RMB67,899 (US$10,655) as of December 31, 2020 and 2021, respectively) 5,463 70,744 11,101 Prepayments and other current assets 64,587 72,332 11,350 Total current assets 412,141 543,037 85,213 Non ‑ current assets Property and equipment, net 6,390 11,949 1,875 Intangible assets, net 10,582 17,259 2,708 Operating lease right‑of‑use assets 6,521 19,100 2,998 Amounts due from related parties — 3,009 472 Other non‑current assets 784 3,604 566 Total non ‑ current assets 24,277 54,921 8,619 Total assets 436,418 597,958 93,832 LIABILITIES Current liabilities Accounts payable 19,980 25,950 4,072 Deferred revenue and customer advances 268,613 302,980 47,544 Amounts due to related parties (including amounts due to Group companies of nil and RMB8,410 (US$1,320) as of December 31, 2020 and 2021, respectively) 485 12,289 1,928 Accrued expenses and other current liabilities 95,200 88,053 13,817 Current operating lease liabilities 1,544 11,735 1,841 Total current liabilities 385,822 441,007 69,202 Non ‑ current liabilities Non‑current operating lease liabilities 5,070 6,501 1,020 Total non ‑ current liabilities 5,070 6,501 1,020 Total liabilities 390,892 447,508 70,222 The VIE and VIE’s subsidiaries’ net asset balances were RMB45,526 and RMB150,450 (US$23,610) as of December 31, 2020 and 2021, respectively. 1. ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES (Continued) The table sets forth the results of operations of the VIE and VIE’s subsidiaries included in the Group’s consolidated statements of comprehensive loss for years ended December 31, 2019, 2020 and 2021, respectively: For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Revenue 218,656 531,915 944,722 148,247 Net income (loss) (275,511) (23,486) 92,175 14,464 The table sets forth the cash flows of the VIE and VIE’s subsidiaries included in the Group’s consolidated statements of cash flows for the years ended December 31, 2019, 2020 and 2021, respectively: For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Net cash provided by operating activities 42,627 218,765 144,980 22,751 Net cash used in investing activities (2,391) (15,622) (76,555) (12,013) Net cash provided by (used in) financing activities 58,523 (60,773) 97 15 Net increase in cash and cash equivalents 98,759 142,370 68,522 10,753 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Principles of consolidation The consolidated financial statements of the Group include the financial statements of the Company, its subsidiaries, the VIE and the VIE’s subsidiaries for which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated upon consolidation. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in the Group’s consolidated financial statements include, but are not limited to, allowance for doubtful accounts, reserve for inventories, useful lives of long-lived assets, impairment of long-lived assets, realization of deferred tax assets, incremental borrowing rate for leases, expected contract periods for indefinite term subscriptions, determination of the stand-alone selling prices, return allowances and share-based compensation. Prior to the restructuring, the results of the Offline Business are determined by using a combination of specific identification of revenues and certain costs as well as a reasonable allocation of the remaining costs using applicable cost drivers where specific identification is not determinable. Management bases the estimates on historical experience and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could materially differ from those estimates. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Convenience translation Amounts in U.S. dollars are presented for the convenience of the reader and are translated at the rate of RMB 6.3726 per US$1.00, representing the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on December 30, 2021 (exchange rate on December 31, 2021 was not available in the H.10 statistical release). No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. Foreign currency The Group’s financial information is presented in Renminbi (“RMB”). The functional currency of the Company and its subsidiary in Hong Kong is U.S. dollars (“US$”). The functional currency of WFOE and WFOE’s subsidiaries, the VIE and subsidiaries of the VIE located in the PRC is RMB. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are re-measured at the exchange rates prevailing at the balance sheet date. Non-monetary items that are measured in terms of historical cost in foreign currency are re-measured using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of comprehensive loss. The Group uses the average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position, respectively. Translation differences are recorded in “Accumulated other comprehensive loss”, a component of shareholders’ equity. Total foreign currency translation adjustment, were nil, RMB21,861 and RMB12,816 (US$2,011) as of December 31, 2019, 2020 and 2021, respectively. Cash and cash equivalents Cash and cash equivalents consist of cash on hand, time deposits and highly liquid investments placed with banks and securities account which are unrestricted as to withdrawal or use and have original maturities of less than three months. Accounts receivable and allowance for doubtful accounts Accounts receivable represents uncollected payments from customers for (i) completed transactions where customer payments settled by mobile app stores and third-party online channels but not yet remitted to the Group, or (ii) completed shipments where the Group charges customers and payment has not been received. Accounts receivable are carried at net realizable value. An allowance for doubtful accounts is recorded when collection of the full amount is no longer probable. In evaluating the collectability of receivable balances, the Group considers specific evidence including the aging of the receivable, the customer’s payment history, its current credit-worthiness and current economic trends. Accounts receivable are written off when deemed uncollectible. Inventories, net Inventories primarily consist of products available for sale and are stated at the lower of cost or net realizable value. Cost of inventory is determined using the weighted average cost method. Inventory reserve is recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. Write-downs are recorded in cost of revenues in the consolidated statements of comprehensive loss. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) As of December 31, 2020 and 2021, the Group had inventories cost of RMB19,539 and RMB32,163 (US$5,047), and the related inventory reserve was RMB2,666 and RMB4,109 (US$645), respectively. Property and equipment, net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, as follows: Category Estimated Useful Life Electronic equipment 4 years Repair and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterments that extend the useful lives of property and equipment are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the asset and accumulated depreciation accounts with any resulting gain or loss reflected in the consolidated statements of comprehensive loss. Intangible assets, net 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 of amortization that reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed. The estimated useful life for the intangible assets is as follows: Category Estimated Useful Life Intellectual property rights 3-10 years Purchased software 1-5 years Impairment of long-lived assets The Group evaluates its long-lived assets 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 may not be fully recoverable. When these events occur, the Group evaluates the recoverability of long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss based on the excess of the carrying amount of the assets over their 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 all periods presented, there was no impairment of any of the Group’s long-lived assets. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Segment reporting In accordance with ASC 280-10, Segment Reporting: Overall Revenue recognition The Group applies the five-step model outlined in ASC 606, Revenue from Contracts with Customers The Group has elected to exclude from revenue sales taxes and other similar taxes that are both imposed on and are concurrent with revenue producing transactions. Therefore, revenues are recognized net of value added taxes (“VAT”). Online subscriptions The majority of the Group’s online subscription revenue is generated from non-cancellable subscriptions on its various self-directed and interactive applications. The non-cancellable subscription contracts provide customers the access to hosted software over a contract term without the customer taking possession of the content software. Subscription revenue is recognized ratably over the contract period as the performance obligation is satisfied. The subscription services are sold in short term periods, typically no more than 12 months. Certain subscriptions have contracts with no fixed duration and are marketed as indefinite term subscriptions. For these indefinite term subscriptions, the Group considers users’ historical usage patterns and contract periods of comparable subscriptions, or the products’ designed features and anticipated usage patterns, to arrive at the best estimates of the expected contract periods, over which the Group recognizes related revenue ratably. The Group also offers its customers to purchase specified completed digital contents on certain applications. The completed digital contents can be downloaded and used offline indefinitely. Therefore, customers take possession of these contents, and revenues from sales of completed digital content is recognized at a point in time when the content is made available for the customer’s use. Offline products and others The Group sells materials and smart devices to individual users, kindergartens and distributors. Revenue from offline products is recognized when control of the promised goods is transferred to the customer, at an amount that reflects the consideration the Group expects to be entitled to in exchange for the goods. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Group offers certain customers with rights of return. These rights are accounted for as variable consideration when estimating the amount of revenue to be recognized by utilizing expected value method. As of December 31, 2020 and 2021, the liabilities for return allowances and rights to recover products from customers associated with the Group’s liabilities for return allowances were not material. Some contracts with customers include promise to transfer both online subscriptions and offline products. The Group identified the offerings of material offline products as separate performance obligations if customers can benefit from the products on their own and the promise to deliver the products is separately identifiable from the online subscriptions in accordance with ASC 606. Revenue is allocated to each identified performance obligation based on its relative standalone selling price (“SSP”). In instances where stand-alone selling price is not directly observable, considerations are allocated using adjusted market assessment approach and expected cost plus margin approach. Determining the stand-alone selling price of each separate unit may require significant judgments, and significant assumptions and estimates have been made in estimating the relative selling price of each single-element. Deferred revenue and customer advances Timing of revenue recognition may differ from the timing of cash collection. For certain revenue contracts, customers are required to pay before the services and goods are delivered to the customer. The Group recognizes the excess of payments received as compared to the recognized revenue as deferred revenue or customer advances, which primarily consist of unearned revenue related to subscription services which is recognized ratably over the subscription period, and advanced payments received from customers for goods to be delivered and services to be provided. Payment terms and conditions vary by contract type and customer. For the offerings of online subscriptions and sales of offline procucts to individual users, immediate payment upon purchase is required. Payments made through certain third-party payment service providers are collected on a real time basis, and payments made through mobile app stores and other third party online channels are generally collected within 60 days. For sales of child-rearing materials and devices to kindergartens and distributors, payment terms generally require advanced payments or payment within 180 days. In instances where the timing of revenue recognition differs from the timing of payment, the Group has determined that its contracts do not include a significant financing component. Practical expedients The Group has utilized the practical expedient available under ASC 606-10-50-14 to not to disclose information about its remaining performance obligations because the Group’s contracts with customers generally have an expected duration of no more than one year. Assets recognized from costs to obtain a contract with a customer The Group has determined that certain costs, primarily channel costs associated with sales made in mobile app stores, meet the requirements to be capitalized as costs of obtaining contracts. The Group recognizes an asset for these costs incurred for non-cancellable subscription contracts in “Prepayments and other current assets” in the consolidated balance sheets. The amortization of these costs over the applicable subscription term are included in cost of revenues. Cost of revenues Cost of revenues primarily represents costs incurred to support and maintain online applications including channel costs, product costs, freight, rental costs, salaries and benefits for employees directly involved in revenue generation activities. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Research and development expenses Research and development expenses primarily consist of salaries, benefits and share-based compensation for research and development personnel, third-party outsourcing service provider costs and rental costs. The Group expenses research and development costs as they are incurred. Advertising expenditures Advertising costs are expensed when incurred and are included in sales and marketing expenses in the consolidated statements of comprehensive loss. The advertising expenses were RMB4,593, RMB63,195 and RMB126,264 (US$19,814) for the years ended December 31, 2019, 2020 and 2021, respectively. Employee benefit expenses All eligible employees of the Group in the PRC are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The Group is required to accrue for these benefits based on certain percentages of the qualified employees’ salaries and to make contributions to the plans out of the amounts accrued. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group’s obligations are limited to the amounts contributed. The Group recorded employee benefit expenses of RMB22,107, RMB24,073 and RMB89,679 (US$14,073) for the years ended December 31, 2019, 2020 and 2021, respectively. The Group has no further payment obligations once the contributions have been paid. Share-based compensation The Groups applies ASC 718, Compensation—Stock Compensation The Group applies ASC 718 to account for share-based payments for acquiring goods and services from non-employees at grant date fair value. The Group has elected to recognize share-based compensation using the accelerated method, for all share-based awards granted with graded vesting or cliff vesting based on service conditions and performance conditions and only if performance-based conditions are considered probable to be satisfied. The Group elected to account for forfeitures as they occur. The Group, with the assistance of an independent valuation firm, determined the fair value of the share options. