U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 November 2023

 

Commission File Number: 001-39137

 

Fresh2 Group Limited

 

650 5TH AVE STE 2416

NEW YORK, NY 10019-6108

United States

(Address of principal executive office)

 

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  ☐

 

 

 

 

 

 

EXPLANATORY NOTE

 

Filed herewith as Exhibits 99.1 and 99.2 are Registrant’s Condensed Interim Unaudited Consolidated Financial Statements as of June 30, 2023 and for the six months ended June 30, 2022 and 2023 and Management’s Discussion and Analysis of Results of Operations.

 

1

 

 

EXHIBIT INDEX

 

Exhibit   Description
99.1   Unaudited Condensed Consolidated Financial Statements as of June 30, 2023
99.2   Management’s Discussion and Analysis of Results of Operations
101.INS   Inline XBRL Instance 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)

 

2

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  Fresh2 Group Limited
   
  By: /s/ Haohan Xu
  Name:  Haohan Xu
  Title: Chief Executive Officer
     
Dated: November 9, 2023    

 

 

3

 

 

Exhibit 99.1

 

FRESH2 GROUP LIMITED

 

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Unaudited Condensed Consolidated Financial Statements   F-1
Unaudited Condensed Consolidated Balance Sheets as of December 31, 2022 and June 30, 2023   F-2
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Six Months Ended June 30, 2022 and 2023   F-3
Unaudited Condensed Consolidated Statements of Equity (Deficit) for the Six Months ended June 30, 2022 and 2023   F-4
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2022 and 2023   F-5
Notes to Unaudited Condensed Consolidated Financial Statements   F-6 – F-33

 

F-1

 

 

FRESH2 GROUP LIMITED 

(FORMERLY ANPAC BIO-MEDICAL SCIENCE CO., LTD.)  

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of Renminbi (“RMB”) and U.S. dollars (“US$”), except for number of shares and per share data)

 

   December 31   June 30   June 30 
   2022   2023   2023 
   RMB   RMB   US$ 
ASSETS            
Current assets:            
Cash and cash equivalents   16    495    68 
Prepayment   1,050    3,948    544 
Accounts receivable, net   —    270    37 
Accounts receivable-related party   —    11,450    1,579 
Amounts due from related parties, net   —    864    119 
Inventories, net   —    135    19 
Other current assets, net   —    414    57 
Current assets held for sale   12,633    9,777    1,348 
Total current assets   13,699    27,353    3,771 
                
Long term -prepayment   —    4,678    645 
Property and equipment, net   —    4,309    594 
Intangible assets, net   —    45,169    6,229 
Goodwill   —    36,503    5,034 
Right of use assets   —    223    31 
Long-term investments, net   —    39,783    5,486 
Noncurrent assets held for sale   26,770    20,193    2,785 
TOTAL ASSETS.   40,469    178,211    24,575 
                
LIABILITIES AND EQUITY/(DEFICIT)               
Current liabilities:               
Short-term debts   15    16    2 
Accounts payable   —    420    56 
Advance from customers   —    479    66 
Amounts due to related parties   1,214    592    82 
Lease liability-current   —    148    20 
Accrued expenses and other current liabilities   7,535    24,759    3,414 
Current liabilities held for sale   33,514    33,421    4,609 
Total current liabilities   42,278    59,835    8,249 
Deferred tax liabilities   —    2,938    405 
Lease liability-non-current   —    37    5 
Other long-term liabilities   —    903    125 
Noncurrent liabilities held for sale   7,595    2,434    336 
TOTAL LIABILITIES   49,873    66,147    9,120 
                
Commitments and contingencies   
 
    
 
    
 
 
                
Shareholders’ equity (deficit):               
Class A Ordinary shares ((US$0.01 par value per share; 2,400,000,000 shares authorized, 79,536,589 and 176,070,465 shares issued and outstanding as of December 31, 2022 and June 30, 2023, respectively)   5,494    12,181    1,680 
Class B Ordinary shares ((US$0.01 par value per share; 30,000,000 authorized, 3,573,100 and 3,573,100 shares issued and outstanding as of December 31, 2022 and June 30, 2023)   240    240    33 
Treasury shares (1)   (11,003)   —    — 
Additional paid-in capital   564,869    715,327    98,648 
Accumulated deficit   (577,539)   (648,303)   (89,405)
Accumulated other comprehensive income   4,263    13,079    1,804 
Total Fresh2 Group Limited shareholders’ equity (deficit)   (13,676)   92,524    12,760 
Non-controlling interest   4,272    19,540    2,695 
Total equity (deficit)   (9,404)   112,064    15,455 
                
TOTAL LIABILITIES AND EQUITY (DEFICIT)   40,469    178,211    24,575 

 

(1): 12,492,283 shares Class A Ordinary shares were held as treasury shares.

 

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

F-2

 

 

FRESH2 GROUP LIMITED 

(FORMERLY ANPAC BIO-MEDICAL SCIENCE CO., LTD.)  

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

OPERATIONS AND COMPREHENSIVE LOSS

(Amounts in thousands of RMB and US$, except for number of shares and per share data)

 

   Six Months Ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Total revenues   
—
    4,936    681 
Cost of revenues   
—
    (4,039)   (557)
Gross Profit   
—
    897    124 
Operating expenses:               
Selling and marketing expenses   (463)   (6,070)   (837)
General and administrative expenses   (8,167)   (35,680)   (4,920)
Research and development expenses   
—
    (2,303)   (318)
Loss from operations   (8,630)   (43,156)   (5,951)
Non-operating income and expenses:               
Interest expense, net   (31)   (309)   (43)
Foreign exchange loss, net   (513)   
—
    
—
 
Share of net loss in equity method investments   
—
    (95)   (13)
Change in fair value of convertible debt   139    
—
    
—
 
Other income, net   
—
    21    3 
Loss from continuing operations before income taxes   (9,035)   (43,539)   (6,004)
Income tax benefit   
—
    79    11 
Loss from continuing operations   (9,035)   (43,460)   (5,993)
Loss from discontinued operations, net of taxes   (39,780)   (27,945)   (3,854)
Net loss   (48,815)   (71,405)   (9,847)
Net loss from discontinued operations attributable to noncontrolling interests   (740)   (641)   (88)
Net loss attributable to ordinary shareholders   (48,075)   (70,764)   (9,759)
                
Other comprehensive (loss) income, net of tax:               
Foreign currency translation differences   (162)   8,816    1,216 
Total comprehensive loss   (48,977)   (62,589)   (8,631)
Total comprehensive loss attributable to noncontrolling interests   (740)   (641)   (88)
Total comprehensive loss attributable to ordinary shareholders   (48,237)   (61,948)   (8,543)
                
Amounts attributable to ordinary shareholders:               
Net loss from continuing operations   (9,035)   (43,460)   (5,993)
Net loss from discontinued operations   (39,040)   (27,304)   (3,766)
Net loss attributable to ordinary shareholders   (48,075)   (70,764)   (9,759)
                
Loss per Class A and B ordinary shares - basic and diluted               
Continuing operations
   (0.38)   (0.35)   (0.05)
Discontinued operations
   (1.66)   (0.22)   (0.03)
Net Loss
   (2.04)   (0.57)   (0.08)
                
Weighted average shares outstanding used in calculating basic and diluted loss per share               
Class A and Class B ordinary shares - basic and diluted
   23,603,709    124,374,140    124,374,140 

 

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

 

F-3

 

 

FRESH2 GROUP LIMITED

(FORMERLY ANPAC BIO-MEDICAL SCIENCE CO., LTD.)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

SHAREHOLDERS’ EQUITY/(DEFICIT)

(Amounts in thousands of RMB and US$, except for number of shares and per share data)

 

   Class A
Ordinary Shares		   Class B
Ordinary Shares		   Treasury shares   Additional
Paid-in		   Accumulated   Accumulated
Other
(Loss)		   Total
Fresh2 Group
Limited
Shareholders’
Equity		   Non-controlling   Total
Equity		 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Income   (Deficit)   interest   (Deficit) 
Balance at January 1, 2022   16,604,402    1,096    2,773,100    185    —    —    465,334    (475,646)   4,532    (4,499)   5,817    1,318 
Net loss   —    —    —    —    —    —    —    (48,075)   —    (48,075)   (740)   (48,815)
Issuance of shares in private placements, net of offering costs   14,382,693    961    —    —    —    —    30,028    —    —    30,989    —    30,989 
Issuance shares for exercise of share option   417,702    27    —    —    —    —    (27)   —    —    —    —    — 
Issuance shares reserved for convertible loan   6,000,000    381    —    —    —    —    (381)   —    —    —    —    — 
Issuance shares for service   187,094    13    —    —    —    —    (13)   —    —    —    —    — 
Conversion of convertible loans   —    —    —    —    —    —    27,739    —    —    27,739    —    27,739 
Share based compensation   —    —    —    —    —    —    4,528    —    —    4,528    —    4,528 
Foreign currency translation differences   —    —    —    —    —    —    —    —    (162)   (162)   —    (162)
Balance at June 30, 2022 (unaudited)   37,591,891    2,478    2,773,100    185    —    —    527,208    (523,721)   4,370    10,520    5,077    15,597 

 

   Class A
Ordinary Shares		   Class B
Ordinary Shares		   Treasury shares   Additional
Paid-in		   Accumulated   Accumulated
Other
(Loss)		   Total
Fresh2 Group
Limited
Shareholders’
Equity		   Non-controlling   Total
Equity		 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Income   (Deficit)   interest   (Deficit) 
Balance at January 1, 2023   79,536,589    5,494    3,573,100    240    (12,492,283)   (11,003)   564,869    (577,539)   4,263    (13,676)   4,272    (9,404)
Net loss   —    —    —    —    —    —    —    (70,764)   —    (70,764)   (641)   (71,405)
Issuance of shares in private placements, net of offering costs   62,885,707    4,355    —    —    —    —    77,541    —    —    81,896    —    81,896 
Issuance shares for exercise of share options   663,900    46    —    —    —    —    182    —    —    228    —    228 
Issuance shares for exercise of warrants   7,584,900    528    —    —    —    —    6,383    —    —    6,911    —    6,911 
Issuance shares for acquisition   31,891,652    2,174    —    —    —    —    66,788    —    —    68,962    —    68,962 
Issuance shares for service   3,500,000    243    —    —    —    —    6,142    —    —    6,385    —    6,385 
Shares issued in private placement, cancelled subsequently   2,500,000    178    —    —    —    —    (178)   —    —    —    —    — 
Canceled treasure shares   (12,492,283)   (837)   —    —    12,492,283    11,003    (10,166)   —    —    —    —    — 
Share based compensation   —    —    —    —    —    —    3,766    —    —    3,766    —    3,766 
Disposition of Changwei   —    —    —    —    —    —    —    —    —    —    15,909    15,909 
Foreign currency translation differences   —    —    —    —    —    —    —    —    8,816    8,816    —    8,816 
Balance at June 30, 2023 (unaudited)   176,070,465    12,181    3,573,100    240    —    —    715,327    (648,303)   13,079    92,524    19,540    112,064 
Balance at June 30, 2023 (US$)   176,070,465    1,680    3,573,100    33    —    —    98,648    (89,405)   1,804    12,760    2,695    15,455 

 

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

 

F-4

 

 

FRESH2 GROUP LIMITED

(FORMERLY ANPAC BIO-MEDICAL SCIENCE CO., LTD.)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

CASH FLOWS

(Amounts in thousands of RMB and US$, except for number of shares and per share data)

 

   Six Months Ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Operating activities:            
Net loss   (48,815)   (71,405)   (9,847)
Less: net loss from discontinued operations   (39,780)   (27,945)   (3,854)
Net loss from continuing operations   (9,035)   (43,460)   (5,993)
Adjustments to reconcile net loss to net cash provided by operating activities:               
Depreciation and amortization   —    2,960    408 
Share of net loss in equity method investments   —    95    13 
Share-based compensation   —    2,872    396 
Amortization of right of use assets   —    68    9 
Change in fair value of convertible debt   (139)   —    — 
Deferred tax benefits   —    (79)   (11)
Changes in operating assets and liabilities:               
Prepayment   (9,034)   (699)   (96)
Accounts receivable   —    (154)   (21)
Accounts receivable-related party   —    962    133 
Inventories   —    (129)   (18)
Other current assets   658    742    102 
Accounts payable   —    (569)   (78)
Advance from customers   —    458    63 
Accrued expenses and other current liabilities   (155)   1,384    191 
Lease liabilities   —    (60)   (8)
Net cash used in operating activities – continuing operations   (17,705)   (35,609)   (4,910)
Net cash used in operating activities –discontinued operations   (13,497)   (1,669)   (230)
Net cash used in operating activities   (31,202)   (37,278)   (5,140)
                
Investing activities:               
Purchases of property and equipment   —    (2,355)   (325)
Purchases of intangible assets   —    (8,980)   (1,238)
Cash acquired from acquisition   —    1,130    156 
Long-term investment   —    (38,106)   (5,255)
Net cash used in investing activities – continuing operations   —    (48,311)   (6,662)
Net cash provided by investing activities –discontinued operations   (817)   2,095    289 
Net cash used in investing activities   (817)   (46,216)   (6,373)
                
Financing activities:               
Proceeds from private placement   30,989    81,643    11,259 
Proceeds from exercising of warrants   —    6,911    953 
Proceeds from exercising of options   —    228    31 
Other long-term liabilities   —    982    135 
Payment to related parties   (160)   (549)   (76)
Net cash provided by financing activities – continuing operations   30,829    89,215    12,302 
Net cash used in financing activities –discontinued operations   (1,589)   (2,799)   (386)
Net cash provided by financing activities   29,240    86,416    11,916 
                
Effect of exchange rate changes on cash and cash equivalents   (362)   (2,443)   (337)
Net increase (decrease) in cash and cash equivalents   (3,141)   479    66 
Cash and cash equivalents at beginning of period   3,152    16    2 
Cash and cash equivalents at end of period   11    495    68 
                
Supplemental disclosure of non-cash activities:   —    —    — 
Conversion of convertible loans   27,739    —    — 
Right of use assets obtained in exchange for lease liabilities   8,954    —    — 
Receivable from issuance shares for private placement   —    253    35 
Issuances of shares for services   —    6,385    881 
Issuances of shares for acquisitions   —    68,962    9,510 
Additions to intangible assets through accrued expenses and other current liabilities   —    1,851    255 

 

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

F-5

 

 

FRESH2 GROUP LIMITED

(FORMERLY ANPAC BIO-MEDICAL SCIENCE CO., LTD.)

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands of RMB and US$, except for number of shares and per share data)

 

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

 

Fresh2 Group Limited (Formerly AnPac Bio-Medical Science Co., Ltd., the “Company”) was incorporated in the British Virgin Islands (“the BVI”) in January 2010. The Company incorporated a new subsidiary, Fresh2 Technology Inc. (“Fresh2”) on October 4, 2022. On February 1, 2023, the Group acquired GISN (HK) LIMITED (“GISN”), a technical solution and outsourcing consulting services provider focused on the digital, internet and Web 3 business transformation for start-ups and traditional enterprises. This acquisition is a critical initiative for the Company to improve the efficiency of its e-commerce operations. On February 8, 2023, the Group acquired Fresh 2 Ecommerce Inc. (“Fresh2 Ecommerce”), a business-to-business e-commerce platform focused on connecting Asian food suppliers and restaurants and other retail customers in the U.S. Fresh2 Ecommerce provides an online direct selling platform for food suppliers such as food companies, manufacturers, agents, importers, and wholesalers to restaurants and other retail customers. On March 31, 2023, the Group closed an asset purchase with Easy Hundred Inc. (“Easy Hundred”), a U.S.-based e-commerce startup company in the foodservice industry. On July 17, 2023, the Group entered into a definitive Share Purchase Agreement to purchase 51% of Roxe Holding Inc. (“Roxe”). On July 27, 2023, Roxe entered into a Share Purchase Agreement with SpeedIn INC (“SpeedIn”) to purchase 100% of the shares of SpeedIn. Due to its poor operating results, on October 9, 2023, Roxe sold SpeedIn to Immensus LLC, a company owned by our CEO. On November 4, 2023 the Company and Fresh2 Technology entered into a definitive Share Purchase Agreement to purchase 38.61% of the common stock of Roxe.

