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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

For the month of August, 2022

Commission File Number: 001-39111

Q&K International Group Limited

(Registrant’s Name)

Suite 1607, Building A
No.596 Middle Longhua Road
Xuhui District, Shanghai, 200032
People’s Republic of China
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒

Form 40-F ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 


 

TABLE OF CONTENTS

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

2

CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2022 (UNAUDITED) AND SEPTEMBER 30, 2021

10 - 11

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE SIX MONTHS ENDED MARCH 31, 2021 AND 2022

12 - 13

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT FOR THE SIX MONTHS ENDED MARCH 31, 2021 AND 2022

14 -15

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED MARCH 31, 2021 AND 2022

16

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

17 - 28

 

 

1


 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Equity Transfer

On October 26, 2021, we transferred all of our equity interest in Shanghai Qingke Investment Consulting Co., Ltd., or the WFOE, to Wangxiancai Limited, which is beneficially owned by the legal representative and executive director of one of our subsidiaries, a related party (the “Equity Transfer”). The WFOE has a series of contractual arrangements with Shanghai Qingke E-commerce Co., Ltd, or the VIE. Through the VIE and its subsidiaries (the “VIE entities”), we carried out certain rental apartment operation business prior to the Equity Transfer. As a result of the Equity Transfer, we no longer conduct any operation through a variable interest entity. However, we did not account for the Equity Transfer as a discontinued operation and the financials of the WFOE and VIE entities were consolidated into our unaudited condensed consolidated financial statements as of and for the six months ended March 31, 2022 as we have been involved in the settlement of liabilities of the WFOE and still have the control over the allocation of remaining assets in the liquidation of the VIE entities. The WFOE and VIE entities contributed 30% and 0.4% of our consolidated revenues for the six months ended March 31, 2021 and 2022, respectively. As of the date hereof, we have initiated bankruptcy proceedings with respect to major VIE entities. See Note 1 to the unaudited condensed consolidated financial statements included herein.

Summary Consolidated Financial and Operating Data

The summary unaudited condensed consolidated financial information for the six months ended March 31, 2021 and 2022 and as of March 31, 2022 has been derived from our unaudited condensed consolidated financial statements as of and for the six months ended March 31, 2022 included herein. Our unaudited condensed consolidated financial statements have been prepared on a basis consistent with our audited consolidated financial statements. The summary condensed consolidated balance sheet data as of September 30, 2021 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, 2021 filed with the SEC on February 15, 2022 (the “FY 2021 annual report”). The summary condensed 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 2021 annual report.

Summary Unaudited Condensed Consolidated Statements of Comprehensive Loss

 

Six months ended March 31,

 

2021

2022

 

RMB

RMB

US$

 

(in thousands)

 

 

(Unaudited)

Net revenue:

 

 

 

Rental service

541,671

332,783

52,495

Value-added services and others

73,538

31,431

4,958

Total net revenues

615,209

364,214

57,453

Operating costs and expenses:

 

 

 

Operating cost

(684,205)

(405,661)

(63,991)

Selling and marketing expenses

(12,503)

(189)

(30)

General and administrative expenses

(46,243)

(25,329)

(3,996)

Research and development expenses

(4,765)

(1,853)

(292)

Impairment loss on long-lived assets

(42,584)

(100,156)

(15,799)

Other expense, net

(26,426)

(20,074)

(3,167)

 

2


 

Total operating costs and expenses

(816,726)

(553,262)

(87,275)

Loss from operations

(201,517)

(189,048)

(29,822)

Interest expense, net

(64,287)

(54,174)

(8,546)

Debt extinguishment cost

(41,964)

Foreign exchange loss, net

(192)

(5)

(1)

Loss before income taxes

(307,960)

(243,227)

(38,369)

Income tax (expenses) benefits

(25)

3

Net loss

(307,985)

(243,224)

(38,369)

Less: net loss attributable to noncontrolling interests

(11)

Net loss attributable to Q&K International Group Limited’s ordinary shareholders

(307,974)

(243,224)

(38,369)

Net loss per share attributable to ordinary shareholders of Q&K International Group Limited—Basic and diluted

(0.23)

(0.14)

(0.02)

Weighted average number of ordinary shares used in computing net loss per share—Basic and diluted

1,352,152,052

1,728,612,425

1,728,612,425

Net loss

(307,985)