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A change in the terms or conditions of equity-based awards is accounted for as a modification of the award. The Group measures the incremental compensation cost as the excess of the fair value of the modified awards over the fair value of the original awards immediately before its terms are modified, based on the share price and other pertinent factors at the modification date. For vested awards, the Group recognizes incremental compensation cost in the period of the modification occurs. For unvested awards, the Group recognizes, over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date. If the fair value of the modified award is lower than the fair value of the original award immediately before modification, the minimum compensation cost the Group recognizes is the cost of the original award. Leases The Group adopted ASU No. 2016-02, Leases (Topic 842) The Group leases real estate property under operating leases. Right-of-use (“ROU”) assets are recognized at the amount of the lease liabilities, adjusted for cumulative prepayments and lease incentives, if any. Lease liabilities are recognized at the present value of the lease payments over the lease term at the commencement date. As the rate implicit in the Group’s leases are not readily available, the Group uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The incremental borrowing rate reflects the fixed rate at which the Group could borrow on a collateralized basis, the amount of the lease payments in the same currency, for a similar term and in a similar economic environment. The Group recognizes operating lease expense on a straight-line basis over the lease term. Lease terms are based on the non-cancelable term of the lease and may contain options to extend the lease when it is reasonably certain that the Group will exercise. The Group accounts termination of a lease before the expiration of the lease term by removing the right-of-use asset and the lease liability, with profit or loss recognized for the difference, if any. Income taxes The Group follows the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Group accounted for uncertainties in income taxes in accordance with ASC 740. Interest and penalties arising from underpayment of income taxes shall be computed in accordance with the related PRC tax law. The amount of interest expense is computed by applying the applicable statutory rate of interest to the difference between the tax position recognized and the amount previously taken or expected to be taken in a tax return. Interest and penalties recognized in accordance with ASC 740 are classified in the consolidated statements of comprehensive loss as income tax expense. In accordance with the provisions of ASC 740, the Group recognizes in its consolidated financial statements the impact of a tax position if a tax return position or future tax position is “more likely than not” to prevail based on the facts and technical merits of the position. Tax positions that meet the “more likely than not” recognition threshold are measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. The Group’s estimated liability for unrecognized tax benefits, if any, will be recorded in the “other non-current liabilities” in the accompanying consolidated financial statements and is periodically assessed for adequacy, and may be affected by changing interpretations of laws, rulings by tax authorities, changes and/or developments with respect to tax audits, and expiration of the statute of limitations. The actual benefits ultimately realized may differ from the Group’s estimates. As each audit is concluded, adjustments, if any, are recorded in the Group’s consolidated financial statements. Additionally, in future periods, changes in facts, circumstances, and new information may require the Group to adjust the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recognized in the period in which the changes occur. Loss per share In accordance with ASC 260, Earnings Per Share Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of the contingently redeemable ordinary shares using the if-converted method; and ordinary shares issuable upon the exercise of share options, using the treasury stock method. Ordinary share equivalents are excluded from the computation of diluted per share if their effects would be anti-dilutive. Share options with performance conditions are considered contingently issuable shares and are included in the computation of diluted loss per share to the extent that the performance conditions are met such that the ordinary shares will be issued at the end of the reporting period, assuming it was the end of the contingency period. Fair value measurements Financial instruments of the Group primarily include cash and cash equivalents, accounts receivable, amounts due from and due to related parties, accounts payable and certain other current assets and liabilities. The Group applies ASC 820, Fair Value Measurements and Disclosures 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Include other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. There were no assets and liabilities measured at fair value on a recurring basis or nonrecurring basis as of December 31, 2020 and 2021. Comprehensive loss Comprehensive loss is defined to include all changes in equity of the Group during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive loss includes net loss and foreign currency translation adjustment of the Group. Impact of COVID-19 During the years ended December 31, 2020 and 2021, the Group’s operations has been affected by the COVID-19 pandemic. The sales of offline products has been negatively impacted by the COVID-19 outbreak, as child-rearing organizations, which are the major customers of the Group’s offline products, have undergone temporary closures since early 2020. The Group has considered the impact in the provision of allowance for doubtful accounts and reserves for inventories. There are still uncertainties of COVID-19’s future impact, and the extent of the impact will depend on a number of factors, including the duration and severity of COVID-19, the development and progress of distribution of COVID-19 vaccine and other medical treatment, the potential change in customer behavior, the actions taken by government authorities, particularly to contain the outbreak, stimulate the economy to improve business condition, almost all of which are beyond the Company’s control. As a result, certain of the Company’s estimates and assumptions, including the allowance for doubtful accounts, the valuation of inventories and long-lived assets subject to impairment assessments, require significant judgments and carry a higher degree of variabilities and volatilities that could result in material changes to the Group’s current estimates in future periods. Recent accounting pronouncements The Group is an emerging growth company (“EGC”) as defined by the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an EGC can take advantage of extended transition periods for complying with new or revised accounting standards. This allows an EGC to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. The Group elected to take advantage of the extended transition periods. However, this election will not apply should the Group cease to be classified as an EGC. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance |
CONCENTRATION OF RISKS
CONCENTRATION OF RISKS | 12 Months Ended |
Dec. 31, 2021 | |
CONCENTRATION OF RISKS | |
CONCENTRATION OF RISKS | 3. CONCENTRATION OF RISKS Business, customer, political, social and economic risks The Group participates in a dynamic and competitive high technology industry and believes that changes in any of the following areas could have a material adverse effect on the Group’s future financial position, results of operations or cash flows: changes in the overall demand for services; competitive pressures due to existing competitors; and new trends in new technologies and industry standards; changes in certain strategic relationships or customer relationships; regulatory considerations; and risks associated with the Group’s ability to attract and retain employees necessary to support its growth. The Group’s operations could be adversely affected by significant political, economic and social uncertainties in the PRC. The Group did not have customers accounted for more than 10% of the total revenue for the years ended December 31, 2019, 2020 and 2021. Concentration of credit risk Assets that potentially subject the Group to significant concentration of credit risk primarily consist of cash and cash equivalents and accounts receivable. The Group expects that there is no significant credit risk associated with cash and cash equivalents, which were held by reputable financial institutions in the jurisdictions where the Company, its subsidiaries, the VIE and subsidiaries of the VIE are located. The Group believes that it is not exposed to unusual risks as these financial institutions have high credit quality. 3. CONCENTRATION OF RISKS (Continued) Accounts receivable are typically unsecured and denominated in RMB. Accounts receivable primarily comprise of net cash to be collected from reputable mobile app stores, third-party online payment channels, child-rearing organizations and distributors. The risk with respect to accounts receivable is mitigated by credit evaluations the Group performs on its customers and its ongoing monitoring process of outstanding balances. Currency convertibility risk The Group transacts a majority 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 (“PBOC”). However, the unification of the exchange rates does not imply that the RMB may be readily convertible into U.S. dollar 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. Additionally, the value of the RMB is subject to changes in central government policies and international economic and political developments affecting supply and demand in the PRC foreign exchange trading system market. Foreign currency exchange rate risk From July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. For RMB against U.S. dollar, there was depreciation of 1.3% |
REVENUE AND DEFERRED REVENUE
REVENUE AND DEFERRED REVENUE | 12 Months Ended |
Dec. 31, 2021 | |
REVENUE AND DEFERRED REVENUE | |
REVENUE AND DEFERRED REVENUE | 4. REVENUE AND DEFERRED REVENUE The following table presents the Group’s revenues from contracts with customers disaggregated by material revenue category: For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Online subscriptions: Recognized over time 106,163 429,633 831,363 130,459 Recognized at a point in time 1,246 833 982 154 107,409 430,466 832,345 130,613 Offline products and others recognized at a point in time 111,247 101,449 112,377 17,634 Total revenues 218,656 531,915 944,722 148,247 4. REVENUE AND DEFERRED REVENUE (Continued) Contract cost Deferred channel costs were recorded under “Prepayment and other current assets” (Note 6). For the years ended December 31, 2019, 2020 and 2021, the Group recognized RMB22,381, RMB89,444 and RMB170,068 (US$26,687), respectively, of amortization of deferred channel costs as “Cost of revenues”. There was no impairment recognized to the deferred channel costs during the years ended December 31, 2019, 2020 and 2021. Deferred revenue and customer advances Deferred revenue and customer advances primarily consist of deferred revenue from online subscriptions and advanced consideration received from customers for the sales of offline products and others, which are recognized as contract liability until services are provided to the customer and products are delivered at customers. Revenue recognized during the year ended December 31, 2021 that was included in the deferred revenue and customer advances balance of RMB268,613 at January 1, 2021 was RMB262,437 (US$41,182). |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2021 | |
ACCOUNTS RECEIVABLE, NET | |
ACCOUNTS RECEIVABLE, NET | 5. ACCOUNTS RECEIVABLE, NET As of December 31, 2020 2021 2021 RMB RMB US$ Accounts receivable 78,121 56,513 8,868 Allowance for doubtful accounts (156) (381) (60) Accounts receivable, net 77,965 56,132 8,808 The movements in the allowance for doubtful accounts were as follows: For the year ended December 31, 2020 2021 2021 RMB RMB US$ Balance at beginning of the year 316 156 24 Provisions/(reversals) (160) 225 36 Balance at end of the year 156 381 60 |
PREPAYMENTS AND OTHER CURRENT A
PREPAYMENTS AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
PREPAYMENTS AND OTHER CURRENT ASSETS | |
PREPAYMENTS AND OTHER CURRENT ASSETS | 6. PREPAYMENTS AND OTHER CURRENT ASSETS As of December 31, 2020 2021 2021 RMB RMB US$ Deferred channel costs (Note 4) 56,335 59,501 9,337 VAT prepayments 3,433 8,909 1,398 Rental deposits 2,636 489 77 Advances to suppliers 136 481 75 Others 2,079 3,471 544 64,619 72,851 11,431 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET As of December 31, 2020 2021 2021 RMB RMB US$ Electronic equipment 8,793 17,815 2,796 Less: accumulated depreciation (2,403) (5,529) (868) Property and equipment, net 6,390 12,286 1,928 Depreciation expense for the years ended December 31, 2019, 2020 and 2021 was RMB511, RMB1,360 and RMB3,399 (US$533), respectively. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2021 | |
INTANGIBLE ASSETS, NET | |
INTANGIBLE ASSETS, NET | 8. INTANGIBLE ASSETS, NET As of December 31, 2020 2021 2021 RMB RMB US$ Intellectual property rights (1) 7,375 22,919 3,596 Purchased software 5,570 8,543 1,341 Less: accumulated amortization (1,156) (4,175) (655) Intangible assets, net 11,789 27,287 4,282 (1) Intellectual property rights represent acquired titles or copyrights of assorted digital contents that can be used in developing and operating the Group’s online applications and other products. The Group recorded amortization expense of RMB86, RMB1,454 and RMB3,019 (US$474) for the years ended December 31, 2019, 2020 and 2021, respectively. As of December 31, 2021, estimated amortization expense of the existing intangible assets for each of the next five years is RMB5,340 (US$ 838), RMB5,164 (US$810), RMB4,369 (US$686), RMB3,585 (US$563) and RMB2,957 (US$464), respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
LEASES | 9. LEASES The total lease cost for the years ended December 31, 2020 and 2021 were RMB11,432 and RMB22,147 (US$3,476), comprised of operating lease cost of RMB11,297 and RMB21,755 (US$3,414), and short-term lease cost of RMB135 and RMB392 (US$62), respectively. Cash payments for operating leases for the years ended December 31, 2020 and 2021 were RMB10,463 and RMB21,598 (US$3,389), respectively. The weighted-average remaining lease term as of December 31, 2020 and 2021 were 5.07 years and 1.90 years, respectively. The weighted average incremental borrowing rate as of December 31, 2020 and 2021 were 8.01% and 7.54%, respectively. The undiscounted future minimum payments under the Group’s operating lease liabilities and reconciliation to the operating lease liabilities recognized on the consolidated balance sheets was as below: As of December 31, 2021 RMB US$ 2022 25,777 4,045 2023 7,580 1,189 2024 1,563 245 2025 1,327 208 2026 508 80 Total lease payments 36,755 5,767 Less: Imputed interest 2,509 393 Present value of lease liabilities 34,246 5,374 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES As of December 31, 2020 2021 2021 RMB RMB US$ Payroll payable 55,176 69,202 10,859 Tax payable 17,391 20,091 3,153 Accrued expenses 29,063 17,261 2,709 Deposits 2,061 1,985 311 Others 3,338 7,356 1,154 107,029 115,895 18,186 |
TAXATION
TAXATION | 12 Months Ended |
Dec. 31, 2021 | |
TAXATION | |
TAXATION | 11. TAXATION Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gains. Additionally, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed. Hong Kong iHuman Online is incorporated in Hong Kong and is subject to Hong Kong Profits Tax, which is currently imposed at the rate of 16.5%, with half-rate of 8.25% that may be applied for the first HK$2 million of assessable profits for years of assessment beginning on or after April 1, 2018. No provision for Hong Kong profits tax was made in the consolidated financial statements as iHuman Online had no assessable income for any of the periods presented. 11. TAXATION (Continued) PRC Effective from January 1, 2008, the PRC’s statutory, Enterprise Income Tax (“EIT”) rate is 25%. In accordance with the implementation rules of EIT Law, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of 15% and a “Software Enterprise” (“SE”) is entitled to a two-year income tax exemption starting from the first profit making year, followed by a reduction of half the applicable tax rate for the subsequent three years. The HNTE certificate is effective for a period of three years. An entity must file required supporting documents with the tax authority and ensure fulfillment of the relevant HNTE criteria before using the preferential rate. An entity could re-apply for the HNTE certificate when the prior certificate expires. The SE is subject to relevant governmental authorities’ annual assessment based on self-assessment supporting documents filed with the tax authorities each year. Tianjin Hongen is qualified as SE and is entitled to an exemption from the enterprise income tax for two years beginning from 2020, and a reduced tax rate of 12.5% for the subsequent three years. The qualification as a SE is subject to annual evaluation by the relevant authorities in China. In 2021, Tianjin Hongen was granted HNTE certificate and is also entitled to a preferential tax rate of 15% for three years starting from 2021. The Group expects to adopt the tax exemption as SE in the Annual Filing of Enterprise Income Taxes for the fiscal year of 2021 that would be completed in May 2022. In 2019, Beijing Jinhongen was qualified as a small and micro-sized enterprise, and it was eligible for 75% reduction for its first RMB1,000 of annual taxable income, and 50% of reduction for its annual taxable income between RMB1,000 and RMB3,000. Therefore, Beijing Jinhongen was subject to the applicable tax rate of 20% in 2019. In 2020 and 2021, Beijing Jinhongen was subject to the 25% EIT rate. The other PRC subsidiaries and consolidated VIE and VIE’s subsidiaries are subject to the 25% EIT rate. Dividends, interests, rent or royalties payable by the Company’s PRC subsidiaries, to non-PRC resident enterprises, and proceeds from any such non-resident enterprise investor’s disposition of assets (after deducting the net value of such assets) shall be subject to 10% withholding tax, unless the respective non-PRC resident enterprise’s jurisdiction of incorporation has a tax treaty or arrangements with China that provides for a reduced withholding tax rate or an exemption from withholding tax. To the extent that the PRC subsidiaries and VIE and its subsidiaries have undistributed earnings, the Group will accrue appropriate expected withholding tax associated with repatriation of such undistributed earnings. As of December 31, 2020 and 2021, the Group did not record any withholding tax as the PRC entities were still in accumulated deficit position. The current and