 

The Company and its subsidiaries (collectively, the “Group”) provides a business-to-business e-commerce platform focused on connecting Asian food suppliers and restaurants and other retail customers in the U.S.

 

Effective on July 28, 2023, the Group disposed its multi-cancer screening and detection test business (the “CDA Business”) in the People’s Republic of China (the “PRC” or “China”). The Group determined that the disposal of the CDA Business met the criteria to be classified as a discontinued operation (see Note 4) and, as a result, the CDA business’s historical financial results are reflected in the Group’s unaudited condensed consolidated financial statements as a discontinued operation.

 

As of June 30, 2023, the details of the Group’s principal subsidiaries are as follows:

 

Major subsidiaries  Percentage of
Ownership		  

Date of
Incorporation/

Acquisition

  Place of
Incorporation		  Major Operation
Changhe Bio-Medical Technology (Yangzhou) Co., Ltd.    100%  March 2010  the PRC  Cancer screening and detection tests
AnPac Bio-Medical Technology (Lishui) Co., Ltd. (“AnPac Lishui”) *

   100%  October 2012  the PRC  Cancer screening detection tests and device manufacturing
AnPac Bio-Medical Technology (Shanghai) Co., Ltd.*   100%  April 2014  the PRC  Cancer screening and detection tests
AnPac Technology USA Co., Ltd. (“AnPac US”) *

   100%  September 2015  the U.S.  Clinical trials for research on cancer screening and detection tests
Lishui AnPac Medical Laboratory Co., Ltd.*   100%  July 2016  the PRC  Cancer screening and detection tests
Shiji (Hainan) Medical Technology Ltd.*   100%  March 2013  the PRC  Cancer screening and detection research
Shanghai Muqing AnPac Health Technology Co., Ltd. (“AnPac Muqing”) (i)*   51%  March 2019  the PRC  Cancer screening and detection tests
Anpai (Shanghai) Healthcare Management and Consulting Co., Ltd.*   60%  August 15, 2021  the PRC  Cancer screening and detection tests
Fresh 2 Group Inc   100%  December 27, 2022  the U.S.  B2B e-commerce
Fresh 2 Technology Inc (“Fresh2”)   100%  October 4, 2022  the U.S.  B2B e-commerce
Fresh 2 Logistics Inc.   100%  February 22, 2023  the U.S.  B2B e-commerce
Fresh 2 HF Inc   100%  February 21, 2023  the U.S.  B2B e-commerce
Foodbase Group Inc   100%  January 19, 2023  the U.S.  B2B e-commerce
Fresh 2 EZ Inc   100%  March 3, 2023  the U.S.  B2B e-commerce
Fresh 2 information Inc (ii)   100%  April 12, 2023  the U.S.  B2B e-commerce
Fresh 2 Ecommerce (“Fresh2 Ecommerce”)   100%  February 8, 2023  the U.S.  B2B e-commerce
GISN (HK) Limited (“GISN”)   100%  February 1, 2023  Hongkong, PRC,  B2B e-commerce
Hua You Sheng Future (Beijing) Technology Co., Ltd.   100%  February 1, 2023  PRC  B2B e-commerce
Guanshi Technology (Beijing) Co., Ltd.   100%  February 1, 2023  PRC  Software development

 

* Subsidiaries that were sold subsequent to June 30, 2023.
(i) AnPac Muqing closed business in March 2023
(ii) On April 12, 2023, the Company, through its subsidiary, Fresh 2 EZ Inc to acquire 100% of equity interest in Fresh 2 information Inc from Roxe Holding Inc, a company controlled by Mr. Haohan Xu, with a nominal price. Fresh 2 information Inc has not begun operation yet.

F-6

 

 

2. LIQUIDITY AND GOING CONCERN UNCERTAINTIES

 

The Group’s principal sources of liquidity have been cash generated from financing and operating activities. As of June 30, 2023, the Group had RMB495 (US$68) of cash and cash equivalents and a working capital deficit of RMB34,148 (US$4,710). For the six months ended June 30, 2023, the Group incurred a loss from continuing operations of RMB43,460(US$5,993). For the six months ended June 30, 2023, net cash used in continuing operating activities was RMB35,609 (US$4,910). The above-mentioned facts raise substantial doubt about the Group’s ability to continue as a going concern. In assessing its liquidity, management monitors and analyzes the Group’s cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. With respect to capital funding requirements, the Group budgeted capital spending based on ongoing assessments of needs to maintain adequate cash. The Group intends to finance its future working capital requirements and capital expenditures from financing activities until the Group’s operating activities generate positive cash flows, if ever. Management expects continued capital financing through debt or equity issuances to support its working capital requirements.

 

On September 25, 2023, the Company entered into an agreement with an institutional investor to purchase up to US$2,000 of convertible notes, the convertible notes will be sold in two tranches (i) US$400 (original principal amount) of convertible notes, Series C warrants to purchase 258,065 ADSs (or 5,161,300 Class A ordinary shares) at an exercise price equal to 125% of the lower of (a) $1.86 and (b) the lowest daily volume-weighted average price (“VWAP”) for the 10 trading days prior to the exercise date and Series D warrants to purchase up to 283,688 ADSs (or 5,673,760 Class A ordinary shares) at an exercise price equal to the lower of (x) $1.41 and (y) 75.83% of the lowest daily VWAP for the ten (10) trading days immediately prior to the exercise date, subject to adjustment, and (ii) US$1,600 (original principal amount) of convertible notes, 20,645,160 Series C warrants and 22,695,040 Series D warrants. The Company received the first payment of RMB1,697(US$234) from this offering, excluding related financing costs.

 

The Group can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to the Group, if at all. If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfall, there would likely be a material adverse effect on the Group and its financial statements.

 

The unaudited condensed consolidated financial statements have been prepared assuming that the Group will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

 

3. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

 

(a) Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for financial reporting and pursuant to the applicable rules and regulations of the SEC pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2023 and 2022 are not necessarily indicative of the results that may be expected for the full year. The information included in this report should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in the Group’s annual financial statements for the fiscal year ended December 31, 2022 filed with the SEC on May 16, 2023.

 

(b) Principles of consolidation

 

The accompanying unaudited condensed consolidated financial statements include the financial statements of the Group. All inter-company transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.

 

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

 

F-7

 

 

(c) Use of estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Areas where management uses subjective judgement include, but are not limited to allowance for doubtful accounts, share-based compensation, deferred tax and uncertain tax position, useful lives of intangible assets and property and equipment, impairment of long-lived assets, goodwill and long-term investments and the purchase price allocation with respect to business combinations. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences could be material to the unaudited condensed consolidated financial statements. 

 

(d) Cash and cash equivalents

 

Cash and cash equivalents consist of cash on hand and demand deposits placed with banks which are unrestricted as to withdrawal or use and have original maturities less than three months. All highly liquid investments with a stated maturity of 90 days or less from the date of purchase are classified as cash equivalents.

 

(e) Accounts receivable and allowance for credit losses

 

Accounts receivable represents the amounts that the Group has an unconditional right to consideration and is recorded net of allowance for credit losses.

In 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”), which amends previously issued guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses rather than incurred losses. The Group has adopted this ASC Topic 326 and several associated ASUs on January 1, 2023 using a modified retrospective approach. The adoption has no material impact to the Company’s consolidated financial statements. The Group estimated allowance for credit losses to reserve for potentially uncollectible receivable amounts periodically, considering factors in assessing the collectability of its accounts receivable, such as historical distribution of the age of the amounts due, payment history, creditworthiness, forward-looking factor, historical collections data of the customers, to assess the credit risk characteristics. If there is strong evidence indicating that the accounts receivable is likely to be unrecoverable, the Group also makes specific allowance in the period in which a loss is determined to be probable. Accounts receivable are considered impaired and written-off when it is probable that all contractual payments due will not be collected after all collection efforts have been exhausted.

 

(f) Convenience translation

 

Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB7.2513 on June 30, 2023, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be converted, realized or settled into US$ at such rate or at any other rate.

 

(g) Long-term investments

 

The Group’s long-term investments include equity method investments and equity investments without readily determinable fair values.

 

Investments in entities in which the Group can exercise significant influence but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC 323, Investments-Equity Method and Joint Ventures (“ASC 323”). Under the equity method, the Group initially records its investment at cost and the difference between the cost of the equity investee and the amount of the underlying equity in the net assets of the equity investee is accounted for as if the investee were a consolidated subsidiary. The share of earnings or losses of the investee are recognized in the unaudited condensed consolidated statements of operations and comprehensive loss. Equity method adjustments include the Group’s proportionate share of investee income or loss, adjustments to recognize certain differences between the Group’s carrying value and its equity in net assets of the investee at the date of investment, impairments, and other adjustments required by the equity method. The Group assesses its equity investment for other-than-temporary impairment by considering factors as well as all relevant and available information including, but not limited to, current economic and market conditions, the operating performance of the investees including current earnings trends, the general market conditions in the investee’s industry or geographic area, factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, and cash burn rate and other company-specific information.

 

F-8

 

 

Investments in equity securities without readily determinable fair values are measured at cost minus impairment adjusted by observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These investments are measured at fair value on a nonrecurring basis when there are events or changes in circumstances that may have a significant adverse effect. An impairment loss is recognized in the unaudited condensed consolidated statements of operations and comprehensive loss equal to the amount by which the carrying value exceeds the fair value of the investment. No impairment on its long-term investments was recognized for the six months ended June 30, 2022 and 2023.

 

(h) Business combinations

 

The cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of the cost of the acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the identifiable net assets of the acquiree, the difference is recognized directly in earnings.

 

The determination and allocation of fair values to the identifiable net assets acquired, liabilities assumed and noncontrolling interest is based on various assumptions and valuation methodologies requiring considerable judgment. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Group determines discount rates to be used based on the risk inherent in the acquiree’s current business model and industry comparisons. Although the Group believes that the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results may differ from forecasted amounts and the differences could be material.

 

(i) Asset Acquisition

 

We evaluate acquisitions pursuant to ASC 805, “Business Combinations,” to determine whether the acquisition should be classified as either an asset acquisition or a business combination. Acquisitions for which substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or a group of similar identifiable assets are accounted for as an asset acquisition.

 

For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition. Common stock issued as consideration in an asset acquisition is generally measured based on the acquisition date fair value of the equity interests issued. Direct transaction costs are recognized as part of the cost of an asset acquisition. The cost of an asset acquisition, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. However, as of the date of acquisition, if certain assets are carried at fair value under other applicable GAAP, the consideration is first allocated to those assets with the remainder allocated to the non-monetary identifiable assets based on relative fair value basis.

 

(j) Goodwill

 

Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable assets acquired less liabilities assumed of an acquired business. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually, or more frequently if certain circumstances indicate a possible impairment may exist.

 

In accordance with ASC 350-20, Intangibles-Goodwill and Other, Goodwill, (“ASC 350-20”) the Group has assigned and assessed goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment. The Group has determined that it has one reporting unit for the six months ended June 30, 2023. The Group has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step test in accordance with ASC 350-20. If the Group believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the two-step quantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, the Group considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing the two-step quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quoted market prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired, and the Group is not required to perform further testing. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, then the Group must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized as an impairment loss.

 

F-9

 

 

For the six months ended June 30, 2022 and 2023, the Group performed a qualitative assessment for the reporting unit. Based on the requirements of ASC 350-20, the Group evaluated all relevant qualitative and quantitative factors, weighed all factors in their entirety and concluded that it was not more-likely-than-not that the fair value of the reporting unit was less than its carrying amount. Therefore, no goodwill impairment was recognized for the six months ended June 30, 2022 and 2023.

 

(k) Discontinued operations

 

A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Discontinued operations are reported when a component of an entity comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity is classified as held for disposal or has been disposed of, if the component either (1) represents a strategic shift or (2) have a major impact on an entity’s financial results and operations. Included in the unaudited condensed consolidated statements of income and comprehensive income, result from discontinued operations is reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. In order to present the financial effects of the continuing operations and discontinued operations, revenues and expenses arising from intra-group transactions are eliminated except for those revenues and expenses that are considered to continue after the disposal of the discontinued operations.

 

(l) Fair value of financial instruments

 

The Group applies ASC 820, Fair Value Measurements and Disclosures, (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

 

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—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.

  

The Group’s financial instruments include cash and cash equivalents, accounts receivables, accounts payable, other receivables, other payables and short-term debt. The carrying values of these financial instruments approximate their fair values due to their short-term maturities.

 

The Group elected the fair value option to account for its convertible loans. The Group engaged an independent valuation firm to perform the valuation. The fair value of the convertible loans as of December 31, 2022 and June 30, 2023 was RMB15 and RMB16 (US$2) calculated using the binomial tree model. The convertible loans are classified as level 3 instruments as the valuation was determined based on unobservable inputs which are supported by little or no market activity and reflect the Group’s own assumptions in measuring fair value. Significant estimates used in developing the fair value of the convertible loans include time to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected timing of conversion. Refer to Note 11 for additional information.

 

As the inputs used in developing the fair value for level 3 instruments are unobservable, and require significant management estimate, a change in these inputs could result in a significant change in the fair value measurement.

 

F-10

 

 

The following is a reconciliation of the beginning and ending balances for convertible loans measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2022 and June 30, 2023:

 

   December 31   June 30   June 30 
   2022   2023   2023 
   RMB   RMB   US$ 
Opening balance   27,859    15    2 
Conversion of convertible loans   (27,739)   
—
    
—
 
Loss (gain) on change in fair value of convertible loan   (144)   
—
    
—
 
Other comprehensive income -foreign exchange translations   39    1    
—
 
Total   15    16    2 

 

(m) Property and equipment

 

Property and equipment are stated at cost less accumulated depreciation and any recorded impairment. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, as follows:

 

Category  Estimated useful life
Furniture, fixtures and equipment  3-5 years
Motor vehicles  5 years

 

(n) Intangible assets

 

The Company’s intangible assets mainly include acquired software from business acquisition and asset acquisition. In business combinations, identifiable intangible assets acquired are measured separately at their fair value as of the acquisition date. For asset acquisitions, the cost of the asset acquisition is allocated to identifiable assets acquired based on a relative fair value basis. Intangible assets with finite lives are carried at cost less accumulated amortization. All intangible assets with finite lives are amortized using the straight-line method over the estimated useful lives.

 

Intangible assets have estimated useful lives from the date of purchase as follows:

 

Category  Estimated useful life
Software  5-10 years

 

(o) Impairment of Long-Lived Assets

 

The Company evaluates the recoverability of its long-lived assets, including property and equipment and the intangible assets and for impairment whenever events or changes in circumstances indicate that the carrying amount of its asset may not be fully recoverable. When these events occur, the Company measures impairment by comparing the carrying amount of the assets to the estimated undiscounted future cash flows expected to result from the use of the asset and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the asset, the Company recognizes an impairment loss based on the excess of the carrying amount of the asset over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the asset when the market prices are not readily available. The adjusted carrying amount of the asset is the new cost basis and is depreciated over the asset’s remaining useful life. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. No impairment of long-lived assets was recognized for the six months ended June 30, 2022 and 2023, respectively.

 

(p) Treasury shares

 

The Company accounts for treasury share using the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury shares account on the unaudited condensed consolidated balance sheets. At retirement of the treasury shares, the ordinary shares account is charged only for the aggregate par value of the shares. The excess of the acquisition cost of treasury shares over the aggregate par value is allocated between additional paid in capital (up to the amount credited to the additional paid in capital upon original issuance of the shares) and retained earnings.

 

F-11

 

 

(q) Revenue recognition

 

The Group applies the ASU 2014-09, Revenue from Contracts with Customers — Topic 606 for its revenue recognition for all periods presented. The majority of the Group’s revenue comes from product sales of Asia food and consumable through its software application (“APP”). Revenue is recognized when the Group satisfies the performance obligations in an amount of consideration to which the Group expects to be entitled to in exchange for those goods. The Group evaluates the presentation of revenue on a gross or net basis based on whether it controls the goods provided to customers and is the principal (i.e., “gross”), or the Group arranges for other parties to provide the goods to the customers and is an agent (i.e., “net”).