(243,224)

(38,369)

Other comprehensive income (loss), net of tax of nil:

 

 

 

Foreign currency translation adjustments

13,500

3,642

575

Comprehensive loss

(294,485)

(239,582)

(37,794)

Less: comprehensive loss attributable to noncontrolling interests

(11)

Comprehensive loss attributable to Q&K International Group Limited’s ordinary shareholders

(294,474)

(239,582)

(37,794)

 

3


 

Summary Condensed Consolidated Balance Sheet Data

 

As of September 30,

As of March 31,

 

2021

2022

 

RMB

RMB

US$

 

(in thousands)

 

 

(Unaudited)

Total current assets

176,670

74,365

11,731

Total non‑current assets

200,960

70,829

11,173

Total assets

377,630

145,194

22,904

Total current liabilities

2,347,625

2,534,540

399,814

Total non-current liabilities

514,911

333,323

52,580

Total liabilities

2,862,536

2,867,863

452,394

Total current assets less current liabilities

(2,170,955)

(2,460,175)

(388,083)

Net liabilities

(2,484,906)

(2,722,669)

(429,490)

Total Q&K International Group Limited shareholders’ deficit

(2,494,506)

(2,732,269)

(431,004)

Noncontrolling interest

9,600

9,600

1,514

Total shareholders’ deficit

(2,484,906)

(2,722,669)

(429,490)

Total liabilities and shareholders’ deficit

377,630

145,194

 22,904

 

Summary Unaudited Condensed Statement of Cash Flows

 

Six months ended March 31,

 

2021

2022

 

RMB

RMB

US$

 

(in thousands)

 

 

(Unaudited)

 

 

Net cash used in operating activities

(77,566)

(27,545)

(4,297)

Net cash used in investing activities

(3,879)

Net cash provided by financing activities

68,386

16,532

2,608

Effect of foreign exchange rate changes

7,763

(142)

(22)

Net decrease in cash, cash equivalents and restricted cash

(5,296)

(11,155)

(1,711)

Cash, cash equivalents and restricted cash at the beginning of period

31,766

19,252

2,988

Cash, cash equivalents and restricted cash at the end of period

26,470

8,097

1,277

 

Key Operating Data

The table below sets forth our key operating data as of March 31, 2021 and 2022:

 

As of March 31,

 

2021

2022

Number of rental units contracted

75,153

55,177

Number of rental units under renovation

-

-

Number of available rental units

75,153

55,177

Number of occupied rental units

66,015

49,891

Number of vacant available rental units

9,138

5,286

Number of rental units managed but not contracted by us(1)

25,375

-

____________

4


 

(1) refers to the number of rental units that we managed under the cooperation with a rental service company owned by a state-owned bank. Under such cooperation, we provided rental management service only and the rental units were contracted between the rental service company and the tenants. As of August 31, 2021, we had terminated such cooperation with the rental service company and no longer manage these rental units.

 

The table below sets forth the numbers of available rental units as of March 31, 2021 and 2022:

 

As of March 31,

 

2021

2022

East China(1)

21,359

13,989

North China(2)

24,835

20,974

Southwest China(3)

20,562

17,361

Others(4)

8,397

2,853

____________

(1) includes Fuzhou, Hangzhou, Hefei, Nanjing, Ningbo, Shanghai, Suzhou, Jinan and Qingdao

(2) includes Beijing, Shijiazhuang, Tianjin and Xi’an

(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, 2021 and 2022:

 

Six months ended March 31,

 

2021

2022

Period-average occupancy rate (%)

86.6%

91.6%

Average monthly rental (RMB)

 

 

before discount for rental prepayment

1,031

1,060

after discount for rental prepayment

1,024

1,060

Rental spread margin (%)

 

 

before discount for rental prepayment

13.0%

16.5%

after discount for rental prepayment

12.3%

16.5%

 

Impact of COVID-19 on Our Operations and Financial Performance

We derive our revenue primarily from our rental service. The COVID-19 outbreak and the restrictive measures implemented by the relevant governmental authorities, including lockdowns, travel restrictions and closures of business have adversely impacted the long-term rental market. There have been resurgences in COVID-19 cases in several parts of China, including in cities where we have our rental apartment network such as Beijing and Xi’an, in the six months ended March 31, 2022. In light of such circumstances, we had undertaken a more conservative approach and proactively contracted fewer rental units during such period to keep the period-average occupancy rate and average monthly rental at comparatively high level. As such, the number of our occupied rental units has decreased, which had an adverse impact on our results of operation and cash flow.

