Number |
Description of Document | |
99.1 |
Management’s Discussion and Analysis of Financial Condition and Results of Operations and Recent Developments | |
99.2 |
Unaudited Condensed Consolidated Financial Statements | |
101.INS |
Inline XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
101.SCH |
Inline XBRL Taxonomy Extension Schema Document | |
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Q&K International Group Limited | ||
By: |
/s/ Chengcai Qu | |
Name: |
Chengcai Qu | |
Title: |
Chairman of the Board of Directors, Chief | |
Executive Officer, Chief Operating Officer and Vice President |
Exhibit 99.1
Managements Discussion and Analysis of Financial Condition and Results of Operations
Discussion and analysis below are limited to the operations of Q&K International Group Limited (we or us).
Summary Consolidated Financial and Operating Data
The summary unaudited interim consolidated financial information for the six months ended March 31, 2020 and 2021 and as of March 31, 2021 has been derived from our unaudited interim condensed consolidated financial statements as of and for the six months ended March 31, 2021 included in this current report. Our unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with our audited consolidated financial statements. The summary consolidated balance sheet data as of September 30, 2020 has been derived from our audited consolidated financial statements included in our annual report on Form 20-F for the fiscal year ended September 30, 2020 filed with the SEC on February 16, 2021 (the FY 2020 annual report). The summary consolidated financial data should be read in conjunction with those financial statements and the accompanying notes and Item 5. Operating and Financial Review and Prospects included in our FY 2020 annual report.
Summary Unaudited Condensed Consolidated Statements of Comprehensive Loss
Six months ended March 31, | ||||||||||||
2020 | 2021 | |||||||||||
RMB | RMB | US$ | ||||||||||
(in thousands) | ||||||||||||
Net revenue: |
||||||||||||
Rental service |
555,706 | 541,671 | 82,675 | |||||||||
Value-added services and others |
71,395 | 73,538 | 11,224 | |||||||||
|
|
|
|
|
|
|||||||
Total net revenues |
627,101 | 615,209 | 93,899 | |||||||||
|
|
|
|
|
|
|||||||
Operating costs and expenses: |
||||||||||||
Operating cost |
(682,225 | ) | (684,205 | ) | (104,431 | ) | ||||||
Selling and marketing expenses |
(40,450 | ) | (12,503 | ) | (1,908 | ) | ||||||
General and administrative expenses |
(65,089 | ) | (46,243 | ) | (7,058 | ) | ||||||
Research and development expenses |
(15,412 | ) | (4,765 | ) | (727 | ) | ||||||
Pre-operation expenses |
(12,725 | ) | | | ||||||||
Impairment loss on long-lived assets |
(250,048 | ) | (42,584 | ) | (6,500 | ) | ||||||
Other expense, net |
(13,870 | ) | (26,426 | ) | (4,033 | ) | ||||||
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|
|
|
|
|
|||||||
Total operating costs and expenses |
(1,079,819 | ) | (816,726 | ) | (124,657 | ) | ||||||
|
|
|
|
|
|
|||||||
Loss from operations |
(452,718 | ) | (201,517 | ) | (30,758 | ) | ||||||
Interest expense, net |
(61,518 | ) | (64,287 | ) | (9,812 | ) | ||||||
Debt extinguishment cost |
| (41,964 | ) | (6,405 | ) | |||||||
Foreign exchange loss, net |
(4 | ) | (192 | ) | (29 | ) | ||||||
Fair value change of contingent earn-out liabilities |
97,417 | | | |||||||||
|
|
|
|
|
|
|||||||
Loss before income taxes |
(416,823 | ) | (307,960 | ) | (47,004 | ) | ||||||
Income tax expense |
(26 | ) | (25 | ) | (4 | ) | ||||||
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|
|
|
|
|
|||||||
Net loss |
(416,849 | ) | (307,985 | ) | (47,008 | ) | ||||||
Less: net loss attributable to noncontrolling interests |
(26 | ) | (11 | ) | (2 | ) | ||||||
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|
|
|
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Net loss attributable to Q&K International Group Limited ordinary shareholders |
(416,823 | ) | (307,974 | ) | (47,006 | ) | ||||||
|
|
|
|
|
|
|||||||
Net loss per share attributable to ordinary shareholders of Q&K International Group LimitedBasic and diluted |
(0.34 | ) | (0.23 | ) | (0.03 | ) | ||||||
Weighted average number of ordinary shares used in computing net loss per shareBasic and diluted |
1,226,807,606 | 1,352,152,052 | 1,352,152,052 | |||||||||
Net loss |
(416,849 | ) | (307,985 | ) | (47,008 | ) | ||||||
Other comprehensive income (loss), net of tax of nil: |
||||||||||||
Foreign currency translation adjustments |
(1,464 | ) | 13,500 | 2,061 | ||||||||
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|
|||||||
Comprehensive loss |
(418,313 | ) | (294,485 | ) | (44,947 | ) | ||||||
Less: comprehensive loss attributable to noncontrolling interests |
(26 | ) | (11 | ) | (2 | ) | ||||||
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|
|
|
|
|
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Net loss attributable to Q&K International Group Limited ordinary shareholders |
(418,287 | ) | (294,474 | ) | (44,945 | ) | ||||||
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|
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Summary Condensed Consolidated Balance Sheet Data
As of September 30, |
As of March 31, | |||||||||||
2020 | 2021 | |||||||||||
RMB | RMB | US$ | ||||||||||
(in thousands) | ||||||||||||
(Unaudited) | ||||||||||||
Total current assets |
203,004 | 134,640 | 20,549 | |||||||||
Total non-current assets |
647,726 | 555,354 | 84,764 | |||||||||
|
|
|
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|
|
|||||||
Total assets |
850,730 | 689,994 | 105,313 | |||||||||
|
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|
|
|
|
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Total current liabilities |