deferred components of income tax expense appearing in the consolidated statements of comprehensive loss are as follows: For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Current income tax expenses (benefits) 1,364 466 (145) (23) Deferred income tax expenses — — — — Total income tax expenses (benefits) 1,364 466 (145) (23) 11. TAXATION (Continued) A reconciliation of the differences between the statutory tax rate and the effective tax rate for enterprise income tax is as follows: For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Loss before income tax (274,233) (37,010) (37,196) (5,837) Income tax computed at the PRC statutory tax rate of 25% (68,558) (9,253) (9,299) (1,459) Effect of differing tax rates in different jurisdictions — 1,596 5,232 821 Effect of tax rate changes on deferred taxes — 50,950 — — Research and development super‑deduction (8,774) (12,707) (31,855) (4,999) Shared‑based compensation expenses 67,635 19,913 3,223 506 Non‑deductible expenses 554 3,678 1,656 260 Effect of PRC preferential tax rates and tax holiday — (22,458) (43,974) (6,900) Change in valuation allowance 10,342 (31,269) 75,192 11,799 Others 165 16 (320) (51) Income tax expenses 1,364 466 (145) (23) Income tax expense related to the Offline Business is included in above effective tax rate reconciliation, in particular, deferred tax items not preserved due to Onshore Restructuring are included in above “valuation allowance” in the amount of RMB(924) for the year ended December 31, 2019. Deferred tax The significant components of the Group’s deferred tax assets are as follows: As of December 31, 2020 2021 2021 RMB RMB US$ Deferred tax assets Tax loss carry forward 6,520 50,497 7,924 Deferred revenue and customer advances 721 30,984 4,862 Lease liabilities recognized under ASC 842 1,630 7,498 1,177 Others 383 964 151 Less: valuation allowance (7,624) (82,816) (12,996) 1,630 7,127 1,118 Deferred tax liabilities ROU assets recognized under ASC 842 (1,630) (7,127) (1,118) (1,630) (7,127) (1,118) Presentation in the consolidated balance sheets Deferred tax assets, net — — — Deferred tax liabilities, net — — — Net deferred tax assets, net — — — 11. TAXATION (Continued) The Company operates through its WFOE, VIE and the VIE’s subsidiaries and valuation allowance is considered on an individual entity basis. The Group recorded valuation allowance against deferred tax assets of those entities that were in a three year cumulative financial loss as of December 31, 2020 and 2021. In making such determination, the Company also evaluated a variety of factors including the Company’s operating history, accumulated deficit, forecasting profits, existence of taxable temporary differences and reversal periods. As of December 31, 2021, the Group had taxable losses of approximately RMB201,701 (US$31,651) mainly deriving from entities in the PRC. The tax losses in the PRC can be carried forward for five years to offset future taxable profit. The tax losses of entities in the PRC will begin to expire in 2022, if not utilized. Unrecognized tax benefit The Group evaluated its income tax uncertainty under ASC 740. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the financial statements. The Group elects to classify interest and penalties related to an uncertain tax position, if and when required, as part of income tax expense in the consolidated statements of comprehensive loss. As of and for the years ended December 31, 2019, 2020 and 2021, there were no significant impact from tax uncertainties on the Group’s financial position and result of operations. The Group does not expect the amount of unrecognized tax benefits would increase significantly in the next 12 months. In general, the PRC tax authority has up to five years to conduct examinations of the tax filings. Accordingly, as of December 31, 2021, the tax years ended December 31, 2016 through period ended as of the reporting date for the Company’s PRC entities remain open to examination by the PRC tax authorities. |
CONTINGENTLY REDEEMABLE ORDINAR
CONTINGENTLY REDEEMABLE ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2021 | |
CONTINGENTLY REDEEMABLE ORDINARY SHARES | |
CONTINGENTLY REDEEMABLE ORDINARY SHARES | 12. CONTINGENTLY REDEEMABLE ORDINARY SHARES On December 6, 2019, the Group issued 11,318,619 contingently redeemable ordinary shares with preferential rights (the “Contingently Redeemable Ordinary Shares”) to a third-party investor (the “Investor Shareholder”), of which RMB120,000 and RMB40,000 were received on December 6, 2019 and May 18, 2020, respectively. All of the Contingently Redeemable Ordinary Shares were converted to 11,318,619 Class A ordinary shares upon the completion of the Group’s IPO in October 2020 (Note 13). Accounting for Contingently Redeemable Ordinary Shares The Contingently Redeemable Ordinary Shares are classified as mezzanine equity as they may be redeemed at the option of the holder on or after an agreed upon date outside the sole control of the Company. The Company uses the whole instrument approach to determine whether the nature of the host contract in a hybrid instrument is more akin to debt or to equity. The Company evaluated the embedded conversion features to determine if there were any embedded derivatives required bifurcation and to determine if there were any beneficial conversion features (“BCF”). On the commitment date, there is no BCF to be recognized because the most favorable conversion price used to measure the BCF of the Contingently Redeemable Ordinary Shares was higher than the fair value per ordinary share. The Company determined the fair value of ordinary shares with the assistance of an independent valuation firm. There are no embedded derivatives that are required to be bifurcated because the underlying ordinary shares are not publicly traded nor readily convertible into cash. 12. CONTINGENTLY REDEEMABLE ORDINARY SHARES (Continued) The Company concluded that Contingently Redeemable Ordinary Shares are not redeemable currently, but it is probable to become redeemable. The Company chose to recognize changes in the redemption value immediately as they occur and adjusted the carrying amount of the Contingently Redeemable Ordinary Shares to equal the redemption value at the end of each reporting period. An accretion charge of RMB821 and RMB10,792 was recorded as an increase to the net loss attributable to ordinary shareholders for the years ended December 31, 2019 and 2020, respectively. |
ORDINARY SHARES
ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2021 | |
ORDINARY SHARES. | |
ORDINARY SHARES | 13. ORDINARY SHARES Upon completion of the IPO, the Company issued 7,000,000 ADSs, representing 35,000,000 Class A ordinary shares, and 1,050,000 ADSs, representing 5,250,000 Class A ordinary shares, pursuant to the underwriters’ full exercise of their option to purchase additional ADSs. Proceeds from the issuance of IPO shares, net of issuance cost, was RMB589,587. Immediately prior to the completion of the IPO, all the ordinary shares held by the controlling shareholder were converted into an equal number of the Class B ordinary shares, all the ordinary shares held by other shareholders were converted into an equal number of the Class A ordinary shares, all of outstanding Contingently Redeemable Ordinary Shares were automatically converted on a one-for-one basis into 11,318,619 Class A ordinary shares, and the related aggregate carrying value of RMB171,580 was reclassified from mezzanine equity to shareholders’ equity. As of December 31, 2020 and 2021, the authorized share capital consisted of 1,000,000,000 shares, of which 700,000,000 shares were designated as Class A ordinary shares, 200,000,000 as Class B ordinary shares, and 100,000,000 shares of such class (or classes) as the board of directors may determine. The rights of the holders of Class A and Class B ordinary shares are identical, except with respect to voting and conversion rights. Each Class A ordinary share is entitled to one vote per share and each Class B ordinary share is entitled to ten votes per share. Each Class B ordinary share can be converted into one Class A ordinary share at any time, while Class A ordinary shares cannot be converted into Class B ordinary shares. As of December 31, 2020, there were 122,622,382 and 144,000,000 Class A and Class B ordinary shares issued and outstanding, respectively. As of December 31, 2021, there were 125,122,382 Class A shares issued and 123,852,667 outstanding, and 144,000,000 Class B ordinary shares issued and outstanding. No Class B ordinary shares were converted into Class A ordinary shares during the years ended December 31, 2020 and 2021. |
SHARE REPURCHASE PROGRAM
SHARE REPURCHASE PROGRAM | 12 Months Ended |
Dec. 31, 2021 | |
SHARE REPURCHASE PROGRAM | |
SHARE REPURCHASE PROGRAM | 14. SHARE REPURCHASE PROGRAM In December 2021, the Company’s Board of Directors authorized a share repurchase program (“2021 Share Repurchase Program”) under which the Company may repurchase up to 10 million U.S. dollars worth of its ADSs over the following 12 months. The share repurchases may be made from time to time through open market transactions at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on the market conditions and in accordance with applicable rules and regulation. For the year ended December 31, 2021, the Company repurchased 9,000 ADSs, equivalent of 45,000 ordinary shares for 164 thousands in RMB (26 thousands in U.S. dollars) on the open market, at a weighted average price of US$2.86 per ADS. The Company accounts for the repurchased ordinary shares under the cost method and includes such treasury stock as a component of the shareholders’ equity. |
SHARE BASED PAYMENTS
SHARE BASED PAYMENTS | 12 Months Ended |
Dec. 31, 2021 | |
SHARE BASED PAYMENTS | |
SHARE BASED PAYMENTS | 15. SHARE-BASED PAYMENTS Share incentive plan In January 2019, the Group adopted a share incentive plan for the purpose of providing incentives and rewards to the Group’s directors, employees and consultants. As part of the Restructuring, the outstanding options were carried over on a one-for-one basis for the options under the Company’s share incentive plan (the “Share Incentive Plan”) with identical terms and conditions. Under the Share Incentive Plan, a total of 19,684,555 ordinary shares of the Company were reserved. The options granted under the Share Incentive Plan have a contractual term of 10 years. The options granted are accounted for as equity awards and contain both service and performance vesting conditions. The options generally vest in several installments over certain service periods, subject to certain specified performance targets. In addition, majority of the options granted will not be vested and exercisable until the closing of an IPO and the completion of the requisite service periods after such IPO. Certain options granted would be fully vested and exercisable upon the closing of an IPO. The Company records shared-based compensation expense for options with performance conditions using an accelerated method over the requisite service period only if performance conditions are considered probable to be satisfied. Through the date of IPO, the Company has not recognized shared-based compensation expense for the options because the IPO is a performance condition that is not considered probable until it occurs. Upon the Company’s IPO in October 2020, the performance condition was met and RMB73,378 of share-based compensation expenses was recognized accumulatively related to these awards. In December 2021, the Company modified its share options granted under the Share Incentive Plan, to remove certain performance vesting conditions, if bound, for eligible share options. The incremental cost resulted from the modification is not material. A summary of the option activities under the Share Incentive Plan is stated below: Weighted ‑ Weighted ‑ Weighted ‑ average average average remaining Aggregate Number of Exercise grant ‑ date contractual intrinsic options price fair value term value US$ US$ Years US$ Outstanding, December 31, 2020 14,164,968 0.88 1.28 8.93 38,899 Granted — — Forfeited (1,889,089) 1.45 Exercised (1,275,285) 0.06 Outstanding, December 31, 2021 11,000,594 0.87 1.25 7.89 2,284 Vested and expected to vest at December 31, 2021 11,000,594 0.87 1.25 7.89 2,284 Exercisable at December 31, 2021 4,410,630 0.61 1.65 8.22 1,346 The aggregate intrinsic value in the table above represents the difference between the Company’s closing stock price on the last trading day in 2021 and the options’ respective exercise price. The total intrinsic value of options exercised was nil during the years ended December 31, 2019 and 2020 as no options were exercised. The total intrinsic value of options exercised was RMB4,074 (US$639) during the year ended December 31, 2021. The total fair value of share options vested during the years ended December 31, 2019, 2020 and 2021 was nil , RMB 49,835 and RMB 15,725 (US$ 2,468 ), respectively. As of December 31, 2021, total unrecognized share-based compensation expenses related to unvested share-based awards were RMB 16,296 (US$ 2,557 ), which were expected to be recognized over a weighted-average vesting period of 1.84 years. 15. SHARE-BASED PAYMENTS (Continued) Fair value of options The fair value of options was determined using the binomial option pricing model, with the assistance from an independent valuer. The binomial option pricing model requires the input of highly subjective assumptions, including the expected share price volatility and the exercise multiple. For expected volatilities, the Group has made reference to historical volatilities of several comparable companies. The suboptimal exercise factor was estimated based on the Group’s expectation of exercise behavior of the grantees. The risk-free rate for periods within the contractual life of the options is based on the market yield of U.S. Treasury Bonds in effect at the time of grant. Prior to the IPO, the estimated fair value of the ordinary shares, at the option grant dates, was determined with the assistance from an independent valuation firm using the discounted cash flow method. Subsequent to the IPO, the fair value of the ordinary shares is one-fifth of the price of the Company’s publicly traded ADSs. The assumptions used to estimate the fair value of the options granted are as follows: For the year ended For the year ended For the year ended December 31, 2019 December 31, 2020 December 31, 2021 Fair value per ordinary share as at valuation date US$0.73 - US$1.93 US$1.30 — US$5.55 — Risk‑free rate 1.92% - 2.69% 0.69% - 0.84% — Expected volatility range 48.0% - 48.1% 50.87% - 51.22% — Exercise multiple 2.2 2.2 — 2.8 — Other share-based compensation In January 2019, the Group awarded certain employees and consultant, for their past services performed, 55,053,763 ordinary shares which were immediately vested on the grant date and issued upon the contribution of RMB3,441 received from them. The fair value of the awards was based on the grant date fair value of Tianjin Hongen’s ordinary shares, which is RMB4.98 per share, determined with the assistance of an independent valuation firm. For the year ended December 31, 2019, total share-based compensation expenses recognized for such awards were RMB270,541. The following table sets forth the amount of share-based compensation expense included in each of the relevant financial statement line items: For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Cost of revenue — 1,897 940 148 Research and development expenses 76,301 19,499 5,431 852 Sales and marketing expenses 25,892 2,858 3,010 472 General and administrative expenses 168,348 55,637 5,794 909 270,541 79,891 15,175 2,381 |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2021 | |
LOSS PER SHARE | |