 

In addition, the COVID-19 outbreak caused temporary office closures and rotation arrangements, resulting in lower work efficiency and productivity. We also incurred costs in response to the COVID outbreak, including purchasing personal protective equipment, upgrading our technology system to support the growth in online courses, monitoring our employees’ health, and rotation arrangements to avoid infection transmission. In addition, some of our employees and business partners were unable to return to work timely during the recent Shanghai lockdowns, which also temporarily interrupted our operation.

 

In response to the challenges and uncertainties resulting from the COVID-19 pandemic and its impact on our business, we have adopted a defensive strategy by consolidating internal resources, further improving operating efficiencies and focusing on asset quality improvement rather than aggressive expansion. Our rental spread margin improved in the six months ended March 31, 2022, compared to that in the six months ended March 31, 2021.

 

5


 

The extent to which COVID-19 impacts our financial position, results of operations and cash flows in the future will depend on the future developments of the COVID-19 pandemic, including the duration and severity of COVID-19, the extent and severity of new waves of outbreak, the development and progress of distribution of COVID-19 vaccines and other medical treatments and the effectiveness of such vaccines and other medical treatments, and the actions taken by government authorities to contain the outbreak, all of which are highly uncertain, unpredictable and beyond our control.

 

 

Results of Operations

Net Revenues

Our total net revenues decreased by 40.8% from RMB615.2 million in the six months ended March 31, 2021 to RMB364.2 million (US$57.5 million) in the six months ended March 31, 2022.

Rental service. Our net revenue from rental service decreased by 38.6% from RMB541.7 million in the six months ended March 31, 2021 to RMB332.8 million (US$52.5 million) in the six months ended March 31, 2022, primarily because (i) we terminated the cooperation with the rental service company owned by a state-owned bank and therefore we no longer managed those rental units that were not contracted by us; and (ii)of a decrease in the number of available rental units, as we had undertaken a more conservative approach and proactively contracted fewer rental units in the six months ended March 31, 2022 to keep the period-average occupancy rate and average monthly rental at comparatively high level notwithstanding the COVID impact.
Value-added services and others. Our net revenues from value-added services and others decreased by 57.3% from RMB73.5 million in the six months ended March 31, 2021 to RMB31.4 million (US$5.0 million) in the six months ended March 31, 2022, primarily due to a decrease in number of occupied rental units.

 

Operating Costs and Expenses

Our total operating costs and expenses decreased by 32.3% from RMB816.7 million in the six months ended March 31, 2021 to RMB553.3 million (US$87.3 million) in the six months ended March 31, 2022, primarily due to the decreases in our operating cost and general and administrative expenses.

Operating cost. Our operating cost decreased by 40.7% from RMB684.2 million in the six months ended March 31, 2021 to RMB405.7 million (US$64.0 million) in the six months ended March 31, 2022. The decrease was primarily due to the followings:
Rental cost. Our rental cost decreased by 40.6% from RMB506.2 million in the six months ended March 31, 2021 to RMB300.7 million (US$47.4 million) in the six months ended March 31, 2022, primarily because we terminated the cooperation with the rental service company owned by a state-owned bank and therefore, we no longer managed those rental units that were not contracted by us.
Depreciation expenses. Our depreciation expenses decreased by 58.1% from RMB52.3 million in the six months ended March 31, 2021 to RMB21.9 million (US$3.5 million) in the six months ended March 31, 2022, primarily because we ceased to recognize depreciation expenses for leasehold improvements and other capital expenditure for the rental units that were managed but not contracted by us under the cooperation with the rental service company owned by a state-owned bank.
Personnel costs. Our personnel costs decreased by 32.5% from RMB120.5 million in the six months ended March 31, 2021 to RMB81.3 million (US$12.8 million) in the six months ended March 31, 2022, primarily attributable to our cost-saving effort due to COVID-19 pandemic and