 

The Group sells food and consumable products through its own APP. The Group utilizes external delivery service providers to deliver goods to its customers. The customers pay for the goods in advance. The Group recognizes product sales made through APP on a gross basis because the Group is acting as a principal in these transactions as the Company (i) is responsible for fulfilling the promise to provide the specified goods, (ii) takes on inventory risk and (iii) has discretion in establishing price. Revenues are recognized when control is transferred, which typically happens upon delivery. The Group’s contracts with customer are primarily on a fixed-price basis. Discounts and allowances provided to customers are recognized as a reduction in net sales as control of the products is transferred to customers.

 

The Group generally provides a quality assurance warranty related to the sale of products. The Group considered the warranty as an assurance type warranty since the warranty provides the customer the assurance that the product complies with agreed-upon quality. Estimated future warranty obligations are accrued and included in cost of revenues. The Group also estimates returns of the products and estimated returns are deducted from sales in the period in which the related revenue is recognized. The determination of the Group’s warranty and product return accrual is based on actual historical experience with the product and estimates of replacement costs. The Group estimates and adjusts these accruals at each balance sheet date in accordance with changes in these factors.

 

Contract balances

 

Contract assets relate to the Group’s conditional right to consideration for completed performance obligations under the contract. Accounts receivable are recorded when the right to consideration becomes unconditional. The Group does not have contract assets for the periods presented. In instances where the timing of revenue recognition differs from the timing of invoicing, the Group has determined that its contracts generally do not include a significant financing component.

 

Contract liabilities represent considerations received from customers in advance of satisfying the Group’s performance obligations under the contract, which are presented in “advance from customers” in the unaudited condensed consolidated balance sheets. The Group classifies contract liabilities as current based on the timing of when we expect to recognize revenue, which typically occurs within one year. Revenue recognized that was included in contract liabilities at the beginning of the period was nil for the six months ended June 30, 2022 and 2023, respectively. As of December 31, 2022 and June 30, 2023, contract liabilities amounted to nil and RMB479 (US$66), respectively.

 

Practical expedients

 

The Group has applied the following practical expedients:

 

(i) The transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied has not been disclosed, as substantially all of the Group’s contracts have a duration of one year or less.

 

(ii) The Group recognizes incremental costs to obtain a contract as expenses when incurred because the amortization period would be one year or less. These costs are recorded within sales and marketing expenses.

  

(r) Research and development expenses

 

Research and development expenses primarily are comprised of costs incurred in performing research and development activities, including related personnel and consultant’s compensation, benefits, share-based compensation and related materials and supplies costs. The Group expenses research and development expenses as they are incurred.

 

F-12

 

 

(s) Leases

 

The Group adopted ASU No. 2016-02—Leases (Topic 842) as of January 1, 2022, using a modified retrospective transition method permitted under ASU No. 2018-11. This transition approach provides a method for recording existing leases only at the date of adoption and does not require previously reported balances to be adjusted. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. Adoption of the new standard resulted in the recording of additional lease assets and lease liabilities on the consolidated balance sheets. The standard did not materially impact our unaudited condensed consolidated net earnings and cash flows.

 

Right-of-use (“ROU”) assets represent the Group’s rights to use underlying assets for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term, reduced by lease incentives received, plus any initial direct costs, using the discount rate for the lease at the commencement date. As the implicit rate in lease is not readily determinable for the Group’s operating leases, the Group generally use the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The Group’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Group accounts for lease and non-lease components separately. the Group has no finance leases for any of the periods presented.

 

Prior to the adoption of ASU No. 2016-02, leases were classified at the inception date as either a capital lease or an operating lease. The Group assesses a lease to be a capital lease if any of the following conditions exist: (a) ownership is transferred to the lessee by the end of the lease term, (b) there is a bargain purchase option, (c) the lease term is at least 75% of the property’s estimated remaining economic life, or (d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an occurrence of an obligation at the inception of the lease. The Group has no capital leases for the six months ended June 30, 2022 and 2023.

 

(t) Warrants

 

The Group accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480 “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Group’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Group’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent annual period end date while the warrants are outstanding.

 

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. All warrants outstanding as of June 30, 2023 and December 31, 2022 do not meet the definition of a liability pursuant to ASC 480 and meet all of the requirements for equity classification under ASC 815 and therefore, classified as equity.

 

(u) Share-based compensation

 

The Group accounts for share-based compensation in accordance with ASC 718, Compensation – Stock Compensation (“ASC 718”). In accordance with ASC 718, the Group determines whether an award should be classified and accounted for as a liability award or an equity award. All the Group’s share-based awards were classified as equity awards and are recognized in the unaudited condensed consolidated financial statements based on their grant date fair values.

 

The Group has elected to recognize share-based compensation using the straight-line method for all share-based awards granted with graded vesting based on service conditions. The Group accounts for forfeitures as they occur in accordance with ASU No. 2016-09, Compensation — Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting. The Black-Scholes Model were applied in determining the estimated fair value of the options granted to employees and non-employees.

 

(v) Income taxes

 

The Group follows the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Group records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate.

 

F-13

 

 

The Group accounted for uncertainties in income taxes in accordance with ASC 740. Interest and penalties related to unrecognized tax benefit recognized in accordance with ASC 740 are classified in the unaudited condensed consolidated statements of operations and comprehensive loss as income tax expenses.

 

For the six months ended June 30, 2022 and 2023, the Group did not have any significant unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefits. The Group does not believe that its uncertain tax benefits position will materially change over the next twelve months.

 

(w) Comprehensive loss

 

Comprehensive loss is defined as the changes in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive Income, requires that all items that are required to be recognized under current accounting standards as components of comprehensive loss be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the periods presented, the Group’s comprehensive loss includes net loss and foreign currency translation differences, and is presented in the unaudited condensed consolidated statements of operations and comprehensive loss.

  

(x) Segment reporting

 

After the Group discontinued CDA business, the Group operates and manages its business as a single segment and the Group’s primary revenue are generated in the U.S. The Group has only one reportable segment for the six months ended June 30, 2023, in accordance with ASC 280, Segment Reporting. The Group’s Chief Executive Officer is the chief operating decision-maker that review the unaudited condensed consolidated financial results when making decisions about allocating resources and assessing the performance of the Group as a whole.

 

(y) Loss per share

 

Loss per share is calculated in accordance with ASC 260, Earnings per Share. Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

 

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 ordinary shares issuable upon the conversion of the share options, using the treasury share method. Ordinary share equivalents are excluded from the computation of diluted loss per share if their effects would be anti-dilutive. Basic and diluted loss per ordinary share is presented in the Group’s unaudited condensed consolidated statements of operations and comprehensive loss.

 

The rights, including the liquidation and dividend rights, of the holders of our Class A and Class B ordinary shares are identical, except with respect to voting. Each Class A ordinary share is entitled to one vote; and each Class B ordinary share is entitled to ten votes and is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. For the six months ended June 30, 2022 and 2023, the net loss per share amounts are the same for Class A and Class B common ordinary shares because the holders of each class are entitled to equal per share dividends or distributions in liquidation.

 

The Group did not include share options, convertible debt and warrants in the computation of diluted earnings per share for the six months ended June 30, 2022 and 2023, because those were anti-dilutive for loss per share.

 

(z) Risks, Uncertainties and Concentrations

 

Concentration of credit risk

 

Financial instruments that potentially subject the Group to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivables. As of December 31, 2022 and June 30, 2023, the aggregate amounts of cash and cash equivalents of RMB14 and RMB62 (US$9), respectively, were held at major financial institutions located in the PRC and RMB1 and RMB268 (US$37), respectively, were deposited at banks located in U.S. and covered by the FDIC insurance program. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions. There is a RMB 500,000 deposit insurance limit for a legal entity’s aggregated balance at each PRC bank.

 

F-14

 

 

As of December 31, 2022, no customer accounted for more than 10% of total accounts receivables. As of June 30, 2023, four customers accounted for 37%, 20%, 19% and 16% of total accounts receivables. The risk is mitigated by credit evaluations the Group performs on its customers.

 

Business, customer, supplier, political and economic risks

 

The Group’s e-commerce food-related business has a limited operating history. The recently acquired operations are subject to all of the risks inherent in the initial expenses, challenges, complications, and delays frequently encountered in connection with the formation of any new business.

 

The Group participates in a dynamic 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 new entrants; advances and new trends in industry standards; changes in certain strategic relationships or customer relationships; regulatory considerations; intellectual property considerations; and risks associated with the Group’s ability to attract and retain employees necessary to support its growth.

 

For the six months ended June 30, 2022, no customer accounted for more than 10% of the total revenues, respectively. For the six months ended June 30, 2023, the Group had one customer that accounted for 16% of total revenues.

 

For the six months ended June 30, 2022, no supplier accounted for more than for 10% of total cost of revenues. For the six months ended June 30, 2023, two suppliers that accounted for 22% and 22% of total cost of revenues, respectively.

 

As of December 31, 2022, no supplier accounted for more than 10% of total accounts payables As of June 30, 2023, three suppliers accounted for 25%, 14%and 12% of total accounts payables, respectively.

  

(aa) 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.

 

In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective January 1, 2024, for the Group. Early adoption is permitted. Management is currently evaluating the effect of the adoption of ASU 2020-06 on the unaudited condensed consolidated financial statements.

 

In October 2021, the FASB issued ASU No. 2021-08, “‘Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for fiscal years beginning after December 15, 2023, and are applied prospectively to business combinations that occur after the effective date. The Group does not expect the adoption of ASU 2021-04 will have a material effect on the unaudited condensed consolidated financial statements.

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Group adopts as of the specified effective date. Unless otherwise discussed, the Group does not believe that the impact of recently issued standards that are not yet effective will have a material impact on its financial position or results of operations upon adoption.

 

F-15

 

 

4. ACQUSITIONS

 

Business Combinations

 

The Group accounted the following acquisitions as business combinations in accordance with ASC 805. Acquisition-related costs incurred for the acquisitions are not material.

 

GISN acquisition

 

On January 28, 2023, the Company, through its subsidiary Fresh2, entered into a Share Purchase Agreement to acquire GISN (HK) LIMITED, a Hongkong corporation (“GISN”), from Mr. Haohan Xu, the Company’s Co-CEO and Co-Chairman of the board of directors. GISN and its subsidiaries provide technical solution and outsourcing consulting services provider focused on the digital, internet and Web 3 business transformation for start-ups and traditional enterprises. This acquisition is a critical initiative for the Group’s efficiency in its e-commerce operations. The acquisition closed on February 1, 2023. The Company issued 8,785,530 Class A ordinary shares with fair value of RMB25,938 (US$3,848) to purchase all the issued and outstanding equity interest of GISN.

 

The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed for the combined entities at the acquisition date, which represents the net purchase price allocation at the date of the acquisition based on a valuation performed by an independent valuation firm engaged by the Group:

 

   Amount 
   RMB 
     
Total consideration   25,938 
      
Assets acquired and liabilities assumed:     
Cash acquired   1,028 
Accounts receivable   100 
Accounts receivable-related parties   12,073 
Other current assets   123 
Property and equipment   1,573 
Intangible assets   11,233 
Advance from customer   (1,013)
Accrued expenses and other current liabilities   (13,705)
Lease liabilities   (239)
Deferred tax liability   (2,808)
Total net assets acquired   8,365 
Goodwill   17,573 

 

The intangible assets are mainly attributable to software acquired through the acquisition, which are amortized over 10 years.

 

The following unaudited pro forma summary presents consolidated information of the Group as of the business combination had occurred on January 1, 2022.

 

   Unaudited Pro Forma 
   For the six months
ended June 30,		 
   2022   2023 
   RMB   RMB 
Revenue   10,149    4,936 
           
Net losses   51,322    (71,405)

 

F-16

 

 

Fresh2 acquisition

 

On February 7, 2023, the Company, through its subsidiary Fresh2, entered into a Share Purchase Agreement (the “Ecommerce Agreement”) to acquire Fresh 2 Ecommerce Inc, a Delaware corporation (“Fresh2 Ecommerce”), from Mr. Haohan Xu, the Company’s Co-CEO and Co-Chairman of the board of directors. Fresh2 Ecommerce is a business-to-business e-commerce platform focused on connecting Asian food suppliers and restaurants well as other retail customers in the U.S. Fresh2 Ecommerce provides an online direct selling platform for food suppliers such as food companies, manufacturers, agents, importers, and wholesalers to restaurants and other retail customers. The acquisition was closed on February 8, 2023. The Company issued 5,440,420 Class A ordinary shares with fair value of RMB17,304 (US$2,549) to acquire all the issued and outstanding equity interests in Fresh2 Ecommerce.

 

The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed for the combined entities at the acquisition date, which represents the net purchase price allocation at the date of the acquisition based on a valuation performed by an independent valuation firm engaged by the Group:

 

   Amount 
   RMB 
     
Total consideration   17,304 
      
Assets acquired and liabilities assumed:     
Cash acquired   71 
Other current assets   938 
Accounts payables   (950)
Accrued expenses and other current liabilities   (72)
Total net assets acquired   (13)
Goodwill   17,317 

 

None of the goodwill is expected to be deductible for income tax purposes. For the six months ended June 30, 2023, Fresh2 Ecommerce contributed revenue of 199 and loss of 86 to the group from February 8, 2023 to June 30, 2023. Pro forma results reflecting this transaction were not presented because it is not significant to the Group’s consolidated financial results.

 

Asset acquisition

 

On March 31, 2023, the Group closed an asset purchase with Easy Hundred Inc. (“Easy Hundred”), a U.S.-based e-commerce startup company in the foodservice industry. Pursuant to the Asset Purchase Agreement (the “EZ Agreement”), the Group acquired certain fixed assets of Easy Hundred and Easy Hundred’s intellectual property relating to ez100, 2Supply and 100WAY systems with total consideration consisting of RMB5,013(US$730) in cash and 17,665,702 Class A ordinary shares of the Company. The fair value of the shares issued was RMB25,720 (US$3,745).

 

The following table summarizes the fair value of the identifiable assets:

 

   Amount 
   RMB 
Property and equipment- furniture, fixtures and equipment   160 
Property and equipment- motor vehicles   434 
Intangible assets- software*   30,139 
Total consideration   30,733 

 

*Intangible assets refer to intellectual property relating to ez100, 2Supply and 100WAY systems.

 

F-17

 

 

5. DISCONTINUED OPERATION

 

In July, 2023, the Board approved the sale of its early cancer screening and detection business (the “CDA Business”), comprised of (i) AnPac Bio-Medical Technology (Lishui) Co., Ltd. (“AnPac Lishui”), a subsidiary based in Lishui, China, (ii) Anpac Technology USA CO., LTD. (“AnPac USA”), a subsidiary based in Pennsylvania and California, and (iii) Changhe Bio-Medical Technology (Yangzhou) Co., Ltd.(“Changhe”), a subsidiary based in Yangzhou, China. Accordingly, on July 28, 2023, the Group entered into Share purchase agreements with New-Horizon Bio-Medical Science Co., Ltd. (“New-Horizon”), a Hong Kong company focused on bio-medical technology, under which the Group agreed to sell 100% of the shares of AnPac Lishui and AnPac USA, which had experienced significant financial losses in its operations and are not expected to achieve a breakeven point in the immediate future, to New-Horizon in consideration of nil and nil, respectively. In addition, on July 28, 2023, the Group entered into a share purchase agreement with Ningkasai Technology (Shanghai) Co., Ltd. (“Ningkasai”), a PRC high-tech company specialized in nanotechnologies for life science applications, under which the Group agreed to sell 100% of the shares of Changhe, to Ningkasai for no consideration. The closing is expected to take place in November 2023..