LOSS PER SHARE | 16. LOSS PER SHARE Basic and diluted loss per share for each of the years presented are calculated as follows: For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Numerator: Net loss (275,597) (37,476) (37,051) (5,814) Accretion to redemption value of contingently redeemable ordinary shares (Note 12) (821) (10,792) — — Net loss attributable to ordinary shareholders—basic and diluted (276,418) (48,268) (37,051) (5,814) Denominator: Weighted average number of shares outstanding—basic and diluted 181,427,603 226,339,320 266,631,802 266,631,802 Basic and diluted loss per share (1.52) (0.21) (0.14) (0.02) Basic and diluted loss per share are computed using the weighted average number of ordinary shares outstanding during the period. For the year ended December 31, 2019, the computation of basic loss per share using the two-class method is not applicable as the Group is in a net loss position and the participating securities, the contingently redeemable ordinary shares, do not have contractual rights and obligations to share the losses of the Group. For the years ended December 31, 2020 and 2021, the two-class method is applicable because the Company has two classes of ordinary shares, Class A and Class B. However, basic and diluted loss per share are not reported separately for Class A ordinary shares or Class B ordinary shares as each class of shares has the same rights to undistributed and distributed earnings. The effects of all outstanding contingently redeemable ordinary shares and share options were excluded from the computation of diluted loss per share for the years ended December 31, 2019, 2020 and 2021 as their effects would be anti-dilutive. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 17. RELATED PARTY TRANSACTIONS a) Related parties Shareholders of the Group ● Mr. Michael Yufeng Chi ● Mr. Tian Liang Entities controlled by controlling shareholder ● Hongen Education ● Shihezi Happy Forever Equity Investment Co., Ltd. (“Shihezi Happy Forever”) ● Subsidiaries and affiliates of Perfect World Holding Group Co., Ltd. (“Perfect World Group”) ● Entities involved in the operation of kindergarten business of Hongen Education (“Hongen Kindergartens”) b) The Group had the following related party transactions: For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Product sales to Hongen Kindergartens 1,624 1,326 2,157 338 Rental and property management services from Perfect World Group (1) 240 240 26,463 4,153 Research and development outsourcing, administrative, IP licensing and other services from Perfect World Group 2,059 1,303 3,979 624 Research and development outsourcing services from Hongen Kindergartens — 381 459 72 Assets transferred to Perfect World Group (2) — 8,405 429 67 Proceeds of loans from shareholders (3) 2,000 — — — Repayments of loans from shareholders (3) 12,000 — — — Repayments of loans from Shihezi Happy Forever (4) 51,819 — — — 17. RELATED PARTY TRANSACTIONS (Continued) The Group had the following related party balances at the end of the year: As of December 31, 2020 2021 2021 RMB RMB US$ Amounts due from related parties, current: Perfect World Group entities (5) — 2,799 439 Hongen Education 322 46 7 322 2,845 446 Amounts due from related parties, non-current: Perfect World Group entities (5) — 4,223 663 — 4,223 663 Amounts due to related parties: Hongen Education 127 — — Perfect World Group entities (1) 358 8,853 1,389 485 8,853 1,389 Operating lease right-of-use assets leased from: Perfect World Group entities (1) 174 32,944 5,170 174 32,944 5,170 Current operating lease liabilities arising from offices leased from: Perfect World Group entities (1) 174 23,270 3,652 174 23,270 3,652 Non-current operating lease liabilities arising from offices leased from: Perfect World Group entities (1) — 5,501 863 — 5,501 863 (1) In January 2021, the Group entered into a lease arrangement with Perfect World Group to lease offices in Beijing. The Group accounted for the lease arrangement as operating leases in accordance with ASC 842 and measured ROU assets and operating lease liabilities arising from the lease accordingly. Lease payments due at December 31, 2021 pursuant to the lease contracts were recognized as amounts due to related parties as of December 31, 2021. Accompanying the lease arrangement, Perfect World Group also provided the Group with property management services. (2) In October 2020, the Group transferred certain intangible assets to Perfect World Group at the transaction price of RMB 8,405 . As the transaction was under common control, the difference between the transaction price and the carrying amount of the intangible assets was included in additional paid-in capital. No gain or loss was recognized. Perfect World Group has fully paid the consideration in 2020. In December 2021, the Group transferred certain electronic equipment to Perfect World Group at the transaction price of RMB429 (US$67). As the transaction was under common control, the difference between the transaction price and the carrying amount of the intangible assets was included in additional paid-in capital. No gain or loss was recognized. Perfect World Group has fully paid the consideration in 2021. 17. RELATED PARTY TRANSACTIONS (Continued) (3) In January 2018, Mr. Michael Yufeng Chi and Mr. Tian Liang entered into a two-year loan facility agreement with the Group, respectively. The loan is unsecured and non-interest bearing. The Group withdrew RMB 10,000 and RMB 2,000 during the year ended December 31, 2018 and 2019, respectively. The Group fully repaid the loans from the two shareholders in 2019. (4) In May 2016 and January 2017, Shihezi Happy Forever provided the Group with an on-demand, unsecured and non-interest-bearing loan. The Group withdrew RMB 24,700 during the year ended December 31, 2018, resulting in an accumulative balance of RMB 51,819 as of December 31, 2018. The Group fully repaid the loans in 2019. (5) Amounts due from Perfect World Group entities primarily consist of rental deposits and royalty prepayments to Perfect World Group and its affiliates. |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
RESTRICTED NET ASSETS | |
RESTRICTED NET ASSETS | 18. RESTRICTED NET ASSETS The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Group’s PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s PRC subsidiaries. In accordance with the Regulations on Enterprises with Foreign Investment of China and their Articles of Association, the Company’s wholly foreign-owned enterprises, being foreign invested enterprise established in the PRC, are required to allocate at least 10% of their after-tax profit determined based on the PRC accounting standards and regulations to the general reserve until the reserve has reached 50% of the relevant subsidiary’s registered capital. Appropriations to the staff welfare and bonus fund are at the discretion of the Company’s wholly foreign-owned enterprises. These reserves can only be used for specific purposes and are not transferable to the Company in the form of loans, advances, or cash dividends. In accordance with the PRC Company Laws, the VIE and its subsidiaries must make appropriations from their annual after-tax profits as reported in their PRC statutory accounts to non-distributable reserve funds, namely statutory reserve and discretionary surplus reserve. The VIE and its subsidiaries are required to allocate at least 10% of their after-tax profits to the statutory reserve until such fund has reached 50% of their respective registered capital. Appropriation to discretionary surplus reserve is at the discretion of the VIE and its subsidiaries. These reserves can only be used for specific purposes and are not transferable to the Company in the form of loans, advances, or cash dividends.As of December 31, 2020 and 2021, the Group’s PRC subsidiaries, VIE and subsidiaries of the VIE had appropriated RMB517 and RMB89 (US$14) to their reserves. Furthermore, registered share capital and capital reserve accounts of the Company’s PRC subsidiary, the VIE and VIE’s subsidiaries are also restricted from distribution. As a result, the restrictions amounted to approximately RMB167,294 (US$26,252), or 27.50% of the Company’s total consolidated net assets as of December 31, 2021. Cash transfers from the Company’s PRC subsidiary to its subsidiaries outside of China are subject to PRC government control of currency conversion. Shortages in the availability of foreign currency may restrict the ability of the PRC subsidiary, the VIE and the VIE’s subsidiaries to remit sufficient foreign currency to pay dividends or other payments to the Company, or otherwise satisfy their foreign currency denominated obligations. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 19. COMMITMENTS AND CONTINGENCIES (1) Commitments for purchase and investment obligations The following table sets forth the Group’s purchase and investment obligations as of December 31, 2021: Less than 1 Over 5 Total Year 1-3 Years 3-5 Years Years Purchase commitments 13,200 9,200 4,000 — — Investment commitment (Note 21) 26,333 26,333 — — — Total 39,533 35,533 4,000 — — The Group’s purchase obligations represent commitment to acquire certain intellectual property rights. (2) Contingencies The Group is currently not involved in any legal or administrative proceedings that may have a material adverse impact on the Group’s business, financial position or results of operations. |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 12 Months Ended |
Dec. 31, 2021 | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 20. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY As of December 31, 2020 2021 2021 RMB RMB US$ ASSETS Current assets Cash and cash equivalents 89,178 197,381 30,973 Amounts due from subsidiaries and VIE 457,029 320,996 50,371 Total current assets 546,207 518,377 81,344 Non-current assets Investments in subsidiaries, VIE and VIE’s subsidiaries 103,218 99,670 15,640 Total non-current assets 103,218 99,670 15,640 Total assets 649,425 618,047 96,984 LIABILITIES Current liabilities Amounts due to VIE 140 1,140 179 Accrued expenses and other current liabilities 6,632 8,536 1,339 Total current liabilities 6,772 9,676 1,518 Total liabilities 6,772 9,676 1,518 SHAREHOLDERS’ EQUITY Ordinary shares (par value of US$0.0001 per share, 700,000,000 Class A shares authorized as of December 31, 2020 and December 31, 2021; 122,622,382 Class A shares issued and outstanding 184 185 29 Additional paid-in capital 1,050,304 1,066,052 167,287 Treasury stock — (164) (26) Accumulated other comprehensive loss (21,861) (34,677) (5,442) Accumulated deficit (385,974) (423,025) (66,382) Total shareholders’ equity 642,653 608,371 95,466 Total liabilities and shareholders’ equity 649,425 618,047 96,984 20. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Continued) For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Operating expenses General and administrative expenses (86) (6,335) (22,755) (3,571) Total operating expenses (86) (6,335) (22,755) (3,571) Operating loss Share of losses from subsidiaries, VIE and VIE’s subsidiaries (275,511) (31,142) (15,874) (2,491) Other income, net — 1 1,578 248 Loss before income taxes (275,597) (37,476) (37,051) (5,814) Income tax expenses — — — — Net loss (275,597) (37,476) (37,051) (5,814) Accretion to redemption value of contingently redeemable ordinary shares (821) (10,792) — — Net loss attributable to ordinary shareholders (276,418) (48,268) (37,051) (5,814) Total comprehensive loss (275,597) (59,337) (49,867) (7,825) Net cash provided by (used in) operating activities — 970 (15,837) (2,485) Net cash provided by (used in) investing activities — (522,278) 127,514 20,010 Net cash provided by financing activities — 632,732 313 49 Effect of exchange rate changes on cash and cash equivalents — (22,246) (3,787) (595) Net increase in cash and cash equivalents — 89,178 108,203 16,979 Cash and cash equivalents at the beginning of the year — — 89,178 13,994 Cash and cash equivalents at the end of the year — 89,178 197,381 30,973 Basis of presentation Condensed financial information is used for the presentation of the Company, or the parent company. The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the parent company used the equity method to account for investment in its subsidiaries, the VIE and subsidiaries of the VIE. 20. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Continued) The parent company records its investment in its subsidiaries, the VIE and subsidiaries of the VIE under the equity method of accounting as prescribed in ASC 323, Investments-Equity Method and Joint Ventures The parent company’s condensed financial statements should be read in conjunction with the Group’s consolidated financial statements. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 21. SUBSEQUENT EVENTS Investment In January 2022, the Group acquired 10% of the equity interest of a privately-held company focusing on AI solutions, for a total cash consideration of approximately 26 million in RMB (4 million in U.S. dollars). |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | Basis of presentation The consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). |
Principles of consolidation | Principles of consolidation The consolidated financial statements of the Group include the financial statements of the Company, its subsidiaries, the VIE and the VIE’s subsidiaries for which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated upon consolidation. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in the Group’s consolidated financial statements include, but are not limited to, allowance for doubtful accounts, reserve for inventories, useful lives of long-lived assets, impairment of long-lived assets, realization of deferred tax assets, incremental borrowing rate for leases, expected contract periods for indefinite term subscriptions, determination of the stand-alone selling prices, return allowances and share-based compensation. Prior to the restructuring, the results of the Offline Business are determined by using a combination of specific identification of revenues and certain costs as well as a reasonable allocation of the remaining costs using applicable cost drivers where specific identification is not determinable. Management bases the estimates on historical experience and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could materially differ from those estimates. |
Convenience translation | Convenience translation Amounts in U.S. dollars are presented for the convenience of the reader and are translated at the rate of RMB 6.3726 per US$1.00, representing the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on December 30, 2021 (exchange rate on December 31, 2021 was not available in the H.10 statistical release). No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. |
Foreign currency | Foreign currency The Group’s financial information is presented in Renminbi (“RMB”). The functional currency of the Company and its subsidiary in Hong Kong is U.S. dollars (“US$”). The functional currency of WFOE and WFOE’s subsidiaries, the VIE and subsidiaries of the VIE located in the PRC is RMB. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are re-measured at the exchange rates prevailing at the balance sheet date. Non-monetary items that are measured in terms of historical cost in foreign currency are re-measured using the exchange rates at the dates of the initial transactions. Exchange gains and losses are included in the consolidated statements of comprehensive loss. The Group uses the average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position, respectively. Translation differences are recorded in “Accumulated other comprehensive loss”, a component of shareholders’ equity. Total foreign currency translation adjustment, were nil, RMB21,861 and RMB12,816 (US$2,011) as of December 31, 2019, 2020 and 2021, respectively. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of cash on hand, time deposits and highly liquid investments placed with banks and securities account which are unrestricted as to withdrawal or use and have original maturities of less than three months. |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts Accounts receivable represents uncollected payments from customers for (i) completed transactions where customer payments settled by mobile app stores and third-party online channels but not yet remitted to the Group, or (ii) completed shipments where the Group charges customers and payment has not been received. Accounts receivable are carried at net realizable value. An allowance for doubtful accounts is recorded when collection of the full amount is no longer probable. In evaluating the collectability of receivable balances, the Group considers specific evidence including the aging of the receivable, the customer’s payment history, its current credit-worthiness and current economic trends. Accounts receivable are written off when deemed uncollectible. |
Inventories, net | Inventories, net Inventories primarily consist of products available for sale and are stated at the lower of cost or net realizable value. Cost of inventory is determined using the weighted average cost method. Inventory reserve is recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. Write-downs are recorded in cost of revenues in the consolidated statements of comprehensive loss. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) As of December 31, 2020 and 2021, the Group had inventories cost of RMB19,539 and RMB32,163 (US$5,047), and the related inventory reserve was RMB2,666 and RMB4,109 (US$645), respectively. |
Property and equipment, net | Property and equipment, net Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, as follows: Category Estimated Useful Life Electronic equipment 4 years Repair and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterments that extend the useful lives of property and equipment are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the asset and accumulated depreciation accounts with any resulting gain or loss reflected in the consolidated statements of comprehensive loss. |
Intangible assets, net | Intangible assets, net 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 of amortization that reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed. The estimated useful life for the intangible assets is as follows: Category Estimated Useful Life Intellectual property rights 3-10 years Purchased software 1-5 years |
Impairment of long-lived assets | Impairment of long-lived assets The Group evaluates its long-lived assets 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 may not be fully recoverable. When these events occur, the Group evaluates the recoverability of long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group recognizes an impairment loss based on the excess of the carrying amount of the assets over their 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 all periods presented, there was no impairment of any of the Group’s long-lived assets. |
Segment reporting | Segment reporting In accordance with ASC 280-10, Segment Reporting: Overall |