6


 

our strategy to proactively contract fewer rental units to keep the period-average occupancy rate and average monthly rental at comparatively high level.
Selling and marketing expenses. Our selling and marketing expenses decreased significantly from RMB12.5 million in the six months ended March 31, 2021 to RMB0.2 million (US$30 thousand) in the six months ended March 31, 2022, primarily due to decrease in personnel cost as we terminated the cooperation with the rental service company owned by a state-owned bank and therefore, we no longer incurred selling and marketing expenses to manage those rental units that were not contracted by us.
General and administrative expenses. Our general and administrative expenses decreased by 45.2% from RMB46.2 million in the six months ended March 31, 2021 to RMB25.3 million (US$4.0 million) in the six months ended March 31, 2022, primarily attributable to decrease in share-based payment expense and personnel cost. The decrease was partially offset by the increase in bad debt expense as we provided provision of RMB 6.2 million on prepayments to the suppliers.
Research and development expenses. Our research and development expenses decreased from RMB4.8 million in the six months ended March 31, 2021 to RMB1.9 million (US$0.3 million) in the six months ended March 31, 2022, primarily as we reduced investments in the IT infrastructure as the system matures.
Impairment loss on long-lived assets. Our impairment loss on long-lived assets increased significantly from RMB42.6 million in the six months ended March 31, 2021 to RMB100.2 million (US$15.8 million) in the six months ended March 31, 2022, primarily because we wrote off full trademark balance since the trademark will not be used in the future business development.
Other expense, net. Our net other expense decreased by 24.0% from RMB26.4 million in the six months ended March 31, 2021 to RMB20.1 million (US$3.2 million) in the six months ended March 31, 2022, primarily attributable to the decrease in disposal loss of rental contracts with landlords.

 

Loss from Operations

As a result of the foregoing, our loss from operations decreased by 6.2% from RMB201.5 million in the six months ended March 31, 2021 to RMB189.0 million (US$29.8 million) in the six months ended March 31, 2022.

Interest Expense, Net

Our net interest expense decreased by 15.7% from RMB64.3 million in the six months ended March 31, 2021 to RMB54.2 million (US$8.5 million) in the six months ended March 31, 2022. The decrease was primarily attributable to the decrease in the interest expense of installment loans, debts and capital lease, which was partially offset by the increase of interest expense arising from the issuance of convertible notes.

 

Loss before income taxes

As a result of the foregoing, our loss before income taxes decreased by 21.0% from RMB308.0 million in the six months ended March 31, 2021 to RMB243.2 million (US$38.4 million) in the six months ended March 31, 2022.

Income tax (expenses) benefits

We recorded income tax expense of RMB25 thousand in the six months ended March 31, 2021 and recorded income tax benefits of RMB3 thousand (US$0.4 thousand) in the six months ended March 31, 2022.

Net Loss

As a result of the foregoing, we recorded a net loss of RMB308.0 million in the six months ended March 31, 2021 and RMB243.2 million (US$38.4 million) in the six months ended March 31, 2022.

7


 

 

Liquidity and Capital Resources

To date, our principal sources of liquidity, which we have used to fund our growth, operations and capital expenditures for our apartment network, have been proceeds from tenants’ rental prepayment, including rental prepayment financed by rental installment loans from our financial institution partners, availability under our bank facilities, capital lease and other financing, proceeds from our initial public offering, proceeds from issuance of preferred shares, and proceeds from our issuance of convertible notes. As of March 31, 2022, we had RMB8.0 million (US$1.3 million) in cash and cash equivalents and RMB107 thousand (US$17 thousand) in restricted cash. We did not have any capital commitment as of March 31, 2022.

Going Concern

 

As of March 31, 2022, we recorded negative working capital, and our current liabilities exceeded our current assets by RMB2,460.2 million (US$388.1 million). We recorded accumulated deficits of RMB4,621.9 million (US$729.1 million) as of March 31, 2022 and net cash used in operating activities of RMB27.5 million (US$4.3 million) for the six months ended March 31, 2022. Our businesses have been negatively impacted by the COVID-19 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. 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. We intend to meet the cash requirements for the next 12 months from the issuance date of this report through a combination of bank loans, and shareholder’s financial support. See Note 2 to the unaudited condensed consolidated financial statements included herein. As of March 31, 2022, we had short‑term borrowings (including the portion of long‑term borrowings due within one year) of RMB503.3 million (US$79.4 million). As of March 31, 2022, long‑term loans in the amount of RMB7.7 million (US$1.2 million) would be due for repayment after one year, but within five years. As of March 31, 2022, we had outstanding convertible notes in the principal amount of US$ 51.6 million. In addition, in May 2022, all of the convertible notes and the other short-term payable have been converted into our equity as of the date hereof, resulting in improved liquidity profile and capital structure. See “Recent Developments” below for details.