1,961,740 | 2,022,766 | 308,734 | |||||||||
Total non-current liabilities |
883,440 | 898,540 | 137,144 | |||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
2,845,180 | 2,921,306 | 445,878 | |||||||||
|
|
|
|
|
|
|||||||
Total current assets less current liabilities |
(1,758,736 | ) | (1,888,126 | ) | (288,185 | ) | ||||||
Net liabilities |
1,994,450 | 2,231,312 | 340,565 | |||||||||
|
|
|
|
|
|
|||||||
Total Q&K International Group Limited shareholders deficit |
(2,004,078 | ) | (2,240,929 | ) | (342,033 | ) | ||||||
Noncontrolling interest |
9,628 | 9,617 | 1,468 | |||||||||
|
|
|
|
|
|
|||||||
Total shareholders deficit |
(1,994,450 | ) | (2,231,312 | ) | (340,565 | ) | ||||||
|
|
|
|
|
|
|||||||
Total liabilities and shareholders deficit |
850,730 | 689,994 | 105,313 | |||||||||
|
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|
|
Summary Unaudited Condensed Statement of Cash Flows
Six months ended March 31, | ||||||||||||
2020 | 2021 | |||||||||||
RMB | RMB | US$ | ||||||||||
(in thousands) | ||||||||||||
Net cash used in operating activities |
(179,718 | ) | (77,566 | ) | (11,836 | ) | ||||||
Net cash used in investing activities |
(75,439 | ) | (3,879 | ) | (592 | ) | ||||||
Net cash provided by financing activities |
134,664 | 68,386 | 10,400 | |||||||||
Effect of foreign exchange rate changes |
4,044 | 7,763 | 1,389 | |||||||||
|
|
|
|
|
|
|||||||
Net (decrease) in cash, cash equivalents and restricted cash |
(116,449 | ) | (5,296 | ) | (639 | ) | ||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents and restricted cash at the beginning of period |
250,814 | 31,766 | 4,679 | |||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents and restricted cash at the end of period |
134,365 | 26,470 | 4,040 | |||||||||
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2
Key Operating Data
The table below sets forth our key operating data as of March 31, 2020 and 2021:
As of March 31, | ||||||||
2020 | 2021 | |||||||
Number of rental units contracted |
98,379 | 75,153 | ||||||
Number of rental units under renovation |
2,001 | | ||||||
Number of available rental units |
96,378 | 75,153 | ||||||
Number of occupied rental units |
76,724 | 66,015 | ||||||
Number of vacant available rental units |
19,654 | 9,138 | ||||||
Number of rental units managed but not contracted by us(1) |
| 25,375 |
(1) | refers to the number of rental units that (i) we provide our rental management service for and (ii) are leased in from landlords by third-parties |
The table below sets forth the numbers of available rental units as of March 31, 2020 and 2021:
As of March 31, | ||||||||
2020 | 2021 | |||||||
East China(1) |
88,655 | 21,359 | ||||||
North China(2) |
2,642 | 24,835 | ||||||
Southwest China(3) |
| 20,562 | ||||||
Others(4) |
5,081 | 8,397 |
(1) | includes Fuzhou, Hangzhou, Hefei, Nanjing, Ningbo, Shanghai, Suzhou, Jinan and Qingdao |
(2) | includes Beijing, Shijiazhuang, Tianjin and Xian |
(3) | includes Chengdu, Kunming and Chongqing |
(4) | includes Nanchang, Nanning, Wuhan and Changsha |
The table below sets forth our key operating data for the six months ended March 31, 2020 and 2021:
Six months ended March 31, |
||||||||
2020 | 2021 | |||||||
Period-average occupancy rate (%) |
87.7 | % | 86.6 | % | ||||
Average monthly rental (RMB) |
||||||||
before discount for rental prepayment |
1,094 | 1,031 | ||||||
after discount for rental prepayment |
1,072 | 1,024 | ||||||
Rental spread margin (%) |
||||||||
before discount for rental prepayment |
22.9 | % | 13.0 | % | ||||
after discount for rental prepayment |
21.3 | % | 12.3 | % |
Results of Operations
Net Revenues
Our total net revenues decreased by 1.9% from RMB627.1 million in the six months ended March 31, 2020 to RMB615.2 million (US$93.9 million) in the six months ended March 31, 2021.
| Rental service. Our net revenue from rental service decreased by 2.5% from RMB555.7 million in in the six months ended March 31, 2020 to RMB541.7 million (US$82.7 million) in the six months ended March 31, 2021, primarily attributable to decreases in our average monthly rental and average occupancy rate. The decrease in our average monthly rental was primarily because a majority of the rental units we managed during the six months ended March 31, 2021, particularly the approximately 72,000 rental units from our acquisition of lease contracts and related assets in July 2020, were located outside the tier 1 cities in China, where the average monthly rental was lower compared to those in the tier 1 cities in China. As a result, our rental spread margin decreased during the same periods. The decrease in our period-average occupancy rate was primarily due to the impact of the COVID-19 pandemic. |
3
| Value-added services and others. Our net revenues from value-added services and others increased by 3.0% from RMB71.4 million in the six months ended March 31, 2020 to RMB73.5 million (US$11.2 million) in the six months ended March 31, 2021, primarily due to a decrease in revenues from broadband internet and utility service. This was partially offset by an increase in revenue from indemnity, as an increased number of tenants and landlords terminated their leases with us before expiration of the lock-in period and we forfeited their deposits or received compensation from them for their early termination. |
Operating Costs and Expenses
Our total operating costs and expenses decreased by 24.4% from RMB1,079.8 million in the six months ended March 31, 2020 to RMB816.7 million (US$124.7 million) in the six months ended March 31, 2021, primarily due to a decrease in impairment loss, selling and marketing expenses, general and administrative expenses and research and development expense.