Revenue recognition | Revenue recognition The Group applies the five-step model outlined in ASC 606, Revenue from Contracts with Customers The Group has elected to exclude from revenue sales taxes and other similar taxes that are both imposed on and are concurrent with revenue producing transactions. Therefore, revenues are recognized net of value added taxes (“VAT”). Online subscriptions The majority of the Group’s online subscription revenue is generated from non-cancellable subscriptions on its various self-directed and interactive applications. The non-cancellable subscription contracts provide customers the access to hosted software over a contract term without the customer taking possession of the content software. Subscription revenue is recognized ratably over the contract period as the performance obligation is satisfied. The subscription services are sold in short term periods, typically no more than 12 months. Certain subscriptions have contracts with no fixed duration and are marketed as indefinite term subscriptions. For these indefinite term subscriptions, the Group considers users’ historical usage patterns and contract periods of comparable subscriptions, or the products’ designed features and anticipated usage patterns, to arrive at the best estimates of the expected contract periods, over which the Group recognizes related revenue ratably. The Group also offers its customers to purchase specified completed digital contents on certain applications. The completed digital contents can be downloaded and used offline indefinitely. Therefore, customers take possession of these contents, and revenues from sales of completed digital content is recognized at a point in time when the content is made available for the customer’s use. Offline products and others The Group sells materials and smart devices to individual users, kindergartens and distributors. Revenue from offline products is recognized when control of the promised goods is transferred to the customer, at an amount that reflects the consideration the Group expects to be entitled to in exchange for the goods. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Group offers certain customers with rights of return. These rights are accounted for as variable consideration when estimating the amount of revenue to be recognized by utilizing expected value method. As of December 31, 2020 and 2021, the liabilities for return allowances and rights to recover products from customers associated with the Group’s liabilities for return allowances were not material. Some contracts with customers include promise to transfer both online subscriptions and offline products. The Group identified the offerings of material offline products as separate performance obligations if customers can benefit from the products on their own and the promise to deliver the products is separately identifiable from the online subscriptions in accordance with ASC 606. Revenue is allocated to each identified performance obligation based on its relative standalone selling price (“SSP”). In instances where stand-alone selling price is not directly observable, considerations are allocated using adjusted market assessment approach and expected cost plus margin approach. Determining the stand-alone selling price of each separate unit may require significant judgments, and significant assumptions and estimates have been made in estimating the relative selling price of each single-element. Deferred revenue and customer advances Timing of revenue recognition may differ from the timing of cash collection. For certain revenue contracts, customers are required to pay before the services and goods are delivered to the customer. The Group recognizes the excess of payments received as compared to the recognized revenue as deferred revenue or customer advances, which primarily consist of unearned revenue related to subscription services which is recognized ratably over the subscription period, and advanced payments received from customers for goods to be delivered and services to be provided. Payment terms and conditions vary by contract type and customer. For the offerings of online subscriptions and sales of offline procucts to individual users, immediate payment upon purchase is required. Payments made through certain third-party payment service providers are collected on a real time basis, and payments made through mobile app stores and other third party online channels are generally collected within 60 days. For sales of child-rearing materials and devices to kindergartens and distributors, payment terms generally require advanced payments or payment within 180 days. In instances where the timing of revenue recognition differs from the timing of payment, the Group has determined that its contracts do not include a significant financing component. Practical expedients The Group has utilized the practical expedient available under ASC 606-10-50-14 to not to disclose information about its remaining performance obligations because the Group’s contracts with customers generally have an expected duration of no more than one year. Assets recognized from costs to obtain a contract with a customer The Group has determined that certain costs, primarily channel costs associated with sales made in mobile app stores, meet the requirements to be capitalized as costs of obtaining contracts. The Group recognizes an asset for these costs incurred for non-cancellable subscription contracts in “Prepayments and other current assets” in the consolidated balance sheets. The amortization of these costs over the applicable subscription term are included in cost of revenues. |
Cost of revenues | Cost of revenues Cost of revenues primarily represents costs incurred to support and maintain online applications including channel costs, product costs, freight, rental costs, salaries and benefits for employees directly involved in revenue generation activities. |
Research and development expenses | Research and development expenses Research and development expenses primarily consist of salaries, benefits and share-based compensation for research and development personnel, third-party outsourcing service provider costs and rental costs. The Group expenses research and development costs as they are incurred. |
Advertising expenditures | Advertising expenditures Advertising costs are expensed when incurred and are included in sales and marketing expenses in the consolidated statements of comprehensive loss. The advertising expenses were RMB4,593, RMB63,195 and RMB126,264 (US$19,814) for the years ended December 31, 2019, 2020 and 2021, respectively. |
Employee benefit expenses | Employee benefit expenses All eligible employees of the Group in the PRC are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The Group is required to accrue for these benefits based on certain percentages of the qualified employees’ salaries and to make contributions to the plans out of the amounts accrued. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group’s obligations are limited to the amounts contributed. The Group recorded employee benefit expenses of RMB22,107, RMB24,073 and RMB89,679 (US$14,073) for the years ended December 31, 2019, 2020 and 2021, respectively. The Group has no further payment obligations once the contributions have been paid. |
Share-based compensation | Share-based compensation The Groups applies ASC 718, Compensation—Stock Compensation The Group applies ASC 718 to account for share-based payments for acquiring goods and services from non-employees at grant date fair value. The Group has elected to recognize share-based compensation using the accelerated method, for all share-based awards granted with graded vesting or cliff vesting based on service conditions and performance conditions and only if performance-based conditions are considered probable to be satisfied. The Group elected to account for forfeitures as they occur. The Group, with the assistance of an independent valuation firm, determined the fair value of the share options. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) A change in the terms or conditions of equity-based awards is accounted for as a modification of the award. The Group measures the incremental compensation cost as the excess of the fair value of the modified awards over the fair value of the original awards immediately before its terms are modified, based on the share price and other pertinent factors at the modification date. For vested awards, the Group recognizes incremental compensation cost in the period of the modification occurs. For unvested awards, the Group recognizes, over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date. If the fair value of the modified award is lower than the fair value of the original award immediately before modification, the minimum compensation cost the Group recognizes is the cost of the original award. |
Leases | Leases The Group adopted ASU No. 2016-02, Leases (Topic 842) The Group leases real estate property under operating leases. Right-of-use (“ROU”) assets are recognized at the amount of the lease liabilities, adjusted for cumulative prepayments and lease incentives, if any. Lease liabilities are recognized at the present value of the lease payments over the lease term at the commencement date. As the rate implicit in the Group’s leases are not readily available, the Group uses an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The incremental borrowing rate reflects the fixed rate at which the Group could borrow on a collateralized basis, the amount of the lease payments in the same currency, for a similar term and in a similar economic environment. The Group recognizes operating lease expense on a straight-line basis over the lease term. Lease terms are based on the non-cancelable term of the lease and may contain options to extend the lease when it is reasonably certain that the Group will exercise. The Group accounts termination of a lease before the expiration of the lease term by removing the right-of-use asset and the lease liability, with profit or loss recognized for the difference, if any. Income taxes |
Income taxes | The Group follows the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Group accounted for uncertainties in income taxes in accordance with ASC 740. Interest and penalties arising from underpayment of income taxes shall be computed in accordance with the related PRC tax law. The amount of interest expense is computed by applying the applicable statutory rate of interest to the difference between the tax position recognized and the amount previously taken or expected to be taken in a tax return. Interest and penalties recognized in accordance with ASC 740 are classified in the consolidated statements of comprehensive loss as income tax expense. In accordance with the provisions of ASC 740, the Group recognizes in its consolidated financial statements the impact of a tax position if a tax return position or future tax position is “more likely than not” to prevail based on the facts and technical merits of the position. Tax positions that meet the “more likely than not” recognition threshold are measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. The Group’s estimated liability for unrecognized tax benefits, if any, will be recorded in the “other non-current liabilities” in the accompanying consolidated financial statements and is periodically assessed for adequacy, and may be affected by changing interpretations of laws, rulings by tax authorities, changes and/or developments with respect to tax audits, and expiration of the statute of limitations. The actual benefits ultimately realized may differ from the Group’s estimates. As each audit is concluded, adjustments, if any, are recorded in the Group’s consolidated financial statements. Additionally, in future periods, changes in facts, circumstances, and new information may require the Group to adjust the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recognized in the period in which the changes occur. |
Loss per share | Loss per share In accordance with ASC 260, Earnings Per Share Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of the contingently redeemable ordinary shares using the if-converted method; and ordinary shares issuable upon the exercise of share options, using the treasury stock method. Ordinary share equivalents are excluded from the computation of diluted per share if their effects would be anti-dilutive. Share options with performance conditions are considered contingently issuable shares and are included in the computation of diluted loss per share to the extent that the performance conditions are met such that the ordinary shares will be issued at the end of the reporting period, assuming it was the end of the contingency period. |
Fair value measurements | Fair value measurements Financial instruments of the Group primarily include cash and cash equivalents, accounts receivable, amounts due from and due to related parties, accounts payable and certain other current assets and liabilities. The Group applies ASC 820, Fair Value Measurements and Disclosures 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Include other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. There were no assets and liabilities measured at fair value on a recurring basis or nonrecurring basis as of December 31, 2020 and 2021. |
Comprehensive loss | Comprehensive loss Comprehensive loss is defined to include all changes in equity of the Group during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive loss includes net loss and foreign currency translation adjustment of the Group. |
Impact of COVID-19 | Impact of COVID-19 During the years ended December 31, 2020 and 2021, the Group’s operations has been affected by the COVID-19 pandemic. The sales of offline products has been negatively impacted by the COVID-19 outbreak, as child-rearing organizations, which are the major customers of the Group’s offline products, have undergone temporary closures since early 2020. The Group has considered the impact in the provision of allowance for doubtful accounts and reserves for inventories. There are still uncertainties of COVID-19’s future impact, and the extent of the impact will depend on a number of factors, including the duration and severity of COVID-19, the development and progress of distribution of COVID-19 vaccine and other medical treatment, the potential change in customer behavior, the actions taken by government authorities, particularly to contain the outbreak, stimulate the economy to improve business condition, almost all of which are beyond the Company’s control. As a result, certain of the Company’s estimates and assumptions, including the allowance for doubtful accounts, the valuation of inventories and long-lived assets subject to impairment assessments, require significant judgments and carry a higher degree of variabilities and volatilities that could result in material changes to the Group’s current estimates in future periods. |
Recent accounting pronouncements | Recent accounting pronouncements The Group is an emerging growth company (“EGC”) as defined by the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an EGC can take advantage of extended transition periods for complying with new or revised accounting standards. This allows an EGC to delay adoption of certain accounting standards until those standards would otherwise apply to private companies. The Group elected to take advantage of the extended transition periods. However, this election will not apply should the Group cease to be classified as an EGC. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance |
ORGANIZATION, CONSOLIDATION A_2
ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES | |
Schedule of subsidiaries and variable interest entities | Percentage of equity interest Date of Place of attributable to Name establishment establishment the Company Principal activities Subsidiaries iHuman Online October 2, 2019 HK 100 % Investment holding Hongen Investment November 11, 2019 PRC 100 % Management and technical consulting Hongen Perfect (Beijing) Education Technology Development Co., Ltd. May 19, 2020 PRC 100 % Research and development Variable interest entity: Tianjin Hongen March 30, 2016 PRC Nil Operation of online applications Subsidiaries of the VIE: Beijing Hongen Perfect Future Education Technology Co., Ltd. July 1, 2016 PRC Nil Research and development Tianjin Hongen Perfect Technology Development Co., Ltd. August 26, 2019 PRC Nil Operation of online applications Beijing Jinhongen September 4, 2019 PRC Nil Offerings of products and other services |
Schedule of VIE and its subsidiaries' financial statements | The table sets forth the assets and liabilities of the VIE and VIE’s subsidiaries included in the Group’s consolidated balance sheets: As of December 31, 2020 2021 2021 RMB RMB US$ ASSETS Current assets Cash and cash equivalents 247,253 315,775 49,552 Accounts receivable, net of allowance of RMB156 and RMB381 (US$60) as of December 31, 2020 and 2021, respectively 77,965 56,132 8,808 Inventories, net 16,873 28,054 4,402 Amounts due from related parties (including amounts due from Group companies of RMB5,141 and RMB67,899 (US$10,655) as of December 31, 2020 and 2021, respectively) 5,463 70,744 11,101 Prepayments and other current assets 64,587 72,332 11,350 Total current assets 412,141 543,037 85,213 Non ‑ current assets Property and equipment, net 6,390 11,949 1,875 Intangible assets, net 10,582 17,259 2,708 Operating lease right‑of‑use assets 6,521 19,100 2,998 Amounts due from related parties — 3,009 472 Other non‑current assets 784 3,604 566 Total non ‑ current assets 24,277 54,921 8,619 Total assets 436,418 597,958 93,832 LIABILITIES Current liabilities Accounts payable 19,980 25,950 4,072 Deferred revenue and customer advances 268,613 302,980 47,544 Amounts due to related parties (including amounts due to Group companies of nil and RMB8,410 (US$1,320) as of December 31, 2020 and 2021, respectively) 485 12,289 1,928 Accrued expenses and other current liabilities 95,200 88,053 13,817 Current operating lease liabilities 1,544 11,735 1,841 Total current liabilities 385,822 441,007 69,202 Non ‑ current liabilities Non‑current operating lease liabilities 5,070 6,501 1,020 Total non ‑ current liabilities 5,070 6,501 1,020 Total liabilities 390,892 447,508 70,222 1. ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES (Continued) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of estimated useful lives of property and equipment | Category Estimated Useful Life Electronic equipment 4 years |