 

Future financing requirements will depend on many factors, including the scale and pace of the expansion of our apartment network, efficiency in apartment operation, including apartment renovation and pricing, the expansion of our sales and marketing activities, and potential investments in, or acquisitions of, businesses or technologies. Inability to access financing on favorable terms in a timely manner or at all would materially and adversely affect our business, results of operations, financial condition, and growth prospects.

 

Material Cash Requirements

Our material cash requirements as of March 31, 2022 primarily include our operating lease obligations.

The following table sets forth our operating lease obligations as of March 31, 2022:

 

(RMB’000)

For the six months ending September 30, 2022

 

 

273,526

 

For the year ending September 30, 2023

 

 

424,577

 

For the year ending September 30, 2024

 

 

239,039

 

For the year ending September 30, 2025

 

 

92,271

 

For the year ending September 30, 2026

 

 

41,352

 

Thereafter

 

 

57,125

 

Total

 

 

1,127,890

 

 

8


 

 

Cash Flows

Our net cash used in operating activities in the six months ended March 31, 2022 was RMB27.5 million (US$4.3 million), which was primarily attributable to a net loss of RMB243.2 million (US$38.4 million) adjusted by non-cash items of RMB131.9 million (US$20.8 million) and a net working capital inflow of RMB83.8 million (US$13.3 million). The non-cash items of RMB131.9 million (US$20.8 million) were primarily attributable to RMB100.1 million (US$15.8 million) of impairment loss on long-lived assets and RMB22.4 million (US$3.5 million) of depreciation and amortization expenses. The net working capital inflow of RMB83.8 million (US$13.3 million) was primarily attributable to RMB83.4 million(US$13.2 million) decrease of other current assets, RMB46.0 million(US$7.3 million) increase of accounts payable, offset by RMB13.9 million (US$2.2 million) decrease of deferred revenue, RMB9.6 million (US$1.5 million) decrease of deposits from tenants and RMB 23.7 million (US$3.7 million) decrease of accrued expenses and other current liabilities.

We did not record any net cash used in investing activities in the six months ended March 31, 2022.

Our net cash provided by financing activities in the six months ended March 31, 2022 was RMB16.5 million (US$2.6 million). This was primarily attributable to our proceeds from issuance of convertible notes of RMB17.8 million (US$2.8 million), partially offset by the repayment of rental installment loans of RMB1.3 million (US$0.2 million).

We did not have any off‑balance sheet arrangement as of March 31, 2022.

Recent Developments

In May 2022, we entered into certain amendments (the “Amendments”) to the 2020 CB and related transaction documents with the holders (the “CB Holders”) of our convertible note dated July 29, 2020 (the “2020 CB”). Pursuant to the Amendments, the conversion price of the 2020 CB was adjusted to being the price calculated as seventy five percent 75% of the 15-Trading Day average closing price of our American Depositary Shares (the “ADS”), each representing 150 of our class A ordinary shares, as of May 13, 2022 (the “Conversion Price”). Also pursuant to the Amendments, all of the issued and outstanding warrants previously issued to the CB Holders in connection with the 2020 CB are deemed to have expired and we will have no further obligation to issue additional warrants to the CB Holders in connection with the 2020 CB. On May 25, 2022, the CB Holders elected to convert, and converted, all of the US$64,729,973 outstanding principal amount of the 2020 CB and all the accrued but unpaid interest as of such date at the Conversion Price, resulting in the issuance of 15,414,467,400 class A ordinary shares or 102,763,116 ADSs. In addition, on the same day, we issued 8,617,124,250 class A ordinary shares to a lender (the “Lender”) of our outstanding facility (the “Converted Loan”) at a per share price equal to the Conversion Price divided by 150 (being the ADS to class A ordinary share ratio), or for a total consideration of US$36,185,890. The payment of the total consideration is set off by the repayment by us of the outstanding amount (including any accrued but unpaid interest) owed by us to the Lender under the Converted Loan. Immediately following these issuances, we had 25,506,250,861 class A ordinary shares outstanding.