 

The Group determined that the disposal of CDA Business met the criteria to be classified as a discontinued operation and, as a result, CDA business’s historical financial results are reflected in the Group’s unaudited condensed consolidated financial statements as a discontinued operation. The disposal of CDA Business represents a strategic shift that has a significant effect on the Group’s operations and financial results, which trigger discontinued operations accounting in accordance with ASC 205-20-45. The assets and liabilities related to the discontinued operations were retroactively classified as assets/liabilities held for sale, while results of operations related to the discontinued operations, including comparatives, were retroactively reported as income (loss) from discontinued operations for the six months ended June 30, 2022 and 2023, respectively.

 

In connection with the disposal of CDA business, the Group also sold its 70% equity interest in Changwei System Technology (Shanghai) Co., Ltd (“Changwei”) to Jiaxing Changxin Enterprise Management, LLP (“Changxin”) in consideration of US$350 (RMB2,538) and sold the remaining 29% equity interest in Changwei to Shanghai Yiyou Investment Management Co., LTD (“Yiyou”) in consideration of US$150 (RMB1,088). Yiyou further entered into an arrangement with Changxin and Ms. Ruoou Ying, pursuant to which the Group agreed to transfer 29% of Changwei’s shares to Changxin and 1% of the shares to Ms. Ruoou Ying (the “Changwei disposal”). The Group received the consideration in aggregated of RMB3,626 (US$500) from the Changwei disposal. This transaction was a sale to related parties. Ms. Ruoou Ying held the position of Supervisor at Anpac Lishui, while Changxin was under the common control of Ms. Ruoou Ying and Mr. Chris Yu, the Co-Founder and Co-Chairman of the Company. Loss from disposal of Changwei amounted to RMB20,282(US$2,797) and was included in net loss from discontinued operations. This transaction was a sale to related parties. Ms. Ruoou Ying held the position of Supervisor at Anpac Lishui, while Changxin was under the common control of Ms. Ruoou Ying and Mr. Chris Yu, the Co-Founder and Co-Chairman of the Company. Loss from disposal of Changwei amounted to RMB20,282(US$2,797) and was included in net loss from discontinued operations.

 

The results of discontinued operations for the six months ended June 30, 2022 and 2023 were as follows:

 

   Six Months Ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Revenues:            
Revenues-third parties   3,972    2,818    389 
Revenues-related parties   1,241    210    29 
Total revenues   5,213    3,028    418 
Cost of revenues   (1,832)   (1,292)   (178)
Gross Profit   3,381    1,736    240 
Operating expenses:               
Selling and marketing expenses   (4,894)   (3,872)   (534)
General and administrative expenses   (15,629)   (8,593)   (1,185)
Research and development expenses   (4,330)   (3,438)   (474)
Impairment of intangible assets   (7,911)   
—
    
—
 
Impairment of goodwill   (12,758)   
—
    
—
 
Loss from operations   (42,141)   (14,167)   (1,953)
Non-operating income and expenses:               
Interest expense, net   (161)   (81)   (11)
Foreign exchange gain, net   7    9    1 
Share of net loss in equity method investments   (87)   (88)   (12)
Other income, net   472    3,106    428 
Loss from operations for discontinued operations   (41,910)   (11,221)   (1,547)
Loss from disposal of a subsidiary   
—
    (16,724)   (2,307)
Loss from discontinued operations before income taxes   (41,910)   (27,945)   (3,854)
Income tax benefit   2,130    
—
    
—
 
Net Loss from discontinued operations   (39,780)   (27,945)   (3,854)

 

F-18

 

 

Assets and liabilities of the discontinued operations:

 

   December 31   June 30   June 30 
   2022   2023   2023 
   RMB   RMB   US$ 
ASSETS            
Current assets:            
Cash and cash equivalents   1,854    319    44 
Prepayment   2,692    1,334    184 
Accounts receivable, net   2,235    3,318    458 
Amounts due from related parties, net   2,194    684    94 
Inventories, net   210    178    25 
Other current assets, net   3,448    3,944    543 
Total current assets held for sale   12,633    9,777    1,348 
                
Property and equipment, net   17,182    15,746    2,171 
Land use rights, net   1,111    1,097    151 
Intangible assets, net   185    271    37 
Goodwill               
Right of use assets   7,213    2,088    288 
Long-term investments, net   1,079    991    138 
Total noncurrent assets held for sale   26,770    20,193    2,785 
TOTAL ASSETS HELD FOR SALE   39,403    29,970    4,133 
                
LIABILITIES               
Current liabilities:               
Short-term debts   5,000    5,000    690 
Accounts payable   2,108    2,012    277 
Advance from customers   4,956    7,800    1,076 
Amounts due to related parties   2,280    1,079    149 
Lease liability-current   784    1,042    144 
Accrued expenses and other current liabilities   18,386    16,488    2,273 
Total current liabilities held for sale   33,514    33,421    4,609 
Deferred tax liabilities               
Lease liability-non-current   6,515    1,368    189 
Other long-term liabilities   1,080    1,066    147 
Total noncurrent liabilities held for sale   7,595    2,434    336 
TOTAL LIABILITIES HELD FOR SALE   41,109    35,855    4,945 

 

6. ACCOUNTS RECEIVABLE, NET

 

Accounts receivable as of December 31, 2022 and June 30, 2023 were as follows:

 

   December 31     
   2022   June 30 2023 
   RMB   RMB   US$ 
             
Accounts receivable   
—
    270    37 
Allowance for credit losses   
—
    
—
    
—
 
Balance at end of year   
—
    270    37 

 

F-19

 

 

7. OTHER CURRENT ASSETS, NET

 

Other current assets consist of the following:

 

   December 31,     
   2022   June 30, 2023 
   RMB   RMB   US$ 
Deposits   
—
    154    21 
Receivable from private placement investors   
—
    260    36 
Loan to third-parties   422    444    61 
Total   422    858    118 
Allowance for credit losses   (422)   (444)   (61)
Other current assets, net   
—
    414    57 

 

8. PROPERTY AND EQUIPMENT, NET

 

Property and equipment, net consists of the following:

 

   December 31,     
   2022   June 30 2023 
   RMB   RMB   US$ 
Furniture, fixtures and equipment   
—
    3,255    448 
Motor vehicles   
—
    2,007    277 
Total   
—
    5,262    725 
Less: accumulated depreciation   
—
    (953)   (131)
Property and equipment, net   
—
    4,309    594 

 

Depreciation expense was nil and RMB449 (US$62) for the six months ended June 30, 2022 and June 30, 2023, respectively. No impairment charges were recognized on the property and equipment for the six months ended June 30, 2022 and 2023.

 

9. INTANGIBLE ASSETS, NET

 

Intangible assets, net consist of the following:

 

   December 31,     
   2022   June 30 2023 
   RMB   RMB   US$ 
Software   
—
    47,798    6,592 
Total   
—
    47,798    6,592 
Less: accumulated amortization   
—
    (2,629)   (363)
Intangible assets, net   
—
    45,169    6,229 

 

F-20

 

 

Amortization expense for six months ended June 30, 2022 and 2023 amounted to nil and RMB2,511 (US$346), respectively. The estimated aggregate amortization expense for each of the five succeeding years is as follows:

 

Twelve months ending June 30,  RMB 
2024   8,351 
2025   8,351 
2026   8,351 
2027   8,351 
2028   6,226 
Thereafter   5,539 
Total   45,169 

 

10. LONG-TERM INVESTMENTS, NET

 

Long-term investments, net consisted of the following:

 

   December 31,     
   2022   June 30, 2023 
   RMB   RMB   US$ 
Equity method investments               
Advanced Life Therapeutics Co., Ltd. (“Advanced Life”)   
—
    
—
    
—
 
Nassau Enterprises LLC (“Nassau”).   
—
    39,783    5,486 
Total   
—
    39,783    5,486 
Less: Impairment   
—
    
—
    
—
 
Long-term investments, net   
—
    39,783    5,486 

 

Equity method investments

 

Advanced Life

 

On May 15, 2021, the Company and other third parties established Advanced Life Therapeutics Co., Ltd. (“Advanced Life”), of which the Company owned a 40% equity interest in its registered capital. The Company has not made any capital contribution as yet because Advanced Life has not commenced its intended operations. The Group accounts for Advanced Life as long-term investment under the equity method, there’s no carrying value of this investment. Subsequently, the Board has approved the disposition of the 40% of equity interest in Advanced Life to a company controlled by Mr. Chris Yu at a nominal price on October 18, 2023.

 

Nassau

 

On May 24, 2023, the Company, through its subsidiary Foodbase Group Inc. (“Foodbase”), entered into a purchase agreement (the “Nassau Investment Agreement”) with Mr. Haohan Xu (“Mr. Xu”), the CEO of the Company, and Nassau Enterprises LLC, a Delaware limited liability company that was established to engage in real estate development (“Nassau”). Mr. Xu was the sole shareholder and CEO of Nassau prior to the Company’s investment. The Group’s investment in Nassau consisted of a capital injection of RMB39,882 (US$5,500) and a nominal payment to Mr. Xu to acquire 19.64% of the equity interests in Nassau. The transaction closed on May 24, 2023. After the closing, Mr. Xu holds 8,036 voting units in Nassau, representing 80.36% of the outstanding equity interests in Nassau. The Group can exercise significant influence on the management and operation of Nassau. The Group accounts for its investment in Nassau as long-term investment under the equity method. Nassau through its subsidiary intends to develop, market and sell real estate in Savannah Lakes Village (“SLV Project”) and to utilize an EB-5 program to finance the development of the SLV Project, which is expected to provide alternative financing for the Company’s growth.

 

The Group recorded its share of loss in this investment of RMB95 (US$13) for the six months ended June 30, 2023.

  

F-21

 

 

11. SHORT-TERM DEBTS

 

   December 31,     
   2022   June 30, 2023 
   RMB   RMB   US$ 
Convertible loan (“CL”) (i)   15    16    2 
Total   15    16    2 

 

(i)On July 22, 2021, the Company issued convertible debentures (the “Convertible Debentures”) to certain investors in a registered direct offering in an aggregate principal amount of US$3,014 (RMB20,788) for the discounted price of US$2,740 (RMB18,898). The Convertible Debentures were originally due in one year and bear interest of 0% per annum if the conversion feature is not triggered. Pursuant to the agreement, the conversion price is lower of (i) US$15 or (ii) the lower of 82% of the closing bid price or 80% of VWAP of the Company’s ADSs during the ten consecutive trading days immediately preceding conversion, but not lower than a Floor Price of US$1 (the “floor price”). Due to significant drop of the ADS market price in 2022, the debenture holders and the Company renegotiated the Floor Price. On February 5, 2022, the Company entered into an amendment agreement, pursuant to which the Floor Price was reduced to US$0.10 per Class A Ordinary Share. The Company has elected to recognize the Convertible Debentures at fair value and therefore there was no further evaluation of embedded features for bifurcation. The Convertible Debentures were partially converted into 114,234 shares on December 10, 2021. The fair value of the Convertible Debentures loan immediately prior to conversion was assessed at RMB1,321. Substantially all of the remaining outstanding Convertible Debentures were converted into 4,842,197 Class A ordinary shares (refer to Note 14) on March 16, 2022. The fair value of the Convertible Debentures on March 16, 2022 immediately prior to conversion was assessed at RMB22,237. As of June 30, 2023, the fair value of the outstanding balance of the Convertible Debentures was RMB16 (US$2).

 

For the six months ended June 30, 2022 and 2023, the Company recognized change in fair value of the Convertible Debenture of RMB139 and nil, respectively.

 

12. LEASES

 

The Group has several operating leases for offices. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 

Effective on January 1, 2022, the Group adopted the new lease accounting standard using a modified retrospective transition method which allowed the Group not to recast comparative periods presented in its consolidated financial statements. In addition, the Group elected the package of practical expedients, which allowed the Group to not reassess whether any existing contracts contain a lease, to not reassess historical lease classification as operating or finance leases, and to not reassess initial direct costs. The Group has not elected the practical expedient to use hindsight to determine the lease term for its leases at transition. The Group combines the lease and non-lease components in determining the ROU assets and related lease obligation. Adoption of this standard resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities as disclosed below and had no impact on accumulated deficit as of January 1, 2022. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining lease payments over the lease term.

 

Supplemental balance sheet information related to operating leases was as follows:

 

   December 31,     
   2022   June 30, 2023 
   RMB   RMB   US$ 
             
Right-of-use assets, net   
—
    223    31 
                
Operating lease liabilities - current   
—
    148    20 
Operating lease liabilities - non-current   
—
    37    5 
Total operating lease liabilities   
—
    185    25 

 

F-22

 

 

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of June 30, 2023:

 

Weighted average remaining lease term (years)   1.51 
Weighted average discount rate   4.75%

 

The following is a schedule of maturities of lease liabilities are as follows:

 

Twelve months ending June 30,  RMB 
2024   150 
2025   37 
Total future minimum lease payments   187 
Less: imputed interest   (2)
Total   185 

 

13. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

 

   December 31     
   2022   June 30, 2023 
   RMB   RMB   US$ 
Salary and welfare payable   1,740    9,312    1,283 
Accrued expenses (1)   5,762    9,057    1,249 
Payable for property and equipment   
—
    2,301    318 
Other payables   33    4,089    564 
Total   7,535    24,759    3,414 

 

(1):the accrued expenses mainly consist of accrued professional fees.

 

14. SHAREHOLDERS’ EQUITY

 

Ordinary Shares

 

On October 14, 2022, the Company amended and restated its memorandum and articles of association to increase the maximum number of authorized shares to 150,000,000 shares divided into 120,000,000 class A ordinary shares with a par value of US$0.01 each and 30,000,000 class B ordinary shares with a par value of US$0.01 each.

 

On February 14, 2023, the Company amended and restated its memorandum and articles of association to increase the maximum number of authorized shares from 150,000,000 shares to 2,430,000,000 shares divided into 2,400,000,000 Class A Ordinary Shares with a par value of US$0.01 each and 30,000,000 Class B Ordinary Shares with a par value of US$0.01 each.

 

As of December 31, 2022 and June 30, 2023, 79,536,589 and 176,070,465 Class A ordinary shares were issued and outstanding, respectively. As of December 31, 2022 and June 30, 2023, 3,573,100 and 3,573,100 Class B ordinary shares were issued and outstanding.

 

Completion of IPO

 

On January 30, 2020, the Company completed its IPO on the Nasdaq Share Exchange. In November 2022, the Company adopted an ordinary share / ADS ratio change from one (1) Class ‘A’ ordinary share being equal to one (1) ADS to 20 Class ‘A’ ordinary shares being equal to one (1) ADS).

 

F-23

 

 

Conversion of convertible loans

 

On July 22, 2021, the Company issued convertible debentures (the “Convertible Debentures”) to certain investors in a registered direct offering in an aggregate principal amount of US$3,014 (RMB20,788) for the discounted price of US$2,740 (RMB18,898). The Convertible Debentures were partially converted into 114,234 Class ‘A’ ordinary shares on December 10, 2021. On March 16, 2022, substantially all of the remaining outstanding Convertible Debentures were converted into 4,842,197 Class A ordinary shares. The fair value of the Convertible Debentures on March 16, 2022 immediately prior to conversion was assessed at RMB22,237. As of June 30, 2023, the fair value of the outstanding balance of the Convertible Debentures was RMB16 (US$2).

 

On May 31, 2021, the Company issued a convertible note in the principal amount of RMB4,479 to Ascent Investor Relations Inc., (“Ascent”) for public relations services rendered. The convertible note was fully converted into 3,232,397 Class A ordinary shares with conversion prices ranging from US$0.16-0.33 per share by April 27, 2022. The fair value of the convertible note immediately prior to conversion was assessed at RMB5,502.

 

Shares issued for services

 

On June 1, 2022, the Company entered into a service agreement with a public relations firm. Pursuant to the service agreement, the Group was required to pay US$50 as compensation for the public relations services. On June 10, 2022, the Company issued 187,094 class A ordinary shares for the services. The fair value of the PR services was RMB359 (US$54) determined based on the Company’s ADS market price on June 10, 2022.

 

On August 31, 2022, the Company granted 140,000 class A ordinary shares to two employees as bonuses that vested immediately upon grant. On September 16, 2022, the Company issued the 140,000 class A ordinary shares. The fair value of the bonuses was RMB1,341 (US$195) determined based on the Company’s ADS market price on August 31, 2022.