| Operating cost. Our operating cost slightly increased from RMB682.2 million in the six months ended March 31, 2020 to RMB684.2 million (US$104.4 million) in the six months ended March 31, 2021. |
| Selling and marketing expenses. Our selling and marketing expenses decreased by 69.1% from RMB40.5 million in the six months ended March 31, 2020 to RMB12.5 million (US$1.9 million) in the six months ended March 31, 2021, primarily due to our cost-saving and personnel cost optimizing efforts, including providing less promotions in response to the COVID-19 pandemic. |
| General and administrative expenses. Our general and administrative expenses decreased by 29.0% from RMB65.1 million in the six months ended March 31, 2020 to RMB46.2 million (US$7.1 million) in the six months ended March 31, 2021, primarily attributable to decreases in the number of our staff and the share-based compensation expense due to our cost-saving efforts. The decrease was partially offset by an increase in consultant fees in relation to our acquisition of lease contracts and related assets for approximately 72,000 rental units in China. |
| Research and development expenses. Our research and development expenses decreased by 69.1% from RMB15.4 million in the six months ended March 31, 2020 to RMB4.8 million (US$0.7 million) in the six months ended March 31, 2021, primarily because we continuously reduced investments in the IT infrastructure as the system becomes mature. |
| Pre-operation expenses. We incurred pre-operation expenses of RMB12.7 million in the six months ended March 31, 2020, and did not incur pre-operation expenses in the six months ended March 31, 2021, primarily because we hardly developed any new rental units in the six months ended March 31, 2021. |
| Impairment loss on long-lived assets. Our impairment loss on long-lived assets decreased by 83.0% from RMB250.0 million in the six months ended March 31, 2020 to RMB42.6 million (US$6.5 million) in the six months ended March 31, 2021, primarily because large provisions was provided in 2020 for the impact of the COVID-19 pandemic on our business. |
| Other expense, net. Our net other expense increased by 90.5% from RMB13.9 million in the six months ended March 31, 2020 to RMB26.4 million (US$4.0 million) in the six months ended March 31, 2021, primarily attributable to the disposal of our fixed assets due to the termination of leases with landlords. |
Loss from Operations
As a result of the foregoing, our loss from operations decreased by 55.5% from RMB452.7 million in the six months ended March 31, 2020 to RMB201.5 million (US$30.8 million) in the six months ended March 31, 2021.
4
Interest Expense, Net
Our net interest expense increased by 4.5% from RMB61.5 million in the six months ended March 31, 2020 to RMB64.3 million (US$9.8 million) in the six months ended March 31, 2021. The increase was mainly attributable to the issuance of series 1 and series 2 convertible notes.
Debt extinguishment cost
We recorded an RMB42.0 million (US$6.4 million) of debt extinguishment cost in the six months ended March 31, 2021. This debt extinguishment cost is related to the extension of our loan from Azure Investments Ltd., which was originally due on September 30, 2020. We transferred 77,250,000 Class A ordinary shares which were our treasure shares to Azure Investments Ltd., which was recorded as debt extinguishment cost.
Fair value change of contingent earn-out liabilities
We did not have any fair value change of contingent earn-out liabilities in the six months ended March 31, 2021, compared to a loss of RMB97.4 million in the six months ended March 31, 2020. The loss in the six months ended March 31, 2020 was primarily because the contingent earn-out liabilities was waived upon completion of our initial public offering.
Loss before income taxes
As a result of the foregoing, our loss before income taxes increased from RMB416.8 million in the six months ended March 31, 2020 to RMB308.0 million (US$47.0 million) in the six months ended March 31, 2021.
Income Tax Expense
Our income tax expense was RMB26 thousand in the six months ended March 31, 2020 and RMB25 thousand (US$4 thousand) in the six months ended March 31, 2021. We incurred income tax expense despite our loss before income tax as certain of our subsidiaries in the PRC had income before taxes and income tax was assessed accordingly on these subsidiaries.
Net Loss
As a result of the foregoing, we recorded a net loss of RMB416.8 million in the six months ended March 31, 2020 and RMB308.0 million (US$47.0 million) in the six months ended March 31, 2021.
Liquidity and Capital Resources
As of March 31, 2021, we had RMB26.4 million (US$4.0 million) in cash and cash equivalents and RMB107 thousand (US$16 thousand) in restricted cash. We did not have any capital commitment as of March 31, 2021.
As of March 31, 2021, we recorded negative working capital, and our current liabilities exceeded our current assets by RMB1,888.1 million (US$288.2 million). We recorded accumulated deficits of RMB4,117.5 million as of March 31, 2021 and net cash used in operating activities of RMB77.6 million (US$11.8 million) for the six months ended March 31, 2021. Our businesses have been negatively impacted by the COVID-19 coronavirus outbreak to a certain extent. During the COVID-19 pandemic in China, we adopted a defensive strategy after a prudent assessment of the broader macroeconomic downturn by consolidating internal resources, further improving operating efficiencies and focusing on asset quality improvement rather than aggressive expansion. During the six months ended March 31, 2021, our average month-end occupancy rate and the rental spread margin before discount for rental prepayments decreased as compared to the six months ended March 31, 2020 mainly due to the impact of the COVID-19 pandemic. These factors raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
5
As of March 31, 2021, we had short-term borrowings (including the portion of long-term borrowings due within one year) of RMB785.4 million (US$119.9 million) and long-term borrowings (excluding the portion of long-term borrowings due within one year) of RMB448.5 million (US$68.5 million). As of March 31, 2021, long-term loans in the amount of RMB448.5 million (US$68.5 million) would be due for repayment after one year, but within five years. As of March 31, 2021, we had outstanding convertible notes in the principal amount of US$45.5 million.
In July 2020, we executed convertible notes and warrant purchase agreements with investors. As of July 27, 2021, we have raised proceeds of US$48.1 million in aggregate from the investors by issuing convertible notes according to these agreements, and have not incurred issuance cost. Pursuant to these agreements with investors, we are able to issue additional convertible notes to raise proceeds of US$51.9 million in aggregate in the future.
In April 2021, we entered into two bank borrowing extension agreements with Shanghai Huarui Bank (SHRB), pursuant to which SHRB extended due date of one borrowing with the principal of RMB100.0 million to February 2022, and due date of the borrowing with the principal of RMB89.4 million to March 2022.
In July 2021, one of our principal shareholders has agreed to consider to provide us with necessary financial support in the form of debt and/or equity, to enable us to meet our other liabilities and commitments as they become due for at least twelve months from the issuance date of this current report.