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, 2022 set forth in the H.10 statistical release of the U.S. Federal Reserve Board, which was RMB6.3393 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.

9


 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Renminbi in thousands, except for share and per share data, unless otherwise stated)

 

 

 

As of September

 

 

 

 

 

 

30, 2021

 

 

As of March 31, 2022

 

 

 

RMB

 

 

RMB

 

 

USD

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

(unaudited)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

16,317

 

 

 

7,990

 

 

 

1,260

 

Restricted cash

 

 

2,935

 

 

 

107

 

 

 

17

 

Accounts receivable, net

 

 

370

 

 

 

-

 

 

 

-

 

Amounts due from related parties

 

 

201

 

 

 

-

 

 

 

-

 

Prepaid rent and deposit

 

 

571

 

 

 

-

 

 

 

-

 

Advances to suppliers

 

 

12,933

 

 

 

6,339

 

 

 

1,000

 

Other current assets

 

 

143,343

 

 

 

59,929

 

 

 

9,454

 

Total current assets

 

 

176,670

 

 

 

74,365

 

 

 

11,731

 

Non-current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

38,940

 

 

 

38,426

 

 

 

6,062

 

Intangible assets, net

 

 

152,464

 

 

 

22,941

 

 

 

3,619

 

Other assets

 

 

9,556

 

 

 

9,462

 

 

 

1,492

 

Total non-current assets

 

 

200,960

 

 

 

70,829

 

 

 

11,173

 

Total assets

 

 

377,630

 

 

 

145,194

 

 

 

22,904

 

LIABILITIES AND DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES (including amounts of the consolidated VIEs

   without recourse to the Group, see Note 2)

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

320,269

 

 

 

366,221

 

 

 

57,770

 

Deferred revenue

 

 

195,636

 

 

 

184,013

 

 

 

29,027

 

Short-term debt

 

 

558,705

 

 

 

748,111

 

 

 

118,012

 

Rental instalment loans

 

 

18,094

 

 

 

14,561

 

 

 

2,297

 

Deposits from tenants

 

 

65,785

 

 

 

56,170

 

 

 

8,861

 

Contingent liabilities for payable for asset acquisition

 

 

164,254

 

 

 

164,254

 

 

 

25,910

 

Accrued expenses and other current liabilities

 

 

1,024,882

 

 

 

1,001,210

 

 

 

157,937

 

Total current liabilities

 

 

2,347,625

 

 

 

2,534,540

 

 

 

399,814

 

Non-current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

201,041

 

 

 

7,744

 

 

 

1,221

 

Convertible note, net

 

 

313,870

 

 

 

325,579

 

 

 

51,359

 

Total non-current liabilities

 

 

514,911

 

 

 

333,323

 

 

 

52,580

 

Total liabilities

 

 

2,862,536

 

 

 

2,867,863

 

 

 

452,394

 

 

 

10


 

 

Q&K INTERNATIONAL GROUP LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Renminbi in thousands, except for share and per share data, unless otherwise stated)

 

 

 

As of September

 

 

 

 

 

 

30, 2021

 

 

As of March 31, 2022

 

 

 

RMB

 

 

RMB

 

 

USD

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

(unaudited)

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

 

 

 

 

 

 

Deficit:

 

 

 

 

 

 

 

 

 

 

 

 

Ordinary shares (US$0.00001 par value per share; 3,500,000,000 and 50,000,000,000 shares authorized; 1,724,486,700 and 1,732,148,760 shares issued, 1,647,386,700 and 1,655,048,760 shares outstanding as of September 30, 2021 and March 31, 2022, respectively)

 

 

110

 

 

 

111

 

 

 

18

 

Treasury shares, at cost

 

 

(5

)

 

 

(5

)

 

 

(1

)

Additional paid-in capital

 

 

1,845,295

 

 

 

1,847,113

 

 

 

291,375

 

Accumulated deficit

 

 

(4,378,690

)

 

 

(4,621,914

)

 

 

(729,089

)

Accumulated other comprehensive income

 

 

38,784

 

 

 

42,426

 

 

 

6,693

 

Total Q&K International Group Limited shareholders’ deficit

 

 

(2,494,506

)

 

 

(2,732,269

)

 

 

(431,004

)

Non-controlling interest

 

 

9,600

 

 

 

9,600

 

 

 

1,514

 

Total deficit

 

 