 

On April 20, 2023, the Company entered into a service agreement with a finance service firm, Pursuant to the service agreement, the Company was required to pay 3,500,000 Class A ordinary shares for the service. On May 11, 2023, the Company issued 3,500,000 Class A ordinary shares to the finance service firm. The fair value of the services was RMB6,385 (US$919) determined based on the Company’s ADS market price on May 11, 2023.

 

Shares issued for reserve

 

As of December 31, 2022, the Group had 1,322,853 Class A ordinary shares held in an escrow account as reserve solely for potential convertible loans conversion. During the six months ended June 30, 2023, of 22,000,000 Class A ordinary shares issued in a private placement on June 9, 2023, 2,500,000 class A ordinary shares were subsequently recalled and cancelled on October 30, 2023 due to the inability to timely collect the funds from the investor. Such 2,500,000 class A ordinary shares were included as the shares held as a reserve and not included in the calculation of loss per share. As of June 30, 2023, 3,822,853 Class A ordinary shares were held in an escrow account as a reserve.

 

Private placements

 

On March 16, 2022, the Company entered into a share subscription agreement with a third-party investor, pursuant to which the Company issued 1,235,788 Class A ordinary shares at price of US$0.2563 per share to the investor (the “March 16, 2022 private placement”). In addition, the Company also issued pre-funded warrants to purchase an aggregate of 4,226,135 of Class A ordinary shares for US$0.2563 per share to the investor, equal to the exercise price minus US$0.00001 for the pre-funded warrants. Total gross proceeds of RMB9,395 (US$1,400) was received on May 19, 2022. 2,584,900 pre-funded warrants were exercised during the six months ended June 30, 2023; the remaining pre-funded warrants were exercised on July 13, 2023.

 

On March 29, 2022, the Company entered into a share subscription agreement with a third-party Chinese investor, pursuant to which the Company issued 654,622 Class A ordinary shares at price of US$0.35 to the investor and received gross proceeds of RMB1,500 (US$232) on March 30, 2022.

 

F-24

 

 

On May 27, 2022, the Company entered into investment agreements with nine third-party investors. The investors agreed to invest up to RMB20,094 (US$3,000) to purchase Class A ordinary shares, at a purchase price of the lower of (i) $0.30 per ADS (the equivalent of 1 Class A ordinary share) and (ii) 80% of the average ten-day trading closing price of the ADSs (the equivalent of 1 Class A ordinary share) for the ten consecutive day trading period ended on the date of investment agreement. On May 27, 2022 and May 30, 2022, the Company issued 6,229,235 and 6,263,048 Class A ordinary shares to the investors, respectively. In addition, warrants to purchase (i) an aggregate of 3,000,000 Class A ordinary shares for US$0.4 per share, (ii) an aggregate of 1,200,000 Class A ordinary shares for US$0.75 per share (ADS), and (iii) an aggregate of 750,000 Class A ordinary shares (ADS) for US$1.2 per share were issued to the investors. No warrants were excised during the year ended December 31, 2022. On September 2, 2022, three of the investors in the Company’s May 2022 private placements filed an action against the Company in the State of Delaware Court of Chancery captioned Chen Wenge, et al. v. Fresh2 Group Limited, C.A. No. 2022-0779-PAF. The Plaintiffs sued the Company for breaches of the investment agreements. The plaintiffs claimed that the entry into certain investment agreements and a merger agreement breached or would breach the terms of the plaintiffs’ (and several other investors’) securities purchase agreements, including a right of first refusal and a prohibition against certain acquisitions and changes of business. The Court issued a temporary restraining order concerning enforcement of the private placements on September 3, 2022, amended the temporary restraining order on September 9, 2022, and further amended the temporary restraining order on September 23, 2022 (“TRO”). In order to settle the litigation, the Company entered into a share repurchase agreement with the three plaintiffs, and all the other investors in the May 2022 private placements on October 15, 2022. The Company agreed to repurchase 12,492,283 Class A ordinary shares and warrants to purchase a total of 2,475,000 Class A ordinary shares from the nine investors for total consideration of RMB11,003(US$1,507). The Company fully settled the litigation on October 27, 2022. In connection with the settlement, Yuyang Cui and Jiawen Kang resigned from our board of directors of the Company and Yuyang Cui resigned as Co-CEO of the Company. The repurchased warrants were canceled and the repurchased Class A ordinary shares are treated a treasury shares as of December 31, 2022. The treasury shares were canceled on January 19, 2023.
  

On September 2, 2022, the Company entered into investment agreements with three third-party investors (the “September 2, 2022 private placement”). The investors agreed to purchase an aggregate of 5,000,000 Class A ordinary shares at price of US$0.1 per share and warrants to purchase an aggregate of 5,000,000 Class A ordinary shares at an exercise price of US$0.4 per share for RMB3,613. The warrants are exercisable within 2 years from the date of issuance. Total gross proceeds of RMB3,613 was received in September, 2022. No warrants were excised during the year ended December 31, 2022 and six months ended June 30, 2023.

 

On September 26, 2022, the Company entered into investment agreements with nine third-party investors, pursuant to which the Company issued 36,729,613 Class A ordinary Shares at price of US$0.10 per share to the investors and received gross proceeds of RMB26,410 (US$3,660) during the period October 2022 to November 2022.

 

In December 2022 and March 2023, the Company signed investment agreements with several third-party investors (the “March 2023 private placement”) to sell 30,885,707 Class A ordinary shares of the Company at a price of US$0.175 per share for a total purchase price of US$5,405. Proceeds of RMB36,608 (US$5,369) were received by June 30, 2023 and the remaining balance subsequently was received on August 10, 2023. For each Class A ordinary share purchased, the investors received two warrants with each warrant to purchase one Class A ordinary share at an exercise price of US$0.21 per share. The warrants are exercisable within 2 years from the date of issuance. No warrants were exercised during the six months ended June 30, 2023.

 

On April 6, 2023, the Company closed a registered direct offering (the “April 2023 private placement”), the Company sold to the institutional investors a total of 12,500,000 Class A ordinary shares priced at $0.2 per ordinary share, pre-funded warrants exercisable for 2,500,000 Class A ordinary shares and warrants exercisable for 15,000,000 Class A ordinary shares. The purchase price of each pre-funded warrant is equal to the offering price per Class A ordinary shares, minus $0.00005, and the exercise price of each pre-funded warrant is equal $0.00005 per share. The pre-funded warrants are immediately exercisable and may be exercised at any time until exercised in full. The warrants are immediately exercisable and expire five (5) years from the original issuance date and have an exercise price of $0.2 per Class A ordinary shares. The Company also issued to Univest Securities, LLC, which acted as the sole placement agent for the offering, warrants exercisable for 750,000 Class A ordinary shares, with an exercise price of $0.24 per share. The net proceeds to the Company from the registered direct offering were RMB17,238 (US$2,510) after deducting the placement agent’s fees and other offering expenses. No pre-funded warrants were exercised during the six months ended June 30, 2023, and 5,000,000 warrants were exercised with proceeds of RMB6,911(US$1,000) during the six months ended June 30, 2023.

 

F-25

 

 

On June 2, 2023, the Company entered into an agreement with an investor, under which the investor agreed to purchase 22,000,000 Class A ordinary shares and warrants to purchase 22,000,000 Class A ordinary shares at an aggregate purchase price of US$4,400 (the “June 2023 private placement”). The warrants are exercisable within 2 years from the date of issuance and have an exercise price of US$0.21 per share. On June 9, 2023, the Company issued 22,000,000 Class A ordinary shares to the investor, proceeds of RMB27,797 (US$3,900) were received by June 30, 2023. Due to inability to timely collect the remaining proceeds of RMB3,564(US$500) from the investor, the corresponding 2,500,000 shares was recalled and cancelled on October 30, 2023, subsequently. No warrants were exercised during the six months ended June 30, 2023.

 

Shares issued for acquisitions

 

In connection of the GISN acquisition on February 1, 2023, the Company issued 8,785,530 Class A shares to the original shareholders of GISN as consideration of 100% equity interest. The fair value of the shares issued amounted to RMB25,938(US$3,848).

 

In connection of the Fresh2 acquisition on February 8, 2023, the Company issued 5,440,420 Class A shares to the original shareholders of Fresh ecommerce as consideration of 100% equity interest. The fair value of the shares issued amounted to RMB17,304(US$2,549).

 

In connection of the assets acquisition from Easy Hundred on March 31, 2023, the Company issued 17,665,702 Class A shares to Easy Hundred as consideration. The fair value of the shares issued amounted to RMB25,720(US$3,745).

 

Warrants

 

As of June 30, 2023, there were 103,702,658 warrants outstanding. A summary of warrants activity for the six months ended June 30 2023 was as follows:

 

       Weighted
average
exercise
price per
share		   Weighted    
  

Number of

warrants

   US$ per
share		   average life
Years		 

Expiration

dates 

Balance of warrants outstanding and exercisable as of December 31, 2022   9,266,135    0.24   1.85 to unlimited  August 31, 2024 to unlimited
—warrants issued in connection with the March 2023 private placement   61,771,423    0.21   1.58 to 1.96  February 3, 2025 to June 16, 2025
—warrants issued in connection with the April 2023 private placement   18,250,000    0.00001-0.24   1.75 to Unlimited  March 31, 2025 to unlimited
—warrants issued in connection with the June 2023 private placement   22,000,000    0.21   1.95  June 9, 2025
Exercised   (7,584,900)   0.00001-0.2       
Balance of warrants outstanding and exercisable as of June 30, 2023   103,702,658    0.21   1.96 to unlimited  August 31, 2024 to unlimited

 

F-26

 

 

15. SHARE BASED COMPENSATION

 

On October 31, 2019, the Board and the Company’s shareholders approved the 2019 Share Incentive Plan (“2019 Plan”) which authorized the compensation committee or such other committee to grant share options to purchase 1,105,300 Class A ordinary shares to directors, service providers, advisors, employees and consultants of the Group. On July 5, 2021, the Board and the Compensation Committee of the Board approved the Amended and Restated 2019 Plan increasing the number of Class A ordinary shares subject to the 2019 Plan to 1,885,300 shares. As of June 30, 2023, no shares remain available to be issued under the Amended and Restated 2019 Plan. On April 14, 2022, the Company’s Board approved and adopted the 2022 Share Incentive Plan (the “2022 Plan”) providing for the grant of options to purchase 2,800,000 Class A ordinary shares. On August 28, 2022, the Board and the Compensation Committee of the Board approved the Amended and Restated 2022 Plan increasing the number of Class A ordinary shares subject to the 2022 Plan to 4,700,000 shares. These options were granted to employees and professionals during 2022 and 2023 and will vest over four years. As of June 30, 2023, options to purchase 182,593 Class A ordinary shares remain available to be issued under the 2022 Plan.

 

On January 6, 2023, the Company’s Board approved and adopted the 2023 Share Incentive Plan (the “2023 Plan”) providing for the grant of restricted share unit (“RSU”) of 4,000,000 Class A ordinary shares. On March 10, 2023, the Board and the Compensation Committee of the Board approved an amended to the 2023 Plan increasing the number of Class A ordinary shares subject to the 2023 Plan to 13,000,000 shares. On August 23, 2023, the Board and the Compensation Committee of the Board further approved a further amendment to 2023 Plan increasing the number of Class A ordinary shares subject to the 2023 Plan to 41,000,000 shares These RSU are to be granted to employees and professionals. During the six months ended June 30, 2023, the Company issued 12,779,670 RSUs to that can be converted to Class A ordinary shares upon vesting to employees, directors and officers the Group under the 2023 Plan. The aggregate fair value of the RSUs granted was RMB32,310 (US$4,456). These RSUs vest over 1-4 years based on the related granted agreements. During six months ended June 30, 2023, 458,452 RSUs was forfeited and none vested. As of June 30, 2023, the Company had 12,321,218 RSUs outstanding. For the six months ended June 30, 2023, the Company recorded related share-based compensation expense of RMB2,872 (US$396).

 

Employees-options

 

The options granted to employees are measured based on the grant date fair value of the equity instrument. They are accounted for as equity awards and contain only service vesting conditions. The following table summarized the Group’s employee share option activities:

 

               Weighted     
       Weighted   Weighted   Average     
       Average   Average   Remaining   Aggregate 
   Number of   Exercise   Grant date   Contractual   Intrinsic 
   Options   Price   Fair Value   Term   Value 
       US$ per   US$ per         
       option   option   Years   US$ 
Share options outstanding at December 31, 2022   2,334,906    1.69    5.08    8.05    452 
Granted   
—
    
—
    
—
    
—
    
—
 
Exercised   (13,900)   0.05    0.05    0.22    
—
 
Share options outstanding at June 30, 2023   2,321,006    1.70    2.32    7.54    306 
Vested and exercisable at June 30, 2023   2,199,006    1.41    2.08    7.54    306 

 

The aggregate intrinsic value in the table above represents the difference between the exercise price of the awards and the fair value of the underlying ordinary shares at each reporting date for those awards that had exercise price below the estimated fair value of the relevant Class A ordinary shares.

 

For the six months ended June 30, 2022 and 2023, the total fair value of the equity awards vested were RMB2,962 and RMB894 (US$123) respectively. As of June 30, 2023, there was RMB2,525 (USD$348) in total unrecognized employee share-based compensation expense related to unvested options, that may be adjusted for actual forfeitures occurring in the future. Total unrecognized compensation cost may be recognized over a weighted-average period of 0.6 years.  

 

F-27

 

 

Nonemployees-options

 

The options granted to nonemployees are measured based on the grant date fair value of the equity instrument. They are accounted for as equity awards with service and/or performance vesting conditions. The following table summarized the Group’s nonemployee share option activity:

 

               Weighted     
       Weighted   Weighted   Average     
       Average   Average   Remaining   Aggregate 
   Number of   Exercise   Grant date   Contractual   Intrinsic 
   Options   Price   Fair Value   Term   Value 
       US$ per   US$ per         
       option   option   Years   US$ 
Share options outstanding at December 31, 2022   2,651,700    0.86    0.85    9.27    532 
Granted   
—
    
—
    
—
    
—
    
—
 
Exercised   (650,000)   0.05    0.05    0.22    
—
 
Forfeited   (20,000)   
—
    
—
    
—
    
—
 
Share options outstanding at June 30, 2023   1,981,700    1.13    1.04    8.74    315 
Vested and exercisable at June 30, 2023   1,981,700    1.13    1.00    8.74    315 

 

The aggregate intrinsic value in the table above represents the difference between the exercise price of the awards and the fair value of the underlying ordinary shares at each reporting date, for those awards that had exercise price below the estimated fair value of the relevant Class A ordinary shares.

 

The total fair value of the equity awards vested during the six months ended June 30, 2022 and 2023 were RMB1,566 and nil, respectively. There was no unrecognized nonemployee share-based compensation expenses as of June 30, 2023.

 

Fair value of options

 

The Group used Black-Scholes simplified method for the valuation of new options issued during the six months ended June 30, 2022 and 2023. The assumptions used to value the share options granted to employees and nonemployee were as follows:

 

   For the six months ended
June 30,		 
   2022   2023 
Risk-free interest rate   0.34%   
—
%
Expected volatility range   100.2%   
—
%
Fair market value per ordinary share as at grant dates   US$0.29    
—
 

  

The following table sets forth the amount of share-based compensation expense included in each of the relevant financial statement line items:

 

   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Selling and marketing expenses   705    1,712    236 
Research and development expenses   1,263    818    113 
General and administrative expenses   2,560    1,236    170 
Total share-based compensation expenses   4,528    3,766    519 

 

F-28

 

 

16. INCOME TAXES

 

BVI

 

The Company is incorporated in the BVI and conducts its primary business operations through the subsidiaries in the U.S. and PRC Under the current laws of the BVI, the Company is not subject to tax on income or capital gains. Additionally, upon payments of dividends by the Company to its shareholders, no BVI withholding tax will be imposed.

 

Hong Kong

 

GISN (HK) Limited is a holding company registered in Hong Kong and had no operating profit and no taxable income for the six months ended June 30, 2023.