Schedule of estimated useful life for the intangible assets | Category Estimated Useful Life Intellectual property rights 3-10 years Purchased software 1-5 years |
REVENUE AND DEFERRED REVENUE (T
REVENUE AND DEFERRED REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
REVENUE AND DEFERRED REVENUE | |
Schedule of the Group's revenues from contracts with customers disaggregated by learning services, learning materials and devices revenue category | For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Online subscriptions: Recognized over time 106,163 429,633 831,363 130,459 Recognized at a point in time 1,246 833 982 154 107,409 430,466 832,345 130,613 Offline products and others recognized at a point in time 111,247 101,449 112,377 17,634 Total revenues 218,656 531,915 944,722 148,247 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ACCOUNTS RECEIVABLE, NET | |
Schedule of components of accounts receivable | As of December 31, 2020 2021 2021 RMB RMB US$ Accounts receivable 78,121 56,513 8,868 Allowance for doubtful accounts (156) (381) (60) Accounts receivable, net 77,965 56,132 8,808 |
Schedule of movements in the allowance for doubtful accounts | For the year ended December 31, 2020 2021 2021 RMB RMB US$ Balance at beginning of the year 316 156 24 Provisions/(reversals) (160) 225 36 Balance at end of the year 156 381 60 |
PREPAYMENTS AND OTHER CURRENT_2
PREPAYMENTS AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
PREPAYMENTS AND OTHER CURRENT ASSETS | |
Schedule of prepaid expense and other assets | As of December 31, 2020 2021 2021 RMB RMB US$ Deferred channel costs (Note 4) 56,335 59,501 9,337 VAT prepayments 3,433 8,909 1,398 Rental deposits 2,636 489 77 Advances to suppliers 136 481 75 Others 2,079 3,471 544 64,619 72,851 11,431 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment | As of December 31, 2020 2021 2021 RMB RMB US$ Electronic equipment 8,793 17,815 2,796 Less: accumulated depreciation (2,403) (5,529) (868) Property and equipment, net 6,390 12,286 1,928 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INTANGIBLE ASSETS, NET | |
Schedule of intangible assets | As of December 31, 2020 2021 2021 RMB RMB US$ Intellectual property rights (1) 7,375 22,919 3,596 Purchased software 5,570 8,543 1,341 Less: accumulated amortization (1,156) (4,175) (655) Intangible assets, net 11,789 27,287 4,282 (1) Intellectual property rights represent acquired titles or copyrights of assorted digital contents that can be used in developing and operating the Group’s online applications and other products. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
Schedule of the undiscounted future minimum payments under the Group's operating lease liabilities and reconciliation to the operating lease liabilities recognized on the condensed consolidated balance sheet | As of December 31, 2021 RMB US$ 2022 25,777 4,045 2023 7,580 1,189 2024 1,563 245 2025 1,327 208 2026 508 80 Total lease payments 36,755 5,767 Less: Imputed interest 2,509 393 Present value of lease liabilities 34,246 5,374 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | As of December 31, 2020 2021 2021 RMB RMB US$ Payroll payable 55,176 69,202 10,859 Tax payable 17,391 20,091 3,153 Accrued expenses 29,063 17,261 2,709 Deposits 2,061 1,985 311 Others 3,338 7,356 1,154 107,029 115,895 18,186 |
TAXATION (Tables)
TAXATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
TAXATION | |
Schedule of current and deferred portion of income tax expense | For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Current income tax expenses (benefits) 1,364 466 (145) (23) Deferred income tax expenses — — — — Total income tax expenses (benefits) 1,364 466 (145) (23) |
Schedule of the differences between the statutory tax rate and the effective tax rate for enterprise income tax | For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Loss before income tax (274,233) (37,010) (37,196) (5,837) Income tax computed at the PRC statutory tax rate of 25% (68,558) (9,253) (9,299) (1,459) Effect of differing tax rates in different jurisdictions — 1,596 5,232 821 Effect of tax rate changes on deferred taxes — 50,950 — — Research and development super‑deduction (8,774) (12,707) (31,855) (4,999) Shared‑based compensation expenses 67,635 19,913 3,223 506 Non‑deductible expenses 554 3,678 1,656 260 Effect of PRC preferential tax rates and tax holiday — (22,458) (43,974) (6,900) Change in valuation allowance 10,342 (31,269) 75,192 11,799 Others 165 16 (320) (51) Income tax expenses 1,364 466 (145) (23) |
Schedule of components of the Group's deferred tax assets | As of December 31, 2020 2021 2021 RMB RMB US$ Deferred tax assets Tax loss carry forward 6,520 50,497 7,924 Deferred revenue and customer advances 721 30,984 4,862 Lease liabilities recognized under ASC 842 1,630 7,498 1,177 Others 383 964 151 Less: valuation allowance (7,624) (82,816) (12,996) 1,630 7,127 1,118 Deferred tax liabilities ROU assets recognized under ASC 842 (1,630) (7,127) (1,118) (1,630) (7,127) (1,118) Presentation in the consolidated balance sheets Deferred tax assets, net — — — Deferred tax liabilities, net — — — Net deferred tax assets, net — — — |
SHARE BASED PAYMENTS (Tables)
SHARE BASED PAYMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SHARE BASED PAYMENTS | |
Schedule of the option activities under the Share Incentive Plan | Weighted ‑ Weighted ‑ Weighted ‑ average average average remaining Aggregate Number of Exercise grant ‑ date contractual intrinsic options price fair value term value US$ US$ Years US$ Outstanding, December 31, 2020 14,164,968 0.88 1.28 8.93 38,899 Granted — — Forfeited (1,889,089) 1.45 Exercised (1,275,285) 0.06 Outstanding, December 31, 2021 11,000,594 0.87 1.25 7.89 2,284 Vested and expected to vest at December 31, 2021 11,000,594 0.87 1.25 7.89 2,284 Exercisable at December 31, 2021 4,410,630 0.61 1.65 8.22 1,346 |
Schedule of the assumptions used to estimate the fair value of the options granted | For the year ended For the year ended For the year ended December 31, 2019 December 31, 2020 December 31, 2021 Fair value per ordinary share as at valuation date US$0.73 - US$1.93 US$1.30 — US$5.55 — Risk‑free rate 1.92% - 2.69% 0.69% - 0.84% — Expected volatility range 48.0% - 48.1% 50.87% - 51.22% — Exercise multiple 2.2 2.2 — 2.8 — |
Schedule of the amount of share-based compensation expense included in each of the relevant financial statement line items | For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Cost of revenue — 1,897 940 148 Research and development expenses 76,301 19,499 5,431 852 Sales and marketing expenses 25,892 2,858 3,010 472 General and administrative expenses 168,348 55,637 5,794 909 270,541 79,891 15,175 2,381 |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LOSS PER SHARE | |
Schedule of basic and diluted loss per share | For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Numerator: Net loss (275,597) (37,476) (37,051) (5,814) Accretion to redemption value of contingently redeemable ordinary shares (Note 12) (821) (10,792) — — Net loss attributable to ordinary shareholders—basic and diluted (276,418) (48,268) (37,051) (5,814) Denominator: Weighted average number of shares outstanding—basic and diluted 181,427,603 226,339,320 266,631,802 266,631,802 Basic and diluted loss per share (1.52) (0.21) (0.14) (0.02) |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
Schedule of related party transactions | For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Product sales to Hongen Kindergartens 1,624 1,326 2,157 338 Rental and property management services from Perfect World Group (1) 240 240 26,463 4,153 Research and development outsourcing, administrative, IP licensing and other services from Perfect World Group 2,059 1,303 3,979 624 Research and development outsourcing services from Hongen Kindergartens — 381 459 72 Assets transferred to Perfect World Group (2) — 8,405 429 67 Proceeds of loans from shareholders (3) 2,000 — — — Repayments of loans from shareholders (3) 12,000 — — — Repayments of loans from Shihezi Happy Forever (4) 51,819 — — — As of December 31, 2020 2021 2021 RMB RMB US$ Amounts due from related parties, current: Perfect World Group entities (5) — 2,799 439 Hongen Education 322 46 7 322 2,845 446 Amounts due from related parties, non-current: Perfect World Group entities (5) — 4,223 663 — 4,223 663 Amounts due to related parties: Hongen Education 127 — — Perfect World Group entities (1) 358 8,853 1,389 485 8,853 1,389 Operating lease right-of-use assets leased from: Perfect World Group entities (1) 174 32,944 5,170 174 32,944 5,170 Current operating lease liabilities arising from offices leased from: Perfect World Group entities (1) 174 23,270 3,652 174 23,270 3,652 Non-current operating lease liabilities arising from offices leased from: Perfect World Group entities (1) — 5,501 863 — 5,501 863 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of commitments for purchase obligations | The following table sets forth the Group’s purchase and investment obligations as of December 31, 2021: Less than 1 Over 5 Total Year 1-3 Years 3-5 Years Years Purchase commitments 13,200 9,200 4,000 — — Investment commitment (Note 21) 26,333 26,333 — — — Total 39,533 35,533 4,000 — — |
CONDENSED FINANCIAL INFORMATI_2
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | |
Schedule of condensed balance sheets | As of December 31, 2020 2021 2021 RMB RMB US$ ASSETS Current assets Cash and cash equivalents 89,178 197,381 30,973 Amounts due from subsidiaries and VIE 457,029 320,996 50,371 Total current assets 546,207 518,377 81,344 Non-current assets Investments in subsidiaries, VIE and VIE’s subsidiaries 103,218 99,670 15,640 Total non-current assets 103,218 99,670 15,640 Total assets 649,425 618,047 96,984 LIABILITIES Current liabilities Amounts due to VIE 140 1,140 179 Accrued expenses and other current liabilities 6,632 8,536 1,339 Total current liabilities 6,772 9,676 1,518 Total liabilities 6,772 9,676 1,518 SHAREHOLDERS’ EQUITY Ordinary shares (par value of US$0.0001 per share, 700,000,000 Class A shares authorized as of December 31, 2020 and December 31, 2021; 122,622,382 Class A shares issued and outstanding 184 185 29 Additional paid-in capital 1,050,304 1,066,052 167,287 Treasury stock — (164) (26) Accumulated other comprehensive loss (21,861) (34,677) (5,442) Accumulated deficit (385,974) (423,025) (66,382) Total shareholders’ equity 642,653 608,371 95,466 Total liabilities and shareholders’ equity 649,425 618,047 96,984 |
Schedule of condensed statements of results of operations and cash flows | For the year ended December 31, 2019 2020 2021 2021 RMB RMB RMB US$ Operating expenses General and administrative expenses (86) (6,335) (22,755) (3,571) Total operating expenses (86) (6,335) (22,755) (3,571) Operating loss Share of losses from subsidiaries, VIE and VIE’s subsidiaries (275,511) (31,142) (15,874) (2,491) Other income, net — 1 1,578 248 Loss before income taxes (275,597) (37,476) (37,051) (5,814) Income tax expenses — — — — Net loss (275,597) (37,476) (37,051) (5,814) Accretion to redemption value of contingently redeemable ordinary shares (821) (10,792) — — Net loss attributable to ordinary shareholders (276,418) (48,268) (37,051) (5,814) Total comprehensive loss (275,597) (59,337) (49,867) (7,825) Net cash provided by (used in) operating activities — 970 (15,837) (2,485) Net cash provided by (used in) investing activities — (522,278) 127,514 20,010 Net cash provided by financing activities — 632,732 313 49 Effect of exchange rate changes on cash and cash equivalents — (22,246) (3,787) (595) Net increase in cash and cash equivalents — 89,178 108,203 16,979 Cash and cash equivalents at the beginning of the year — — 89,178 13,994 Cash and cash equivalents at the end of the year — 89,178 197,381 30,973 |
ORGANIZATION, CONSOLIDATION A_3
ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES, Restructuring (Details) - CNY (¥) ¥ in Thousands | 1 Months Ended | |
Nov. 30, 2019 | Sep. 30, 2019 | |
Shareholders of Tianjin Hongen | ||
Subsidiary And Variable Interest Entity [Line Items] | ||
Number of ordinary shares exchange for equity interests in Tianjin Hongen | 215,053,763 | |
Beijing Jinhongen | ||
Subsidiary And Variable Interest Entity [Line Items] | ||
Cash consideration to acquire certain operating assets and liabilities relating to the Product Business | ¥ 66,000 |
ORGANIZATION, CONSOLIDATION A_4
ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES, Principal subsidiaries, VIE and the VIE's subsidiaries (Details) | 12 Months Ended |
Dec. 31, 2021 | |
iHuman Online | |
Subsidiary And Variable Interest Entity [Line Items] | |
Percentage of equity interest, subsidiaries (as a percent) | 100.00% |
Hongen Investment | |
Subsidiary And Variable Interest Entity [Line Items] | |
Percentage of equity interest, subsidiaries (as a percent) | 100.00% |
Hongen Perfect (Beijing) Education Technology Development Co., Ltd. | |
Subsidiary And Variable Interest Entity [Line Items] | |
Percentage of equity interest, subsidiaries (as a percent) | 100.00% |
Tianjin Hongen | |
Subsidiary And Variable Interest Entity [Line Items] | |
Percentage of equity interest, Variable interest entity or subsidiaries of the VIE (as a percent) | 0.00% |
Beijing Hongen Perfect Future Education Technology Co., Ltd. | |
Subsidiary And Variable Interest Entity [Line Items] | |
Percentage of equity interest, Variable interest entity or subsidiaries of the VIE (as a percent) | 0.00% |
Tianjin Hongen Perfect Technology Development Co., Ltd. | |
Subsidiary And Variable Interest Entity [Line Items] | |
Percentage of equity interest, Variable interest entity or subsidiaries of the VIE (as a percent) | 0.00% |
Beijing Jinhongen | |
Subsidiary And Variable Interest Entity [Line Items] | |
Percentage of equity interest, Variable interest entity or subsidiaries of the VIE (as a percent) | 0.00% |
ORGANIZATION, CONSOLIDATION A_5
ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES, Balance sheets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) |
Current assets | |||||
Cash and cash equivalents | ¥ 855,362 | $ 134,225 | ¥ 861,682 | ||
Accounts receivable, net of allowance of RMB156 and RMB381 (US$60) as of December 31, 2020 and 2021, respectively | 56,132 | 8,808 | 77,965 | ||
Inventories, net | 28,054 | 4,402 | 16,873 | ||
Amounts due from related parties, current | 2,845 | 446 | 322 | ||
Prepayments and other current assets | 72,851 | 11,431 | 64,619 | ||
Total current assets | 1,015,244 | 159,312 | 1,021,461 | ||
Non-current assets | |||||
Property and equipment, net | 12,286 | 1,928 | 6,390 | ||
Intangible assets, net | 27,287 | 4,282 | 11,789 | ||
Operating lease right-of-use assets | 38,237 | 6,000 | 6,521 | ||
Amounts due from related parties | 4,223 | 663 | |||
Other non-current assets | 3,604 | 566 | 784 | ||
Total non-current assets | 85,637 | 13,439 | 25,484 | ||
Total assets | 1,100,881 | 172,751 | 1,046,945 | ||
Current liabilities | |||||
Accounts payable | 30,536 | 4,792 | 21,551 | ||
Deferred revenue and customer advances | 302,980 | 47,544 | 268,613 | ||
Amounts due to related parties | 8,853 | 1,389 | 485 | ||
Accrued expenses and other current liabilities | 115,895 | 18,186 | 107,029 | ||
Current operating lease liabilities | 24,669 | 3,871 | 1,544 | ||
Total current liabilities | 482,933 | 75,782 | 399,222 | ||
Non-current liabilities | |||||
Non-current operating lease liabilities | 9,577 | 1,503 | 5,070 | ||
Total non-current liabilities | 9,577 | 1,503 | 5,070 | ||
Total liabilities | 492,510 | 77,285 | 404,292 | ||
Allowance for doubtful accounts | 381 | 60 | 156 | $ 24 | ¥ 316 |
VIE | |||||
Current assets | |||||
Cash and cash equivalents | 315,775 | 49,552 | 247,253 | ||
Accounts receivable, net of allowance of RMB156 and RMB381 (US$60) as of December 31, 2020 and 2021, respectively | 56,132 | 8,808 | 77,965 | ||
Inventories, net | 28,054 | 4,402 | 16,873 | ||
Amounts due from related parties, current | 70,744 | 11,101 | 5,463 | ||
Prepayments and other current assets | 72,332 | 11,350 | 64,587 | ||
Total current assets | 543,037 | 85,213 | 412,141 | ||
Non-current assets | |||||
Property and equipment, net | 11,949 | 1,875 | 6,390 | ||
Intangible assets, net | 17,259 | 2,708 | 10,582 | ||
Operating lease right-of-use assets | 19,100 | 2,998 | 6,521 | ||
Amounts due from related parties | 3,009 | 472 | |||
Other non-current assets | 3,604 | 566 | 784 | ||
Total non-current assets | 54,921 | 8,619 | 24,277 | ||
Total assets | 597,958 | 93,832 | 436,418 | ||
Current liabilities | |||||
Accounts payable | 25,950 | 4,072 | 19,980 | ||
Deferred revenue and customer advances | 302,980 | 47,544 | 268,613 | ||
Amounts due to related parties | 12,289 | 1,928 | 485 | ||
Accrued expenses and other current liabilities | 88,053 | 13,817 | 95,200 | ||
Current operating lease liabilities | 11,735 | 1,841 | 1,544 | ||