(2,484,906

)

 

 

(2,722,669

)

 

 

(429,490

)

Total liabilities and deficit

 

 

377,630

 

 

 

145,194

 

 

 

22,904

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

11


 

 

Q&K INTERNATIONAL GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Renminbi in thousands, except for share and per share data, unless otherwise stated)

 

 

 

For the Six Months Ended March 31,

 

 

 

2021

 

 

2022

 

 

 

RMB

 

 

RMB

 

 

USD

 

Net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Rental service

 

 

541,671

 

 

 

332,783

 

 

 

52,495

 

Value-added services and others

 

 

73,538

 

 

 

31,431

 

 

 

4,958

 

Total net revenues

 

 

615,209

 

 

 

364,214

 

 

 

57,453

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Operating cost

 

 

(684,205

)

 

 

(405,661

)

 

 

(63,991

)

Selling and marketing expenses

 

 

(12,503

)

 

 

(189

)

 

 

(30

)

General and administrative expenses

 

 

(46,243

)

 

 

(25,329

)

 

 

(3,996

)

Research and development expenses

 

 

(4,765

)

 

 

(1,853

)

 

 

(292

)

Impairment loss on long-lived assets

 

 

(42,584

)

 

 

(100,156

)

 

 

(15,799

)

Other expense, net

 

 

(26,426

)

 

 

(20,074

)

 

 

(3,167

)

Total operating costs and expenses

 

 

(816,726

)

 

 

(553,262

)

 

 

(87,275

)

Loss from operations

 

 

(201,517

)

 

 

(189,048

)

 

 

(29,822

)

Interest expense, net

 

 

(64,287

)

 

 

(54,174

)

 

 

(8,546

)

Debt extinguishment cost

 

 

(41,964

)

 

 

 

 

 

 

Foreign exchange loss, net

 

 

(192

)

 

 

(5

)

 

 

(1

)

Loss before income taxes

 

 

(307,960

)

 

 

(243,227

)

 

 

(38,369

)

Income tax (expenses) benefits

 

 

(25

)

 

 

3

 

 

 

0

 

Net loss

 

 

(307,985

)

 

 

(243,224

)

 

 

(38,369

)

Less: net loss attributable to non-controlling interests

 

 

(11

)

 

 

 

 

 

 

Net loss attributable to Q&K International Group Limited’s ordinary shareholders

 

 

(307,974

)

 

 

(243,224

)

 

 

(38,369

)

Net loss per share attributable to ordinary shareholders of Q&K International Group Limited’ ordinary shareholders

   —Basic and diluted

 

 

(0.23

)

 

 

(0.14

)

 

 

(0.02

)

Weighted average number of ordinary shares used in computing net loss per share

—Basic and diluted

 

 

1,352,152,052

 

 

 

1,728,612,425

 

 

 

1,728,612,425

 

 

 

12


 

 

Q&K INTERNATIONAL GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Renminbi in thousands, except for share and per share data, unless otherwise stated)

 

 

 

 

For the Six Months Ended March 31,

 

 

 

2021

 

 

2022

 

 

 

RMB

 

 

RMB

 

 

USD

 

Net loss

 

 

(307,985

)

 

 

(243,224

)

 

 

(38,369

)

Other comprehensive income, net of tax of nil:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

13,500

 

 

 

3,642

 

 

 

575

 

Comprehensive loss

 

 

(294,485

)

 

 

(239,582

)

 

 

(37,794

)

Less: comprehensive loss attributable to non-controlling interests

 

 

(11

)

 

 

 

 

 

 

Comprehensive loss attributable to Q&K International Group Limited’ ordinary shareholders

 

 

(294,474

)

 

 

(239,582

)

 

 

(37,794

)

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

13


 

 

Q&K INTERNATIONAL GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT

(Renminbi in thousands, except for share data, unless otherwise stated)

 

 

For the six months ended March 31, 2021

 

 

 

 

 

Q&K International Group Limited shareholders’ deficit

 

 

 

 

 

 

 

 

 

 

Ordinary shares

 

 

 

 

 

 

Additional

 

 

Accumulated

other

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

Number of

shares

 

 

Amount

 

 

Treasury

stock

 

 

paid in

capital

 

 

comprehensive

income

 

 

Accumulated

deficit

 

 

Shareholders’ deficit

 

 

Non-controlling

interests