 

PRC

 

The Group’s subsidiaries in the PRC are subject to tax at the statutory rate of 25%, in accordance with the Enterprise Income Tax law (the “EIT Law”), which was effective since January 1, 2008. Hua You Sheng Future (Beijing) Technology Co., Ltd. is entitled to a preferential income tax treatment as they qualify as small and micro-sized enterprises. For the six months ended June 30, 2022 and 2023, if the annual taxable income of small and micro- profit enterprises does not exceed RMB 1,000, 12.5% shall be included in the taxable income and the enterprise income tax rate shall be 20%; if the annual taxable income exceeds RMB 1,000 but does not exceed RMB 3,000, 25% shall be included in the taxable income and the enterprise income tax shall be paid at the rate of 20%.

 

Dividends, interests, rent and royalties payable by the Group’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 PRC that provides for a reduced withholding tax rate or an exemption from withholding tax.

 

United States

 

The Group’s subsidiaries in the U.S. are subject to the U.S. federal corporate income tax and New York as well as Delaware state income tax at a rate of 21%, 6.5% and 8.7%, respectively, for the six months ended June 30, 2022 and 2023.

 

The Group’s Chinese subsidiaries tax returns filed with Chinese governments for the years after 2019 remain open for statutory examination by PRC tax authorities. The Group’s US subsidiaries tax returns filed with governments remain open for statutory examination by tax authorities in the future.

 

The Group’s loss before income taxes consisted of:

 

   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Non-US   (9,035)   (23,507)   (3,241)
US   
—
    (20,032)   (2,763)
Total   (9,035)   (43,539)   (6,004)

 

F-29

 

 

The current and deferred components of income tax benefit appearing in the unaudited condensed consolidated statements of comprehensive income are as follows:

 

   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Current tax expense   
—
    
—
    
—
 
Deferred tax benefit   
—
    79    11 
Total   
—
    79    11 

 

The reconciliation of tax computed by applying the federal statutory income tax rate of 21% for the six months ended June 30, 2022 and 2023 applicable to the U.S. operations to income tax benefit were as follows:

 

   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Loss before income taxes   (9,035)   (43,539)   (6,004)
Income tax benefit computed at the statutory income tax rate at 21%   (1,897)   9,142    1,261 
International rate differences   1,897    (4,726)   (652)
Change in valuation allowance   —    (4,337)   (598)
Income tax benefit   —    79    11 

 

Deferred Taxes

 

The significant components of deferred taxes were as follows:

 

   As of December 31, 
   December 31,   June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Deferred tax assets:            
Net loss carryforward   1,900    9,608    1,325 
Valuation allowance   (1,900)   (9,608)   (1,325)
Total deferred tax assets.   
—
    
—
    
—
 
                
Deferred tax liabilities:               
Long-lived assets arising from acquisitions   
—
    2,938    405 
Total deferred tax liabilities.   
—
    2,938    405 

 

The Group operates through several subsidiaries. Valuation allowance is considered for each of the entities.

 

Realization of the net deferred tax assets is dependent on factors including future reversals of existing taxable temporary differences and adequate future taxable income, exclusive of reversing deductible temporary differences and tax loss carry forwards. The Group evaluates the potential realization of deferred tax assets on an entity-by-entity basis. As of December 31, 2022 and June 30, 2023, the Company and all of its subsidiaries were in a cumulative loss position, valuation allowances were provided against deferred tax assets in entities where it was determined it was more likely than not that the benefits of the deferred tax assets will not be realized.

 

F-30

 

 

As of June 30, 2023, the Group had PRC net operating losses of RMB10,342 (US$ 1,426), which will expire from 2023 to 2027 if not utilized. As of June 30, 2023, the Group had Hongkong net operating losses of RMB 307 (US$42) that can be carried forward indefinitely for deduction in future periods. As of June 30, 2023, the Group had U.S. net operating losses of RMB33,198 (US$4,578) for U.S. federal and state income tax purposes. The Group files state tax returns in both New York and Delaware. U.S. federal net operating losses are limited to 80% and can be utilized indefinitely. State net operating losses can be carried forward for 20 years and will begin to expire from 2038 to 2042.

 

17. RELATED PARTY TRANSACTIONS AND BALANCES

 

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. The related parties that had transactions in the six months ended June 30, 2022 and 2023 or balances with the Group as of December 30, 2022 and June 30, 2023 consisted of:

 

Related Party   Nature of the party   Relationship with the Group
Haohan Xu   Individual   Chief Executive Officer
Apifiny Inc.   Investment management   Controlled by Haohan Xu
Roxe Holding Inc.   Investment management   Controlled by Haohan Xu
Dr. Chris Chang Yu*   Individual   Co-Founder and shareholder
CRS Holdings Inc.   Investor   Controlled by Dr. Chris Chang Yu
Jiaxing Zhijun Sihang Investment Partnership Enterprises (limited partnership) (“Jiaxing Zhijun”)   Private equity investment   Shareholder, due to diluted equity interest, no longer a related party for the six months ended June 30 2023

 

*Dr. Yu resigned from his position as the Chief Executive Officer (“CEO”) of the Company and Chairman of the Board on April 6, 2022 and was appointed as Co-Chairman and Co-CEO in May 2022. On May 17, 2023, Dr. Yu resigned as the Co-Chief Executive Officer of the Company.

 

Related party balances

 

   As of
December 31,		   As of June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Due from related parties:            
Apifiny Inc.   
—
    211    29 
Roxe Holding Inc.   
—
    363    50 
Dr. Chris Chang Yu   
—
    290    40 
Due from related parties, net   
—
    864    119 

 

   As of
December 31,		  

As of June 30,

 
   2022   2023   2023 
   RMB   RMB   US$ 
Due to related parties:            
CRS Holdings Inc.   287    592    82 
Jiaxing Zhijun   927    
—
    
—
 
Due to related parties   1,214    592    82 

 

F-31

 

 

   As of
December 31,		  

As of June 30,

 
   2022   2023   2023 
   RMB   RMB   US$ 
Accounts receivables-related parties:            
Apifiny Inc.   
—
    3,525    486 
Roxe Holding Inc.   
—
    7,925    1,093 
Accounts Receivables-related parties, net   
—
    11,450    1,579 

 

Accounts receivables-related parties represented receivables from Apifiny Inc. and Roxe Holding Inc. for research and development services provided by the Group’s subsidiaries before the GISN acquisition.

 

Related party transactions

 

For the six months ended June 30, 2022 and 2023, related party transactions consisted of the following:

 

   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Fixed assets purchased from Apifiny Inc.   
—
    970    134 
Consulting service received from Roxe Holding Inc.   
—
    464    64 
Rent expense incurred with Apifiny Inc.   32    624    86 

 

Acquisition, investment and divestitures

 

The Group completed two acquisitions from a related party – Mr. Xu (details refer to Note 4) and completed divestiture transaction with a related party Dr. Chris Yu on July 28, 2023 (details refer to Note 5). On May 24, 2023, the Group completed equity investment in Nassau, controlled by a related party - Mr. Xu (details refer to Note 10).

 

18. COMMITMENTS AND CONTINGENCIES

 

Litigation

 

In the ordinary course of the business, the Group is subject to periodic legal or administrative proceedings. As of December 31, 2022 and June 30, 2023, there was no contingent liability accrued relating to legal or administrative proceedings.

 

19. SUBSEQUENT EVENTS

 

Recent Development

 

The Company announced that as of June 30, 2023, it no longer qualified as a Foreign Private Issuer, as defined in Rule 405 of Regulation C under the Securities Act of 1933 and Rule 3b-4 under the Securities Exchange Act of 1934. The Company will take all necessary actions to comply with the requirements for a domestic issuer under the federal securities laws, as of January 1, 2024.

 

On July 21, 2023, the Company appointed Mr. Yidong Hu as the Chief Strategy Officer of the Company.

 

On August 25, 2023, Mr. Edwards Jinqiu Tang resigned as the Co-Chief Financial Officer of the Company. Mr. Tang’s resignation did not result from any disagreement with the Company or its management.

 

F-32

 

 

Divestiture

 

On July 28, 2023, the Group entered into agreements to sell its CDA Business (details refer to Note 5).

 

Acquisition

 

On July 17, 2023, the Group entered into a definitive share purchase agreement with Immensus LLC, Zero2First Capital Limited, Future Capital Tech Pte. Ltd (Singapore), River Hill China Capital Ltd (collectively, the “Sellers”) and Roxe Holding Inc. (“Roxe”) under which Fresh2 Technology purchased 51% of the common share of Roxe (the “Roxe Shares”). As consideration for the purchase of the Roxe Shares, the Company issued an aggregate of 110,476,291 Class A Ordinary Shares of the Company to the Sellers, based on Roxe’s valuation of US$60,000 and the average trading price of the Company’s ADSs for the prior 90 trading days (each ADS represents 20 Class A Ordinary Shares). The closing took place simultaneously with the execution of the Share Purchase Agreement. Unaudited Pro-forma condensed combined financial information in connection with the above acquisition was included in the Company’s filling in a Form 6-K with the SEC on August 21, 2023. On July 27, 2023, Roxe entered into a share purchase agreement with SpeedIn INC (“SpeedIn”), a delivery service provider, and its shareholders, under which Roxe agreed to purchase 100% of the shares of SpeedIn from the Sellers with a nominal price. The closing took place simultaneously with the execution of the share purchase agreement. Due to badly performance, the Board have approved the disposition of SpeedIn to a company controlled by Mr. Haohan Xu on October 9, 2023.

 

On July 28, 2023, the Company, through its subsidiary, Foodbase Group Inc. agreed to acquire 100% of the equity interest in Windfall SLV Development LLC and SLV Windfall Management LLC, from XHome Group Inc, a company controlled by Mr. Haohan Xu, for a nominal price. Windfall SLV Development LLC and SLV Windfall Management LLC have not begun operations as yet.

 

On November 4, 2023 the Company and Fresh2 Technology entered into a definitive Share Purchase Agreement to purchase 38.61% of the common stock of Roxe.

 

Financing activities

 

On September 25, 2023, the Company entered into an agreement with an institutional investor to purchase up to US$2,000 of convertible notes, the convertible notes will be sold in two tranches (i) US$400 (original principal amount) of convertible notes, Series C warrants to purchase 258,065 ADSs (or 5,161,300 Class A ordinary shares) at exercise price equal to 125% of the lower of (a) $1.86 and (b) the lowest daily volume-weighted average price (“VWAP”) for the 10 trading days prior to the exercise date  and Series D warrants to purchase up to 283,688 ADSs (or 5,673,760 Class A ordinary shares) at exercise price equal to the lower of (x) $1.41 and (y) 75.83% of the lowest daily VWAP for the ten (10) trading days immediately prior to the exercise date, subject to adjustment, and (ii) US$1,600 (original principal amount) of convertible notes, 20,645,160 Series C warrants and 22,695,040 Series D warrants. The Company received the first payment RMB1,697(US$234) from this offering, excluding related financing costs.

 

 

F-33

 

 