In July and August 2021, we are planning to raise proceeds through registered direct offering.
Cash Flows
Our net cash used in operating activities in the six months ended March 31, 2021 was RMB77.6 million (US$11.8 million), which was primarily attributable to a net loss of RMB308.0 million (US$47.0 million) adjusted by non-cash items of RMB136.5 million (US$20.8 million) and a net working capital inflow of RMB93.9 million (US$14.3 million). The non-cash items of RMB136.5 million (US$20.8 million) were primarily attributable to (i) depreciation and amortization of RMB49.8 million (US$7.6 million), (ii) impairment loss of RMB42.6 million (US$6.5 million) as we continuously evaluate the rental units and other assets in our portfolio, such as the rental income that we expect to receive, and recognize an impairment loss equal to the difference between the carrying amount and fair value of these assets, and (iii) debt extinguishment cost of RMB$42.0 million (US$6.4 million), partially offset by the deferred rent of RMB42.3 million (US$6.5 million). The net working capital inflow of RMB93.9 million (US$14.3 million) was primarily attributable to (i) an increase in accrued expenses and other current liabilities of RMB78.4 million (US$12.0 million), (ii) an increase in accounts payable of RMB57.6 million (US$8.8 million) and (iii) a decrease in prepaid rent and deposit of RMB39.7 million (US$6.1 million), partially offset by (i) a decrease in deferred revenue of RMB54.1 million (US$8.3 million) and (ii) an increase in other assets of RMB32.0 million (US$4.9 million).
Our net cash used in investing activities in the six months ended March 31, 2021 was RMB3.9 million (US$0.6 million), due to our purchases of property and equipment of RMB3.9 million (US$0.6 million).
Our net cash provided by financing activities in the six months ended March 31, 2021 was RMB68.4 million (US$10.4 million). This was primarily attributable to (i) proceeds from issuance of convertible notes of RMB84.6 million (US$12.9 million), (ii) proceeds from short-term bank borrowings of RMB52.5 million (US$8.0 million) and (iii) proceeds from long-term bank borrowings of RMB39.4 million (US$6.0 million), partially offset by repayment of rental installment loans of RMB124.9 million (US$19.1 million).
We did not have any off-balance sheet arrangement as of March 31, 2021.
Recent Developments
In April 2021, Mr. Bing Xiao has resigned as our director for personal reasons and has no disagreement with us.
6
In April 2021, we entered into a share charge agreement with Shanghai Huarui Bank Co., Ltd. (Huarui) (the Agreement). Pursuant to the Agreement, we have charged 77,100,000 of our Class A ordinary shares, which are our treasury shares, and other property in connection with these shares as set forth in the Agreement (collectively, the Charged Property), to Huarui (the Charge). The Charge is to secure the payment and other obligations of our subsidiaries, as borrowers, under certain loan agreements with Huarui, as lender, with an aggregate outstanding principal amount of RMB383.3 million. If an event of default occurs under these loan agreements, subject to the terms in the Agreement, Huarui will be authorized to arrange for the Charged Property to be registered in the name of Huarui or its nominee, and will be entitled to exercise all voting and/or consensual powers pertaining to the Charged Property following the transfer of the legal title of the Charged Property to Huarui or its nominee. For purposes of the Charge, we issued 77,100,000 Class A ordinary shares to a third party in April 2021, and repurchased all of these shares and held them as treasury shares on the same day.
In July 2020, we entered into a series of asset purchase agreements with Great Alliance Coliving Limited and its affiliates (collectively, GA) to acquire assets, including approximately 72,000 apartment rental contracts with leasehold improvements attached to it, and trademarks of Beautiful House. As of March 31, 2021, the remaining consideration for the acquisition consisted of US$23.2 million in cash and RMB289.7 million worth of our Class A ordinary shares which were recorded in the account of payable for asset acquisition and additional paid-in capital, respectively. In May 2021, we entered into supplemental agreements with GA, pursuant to which we settled the remaining consideration by delivering 186,375,850 Class A ordinary shares to GA. They are entitled to sell these Class A ordinary shares in the open market, subject to certain lock-up arrangements. In addition, among the 186,375,850 Class A ordinary shares delivered, we are obliged to (i) make up the shortfall if the proceeds GA receives from the sale of 57,786,458 Class A ordinary shares are lower than US$0.4014 per share and (ii) repurchase 20,860,749 Class A ordinary shares at US$0.4015 per share in instalments if GA do not trade these shares in the open market, subject to the terms and conditions set forth in the agreements with GA.
Updates and risks related to PRC laws and regulations on cybersecurity and data protection
The regulatory framework for the collection, use, safeguarding, sharing, transfer and other processing of personal information and important data worldwide is rapidly evolving in PRC and is likely to remain uncertain for the foreseeable future. Regulatory authorities in China have implemented and are considering a number of legislative and regulatory proposals concerning data protection. For example, the PRC Cyber Security Law, which became effective in June 2017, established Chinas first national-level data protection for network operators, which may include all organizations in China that connect to or provide services over the internet or other information network. The PRC Data Security Law, which was promulgated by the Standing Committee of PRC National Peoples Congress, or the SCNPC, on June 10, 2021 and will become effective on September 1, 2021, outlines the main system framework of data security protection. Furthermore, the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law, or the Opinions on Strictly Cracking Down on Illegal Securities Activities, which were issued by the General Office of the State Council and another authority on July 6, 2021, require the relevant regulators to coordinate and accelerate amendments of legislation on the confidentiality and archive management related to overseas issuance and listing of securities, and to improve the legislation on data security, cross-border data flow and management of confidential information.