Total current liabilities | 441,007 | 69,202 | 385,822 | ||
Non-current liabilities | |||||
Non-current operating lease liabilities | 6,501 | 1,020 | 5,070 | ||
Total non-current liabilities | 6,501 | 1,020 | 5,070 | ||
Total liabilities | 447,508 | 70,222 | 390,892 | ||
Allowance for doubtful accounts | 381 | 60 | 156 | ||
Due from Group companies | 67,899 | 10,655 | 5,141 | ||
Due to Group companies | 8,410 | 1,320 | 0 | ||
Net Asset and liability | 150,450 | $ 23,610 | 45,526 | ||
VIE | Asset pledged as collateral without right | |||||
Non-current assets | |||||
Total assets | ¥ 0 | ¥ 0 |
ORGANIZATION, CONSOLIDATION A_6
ORGANIZATION, CONSOLIDATION AND PRINCIPAL ACTIVITIES, Results of operations and consolidated statements of cash flows (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | |
Subsidiary And Variable Interest Entity [Line Items] | ||||
Revenue | ¥ 944,722 | $ 148,247 | ¥ 531,915 | ¥ 218,656 |
Net income (loss) | (37,051) | (5,814) | (37,476) | (275,597) |
Net cash provided by operating activities | 38,214 | 5,996 | 222,986 | 42,627 |
Net cash used in investing activities | (31,951) | (5,014) | (15,906) | (2,391) |
Net cash provided by (used in) financing activities | 410 | 64 | 571,959 | 58,523 |
Net change in cash and cash equivalents | (6,320) | (992) | 756,799 | 98,759 |
VIE | ||||
Subsidiary And Variable Interest Entity [Line Items] | ||||
Revenue | 944,722 | 148,247 | 531,915 | 218,656 |
Net income (loss) | 92,175 | 14,464 | (23,486) | (275,511) |
Net cash provided by operating activities | 144,980 | 22,751 | 218,765 | 42,627 |
Net cash used in investing activities | (76,555) | (12,013) | (15,622) | (2,391) |
Net cash provided by (used in) financing activities | 97 | 15 | (60,773) | 58,523 |
Net change in cash and cash equivalents | ¥ 68,522 | $ 10,753 | ¥ 142,370 | ¥ 98,759 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Narrative (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021CNY (¥)$ / ¥ | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2021USD ($)$ / ¥ | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Convenience translation rate (USD to RMB) | $ / ¥ | 6.3726 | 6.3726 | |||
Translation differences are recorded in "Accumulated other comprehensive income", a component of shareholders' equity. Total exchange loss | ¥ (12,816) | $ (2,011) | ¥ (21,861) | ¥ 0 | |
Inventories cost | 32,163 | 19,539 | $ 5,047 | ||
Inventory reserve | 4,109 | 2,666 | $ 645 | ||
Impairment of long-lived assets | ¥ | ¥ 0 | ¥ 0 | 0 | ||
Number of operating segment | 1 | 1 | |||
Number of geographical segments | 0 | 0 | 0 | ||
Practical expedient available under ASC 606-10-50-14 to not to disclose information about its remaining performance obligations | false | false | |||
Advertising expenses | ¥ 126,264 | $ 19,814 | ¥ 63,195 | 4,593 | |
Employee benefit expenses | ¥ 89,679 | $ 14,073 | ¥ 24,073 | ¥ 22,107 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Property and equipment, net (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Electronic equipment | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 4 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Intangible assets, net (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Intellectual property rights | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Lives | 3 years |
Intellectual property rights | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Lives | 10 years |
Purchased software | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Lives | 1 year |
Purchased software | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Lives | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Leases (Details) ¥ in Thousands, $ in Thousands | Jan. 01, 2020 | Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2021USD ($) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Package of practical expedients | false | ||||
Lease, Practical Expedient, Use of Hindsight [true false] | false | ||||
Operating Lease, Liability | ¥ 34,246 | $ 5,374 | |||
Lease, Cost | 22,147 | $ 3,476 | ¥ 11,432 | ||
Operating Lease, Cost | 21,755 | 3,414 | 11,297 | ||
Short-term Lease, Cost | ¥ 392 | $ 62 | ¥ 135 | ||
Operating Lease, Weighted Average Remaining Lease Term | 1 year 10 months 24 days | 5 years 25 days | 1 year 10 months 24 days | ||
Operating Lease, Weighted Average Discount Rate, Percent | 7.54% | 8.01% | 7.54% |
CONCENTRATION OF RISKS (Details
CONCENTRATION OF RISKS (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CONCENTRATION OF RISKS | |||
Currency Appreciation (Depreciation), Percentage | 2.30% | 6.30% | (1.30%) |
REVENUE AND DEFERRED REVENUE (D
REVENUE AND DEFERRED REVENUE (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Jan. 01, 2021CNY (¥) | |
Disaggregation of Revenue [Line Items] | |||||
Total revenues | ¥ 944,722 | $ 148,247 | ¥ 531,915 | ¥ 218,656 | |
Amortization of deferred channel costs | 170,068 | 26,687 | 89,444 | 22,381 | |
Revenue recognized | 262,437 | 41,182 | |||
Deferred revenue | ¥ 268,613 | ||||
Online subscriptions | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 832,345 | 130,613 | 430,466 | 107,409 | |
Online subscriptions | Recognized over time | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 831,363 | 130,459 | 429,633 | 106,163 | |
Online subscriptions | Recognized at a point in time | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 982 | 154 | 833 | 1,246 | |
Offline products and others | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 112,377 | 17,634 | 101,449 | 111,247 | |
Offline products and others | Recognized at a point in time | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | ¥ 112,377 | $ 17,634 | ¥ 101,449 | ¥ 111,247 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) |
ACCOUNTS RECEIVABLE, NET | |||||
Accounts receivable | ¥ 56,513 | $ 8,868 | ¥ 78,121 | ||
Allowance for doubtful accounts | 381 | 60 | 156 | $ 24 | ¥ 316 |
Accounts receivable, net | ¥ 56,132 | $ 8,808 | ¥ 77,965 |
ACCOUNTS RECEIVABLE, NET - Move
ACCOUNTS RECEIVABLE, NET - Movements in the allowance for doubtful accounts (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | |
Movements in the allowance for doubtful accounts | |||
Balance at beginning of the year | ¥ 156 | $ 24 | ¥ 316 |
Provisions/(reversals) | 225 | 36 | (160) |
Balance at end of the year | ¥ 381 | $ 60 | ¥ 156 |
PREPAYMENTS AND OTHER CURRENT_3
PREPAYMENTS AND OTHER CURRENT ASSETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) |
PREPAYMENTS AND OTHER CURRENT ASSETS | |||
Deferred channel costs | ¥ 59,501 | $ 9,337 | ¥ 56,335 |
VAT prepayments | 8,909 | 1,398 | 3,433 |
Rental deposits | 489 | 77 | 2,636 |
Advances to suppliers | 481 | 75 | 136 |
Others | 3,471 | 544 | 2,079 |
Total prepayments and other current assets | ¥ 72,851 | $ 11,431 | ¥ 64,619 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2021USD ($) | |
Property, Plant and Equipment [Line Items] | |||||
Less: accumulated depreciation | ¥ (5,529) | ¥ (2,403) | $ (868) | ||
Property and equipment, net | 12,286 | 6,390 | 1,928 | ||
Depreciation expense | 3,399 | $ 533 | 1,360 | ¥ 511 | |
Electronic equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | ¥ 17,815 | ¥ 8,793 | $ 2,796 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) |
Finite-Lived Intangible Assets [Line Items] | |||
Less: accumulated amortization | ¥ (4,175) | $ (655) | ¥ (1,156) |
Intangible assets, net | 27,287 | 4,282 | 11,789 |
Intellectual property rights | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible asset, gross | 22,919 | 3,596 | 7,375 |
Purchased software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible asset, gross | ¥ 8,543 | $ 1,341 | ¥ 5,570 |
INTANGIBLE ASSETS, NET - Additi
INTANGIBLE ASSETS, NET - Additional Information (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2021USD ($) | |
INTANGIBLE ASSETS, NET | |||||
Amortization expense | ¥ 3,019 | $ 474 | ¥ 1,454 | ¥ 86 | |
Estimated amortization expense, Year 1 | 5,340 | $ 838 | |||
Estimated amortization expense, Year 2 | 5,164 | 810 | |||
Estimated amortization expense, Year 3 | 4,369 | 686 | |||
Estimated amortization expense, Year 4 | 3,585 | 563 | |||
Estimated amortization expense, Year 5 | ¥ 2,957 | $ 464 |
LEASES - Additional Information
LEASES - Additional Information (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | |
LEASES | |||
Lease, Cost | ¥ 22,147 | $ 3,476 | ¥ 11,432 |
Operating Lease, Cost | 21,755 | 3,414 | 11,297 |
Short-term Lease, Cost | 392 | 62 | 135 |
Cash payments for operating leases | ¥ 21,598 | $ 3,389 | ¥ 10,463 |
Operating Lease, Weighted Average Remaining Lease Term | 1 year 10 months 24 days | 1 year 10 months 24 days | 5 years 25 days |
Operating Lease, Weighted Average Discount Rate, Percent | 7.54% | 7.54% | 8.01% |
LEASES - Undiscounted future mi
LEASES - Undiscounted future minimum payments (Details) - Dec. 31, 2021 ¥ in Thousands, $ in Thousands | CNY (¥) | USD ($) |
LEASES | ||
2022 | ¥ 25,777 | $ 4,045 |
2023 | 7,580 | 1,189 |
2024 | 1,563 | 245 |
2025 | 1,327 | 208 |
2026 | 508 | 80 |
Total lease payments | 36,755 | 5,767 |
Less: Imputed interest | 2,509 | 393 |
Present value of lease liabilities | ¥ 34,246 | $ 5,374 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||
Payroll payable | ¥ 69,202 | $ 10,859 | ¥ 55,176 |
Tax payable | 20,091 | 3,153 | 17,391 |
Accrued expenses | 17,261 | 2,709 | 29,063 |
Deposits | 1,985 | 311 | 2,061 |
Others | 7,356 | 1,154 | 3,338 |
Total | ¥ 115,895 | $ 18,186 | ¥ 107,029 |
TAXATION - Additional Informati
TAXATION - Additional Information (Details) ¥ in Thousands, $ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2021HKD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | |
Income Tax and Tax Rate [Line Items] | ||||||
Income tax expenses | ¥ (145) | $ (23) | ¥ 466 | ¥ 1,364 | ||
Tianjin Hongen | ||||||
Income Tax and Tax Rate [Line Items] | ||||||
Preferential income tax rate | 15.00% | 15.00% | 15.00% | |||
Tianjin Hongen | Subsequent event | ||||||
Income Tax and Tax Rate [Line Items] | ||||||
Reduced tax rate | 12.50% | |||||
Cayman Islands | ||||||
Income Tax and Tax Rate [Line Items] | ||||||
Withholding tax | ¥ | ¥ 0 | |||||
Hong Kong | ||||||
Income Tax and Tax Rate [Line Items] | ||||||
Statutory income tax rate | 16.50% | 16.50% | 16.50% | |||
Preferential income tax rate | 8.25% | 8.25% | 8.25% | |||
Assessable profits threshold for preferential income tax rate | $ 2,000 | |||||
Income tax expenses | 0 | |||||
Assessable income | $ 0 | |||||
PRC | ||||||
Income Tax and Tax Rate [Line Items] | ||||||
Statutory income tax rate | 25.00% | 25.00% | 25.00% | |||
Preferential income tax rate | 15.00% | 15.00% | 15.00% | |||
Withholding tax rate | 10.00% | 10.00% | 10.00% | |||
PRC | Beijing Jinhongen | ||||||
Income Tax and Tax Rate [Line Items] | ||||||
Statutory income tax rate | 25.00% | 25.00% | 25.00% | 25.00% | ||
Preferential income tax rate | 20.00% | |||||
Percentage of reduction for its first RMB1,000 of annual taxable income | 75.00% | |||||
Percentage of reduction for its annual taxable income between RMB1,000 and RMB3,000 | 50.00% |
TAXATION - Current and deferred
TAXATION - Current and deferred components (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | |
TAXATION | ||||
Current income tax expenses (benefits) | ¥ (145) | $ (23) | ¥ 466 | ¥ 1,364 |
Total income tax expenses (benefits) | ¥ (145) | $ (23) | ¥ 466 | ¥ 1,364 |
TAXATION - Reconciliation of th
TAXATION - Reconciliation of the differences between the statutory tax rate and the effective tax rate (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | |
TAXATION | ||||
Loss before income tax | ¥ (37,196) | $ (5,837) | ¥ (37,010) | ¥ (274,233) |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||||
Income tax computed at the PRC statutory tax rate of 25% | (9,299) | (1,459) | (9,253) | (68,558) |
Effect of differing tax rates in different jurisdictions | 5,232 | 821 | 1,596 | |
Effect of tax rate changes on deferred taxes | 50,950 | |||
Research and development superdeduction | (31,855) | (4,999) | (12,707) | (8,774) |
Sharedbased compensation expenses | 3,223 | 506 | 19,913 | 67,635 |
Nondeductible expenses | 1,656 | 260 | 3,678 | 554 |
Effect of PRC preferential tax rates and tax holiday | (43,974) | (6,900) | (22,458) | |
Change in valuation allowance | 75,192 | 11,799 | (31,269) | 10,342 |
Others | (320) | (51) | 16 | 165 |
Total income tax expenses (benefits) | ¥ (145) | $ (23) | ¥ 466 | 1,364 |
Valuation allowance, onshore restructuring | ¥ 924 |
TAXATION - Deferred tax assets
TAXATION - Deferred tax assets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) |
Deferred tax assets | |||
Tax loss carry forward | ¥ 50,497 | $ 7,924 | ¥ 6,520 |
Deferred revenue and customer advances | 30,984 | 4,862 | 721 |
Lease liabilities recognized under ASC842 | 7,498 | 1,177 | 1,630 |
Others | 964 | 151 | 383 |
Less: valuation allowance | (82,816) | (12,996) | (7,624) |
Total deferred income tax assets | 7,127 | 1,118 | 1,630 |
Deferred tax liabilities | |||
ROU assets recognized under ASC 842 | (7,127) | (1,118) | (1,630) |
Total Deferred Tax Liabilities | (7,127) | (1,118) | (1,630) |
Deferred Tax Assets, Net, Total | 0 | 0 | ¥ 0 |
PRC | |||
Deferred tax liabilities | |||
Operating Loss Carryforwards | ¥ 201,701 | $ 31,651 |
CONTINGENTLY REDEEMABLE ORDIN_2
CONTINGENTLY REDEEMABLE ORDINARY SHARES (Details) - CNY (¥) ¥ in Thousands | Oct. 12, 2020 | Oct. 08, 2020 | May 18, 2020 | Dec. 06, 2019 | Oct. 31, 2020 |
Contingently redeemable ordinary shares | |||||
Class of Stock [Line Items] | |||||
Shares issued (in shares) | 11,318,619 | ||||
Proceeds from issuance of contingently redeemable ordinary shares | ¥ 40,000 | ¥ 120,000 | |||
Class A ordinary shares | |||||
Class of Stock [Line Items] | |||||
Shares issued (in shares) | 35,000,000 | 5,250,000 | |||
Shares converted | 11,318,619 |
CONTINGENTLY REDEEMABLE ORDIN_3
CONTINGENTLY REDEEMABLE ORDINARY SHARES - Movement in the carrying value (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Accretion to redemption value | ¥ 10,792 | ¥ 821 |
ORDINARY SHARES (Details)
ORDINARY SHARES (Details) ¥ in Thousands | Oct. 12, 2020shares | Oct. 08, 2020CNY (¥)shares | Oct. 31, 2020shares | Dec. 31, 2020CNY (¥)shares | Dec. 31, 2021Vote$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019shares | Dec. 31, 2018shares |
Class of Stock [Line Items] | ||||||||
Ordinary shares issued at par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||||
Share issuance upon IPO net of issuance cost (Note 13) | ¥ | ¥ 589,587 | |||||||
Aggregate carrying value | ¥ | ¥ 171,580 | ¥ 171,580 | ||||||
Class A ordinary shares | ||||||||
Class of Stock [Line Items] | ||||||||
Share issuance upon IPO net of issuance cost (Note 13) (in shares) | 35,000,000 | 5,250,000 | ||||||
Shares converted | 11,318,619 | |||||||
Common shares, votes per share | Vote | 1 | |||||||
Number of shares authorized | 700,000,000 | 700,000,000 | ||||||
Ordinary shares shares issued | 125,122,382 | 122,622,382 | ||||||
Ordinary shares, shares outstanding | 123,852,667 | 122,622,382 | ||||||
Class B ordinary shares | ||||||||
Class of Stock [Line Items] | ||||||||
Common shares, votes per share | Vote | 10 | |||||||
Number of shares authorized | 200,000,000 | 200,000,000 | ||||||
Ordinary shares shares issued | 144,000,000 | 144,000,000 | ||||||
Ordinary shares, shares outstanding | 144,000,000 | 144,000,000 | ||||||
American Depositary Shares | ||||||||
Class of Stock [Line Items] | ||||||||
Share issuance upon IPO net of issuance cost (Note 13) (in shares) | 1,050,000 | 7,000,000 | ||||||
Shares of undesignated class | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares authorized | 100,000,000 | 100,000,000 | ||||||
Ordinary shares | ||||||||
Class of Stock [Line Items] | ||||||||
Share issuance upon IPO net of issuance cost (Note 13) (in shares) | 40,250,000 | |||||||
Shares converted | 11,318,619 | |||||||
Share issuance upon IPO net of issuance cost (Note 13) | ¥ | ¥ 27 | |||||||
Aggregate carrying value | ¥ | ¥ 8 | |||||||
Number of shares authorized | 1,000,000,000 | 1,000,000,000 | ||||||
Ordinary shares, shares outstanding | 267,897,667 | 266,622,382 | 215,053,763 | 160,000,000 |
SHARE REPURCHASE PROGRAM (Detai
SHARE REPURCHASE PROGRAM (Details) - 12 months ended Dec. 31, 2021 - 2021 Share Repurchase Program $ / shares in Units, ¥ in Thousands, $ in Thousands | USD ($)$ / sharesshares | CNY (¥)shares |
Equity, Class of Treasury Stock [Line Items] | ||
Term of repurchase program | 12 months | 12 months |
Ordinary shares | ||
Equity, Class of Treasury Stock [Line Items] | ||
Shares repurchased | 45,000 | 45,000 |
American Depositary Shares | ||
Equity, Class of Treasury Stock [Line Items] | ||
Shares repurchased | 9,000 | 9,000 |
Total cost of shares repurchased | $ 26 | ¥ 164 |
Weighted average price of shares repurchased | $ / shares | $ 2.86 | |
American Depositary Shares | Maximum | ||
Equity, Class of Treasury Stock [Line Items] | ||
Authorized repurchase amount | $ | $ 10,000 |
SHARE BASED PAYMENTS, Share inc
SHARE BASED PAYMENTS, Share incentive plan (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Oct. 31, 2020CNY (¥) | Jan. 31, 2019shares | Dec. 31, 2021CNY (¥)shares | Dec. 31, 2021USD ($)shares | Dec. 31, 2020CNY (¥)shares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2021USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expenses | ¥ 15,175 | $ 2,381 | ¥ 79,891 | ¥ 270,541 | |||
Exercise of share-based awards (Note 15) (in shares) | 1,275,285 | 1,275,285 | 0 | 0 | |||
Fair value of share options vested | ¥ 15,725 | $ 2,468 | ¥ 49,835 | ¥ 0 | |||
Unrecognized share-based compensation expense | ¥ 16,296 | $ 2,557 | |||||