0.05 0.35 0.38 0.03 0.22 1.66 0.08 0.57 2.04 124374140 124374140 23603709 On June 1, 2023, the Group complete the disposal of Changwei System Technology (Shanghai) Co., Ltd. false --12-31 Q2 2023-06-30 0001786511 0001786511 2023-01-01 2023-06-30 0001786511 2022-12-31 0001786511 2023-06-30 0001786511 us-gaap:RelatedPartyMember 2022-12-31 0001786511 us-gaap:RelatedPartyMember 2023-06-30 0001786511 us-gaap:CommonClassAMember 2022-12-31 0001786511 us-gaap:CommonClassAMember 2023-06-30 0001786511 us-gaap:CommonClassBMember 2022-12-31 0001786511 us-gaap:CommonClassBMember 2023-06-30 0001786511 2022-01-01 2022-06-30 0001786511 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2021-12-31 0001786511 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2021-12-31 0001786511 us-gaap:TreasuryStockCommonMember 2021-12-31 0001786511 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001786511 us-gaap:RetainedEarningsMember 2021-12-31 0001786511 us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember 2021-12-31 0001786511 anpc:TotalFresh2GroupLimitedShareholdersEquityDeficitMember 2021-12-31 0001786511 us-gaap:NoncontrollingInterestMember 2021-12-31 0001786511 2021-12-31 0001786511 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2022-01-01 2022-06-30 0001786511 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2022-01-01 2022-06-30 0001786511 us-gaap:TreasuryStockCommonMember 2022-01-01 2022-06-30 0001786511 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-06-30 0001786511 us-gaap:RetainedEarningsMember 2022-01-01 2022-06-30 0001786511 us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember 2022-01-01 2022-06-30 0001786511 anpc:TotalFresh2GroupLimitedShareholdersEquityDeficitMember 2022-01-01 2022-06-30 0001786511 us-gaap:NoncontrollingInterestMember 2022-01-01 2022-06-30 0001786511 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2022-06-30 0001786511 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2022-06-30 0001786511 us-gaap:TreasuryStockCommonMember 2022-06-30 0001786511 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001786511 us-gaap:RetainedEarningsMember 2022-06-30 0001786511 us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember 2022-06-30 0001786511 anpc:TotalFresh2GroupLimitedShareholdersEquityDeficitMember 2022-06-30 0001786511 us-gaap:NoncontrollingInterestMember 2022-06-30 0001786511 2022-06-30 0001786511 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2022-12-31 0001786511 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2022-12-31 0001786511 us-gaap:TreasuryStockCommonMember 2022-12-31 0001786511 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001786511 us-gaap:RetainedEarningsMember 2022-12-31 0001786511 us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember 2022-12-31 0001786511 anpc:TotalFresh2GroupLimitedShareholdersEquityDeficitMember 2022-12-31 0001786511 us-gaap:NoncontrollingInterestMember 2022-12-31 0001786511 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2023-01-01 2023-06-30 0001786511 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2023-01-01 2023-06-30 0001786511 us-gaap:TreasuryStockCommonMember 2023-01-01 2023-06-30 0001786511 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-06-30 0001786511 us-gaap:RetainedEarningsMember 2023-01-01 2023-06-30 0001786511 us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember 2023-01-01 2023-06-30 0001786511 anpc:TotalFresh2GroupLimitedShareholdersEquityDeficitMember 2023-01-01 2023-06-30 0001786511 us-gaap:NoncontrollingInterestMember 2023-01-01 2023-06-30 0001786511 us-gaap:CommonClassAMember us-gaap:CommonStockMember 2023-06-30 0001786511 us-gaap:CommonClassBMember us-gaap:CommonStockMember 2023-06-30 0001786511 us-gaap:TreasuryStockCommonMember 2023-06-30 0001786511 us-gaap:AdditionalPaidInCapitalMember 2023-06-30 0001786511 us-gaap:RetainedEarningsMember 2023-06-30 0001786511 us-gaap:AccumulatedOtherComprehensiveIncomeLossDerivativeQualifyingAsHedgeExcludedComponentIncludingPortionAttributableToNoncontrollingInterestMember 2023-06-30 0001786511 anpc:TotalFresh2GroupLimitedShareholdersEquityDeficitMember 2023-06-30 0001786511 us-gaap:NoncontrollingInterestMember 2023-06-30 0001786511 2023-07-17 2023-07-17 0001786511 anpc:TotalFresh2GroupLimitedShareholdersEquityDeficitMember 2023-07-17 2023-07-17 0001786511 2023-07-17 0001786511 2023-04-12 2023-04-12 0001786511 anpc:ChangweiSystemTechnologyShanghaiCoLtdMember 2023-06-30 0001786511 anpc:ChangweiSystemTechnologyShanghaiCoLtdMember 2023-01-01 2023-06-30 0001786511 anpc:AnPacBioMedicalTechnologyLishuiCoLtdAnPacLishuiMember 2023-06-30 0001786511 anpc:AnPacBioMedicalTechnologyLishuiCoLtdAnPacLishuiMember 2023-01-01 2023-06-30 0001786511 anpc:AnPacBioMedicalTechnologyShanghaiCoLtdMember 2023-06-30 0001786511 anpc:AnPacBioMedicalTechnologyShanghaiCoLtdMember 2023-01-01 2023-06-30 0001786511 anpc:AnPacTechnologyUSACoLtdAnPacUSMember 2023-06-30 0001786511 anpc:AnPacTechnologyUSACoLtdAnPacUSMember 2023-01-01 2023-06-30 0001786511 anpc:LishuiAnPacMedicalLaboratoryCoLtdMember 2023-06-30 0001786511 anpc:LishuiAnPacMedicalLaboratoryCoLtdMember 2023-01-01 2023-06-30 0001786511 anpc:ShijiHainanMedicalTechnologyLtdMember 2023-06-30 0001786511 anpc:ShijiHainanMedicalTechnologyLtdMember 2023-01-01 2023-06-30 0001786511 anpc:ShanghaiMuqingAnPacHealthTechnologyCoLtdAnPacMuqingMember 2023-06-30 0001786511 anpc:ShanghaiMuqingAnPacHealthTechnologyCoLtdAnPacMuqingMember 2023-01-01 2023-06-30 0001786511 anpc:AnpaiShanghaiHealthcareManagementAndConsultingCoLtdMember 2023-06-30 0001786511 anpc:AnpaiShanghaiHealthcareManagementAndConsultingCoLtdMember 2023-01-01 2023-06-30 0001786511 anpc:Fresh2GroupIncMember 2023-06-30 0001786511 anpc:Fresh2GroupIncMember 2023-01-01 2023-06-30 0001786511 anpc:Fresh2TechnologyIncFresh2Member 2023-06-30 0001786511 anpc:Fresh2TechnologyIncFresh2Member 2023-01-01 2023-06-30 0001786511 anpc:Fresh2LogisticsIncMember 2023-06-30 0001786511 anpc:Fresh2LogisticsIncMember 2023-01-01 2023-06-30 0001786511 anpc:Fresh2HFIncMember 2023-06-30 0001786511 anpc:Fresh2HFIncMember 2023-01-01 2023-06-30 0001786511 anpc:FoodbaseGroupIncMember 2023-06-30 0001786511 anpc:FoodbaseGroupIncMember 2023-01-01 2023-06-30 0001786511 anpc:Fresh2EZIncMember 2023-06-30 0001786511 anpc:Fresh2EZIncMember 2023-01-01 2023-06-30 0001786511 anpc:Fresh2InformationIncMember 2023-06-30 0001786511 anpc:Fresh2InformationIncMember 2023-01-01 2023-06-30 0001786511 anpc:Fresh2EcommerceFresh2EcommerceMember 2023-06-30 0001786511 anpc:Fresh2EcommerceFresh2EcommerceMember 2023-01-01 2023-06-30 0001786511 anpc:GSINHKLimitedGISNMember 2023-06-30 0001786511 anpc:GSINHKLimitedGISNMember 2023-01-01 2023-06-30 0001786511 anpc:HuaYouShengFutureBeijingTechnologyCoLtdMember 2023-06-30 0001786511 anpc:HuaYouShengFutureBeijingTechnologyCoLtdMember 2023-01-01 2023-06-30 0001786511 anpc:GuanshiTechnologyBeijingCoLtdMember 2023-06-30 0001786511 anpc:GuanshiTechnologyBeijingCoLtdMember 2023-01-01 2023-06-30 0001786511 srt:ScenarioForecastMember 2023-09-25 0001786511 srt:MinimumMember 2023-01-01 2023-06-30 0001786511 srt:MaximumMember 2023-01-01 2023-06-30 0001786511 2022-12-31 2022-12-31 0001786511 anpc:OneSuppliersMember 2022-01-01 2022-06-30 0001786511 us-gaap:OtherCustomerMember 2023-01-01 2023-06-30 0001786511 anpc:TwoSuppliersMember 2022-01-01 2022-06-30 0001786511 anpc:TwoCustomersMember 2023-01-01 2023-06-30 0001786511 anpc:ThreeCustomersMember 2023-01-01 2023-06-30 0001786511 anpc:ThreeSuppliersMember 2022-01-01 2022-06-30 0001786511 anpc:TwoSuppliersMember 2023-01-01 2023-06-30 0001786511 anpc:FourSuppliersMember 2023-01-01 2023-06-30 0001786511 anpc:ThreeSuppliersMember 2023-01-01 2023-06-30 0001786511 2022-01-01 2022-12-31 0001786511 srt:MinimumMember anpc:FurnitureFixturesAndEquipmentMember 2023-06-30 0001786511 srt:MaximumMember anpc:FurnitureFixturesAndEquipmentMember 2023-06-30 0001786511 anpc:MotorVehiclesMember 2023-06-30 0001786511 srt:MinimumMember 2023-06-30 0001786511 2008-09-30 0001786511 anpc:GISNAcquisitionMember us-gaap:CommonClassAMember 2023-06-30 0001786511 anpc:GISNAcquisitionMember us-gaap:CommonClassAMember 2023-01-01 2023-06-30 0001786511 anpc:Fresh2AcquisitionMember us-gaap:CommonClassAMember 2023-06-30 0001786511 anpc:Fresh2AcquisitionMember us-gaap:CommonClassAMember 2023-01-01 2023-06-30 0001786511 anpc:Fresh2AcquisitionMember anpc:ProFormMember 2023-01-01 2023-06-30 0001786511 anpc:AssetAcquisitionMember 2023-01-01 2023-06-30 0001786511 anpc:GISNAcquisitionMember 2023-01-01 2023-06-30 0001786511 anpc:GISNAcquisitionMember 2023-06-30 0001786511 anpc:Fresh2AcquisitionMember 2023-01-01 2023-06-30 0001786511 anpc:Fresh2AcquisitionMember 2023-06-30 0001786511 anpc:FurnitureFixturesAndEquipmentMember 2023-06-30 0001786511 anpc:MotorVehiclesMember 2023-06-30 0001786511 anpc:SoftwareMember 2023-06-30 0001786511 anpc:RevenuesThirdPartiesMember us-gaap:SegmentDiscontinuedOperationsMember 2022-01-01 2022-06-30 0001786511 anpc:RevenuesThirdPartiesMember us-gaap:SegmentDiscontinuedOperationsMember 2023-01-01 2023-06-30 0001786511 anpc:RevenuesRelatedPartiesMember us-gaap:SegmentDiscontinuedOperationsMember 2022-01-01 2022-06-30 0001786511 anpc:RevenuesRelatedPartiesMember us-gaap:SegmentDiscontinuedOperationsMember 2023-01-01 2023-06-30 0001786511 us-gaap:SegmentDiscontinuedOperationsMember 2022-01-01 2022-06-30 0001786511 us-gaap:SegmentDiscontinuedOperationsMember 2023-01-01 2023-06-30 0001786511 us-gaap:SegmentDiscontinuedOperationsMember 2022-12-31 0001786511 us-gaap:SegmentDiscontinuedOperationsMember 2023-06-30 0001786511 2022-07-01 2022-12-31 0001786511 us-gaap:SoftwareDevelopmentMember 2022-12-31 0001786511 us-gaap:SoftwareDevelopmentMember 2023-06-30 0001786511 anpc:AdvancedLifeTherapeuticsCoLtdAdvancedLifeMember 2021-05-01 2021-05-15 0001786511 2023-05-24 0001786511 anpc:NassauEnterprisesLLCNassauMember 2023-06-30 0001786511 anpc:NassauEnterprisesLLCNassauMember 2023-05-24 0001786511 anpc:AdvancedLifeTherapeuticsCoLtdAdvancedLifeMember 2022-12-31 0001786511 anpc:AdvancedLifeTherapeuticsCoLtdAdvancedLifeMember 2023-06-30 0001786511 anpc:NassauEnterprisesLLCNassauMember 2022-12-31 0001786511 anpc:NassauEnterprisesLLCNassauMember 2023-06-30 0001786511 2021-07-22 0001786511 2021-07-22 2021-07-22 0001786511 srt:MaximumMember 2021-07-22 2021-07-22 0001786511 srt:MinimumMember 2021-07-22 2021-07-22 0001786511 us-gaap:CommonClassAMember 2022-02-05 0001786511 2021-12-10 0001786511 2021-12-10 2021-12-10 0001786511 2022-03-16 2022-03-16 0001786511 2019-10-14 0001786511 us-gaap:CommonClassAMember 2019-10-01 2019-10-14 0001786511 us-gaap:CommonClassBMember 2019-10-01 2019-10-14 0001786511 srt:MinimumMember 2023-02-14 0001786511 srt:MaximumMember 2023-02-14 0001786511 us-gaap:CommonClassAMember 2023-02-14 2023-02-14 0001786511 us-gaap:CommonClassBMember 2023-02-14 2023-02-14 0001786511 us-gaap:CommonClassAMember 2021-12-10 2021-12-10 0001786511 us-gaap:CommonClassAMember 2022-03-16 2022-03-16 0001786511 2023-03-31 2023-03-31 0001786511 us-gaap:CommonClassAMember 2023-03-31 0001786511 srt:MinimumMember 2023-03-31 2023-03-31 0001786511 2022-04-27 2022-04-27 0001786511 2023-06-01 0001786511 us-gaap:CommonClassAMember 2022-06-10 2022-06-10 0001786511 2022-06-10 2022-06-10 0001786511 us-gaap:CommonClassAMember 2022-08-01 2022-08-31 0001786511 us-gaap:CommonClassAMember 2022-09-16 0001786511 2022-08-31 0001786511 us-gaap:CommonClassAMember 2020-07-28 2020-07-28 0001786511 us-gaap:CommonClassAMember 2023-05-11 2023-05-11 0001786511 2023-05-11 2023-05-11 0001786511 us-gaap:CommonClassAMember 2022-12-31 2022-12-31 0001786511 us-gaap:CommonClassAMember 2023-01-01 2023-06-30 0001786511 us-gaap:CommonClassAMember 2023-06-01 2023-06-09 0001786511 srt:ScenarioForecastMember us-gaap:CommonClassAMember 2023-10-01 2023-10-30 0001786511 us-gaap:InvestorMember us-gaap:CommonClassAMember 2022-03-16 0001786511 us-gaap:InvestorMember us-gaap:CommonClassAMember 2023-06-30 0001786511 us-gaap:InvestorMember us-gaap:CommonClassAMember 2022-03-16 2022-03-16 0001786511 us-gaap:InvestorMember us-gaap:CommonClassAMember 2022-05-19 2022-05-19 0001786511 us-gaap:PrivatePlacementMember 2023-01-01 2023-06-30 0001786511 us-gaap:InvestorMember us-gaap:CommonClassAMember 2022-03-29 0001786511 us-gaap:InvestorMember us-gaap:CommonClassAMember 2022-03-30 2022-03-30 0001786511 2022-05-01 2022-05-27 0001786511 2022-05-27 0001786511 us-gaap:InvestorMember us-gaap:CommonClassAMember 2022-05-27 0001786511 us-gaap:InvestorMember us-gaap:CommonClassAMember 2022-05-30 0001786511 us-gaap:WarrantMember 2022-12-31 0001786511 anpc:NineInvestorsMember us-gaap:CommonClassAMember 2022-12-31 0001786511 us-gaap:CommonClassAMember 2022-01-01 2022-12-31 0001786511 2022-09-02 2022-09-02 0001786511 2022-09-02 0001786511 us-gaap:CommonClassAMember 2022-09-02 2022-09-02 0001786511 us-gaap:PrivatePlacementMember 2022-09-02 0001786511 us-gaap:CommonClassAMember 2022-09-26 0001786511 us-gaap:CommonClassAMember 2022-09-02 0001786511 2022-09-26 2022-09-26 0001786511 2022-03-16 0001786511 us-gaap:CommonClassAMember 2022-03-01 2022-03-16 0001786511 2023-08-10 0001786511 us-gaap:CommonClassAMember 2023-08-10 0001786511 2023-02-01 2023-02-01 0001786511 2023-02-08 2023-02-08 0001786511 us-gaap:WarrantMember 2023-03-31 0001786511 2022-12-30 0001786511 us-gaap:CommonClassAMember 2019-10-01 2019-10-31 0001786511 us-gaap:CommonClassAMember 2021-07-05 0001786511 us-gaap:CommonClassAMember 2022-04-01 2022-04-14 0001786511 2022-08-01 2022-08-28 0001786511 2023-01-01 2023-01-31 0001786511 2023-03-10 0001786511 us-gaap:RestrictedStockUnitsRSUMember 2023-06-30 0001786511 anpc:EmployeesMember 2022-01-01 2022-06-30 0001786511 anpc:EmployeesMember 2023-01-01 2023-06-30 0001786511 anpc:NonEmployeesMember 2022-01-01 2022-06-30 0001786511 anpc:NonEmployeesMember 2023-01-01 2023-06-30 0001786511 us-gaap:ShareBasedPaymentArrangementEmployeeMember 2023-01-01 2023-06-30 0001786511 us-gaap:ShareBasedPaymentArrangementNonemployeeMember 2023-01-01 2023-06-30 0001786511 anpc:NonEmployeesMember 2022-12-31 0001786511 anpc:NonEmployeesMember 2023-06-30 0001786511 srt:MinimumMember 2022-01-01 2022-06-30 0001786511 anpc:PRCMember 2023-01-01 2023-06-30 0001786511 us-gaap:InterestIncomeMember 2023-01-01 2023-06-30 0001786511 anpc:PRCMember 2023-01-01 2023-06-30 0001786511 country:US 2023-01-01 2023-06-30 0001786511 country:US 2022-01-01 2022-06-30 0001786511 stpr:NY 2023-01-01 2023-06-30 0001786511 stpr:NY 2022-01-01 2022-06-30 0001786511 stpr:DE 2023-01-01 2023-06-30 0001786511 stpr:DE 2022-01-01 2022-06-30 0001786511 anpc:Fresh2TechnologiesIncMember 2023-01-01 2023-06-30 0001786511 country:HK 2023-01-01 2023-06-30 0001786511 anpc:NonPRCMember 2023-01-01 2023-06-30 0001786511 us-gaap:InternalRevenueServiceIRSMember 2023-01-01 2023-06-30 0001786511 anpc:NonPRCMember 2022-01-01 2022-06-30 0001786511 country:US 2022-01-01 2022-06-30 0001786511 country:US 2023-01-01 2023-06-30 0001786511 2023-12-31 0001786511 anpc:HaohanXuMember 2023-01-01 2023-06-30 0001786511 anpc:ApifinyIncMember 2023-01-01 2023-06-30 0001786511 anpc:RoxeHoldingIncMember 2023-01-01 2023-06-30 0001786511 anpc:DrChrisChangYuMember 2023-01-01 2023-06-30 0001786511 anpc:CRSHoldingsIncMember 2023-01-01 2023-06-30 0001786511 anpc:JiaxingZhijunSihangInvestmentPartnershipEnterprisesMember 2023-01-01 2023-06-30 0001786511 us-gaap:RelatedPartyMember anpc:ApifinyIncMember 2022-12-31 0001786511 us-gaap:RelatedPartyMember anpc:ApifinyIncMember 2023-06-30 0001786511 us-gaap:RelatedPartyMember anpc:RoxeHoldingIncMember 2022-12-31 0001786511 us-gaap:RelatedPartyMember anpc:RoxeHoldingIncMember 2023-06-30 0001786511 us-gaap:RelatedPartyMember anpc:DrChrisChangYuMember 2022-12-31 0001786511 us-gaap:RelatedPartyMember anpc:DrChrisChangYuMember 2023-06-30 0001786511 us-gaap:RelatedPartyMember anpc:CRSHoldingsIncMember 2022-12-31 0001786511 us-gaap:RelatedPartyMember anpc:CRSHoldingsIncMember 2023-06-30 0001786511 us-gaap:RelatedPartyMember anpc:JiaxingZhijunInvestmentManagementCoLtdZhijunMember 2022-12-31 0001786511 us-gaap:RelatedPartyMember anpc:JiaxingZhijunInvestmentManagementCoLtdZhijunMember 2023-06-30 0001786511 anpc:AnPacBeijingMember 2022-01-01 2022-06-30 0001786511 anpc:AnPacBeijingMember 2023-01-01 2023-06-30 0001786511 anpc:XUdongDuMember 2022-01-01 2022-06-30 0001786511 anpc:XUdongDuMember 2023-01-01 2023-06-30 0001786511 2022-07-01 2022-07-17 0001786511 2023-11-04 2023-11-04 0001786511 us-gaap:SubsequentEventMember 2023-09-25 2023-09-25 iso4217:CNY iso4217:USD iso4217:USD xbrli:shares xbrli:shares iso4217:CNY xbrli:shares xbrli:pure

Exhibit 99.2

 

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

 

A Operating Results

 

The following discussion and analysis of our financial condition as of June 30, 2023 and results of operations for the six months ended June 30, 2023 and June 30, 2022 should be read together with our condensed interim consolidated financial statements and related notes included elsewhere in this filing and our audited consolidated financial statements included in our Annual Report on Form 20-F for the year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission (“SEC”) on May 16, 2023 (the “2022 Form 20-F”). The following discussion contains forward-looking statements that reflect our current plans, estimates and beliefs and involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this filing and in our Annual Report on Form 20-F and other filings with the U.S. Securities and Exchange Commission.