In addition, regulations, guidelines and other measures are expected to be adopted. Drafts of some of these laws, regulations or measures have now been published, including (i) the draft rules on cross-border data transfers of personal information and important data published by Cyberspace Administration of China in 2017, which may, upon enactment, require security review before transferring human health-related data out of China (ii) the Draft Personal Information Protection Law promulgated by the SCNPC in 2020 and passed the second deliberation of the SCNPC in April 2021, which outlines the main system framework and comprehensive requirements of personal information protection and processing, and (iii) the draft amendment to the Measures for Cyber Security Review published by Cyberspace Administration of China in July 2021, which provides that, among others, an application for cybersecurity review must be made by an issuer that is a critical information infrastructure operator or a data processing operator as defined therein before such issuers securities become listed in a foreign country, if the issuer possesses personal information of more than 1 million users, and that the relevant governmental authorities in the PRC may initiate cybersecurity review if such governmental authorities determine an operators cyber products or services, data processing or potential listing in a foreign country affect or may affect Chinas national security.
As there are still uncertainties regarding these new laws and regulations as well as the amendment, interpretation and implementation of the existing laws and regulations related to cybersecurity and data protection, we cannot assure you that we will be able to comply with these laws and regulations in all respects. The regulatory authorities may deem our activities or services non-compliant and therefore require us to suspend or terminate our business. We may also be subject to fines, legal or administrative sanctions and other adverse consequences, and may not be able to become in compliance with relevant laws and regulations in a timely manner, or at all. These may materially and adversely affect our business, financial condition, results of operations and reputation.
Currency Convenience Translation
The conversion of Renminbi into U.S. dollars herein, made solely for the convenience of the readers, is based on the noon buying rate on March 31, 2021 set forth in the H.10 statistical release of the U.S. Federal Reserve Board, which was RMB6.5518 to US$1.00. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized, or settled into U.S. dollars at that rate or any other rate, or at all. The PRC government restricts or prohibits the conversion of Renminbi into foreign currency and foreign currency into Renminbi for certain types of transactions. The percentages stated herein are calculated based on Renminbi.
7
As of September 30, 2020 |
As of March 31, 2021 |
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RMB |
RMB |
USD |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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Restricted cash |
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Accounts receivable, net |
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Amounts due from related parties |
— | — | ||||||||||
Prepaid rent and deposit |
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Advances to suppliers |
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Other current assets |
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Total current assets |
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Non-current assets: |
||||||||||||
Property and equipment, net |
||||||||||||
Intangible assets, net |
||||||||||||
Land use rights |
||||||||||||
Other assets |
||||||||||||
|
|
|
|
|
|
|||||||
Total non-current assets |
||||||||||||
|
|
|
|
|
|
|||||||
Total assets |
||||||||||||
|
|
|
|
|
|
|||||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT |
||||||||||||
LIABILITIES (including amounts of the consolidated VIEs without recourse to the Company) |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable |
||||||||||||
Amounts due to related parties |
||||||||||||
Deferred revenue |
||||||||||||
Short-term debt |
||||||||||||
Rental installment loans |
||||||||||||
Deposits from tenants |
||||||||||||
Payable for asset acquisition |
||||||||||||
Accrued expenses and other current liabilities |
||||||||||||
|
|
|
|
|
|
|||||||
Total current liabilities |
||||||||||||
|
|
|
|
|
|
|||||||
Non-current liabilities: |
||||||||||||
Long-term debt |
||||||||||||
Convertible note, net |
||||||||||||
Long-term deferred rent |
||||||||||||
|
|
|
|
|
|
|||||||
Total non-current liabilities |
||||||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
||||||||||||
|
|
|
|
|
|
As of September 30, 2020 |
As of March 31, 2021 |
|||||||||||
RMB |
RMB |
USD |
||||||||||
Commitments and contingencies (Note 14) |
||||||||||||
Shareholders’ deficit: |
||||||||||||
Ordinary shares (US$ |
||||||||||||
Treasury shares, at cost |
( |
) | — | — | ||||||||
Additional paid-in capital |
||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
Accumulated other comprehensive income |
||||||||||||
|
|
|
|
|
|
|||||||
Total Q&K International Group Limited shareholders’ defici t |
( |
) |
( |
) |
( |
) | ||||||
Noncontrolling interest |
||||||||||||
|
|
|
|
|
|
|||||||
Total shareholders’ deficit |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Total liabilities and shareholders’ defici t |
||||||||||||
|
|
|
|
|
|
Six months ended March 31, |
||||||||||||
2020 |
2021 |
|||||||||||
RMB |
RMB |
USD |
||||||||||
Net revenues: |
||||||||||||
Rental service |
||||||||||||
Value-added services and others |
||||||||||||
|
|
|
|
|
|
|||||||
Total net revenues |
||||||||||||
|
|
|
|
|
|
|||||||
Operating costs and expenses: |
||||||||||||
Operating cost |
( |
) | ( |
) | ( |
) | ||||||
Selling and marketing expenses |
( |
) | ( |
) | ( |
) | ||||||
General and administrative expenses |
( |
) | ( |
) | ( |
) | ||||||
Research and development expenses |
( |
) | ( |
) | ( |
) | ||||||
Pre-operation expenses |
( |
) | — | — | ||||||||
Impairment loss on long-lived assets |
( |
) | ( |
) | ( |
) | ||||||
Other expense, net |
( |
) |
( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Total operating costs and expenses |
( |
( |
( |
|||||||||
|
|
|
|
|
|
|||||||
Loss from operations |
( |
) | ( |
) |
( |
) | ||||||
Interest expense, net |
( |
) | ( |
) | ( |
) | ||||||