Weighted-average vesting period | 1 year 10 months 2 days | 1 year 10 months 2 days | |||||
Performance condition awards | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expenses | ¥ | ¥ 73,378 | ||||||
Share Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of ordinary shares reserved | 19,684,555 | ||||||
Contractual term | 10 years |
SHARE BASED PAYMENTS, option ac
SHARE BASED PAYMENTS, option activities (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2021CNY (¥)shares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2020CNY (¥)shares | Dec. 31, 2019CNY (¥)shares | |
Number of options | |||||
Number of options, Outstanding, Beginning balance | shares | 14,164,968 | 14,164,968 | |||
Number of options, Forfeited | shares | (1,889,089) | (1,889,089) | |||
Number of options, Exercised | shares | (1,275,285) | (1,275,285) | 0 | 0 | 0 |
Number of options, Outstanding, Ending balance | shares | 11,000,594 | 11,000,594 | 14,164,968 | 14,164,968 | |
Number of options, Vested and expected to vest | shares | 11,000,594 | ||||
Number of options, Exercisable | shares | 4,410,630 | 4,410,630 | |||
Weighted average exercise price | |||||
Weighted average exercise price, Outstanding, Beginning balance | $ 0.88 | ||||
Weighted average exercise price, Forfeited | 1.45 | ||||
Weighted average exercise price, Exercised | 0.06 | ||||
Weighted average exercise price, Outstanding, Ending balance | 0.87 | $ 0.88 | |||
Weighted average exercise price,Vested and expected | 0.87 | ||||
Weighted average exercise price, Exercisable | 0.61 | ||||
Weightedaverage grantdate fair value | |||||
Weightedaverage grantdate fair value, Outstanding, Beginning balance | 1.28 | ||||
Weightedaverage grantdate fair value, Outstanding, Ending balance | 1.25 | $ 1.28 | |||
Weightedaverage grantdate fair value, Vested and expected | 1.25 | ||||
Weightedaverage grantdate fair value, Exercisable | $ 1.65 | ||||
Weighted average remaining contractual term and aggregate intrinsic value | |||||
Weighted average remaining contractual term (Years) | 7 years 10 months 20 days | 7 years 10 months 20 days | 8 years 11 months 4 days | 8 years 11 months 4 days | |
Weighted average remaining contractual term vested and expected (Years) | 7 years 10 months 20 days | 7 years 10 months 20 days | |||
Weighted average remaining contractual term Exercisable (Years) | 8 years 2 months 19 days | 8 years 2 months 19 days | |||
Aggregate intrinsic value, Outstanding, Beginning balance | $ | $ 38,899 | ||||
Aggregate intrinsic value, Exercised | 639 | ¥ 4,074 | ¥ 0 | ¥ 0 | |
Aggregate intrinsic value, Outstanding, Ending balance | $ | 2,284 | $ 38,899 | |||
Aggregate intrinsic value, Vested and Expected | $ | 2,284 | ||||
Aggregate intrinsic value, Exercisable | $ | $ 1,346 |
SHARE BASED PAYMENTS, fair valu
SHARE BASED PAYMENTS, fair value of options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
The assumptions used to estimate the fair value of the options granted | ||
Riskfree rate, Minimum | 0.69% | 1.92% |
Riskfree rate, Maximum | 0.84% | 2.69% |
Expected volatility range, Minimum | 50.87% | 48.00% |
Expected volatility range, Maximum | 51.22% | 48.10% |
Exercise multiple | 2.2 | |
Minimum | ||
The assumptions used to estimate the fair value of the options granted | ||
Fair value per ordinary share as at valuation date | $ 1.30 | $ 0.73 |
Exercise multiple | 2.2 | |
Maximum | ||
The assumptions used to estimate the fair value of the options granted | ||
Fair value per ordinary share as at valuation date | $ 5.55 | $ 1.93 |
Exercise multiple | 2.8 |
SHARE BASED PAYMENTS, other sha
SHARE BASED PAYMENTS, other share based compensation (Details) ¥ / shares in Units, ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | ¥ 15,175 | $ 2,381 | ¥ 79,891 | ¥ 270,541 | |
Cost of revenue | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | 940 | 148 | 1,897 | ||
Research and development expenses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | 5,431 | 852 | 19,499 | 76,301 | |
Sales and marketing expenses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | 3,010 | 472 | 2,858 | 25,892 | |
General and administrative expenses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | ¥ 5,794 | $ 909 | ¥ 55,637 | 168,348 | |
Award for past services | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of ordinary shares vested and issued | shares | 55,053,763 | ||||
Proceeds received from issuance of shares for share-based awards | ¥ 3,441 | ||||
Share-based compensation expense | ¥ 270,541 | ||||
Award for past services | Tianjin Hongen | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value per ordinary share as at valuation date | ¥ / shares | ¥ 4.98 |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021CNY (¥)¥ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020CNY (¥)¥ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | |
Numerator: | ||||
Net loss | ¥ (37,051) | $ (5,814) | ¥ (37,476) | ¥ (275,597) |
Accretion to redemption value of contingently redeemable ordinary shares | ¥ | (10,792) | (821) | ||
Net loss attributable to ordinary shareholders-basic | (37,051) | (5,814) | (48,268) | (276,418) |
Net loss attributable to ordinary shareholders-diluted | ¥ (37,051) | $ (5,814) | ¥ (48,268) | ¥ (276,418) |
Denominator: | ||||
Weighted average number of shares outstanding, basic | 266,631,802 | 266,631,802 | 226,339,320 | 181,427,603 |
Weighted average number of shares outstanding, diluted | 266,631,802 | 266,631,802 | 226,339,320 | 181,427,603 |
Loss per share, basic | (per share) | ¥ (0.14) | $ (0.02) | ¥ (0.21) | ¥ (1.52) |
Loss per share, diluted | (per share) | ¥ (0.14) | $ (0.02) | ¥ (0.21) | ¥ (1.52) |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Oct. 31, 2020CNY (¥) | Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2021USD ($) | Jan. 31, 2018 | |
Related Party Transaction [Line Items] | ||||||||||
Sales to related parties | ¥ 2,157 | $ 338 | ¥ 1,326 | ¥ 1,624 | ||||||
Proceeds from loans from related parties | 2,000 | |||||||||
Repayments of loans from related parties | 63,819 | |||||||||
Amounts due from related parties, current | ¥ 2,845 | 2,845 | 322 | $ 446 | ||||||
Amounts due from related parties, non-current | 4,223 | 4,223 | 663 | |||||||
Amounts due to related parties | 8,853 | 8,853 | 485 | 1,389 | ||||||
Operating lease right-of-use assets, related party | 32,944 | 32,944 | 174 | 5,170 | ||||||
Current operating lease liabilities - related party | 23,270 | 23,270 | 174 | 3,652 | ||||||
Non-current operating lease liabilities - related party | 5,501 | 5,501 | 0 | 863 | ||||||
Hongen Kindergartens | Offline products and others | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Sales to related parties | 2,157 | 338 | 1,326 | 1,624 | ||||||
Hongen Kindergartens | Research and development outsourcing services | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses from transactions with related parties | 459 | 72 | 381 | |||||||
Perfect World Group | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Assets transferred to related parties | 429 | $ 67 | ¥ 8,405 | 429 | 67 | 8,405 | ||||
Amounts due from related parties, current | 2,799 | 2,799 | 439 | |||||||
Amounts due from related parties, non-current | 4,223 | 4,223 | 663 | |||||||
Amounts due to related parties | 8,853 | 8,853 | 358 | 1,389 | ||||||
Operating lease right-of-use assets, related party | 32,944 | 32,944 | 174 | 5,170 | ||||||
Current operating lease liabilities - related party | 23,270 | 23,270 | 174 | 3,652 | ||||||
Non-current operating lease liabilities - related party | 5,501 | 5,501 | 863 | |||||||
Gain loss recognized | 0 | ¥ 0 | ||||||||
Perfect World Group | Rental and property management services | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses from transactions with related parties | 26,463 | 4,153 | 240 | 240 | ||||||
Perfect World Group | Administrative, IP licensing and other services | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses from transactions with related parties | 3,979 | $ 624 | 1,303 | 2,059 | ||||||
Shihezi Happy Forever | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Proceeds from loans from related parties | ¥ 24,700 | |||||||||
Repayments of loans from related parties | 51,819 | |||||||||
Accumulative balance | 51,819 | |||||||||
Hongen Education | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Amounts due from related parties, current | ¥ 46 | ¥ 46 | 322 | $ 7 | ||||||
Amounts due to related parties | ¥ 127 | |||||||||
Two shareholders | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Proceeds from loans from related parties | 2,000 | ¥ 10,000 | ||||||||
Repayments of loans from related parties | ¥ 12,000 | |||||||||
Loan facility term | 2 years |
RESTRICTED NET ASSETS (Details)
RESTRICTED NET ASSETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) |
RESTRICTED NET ASSETS | |||
Minimum percentage of after-tax profit allocated to general reserve fund | 10.00% | 10.00% | |
Maximum percentage criteria for appropriation of after-tax profit of Chinese subsidiaries to general reserve fund | 50.00% | 50.00% | |
Minimum percentage of after-tax profit transferred by VIE and its subsidiaries to statutory reserve fund | 10.00% | 10.00% | |
Maximum percentage criteria for its appropriation of after-tax profit by VIE and its subsidiaries to certain statutory reserve funds | 50.00% | 50.00% | |
Amount appropriated | ¥ 89 | $ 14 | ¥ 517 |
Net assets subject to restriction | ¥ 167,294 | $ 26,252 | |
Restricted Investments, Percent of Net Assets | 27.50% | 27.50% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) ¥ in Thousands | Dec. 31, 2021CNY (¥) |
Purchase commitments | |
Total | ¥ 13,200 |
Less than 1 Year | 9,200 |
1-3 Years | 4,000 |
3-5 Years | |
Over 5 Years | |
Investment commitment (Note 21) | |
Total | 26,333 |
Less than 1 Year | 26,333 |
Total commitments | |
Total | 39,533 |
Less than 1 Year | 35,533 |
1-3 Years | 4,000 |
3-5 Years | |
Over 5 Years |
CONDENSED FINANCIAL INFORMATI_3
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Dec. 31, 2021CNY (¥)shares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020CNY (¥)shares | Dec. 31, 2020$ / shares | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Current assets | ||||||
Cash and cash equivalents | ¥ 855,362 | $ 134,225 | ¥ 861,682 | |||
Total current assets | 1,015,244 | 159,312 | 1,021,461 | |||
Non-current assets | ||||||
Total noncurrent assets | 85,637 | 13,439 | 25,484 | |||
Total assets | 1,100,881 | 172,751 | 1,046,945 | |||
Current liabilities | ||||||
Accrued expenses and other current liabilities | 115,895 | 18,186 | 107,029 | |||
Total current liabilities | 482,933 | 75,782 | 399,222 | |||
Total liabilities | 492,510 | 77,285 | 404,292 | |||
SHAREHOLDERS' EQUITY | ||||||
Ordinary shares | 185 | 29 | 184 | |||
Additional paid-in capital | 1,066,052 | 167,287 | 1,050,304 | |||
Treasury stock | (164) | (26) | ||||
Accumulated other comprehensive loss | (34,677) | (5,442) | (21,861) | |||
Accumulated deficit | (423,025) | (66,382) | (385,974) | |||
Total shareholders' equity | 608,371 | 95,466 | 642,653 | ¥ (135,270) | ¥ (63,735) | |
Total liabilities and shareholders' equity | ¥ 1,100,881 | $ 172,751 | ¥ 1,046,945 | |||
Ordinary shares, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Class A ordinary shares | ||||||
SHAREHOLDERS' EQUITY | ||||||
Ordinary shares, shares authorized | 700,000,000 | 700,000,000 | 700,000,000 | |||
Ordinary shares shares issued | 125,122,382 | 125,122,382 | 122,622,382 | |||
Ordinary shares, shares outstanding | 123,852,667 | 123,852,667 | 122,622,382 | |||
Class B ordinary shares | ||||||
SHAREHOLDERS' EQUITY | ||||||
Ordinary shares, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | |||
Ordinary shares shares issued | 144,000,000 | 144,000,000 | 144,000,000 | |||
Ordinary shares, shares outstanding | 144,000,000 | 144,000,000 | 144,000,000 | |||
Undesignated [Member] | ||||||
SHAREHOLDERS' EQUITY | ||||||
Ordinary shares, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |||
Ordinary shares shares issued | 0 | 0 | 0 | |||
Ordinary shares, shares outstanding | 0 | 0 | 0 | |||
Parent Company | ||||||
Current assets | ||||||
Cash and cash equivalents | ¥ 197,381 | $ 30,973 | ¥ 89,178 | |||
Amounts due from subsidiaries and VIE | 320,996 | 50,371 | 457,029 | |||
Total current assets | 518,377 | 81,344 | 546,207 | |||
Non-current assets | ||||||
Investments in subsidiaries, VIE and VIE's subsidiaries | 99,670 | 15,640 | 103,218 | |||
Total noncurrent assets | 99,670 | 15,640 | 103,218 | |||
Total assets | 618,047 | 96,984 | 649,425 | |||
Current liabilities | ||||||
Amounts due to VIE | 1,140 | 179 | 140 | |||
Accrued expenses and other current liabilities | 8,536 | 1,339 | 6,632 | |||
Total current liabilities | 9,676 | 1,518 | 6,772 | |||
Total liabilities | 9,676 | 1,518 | 6,772 | |||
SHAREHOLDERS' EQUITY | ||||||
Ordinary shares | 185 | 29 | 184 | |||
Additional paid-in capital | 1,066,052 | 167,287 | 1,050,304 | |||
Treasury stock | (164) | (26) | ||||
Accumulated other comprehensive loss | (34,677) | (5,442) | (21,861) | |||
Accumulated deficit | (423,025) | (66,382) | (385,974) | |||
Total shareholders' equity | 608,371 | 95,466 | 642,653 | |||
Total liabilities and shareholders' equity | ¥ 618,047 | $ 96,984 | ¥ 649,425 | |||
Ordinary shares, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Parent Company | Class A ordinary shares | ||||||
SHAREHOLDERS' EQUITY | ||||||
Ordinary shares, shares authorized | 700,000,000 | 700,000,000 | 700,000,000 | |||
Ordinary shares shares issued | 125,122,382 | 125,122,382 | 122,622,382 | |||
Ordinary shares, shares outstanding | 123,852,667 | 123,852,667 | 122,622,382 | |||
Parent Company | Class B ordinary shares | ||||||
SHAREHOLDERS' EQUITY | ||||||
Ordinary shares, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | |||
Ordinary shares shares issued | 144,000,000 | 144,000,000 | 144,000,000 | |||
Ordinary shares, shares outstanding | 144,000,000 | 144,000,000 | 144,000,000 | |||
Parent Company | Undesignated [Member] | ||||||
SHAREHOLDERS' EQUITY | ||||||
Ordinary shares, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |||
Ordinary shares shares issued | 0 | 0 |
CONDENSED FINANCIAL INFORMATI_4
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Comprehensive loss (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | |
Operating expenses | ||||
General and administrative expenses | ¥ (97,445) | $ (15,291) | ¥ (114,667) | ¥ (189,433) |
Total operating expenses | (714,872) | (112,179) | (409,894) | (413,304) |
Operating loss | ||||
Other income, net | 17,052 | 2,676 | 7,441 | 4,578 |
Loss before income tax | (37,196) | (5,837) | (37,010) | (274,233) |
Income tax benefits (expenses) | 145 | 23 | (466) | (1,364) |
Net loss | (37,051) | (5,814) | (37,476) | (275,597) |
Accretion to redemption value of contingently redeemable ordinary shares | (10,792) | (821) | ||
Net loss attributable to ordinary shareholders | (37,051) | (5,814) | (48,268) | (276,418) |
Total comprehensive loss | (49,867) | (7,825) | (59,337) | (275,597) |
Parent Company | ||||
Operating expenses | ||||
General and administrative expenses | (22,755) | (3,571) | (6,335) | (86) |
Total operating expenses | (22,755) | (3,571) | (6,335) | (86) |
Operating loss | ||||
Share of losses from subsidiaries, VIE and VIE's subsidiaries | (15,874) | (2,491) | (31,142) | (275,511) |
Other income, net | 1,578 | 248 | 1 | |
Loss before income tax | (37,051) | (5,814) | (37,476) | (275,597) |
Net loss | (37,051) | (5,814) | (37,476) | (275,597) |
Accretion to redemption value of contingently redeemable ordinary shares | (10,792) | (821) | ||
Net loss attributable to ordinary shareholders | (37,051) | (5,814) | (48,268) | (276,418) |
Total comprehensive loss | ¥ (49,867) | $ (7,825) | ¥ (59,337) | ¥ (275,597) |
CONDENSED FINANCIAL INFORMATI_5
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - Cash flows (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021CNY (¥) | Dec. 31, 2021USD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | |
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Net cash provided by (used in) operating activities | ¥ 38,214 | $ 5,996 | ¥ 222,986 | ¥ 42,627 |
Net cash provided by (used in) investing activities | (31,951) | (5,014) | (15,906) | (2,391) |
Net cash provided by financing activities | 410 | 64 | 571,959 | 58,523 |
Effective of exchange rate changes on cash and cash equivalents | (12,993) | (2,038) | (22,240) | |
Net change in cash and cash equivalents | (6,320) | (992) | 756,799 | 98,759 |
Cash and cash equivalents at the beginning of the year | 861,682 | 135,217 | 104,883 | 6,124 |
Cash and cash equivalents at the end of the year | 855,362 | 134,225 | 861,682 | ¥ 104,883 |
Parent Company | ||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Net cash provided by (used in) operating activities | (15,837) | (2,485) | 970 | |
Net cash provided by (used in) investing activities | 127,514 | 20,010 | (522,278) | |
Net cash provided by financing activities | 313 | 49 | 632,732 | |
Effective of exchange rate changes on cash and cash equivalents | (3,787) | (595) | (22,246) | |
Net change in cash and cash equivalents | 108,203 | 16,979 | 89,178 | |
Cash and cash equivalents at the beginning of the year | 89,178 | 13,994 | ||
Cash and cash equivalents at the end of the year | ¥ 197,381 | $ 30,973 | ¥ 89,178 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event - AI solutions ¥ in Millions, $ in Millions | 1 Months Ended | |
Jan. 31, 2022CNY (¥) | Jan. 31, 2022USD ($) | |
SUBSEQUENT EVENTS | ||
Equity interest acquired (as a percent) | 10.00% | 10.00% |
Total cash consideration | ¥ 26 | $ 4 |