Debt extinguishment cost |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Foreign exchange loss, net |
( |
) | ( |
) | ( |
) | ||||||
Fair value change of contingent earn-out liabilities |
— | — | ||||||||||
|
|
|
|
|
|
|||||||
Loss before income taxes |
( |
) |
( |
) |
( |
) | ||||||
Income tax expense |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net loss |
( |
) |
( |
) | ( |
) | ||||||
Less: net loss attributable to noncontrolling interests |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net loss attributable to Q&K International Group Limited ordinary shareholders |
( |
) |
( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net loss per share attributable to ordinary shareholders of Q&K International Group Limited—Basic and diluted |
( |
) | ( |
) | ( |
) | ||||||
Weighted average number of ordinary shares used in computing net loss per share—Basic and diluted |
Six months ended March 31, |
||||||||||||
2020 |
2021 |
|||||||||||
RMB |
RMB |
USD |
||||||||||
Net loss |
( |
) |
( |
) |
( |
) | ||||||
Other comprehensive income (loss), net of tax of |
||||||||||||
Foreign currency translation adjustments |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Comprehensive loss |
( |
) |
( |
) |
( |
) | ||||||
Less: comprehensive loss attributable to noncontrolling interests |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net loss attributable to Q&K International Group Limited ordinary shareholders |
( |
) | ( |
) |
( |
) | ||||||
|
|
|
|
|
|
Six months ended March 31, 2020 |
||||||||||||||||||||||||||||||||||||||||||||
Ordinary shares |
Series A non-redeemable preferred shares |
Treasury stock |
Additional paid in capital |
Accumulated other comprehensive (loss) income |
Accumulated deficit |
Total |
Noncontrolling interests |
Total shareholders’ deficit |
||||||||||||||||||||||||||||||||||||
Number of shares |
Amount |
Number of shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 |
— |
— |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||||
Issuance of ordinary shares in connection with initial public offering (“IPO”), net off issuance of cost of RMB |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Conversion of Series A non-redeemable preferred shares into ordinary shares |
( |
) | ( |
) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Conversion of mezzanine equity into ordinary shares |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — |
( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||
Foreign currency translation adjustments |
— | — | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||||||||||||||
Balance at March 31, 2020 |
— |
— |
— |
( |
) |
( |
) |
( |
) |
( |
) | |||||||||||||||||||||||||||||||||
Six months ended March 31, 2021 |
||||||||||||||||||||||||||||||||||||||||||||
Ordinary shares |
Series A non-redeemable preferred shares |
Treasury stock |
Additional paid in capital |
Accumulated other comprehensive (loss) income |
Accumulated deficit |
Total |
Noncontrolling interests |
Total shareholders’ deficit |
||||||||||||||||||||||||||||||||||||
Number of shares |
Amount |
Number of shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 |
— |
— |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||||
Transfer of treasury shares to extinguish debt with a lender |
— | — | — | — | ( |
) |
— | — |
— | |||||||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Exercise of share-based compensation |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Warrants issued in connection with convertible notes |
— | — | — | — | — | — |
— | — | ||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — |
( |
) | ( |
) | ( |
) | ( |
) | |||||||||||||||||||||||||||||
Foreign currency translation adjustments |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 |
— | — | — | ( |
) | ( |
) |
( |
) | |||||||||||||||||||||||||||||||||||
Six months ended March 31, |
||||||||||||
2020 |
2021 |
|||||||||||
RMB |
RMB |
USD |
||||||||||
Operating activities: |
||||||||||||
Net loss |
( |
) | ( |
) | ( |
) | ||||||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||||||
Share-based compensation |
||||||||||||
Depreciation and amortization |
||||||||||||
Loss from disposal of property, plant and equipment |
||||||||||||
Accretion of interest expense |
— | |||||||||||
Fair value change of contingent earn-out liabilities |
( |
) | — | — | ||||||||
Debt extinguishment cost |
|
|
— |
|
|
|
|
|
|
|
|
|
Deferred rent |
( |
) | ( |
) | ||||||||
Impairment loss |
||||||||||||
Changes in operating assets and liabilities: |
||||||||||||
Accounts receivable |
( |
) | ||||||||||
Amounts due from related parties |
||||||||||||
Prepaid rent and deposit |
||||||||||||
Advances to suppliers |
( |
) | ( |
) | ||||||||
Other current assets |
( |
) | ||||||||||
Other assets |
( |
) | ( |
) | ( |
) | ||||||
Accounts payable |
||||||||||||
Amounts due to related parties |
( |
) | ( |
) | ||||||||
Deferred revenue |
( |
) | ( |
) | ( |
) | ||||||
Deposits from tenants |
( |
) | ( |
) | ( |
) | ||||||
Accrued expenses and other current liabilities |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net cash used in operating activitie s |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Investing activities: |
||||||||||||
Purchases of property and equipment |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net cash used in investing activities |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Financing activities: |
||||||||||||
Proceeds from IPO, net off issuance cost of RMB 29,289 |
— | — | ||||||||||
Proceeds from issuance of convertible notes |
— | |||||||||||
Proceeds from short-term bank borrowings |
||||||||||||
Repayment of short-term bank borrowings |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from long-term bank borrowings |
— | |||||||||||
Repayment of long-term bank borrowings |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from rental installment loans |
||||||||||||
Repayment of rental installment loans |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from capital lease and other financing arrangement payable |
— | — | ||||||||||
Repayment of capital lease and other financing arrangement payable |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by financing activities |
||||||||||||
|
|
|
|
|
|
|||||||
Effect of foreign exchange rate changes |
||||||||||||
|
|
|
|
|
|
|||||||
Net (decrease) in cash, cash equivalents and restricted cash |
( |
) | ( |
) | ( |
) | ||||||
Cash, cash equivalents and restricted cash at the beginning of the period |
||||||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents and restricted cash at the end of the period |
||||||||||||
|
|
|
|
|
|
|||||||
Supplemental disclosure of cash flow information: |
||||||||||||
Interest paid, net of amounts capitalized |
||||||||||||
Income taxes paid |
— | — |
As of September 30, 2020 |
As of March 31, 2021 |
|||||||||||
RMB |
RMB |
USD |
||||||||||
Reconciliation to amounts on the consolidated balance sheets: |
||||||||||||
Cash and cash equivalents |
||||||||||||
Restricted cash |
||||||||||||
|
|
|
|
|
|
|||||||
Total cash, cash equivalents and restricted cash |
||||||||||||
|
|
|
|
|
|
|||||||
Supplemental schedule of non-cash investing and financing activities: |
||||||||||||
Purchases of property and equipment included in payables |
( |
) | — | — | ||||||||
Acquisition of rental assets financed by ADS (Note 4) |
( |
) | — | — | ||||||||
Conversion of Series A non-redeemable preferred shares and mezzanine into ordinary shares |
( |
) | — | — | ||||||||
Transfer of treasury shares to extinguish debt with a lender |
— |
1. |
ORGANIZATION AND PRINCIPAL ACTIVITIES |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES |
• | In July 2020, the Company has executed a convertible note and warrant purchase agreement with two investors (Note 7). By the date of this report, the Company issued the several instalments of Notes and raised proceeds aggregating $(equivalent to RMB ) from the investor. No issuance cost was incurred. Pursuant to the convertible and warrant purchase agreement with investors, the Company is able to issue additional Notes to raise proceeds of $ |
|
• |
In April 2021, the Company entered into two bank borrowing extension agreements with SHRB, pursuant to which the bank extended due date of one borrowing with the principal of RMB |
• |
Between July and August 2021, the Company plans raise proceeds through registered direct offering, and |
• |
In July 2021, a principal shareholder of the Company, has agreed to consider to provide necessary financial support in the form of debt and/or equity, to the Group to enable the Group to meet its other liabilities and commitments as they become due for at least twelve months from the issuance date of this unaudited condensed consolidated financial statements. |
Fair Value Measurements at Reporting Date Using |
||||||||||||||||||||||
Six Months Ended March 31, |
Description |
Fair Value as of March 31 RMB |
Quoted Prices in Active Markets for Identical Assets (Level 1) RMB |
Significant Other Observable Inputs (Level 2) RMB |
Significant Unobservable Inputs (Level 3) RMB |
Total Gain for the Six Months Ended March 31, RMB |
||||||||||||||||
2020 |
Contingent earn-out |
|||||||||||||||||||||
2021 |
liabilities |
Fair Value Measurements at Reporting Date Using |
||||||||||||||||||||||
Six Months Ended March 31, |
Description |
Fair Value as of March 31 RMB |
Quoted Prices in Active Markets for Identical Assets (Level 1) RMB |
Significant Other Observable Inputs (Level 2) RMB |
Significant Unobservable Inputs (Level 3) RMB |
Total Loss for the Six Months Ended March 31, RMB |
||||||||||||||||
2020 |
Property and equipment |
|||||||||||||||||||||
2021 |
||||||||||||||||||||||
2021 |
Apartment rental agreements |
|
||||||||||||||||||||
2021 |
Trademarks | |
— |
• | The apartment rental agreements with both landlords and tenants were valued using the multiperiod excess earnings method, which incorporated certain assumptions including projected rooms’ revenue, growth rates and projected operating costs based on current economic condition, expectation of management and projected trends of current operating results. The revenue growth rate and the discount rate were the significant unobservable inputs used in the fair value measurement, which were negative |
• | T he trademarks were valued using the relief from royalty method, which incorporated certain assumptions including projected revenues contributed by trademarks, royalty savings and projected trends of operating results. The revenue growth rate and the discount rate were the significant unobservable inputs used in the fair value measurement, which were negative |
3. |
OTHER CURRENT ASSETS |
As of September 30, 2020 |
As of March 31, 2021 |
|||||||
Due from a rental service company (1) |
||||||||
Deductible input value added tax (“VAT”) (2) |
— | |||||||
Due from a service provider (3) |
||||||||
Others |
||||||||
Total |
||||||||
(1) |
As of September 30, 2020 and March 31, 2021, the balance due from a rental service company represented the reimbursement renovation costs due from the rental service company. The Company started to cooperate with a rental service company to source and renovate apartments since August 2018. For certain identified newly sourced apartments, the rental service company reimburses the Company for costs incurred for the renovation. The Company then makes payments to the rental service company in installments equal to the reimbursed renovation costs plus interest and tax over a period of five years. |
(2) |
The deductible input VAT represented the excess of input VAT arising from purchases over output VAT arising from sales under the PRC tax laws and regulations. The deductible input VAT is carried forward to future period. As of March 31, 2021, the Company assessed certain PRC subsidiaries would not generate sufficient revenues and output VAT for the balance to be deducted in the next twelve months, the Company reclassified the deductible input VAT to the account of “other assets” as a noncurrent asset. |
(3) |
Upon asset acquisition with Beautiful House, the Group engaged a third party service provider to provide apartment operation services to the Group. To support the operation services, the Company made interest free loans to the service provider and the loans are repayable on demand. |
4. |
PROPERTY AND EQUIPMENT, NET |
As of September 30, 2020 |
As of March 31, 2021 |
|||||||
Cost: |
||||||||
Buildings |
||||||||
Leasehold improvements |
||||||||
Furniture, fixtures and equipment used in apartments |
||||||||
Vehicle |
||||||||
Office furniture, fixtures and equipment |
||||||||
Less: Accumulated depreciation |
( |
) | ( |
) | ||||
Construction in progress |
||||||||
Property and equipment, net |
||||||||
5. |
INTANGIBLE ASSETS, NET |
As of September 30, 2020 |
As of March 31, 2021 |
|||||||
Cost: |
||||||||
Apartment rental contracts |
||||||||
Trademarks |
||||||||
Software |
||||||||
Less: Accumulated amortization |
( |
) | ( |
) | ||||
Intangible assets, net |
||||||||
Amortization expenses |
||||
Six months ending September 30, 2021 |
||||
Year ending September 30, 2022 |
||||
Year ending September 30, 2023 |
||||
Year ending September 30, 2024 |
||||
Year ending September 30, 2025 and thereafter |
||||
6. |
DEBT |
As of September 30, 2020 |
As of March 31, 2021 |
|||||||
Short-term debt: |
||||||||
Short-term bank borrowings (1) |
||||||||
Long-term bank borrowings, current portion (1) |
||||||||
Capital lease and other financing arrangement payable, current portion (2) |
||||||||
Other short-term payable (3) |
||||||||
Subtotal |
||||||||
Long-term debt: |
||||||||
Long-term bank borrowings, non-current portion(1) |
||||||||
Capital lease and other financing arrangement payable, non-current portion(2) |
||||||||
Other long term payable (3) |
||||||||
Subtotal |
||||||||
Total |
||||||||
(1) | Bank borrowings |
(2) |
Capital lease and other financing arrangement payable |
March 31, 2021 |
||||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
2026 and there after |
||||
|
|
|||
Less payment amount allocated to interest |
||||
|
|
|||
Present value of capital lease obligation |
||||
|
|
|||
Current portion of capital lease obligation |
||||
Long-term portion of capital lease obligation |
||||
|
|
|||
|
|
(3) |
Other short and long term payable |
7. |
CONVERTIBLE NOTE, NET |
(1) | the conversion price is calculated as % of the |
(2) | if the Company completes an ADS offering of at least $ |
July 29, 2020 |
September 25, 2020 |
October 14, 2020 |
October 20, 2020 |
October 29, 2020 |
December 15, 2020 |
February 25, 2021 |
||||||||||||||||||||||
Terms of warrants |
||||||||||||||||||||||||||||
Exercise price |
||||||||||||||||||||||||||||
Risk free rate of interest |
% | % | % | % | % | % | % | |||||||||||||||||||||
Dividend yield |
% | % | % | % | % | % | ||||||||||||||||||||||
Annualized volatility of underlying stock |
% | % | % | % | % | % | % |
Number of shares |
Weighted average life |
Expiration Dates |
||||||||||
Balance of warrants outstanding as of September 30, 2020 |
||||||||||||
Grants of Warrants on October 14, 2020 |
||||||||||||
Grants of Warrants on October 20, 2020 |
||||||||||||
Grants of Warrants on October 29, 2020 |
||||||||||||
Grants of Warrants on December 15, 2020 |
||||||||||||
Grants of Warrants on February 25, 2021 |
||||||||||||
|
|
|||||||||||
Balance of warrants outstanding as of March 31, 2021 |
||||||||||||
|
|
8. |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
As of September 30, 2020 |
As of March 31, 2021 |
|||||||
Due to a rental service company (1) |
||||||||
Tenant deposits |
||||||||
Payable to a constructor for leasehold improvements |
||||||||
Other tax payable |
||||||||
Accrued utilities |
||||||||
Interest payable |
||||||||
Accrued payroll and welfare |
||||||||
Operation service payable |
||||||||
Deferred rent |
||||||||
Others |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
(1) | As of March 31, 2021, the balance of due to a rental service company primarily represented the rental deposits and prepaid rental fee collected from tenants. The rental deposits and prepaid rental fee belonged to the rental service company, for which the Group provided apartment operation services since April 2020. |
9. |
SHARE-BASED COMPENSATION |
April 2016 |
October 2016 |
July 2017 |
||||||||||
Risk-free rate of return |
% | % | % | |||||||||
Contractual life of option |
||||||||||||
Estimated volatility rate |
% | % | % | |||||||||
Expected dividend yield |
% | % | % | |||||||||
Fair value of underlying ordinary shares |
US$ | US$ | US$ |
Number of Options |
Exercise Price RMB |
Remaining Contractual Life |
||||||||||
Outstanding, as of September 30, 2019 |
||||||||||||
Granted |
— | — | — | |||||||||
Forfeited |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Outstanding, as of March 31, 2020 |
||||||||||||
|
|
|
|
|
|
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Outstanding, as of September 30, 2020 |
||||||||||||
Granted |
— | — | — | |||||||||
Forfeited |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Outstanding, as of March 31, 2021 |
||||||||||||
|
|
|
|
|
|
|||||||
Vested or expected to vest as of March 31, 2021 |
||||||||||||
|
|
|
|
|
|
10. |
LOSSES PER SHARE |
Six months ended March 31, |
||||||||
2020 |
2021 |
|||||||
Net loss attributable to Q&K International Group Limited |
( |
) | ( |
) | ||||
Net loss per share attributable to ordinary shareholders of Q&K International Group Limited—Basic and diluted |
( |
) | ( |
) | ||||
Weighted average number of ordinary shares used in computing net loss per share—Basic and diluted |
11. |
INCOME TAXES |
12. |
STATUTORY RESERVES AND NET RESTRICTED ASSETS |
13. |
RELATED PARTY TRANSACTIONS AND BALANCES |
Related Party |
Relationship with the Group | |
Shanghai Laiguan Property Management Co., Ltd. (“Laiguan”) | ||
Shanghai Yijia Property Management Co., Ltd. (“Yijia Property”) | ||
Shanghai Youzhen Information Technology Co., Ltd. (“Youzhen”) | ||
Shanghai Qingji Property Management Co., Ltd. (“Qingji”) | ||
Key Space(S) Ptd. Ltd. (“Key Space”) |
Six months ended March 31, |
||||||||
2020 |
2021 |
|||||||
Labor outsourcing service expense to Laiguan |
||||||||
Labor outsourcing service expense to Qingji. |
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|
|
|
|
|||||
Total |
||||||||
|
|
|
|
As of September 30, 2020 |
As of March 31, 2021 |
|||||||
Youzhen. |
||||||||
Others |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
As of September 30, 2020 |
As of March 31, 2021 |
|||||||
Yijia Property. |
||||||||
Qingji |
||||||||
Laiguan |
||||||||
Others |
||||||||
|
|
|
|
|||||
Total |
||||||||
|
|
|
|
14. |
COMMITMENTS AND CONTINGENCIES |
For the six months ended September 30, 2021 |
||||
For the twelve months ended September 30, 2022 |
||||
For the twelve months ended September 30, 2023 |
||||
For the twelve months ended September 30, 2024 |
||||
For the twelve months ended September 30, 2025 |
||||
Thereafter |
||||
|
|
|||
Total |
||||
|
|
• | Certain landlords had disputes on the early termination and entered into legal proceedings against the Group for compensation aggregating RMB 5,211. The Company estimated it exposed to the compensation of RMB |
• | Certain landlords had disputes but did not enter into legal proceedings against the Company. These landlords had rights to file legal proceedings against the Group within |
• | Certain landlords did not reply to the Group’s short message within three months, which legally implied that they agreed with the termination, and the Group is not obliged to compensation for these landlords. |
15. |
SUBSEQUENT EVENTS |