 

Introduction

 

In late 2022 we began to transition our business to build a comprehensive B2B e-commerce platform with a focus on assisting restaurant owners in selecting Asian food suppliers more efficiently with the ultimate goal of providing one-stop fulfillment services from food sourcing to last-mile delivery. We primarily sources consumables and fresh food items from wholesale distributors, reselling them to restaurants nationwide. We were incorporated in the British Virgin Islands in January 2010 as AnPac Bio-Medical Science Co., Ltd. and changed our name to Fresh2 Group Limited to reflect our current business.

 

Unless otherwise indicated or unless the context otherwise requires, references to “Fresh2,” “we,” “us,” “our company,” “the Company,” the “Group” and “our” refers to Fresh2 Group Limited, a British Virgin Islands company and its subsidiaries:

 

Recent Developments

 

Acquisitions

 

In October 2022 we incorporated a new subsidiary, Fresh2 Technology Inc. (“Fresh2”) to serve as the operating company for our B2B business. On February 1, 2023, we acquired GISN (HK) LIMITED (“GISN”), a technical solution and outsourcing consulting services provider focused on the digital, internet and Web 3 business transformation for start-ups and traditional enterprises, from Mr. Haohan Xu, our then Co-CEO and Co-Chairman of the board of directors. This acquisition was a critical initiative for the Company in order to improve the efficiency of its e-commerce operations.

 

On February 8, 2023, we acquired Fresh 2 Ecommerce Inc, a Delaware corporation (“Fresh2 Ecommerce”), from Mr. Xu. Fresh2 Ecommerce is a business-to-business e-commerce platform focused on connecting Asian food suppliers and restaurants in the U.S. Fresh2 Ecommerce provides an online direct selling platform for food suppliers such as manufacturers, agents, importers, and wholesalers to restaurants and other retail customers.

 

On July 17, 2023, we purchased 51% of the common stock of Roxe Holding Inc. (“Roxe”), a development stage Delaware corporation with several New York based operating subsidiaries. Roxe, which has over than 100 independent contractors and employees, has used Blockchain technology to develop a peer-to-peer online payment program. The Roxe Instant Settlement Network (RISN) has been designed to enable financial institutions to provide cost efficient payments and near instant settlement. Roxe’s technology will enable multi asset payments and instant settlement in any supported currency. At present, Roxe has the ability to support transactions in over 100 countries and support more than 50 currencies and intends to allow users to accept payments in multiple assets. It has signed up 42 financial institutions and other organizations who intend to use Roxe’s technology. Roxe’s business is designed to support and interact with third party B2B e-commerce businesses to facilitate seamless payment transactions that take place on these platforms, enabling these businesses to achieve near real-time settlement. This interaction is intended to ensure quicker payment processing, reduced transaction fees, and enhanced cash flow for B2B transactions.

 

 

 

 

Roxe also intends to sign up e-commerce restaurants which could utilize Roxe’s payment technology for more efficient payment processing. Roxe intends to provide these businesses with the option of engaging Roxe to analyze their data points, such as menus, payment systems, and ingredient procurement and offer customized solutions.

 

On July 27, 2023, Roxe purchased SpeedIn Inc., which is focused on last mile deliveries, utilizing independent contractors, for a nominal price, from our CEO, Mr. Haohan Xu. Due to its disappointing performance, we sold SpeedIn back to Mr. Xu for the same nominal amount as paid.

 

We recently acquired a 19.64% interest in Nassau Enterprises LLC (“Nassau”). Nassau intends to develop, market and sell real estate in Savannah Lakes Village (the “SLV Project”) and to utilize an EB-5 program to finance the development of the SLV Project. This activity is expected to provide alternative financing for the Company’s growth.

 

Divestitures

 

In July, 2023, the Board approved the sale of its early cancer screening and detection business (the “CDA Business”), comprised of (i) AnPac Bio-Medical Technology (Lishui) Co., Ltd. (“AnPac Lishui”), a subsidiary based in Lishui, China, (ii) Anpac Technology USA CO., LTD. (“AnPac USA”), a subsidiary based in Pennsylvania and California, and (iii) Changhe Bio-Medical Technology (Yangzhou) Co., Ltd.(“Changhe”), a subsidiary based in Yangzhou, China. Accordingly, on July 28, 2023, the Group entered into Share purchase agreements with New-Horizon Bio-Medical Science Co., Ltd. (“New-Horizon”), a Hong Kong company focused on bio-medical technology, under which the Group agreed to sell 100% of the shares of AnPac Lishui and AnPac USA, which had experienced significant financial losses in its operations and are not expected to achieve a breakeven point in the immediate future, to New-Horizon in consideration of nil and nil, respectively. In addition, on July 28, 2023, the Group entered into a share purchase agreement with Ningkasai Technology (Shanghai) Co., Ltd. (“Ningkasai”), a PRC high-tech company specialized in nanotechnologies for life science applications, under which the Group agreed to sell 100% of the shares of Changhe, to Ningkasai for no consideration. The closing is expected to take place in November 2023.

 

Going Concern Uncertainties

 

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

 

As reflected in the accompanying unaudited condensed consolidated financial statements for the six months ended June 30, 2023, we incurred net losses from continuing operations of approximately RMB43.5 million (US$6.0 million), net cash used in continuing operating activities of RMB43.7 million (US$6.0 million). As of June 30, 2023, we had an accumulated deficit of RMB648.3 million (US$89.4 million). Management believes these factors raise substantial doubt about our ability to continue as a going concern for the next twelve months. The continuation of our company as a going concern through the next twelve months is dependent upon (1) the continued financial support from our shareholders or external financing. While we believe in the viability of our strategy to enter the e-commerce food distribution business will allow us to reduce our losses and improve our ability to raise additional funds, there can be no assurance to that effect, nor that our company will be successful in securing sufficient funds to sustain the operations.

 

These conditions raise substantial doubt about our company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for our company to continue as a going concern.

 

2 

 

 

Results of Operations

 

Effective on July 28, 2023, we disposed of our ownership interests in our multi-cancer screening and detection test business (the “CDA Business”)which was primarily based in the People’s Republic of China (the “PRC” or “China”). The Group determined that the disposal of the CDA Business met the criteria to be classified as a discontinued operation and, as a result, the CDA business’s historical financial results are reflected in the Group’s unaudited condensed consolidated financial statements as a discontinued operation.

 

The following table summarizes our results of operations for the periods indicated. This information should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.

 

   For the six months ended
June 30,		   Amount
Increase		   Percentage
Increase		 
   2022   2023   (Decrease)   (Decrease) 
   RMB   RMB         
(In thousands of RMB, except for percentages)
Revenues   —    4,936    4,936    —%
Cost of revenues   —    (4,039)   (4,039)   —%
Gross Profit   —    897    897    —%
Operating expenses:                    
Selling and marketing expenses   (463)   (6,070)   (5,607)   1,211.0%
General and administrative expenses   (8,167)   (35,680)   (27,513)   336.9%
Research and development expenses   —    (2,303)   (2,303)   —%
Loss from operations   (8,630)   (43,156)   (34,526)   400.1%
Non-operating income and expenses:                   %
Interest expense, net   (31)   (309)   (278)   896.8%
Foreign exchange loss, net   (513)   —    513    (100.0)%
Share of net loss in equity method investments   —    (95)   (95)   —%
Change in fair value of convertible debt   139    —    (139)   (100.0)%
Other income, net   —    21    21    —%
Loss from continuing operations before income taxes   (9,035)   (43,539)   (34,504)   381.9%
Income tax benefit   —    79    79    —%
Loss from continuing operations   (9,035)   (43,460)   (34,425)   381.0%
Loss from discontinuing operations, net of taxes   (39,780)   (27,945)   11,835    (29.8)%
Net loss   (48,815)   (71,405)   (22,590)   46.3%
Net loss from discontinuing operations attributable to noncontrolling interests   (740)   (641)   99    (13.4)%
Net loss attributable to ordinary shareholders   (48,075)   (70,764)   (22,689)   47.2%

 

Six months ended June 30, 2022 Compared to Six months ended June 30, 2023

 

Revenues

 

After the acquisition of GISN, Fresh2 Ecommerce and Easy Hundred during the first quarter 2023, the Group started to operate a business-to-business e-commerce platform focused on connecting Asian food suppliers and restaurants and other retail customers in the U.S.

 

Our total revenues from continuing operations amounted to RMB4.9 million (US$681,000) for the six months ended June 30, 2023, primarily representing the revenue from sales of food and consumable products through our own APP in U.S. market. We did not have revenues from this source in the same period of last year.

 

Cost of Revenues

 

Our cost of revenues from continuing operations amounted to RMB4.0 million (US$557,000) for the six months ended June 30, 2023 as compared to nil for the same period of 2022, which mainly represented the cost of merchandise sold during the period.

 

Gross Profit

 

Our gross profit from continuing operations amounted to RMB897,000 (US$124,000) for the six months ended June 30, 2023 as compared to nil for the same period of 2022. Gross margin was18.2% for the six months ended June 30, 2023.

 

3 

 

 

Operating Expenses

 

Selling and marketing expenses

 

Our selling and marketing expenses from continuing operations increased by 1,211.0% to RMB6.1 million (US$837,000) for the six months ended June 30, 2023 from RMB463,000 for the same period of 2022, primarily due to more promotions and selling expenses incurred in promoting our platform. We also incurred additional sales and marketing staff salaries, share base compensation and shipping expenses during the first half of 2023.

 

General and administrative expenses

 

Our general and administrative expenses from continuing operations increased by 336.9% to RMB35.7 million (US$4.9 million) for the six months ended June 30, 2023 from RMB8.2 million for the same period of 2022, primarily due to increased professional consulting fees and employee salaries and the amortization of intangible assets as new business start.

 

Research and development expenses

 

Our research and development expenses from continuing operations amounted to RMB2.3 million (US$318,000) for the six months ended June 30, 2023 as compared to nil for the same period of 2022, primarily due to the inclusion of the operations of GISN which was acquired in February 2023. Our research and development expense incurred in the 2022 were mainly related to our discontinued CDA business.

 

Interest expense, net

 

Our net interest expense from continuing operations increased to RMB309,000 (US$43,000) for the six months ended June 30, 2023 from RMB31,000 for the same period of 2022, primarily due to increased interest paid on installment financings used for the purchases of fixed assets during the six months ended June 30, 2023. No such financings were made in the same period of 2022.

 

Net Loss

 

As a result of the foregoing, our net loss from continuing operations amounted to RMB43.5 million (US$6.0 million) for the six months ended June 30 2023 compared to RMB9.0 million for the same period of 2022.

 

Net loss from the discontinued CDA business amounted to RMB27.9 million (US$3.9 million) for the six months ended June 30 2023 compared to a net loss of RMB39.8 million for the same period of 2022.

 

4 

 

 

B. Liquidity and Capital Resources

 

Our principal sources of liquidity have been cash generated from financing and operating activities. Management expects that we will require continuous debt or equity financings to support our working capital. As of June 30, 2023, the Group had RM495,000 (US$68,000) of cash and cash equivalents and a working capital deficit of RMB32,482 million (US$4.5million). For the six months ended June 30, 2023, the Group incurred losses from continuing operations of RMB43.5 million (US$6.0 million) and incurred RMB35.6 million (US$4.9 million) of negative cash flows from continuing operations. In assessing its liquidity, management monitors and analyzes the Group’s cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. With respect to capital funding requirements, the Group budgeted capital spending based on ongoing assessments of its need to maintain adequate cash.

 

Our unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

 

Based on the above assessment, we are uncertain as to when we will be able to obtain the financings necessary to fund our working capital requirements during the next 12 months from date of this report. As a result, the substantial doubt about the Company’s ability to continue as a going concern remains as of the date of this report.

 

On September 25, 2023, we entered into an agreement with an institutional investor to purchase up to US$2,000 of convertible notes. The convertible notes will be sold in two tranches of (i) US$400 (original principal amount) of convertible notes, Series C warrants to purchase 258,065 ADSs (or 5,161,300 Class A ordinary shares) at exercise price equal to 125% of the lower of (a) $1.86 and (b) the lowest daily volume-weighted average price (“VWAP”) for the 10 trading days prior to the exercise date and Series D warrants to purchase up to 283,688 ADSs (or 5,673,760 Class A ordinary shares) at exercise price equal to the lower of (x) $1.41 and (y) 75.83% of the lowest daily VWAP for the ten (10) trading days immediately prior to the exercise date, subject to adjustment, and (ii) US$1,600 (original principal amount) of convertible notes, 20,645,160 Series C warrants and 22,695,040 Series D warrants. We received the first payment of RMB1,697 (US$234) from this offering, excluding related financing costs.

 

We intend to finance our future working capital requirements and capital expenditures from cash generated from funds raised from financing activities until operating activities generate positive cash flows, if ever. We may, however, also require additional cash due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If our existing cash is insufficient to meet our requirements, we may seek to issue debt or equity securities or obtain additional credit facilities. Financing may be unavailable in the amounts we need or on terms acceptable to us, if at all. Issuance of additional equity securities or equity-linked securities, including convertible debt securities, will dilute its earnings per share. The incurrence of debt would divert cash for working capital and capital expenditures to service debt obligations and could result in operating and financial covenants that restrict its operations and its ability to pay dividends to our shareholders.

 

We can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to us, if at all. If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfall, there would likely be a material adverse effect on us and our financial statements.

 

The following table sets forth selected cash flow statement information for the periods indicated:

 

   For the six months ended
June 30,		 
   2022   2023   2023 
   RMB   RMB   US$ 
   (in thousands) 
Net cash used in operating activities – continuing operations   (17,705)   (35,609)   (4,910)
Net cash used in operating activities – discontinuing operations   (13,497)   (1,669)   (230)
Net cash used in operating activities   (31,202)   (37,278)   (5,140)
Net cash used in investing activities – continuing operations   —    (48,311)   (6,662)
Net cash provided by investing activities – discontinuing operations   (817)   2,095    289 
Net cash used in investing activities   (817)   (46,216)   (6,373)
Net cash provided by financing activities – continuing operations   30,829    89,215    12,302 
Net cash used in financing activities – discontinuing operations   (1,589)   (2,799)   (386)
Net cash provided by financing activities   29,240    86,416    11,916 
Effect of exchange rate changes on cash and cash equivalents   (362)   (2,443)   (337)
Net increase (decrease) in cash and cash equivalents   (3,141)   479    66 
Cash and cash equivalents at beginning of period   3,152    16    2 
Cash and cash equivalents at end of period   11    495    68 

 

5 

 

 

Operating Activities

 

Net cash used in operating activities for the six months ended June 30, 2023 was RMB37.3 million (US$5.1 million), which was primarily attributable to our net loss from continuing operations of RMB43.5 million (US$6.0 million), adjusted by the non-cash items of RMB3.0 million (US$408,000) of depreciation and amortization expense and RMB2.9 million (US$396,000) of share based compensation, as well as operating cash used in our discontinued CDA business of RMB1.7 million (US$230,000).

 

Net cash used in operating activities for the six months ended June 30, 2022 was RMB31.2 million, which was primarily attributable to operating cash used in our discontinued CDA business of RMB13.5 million and net loss from continuing operations of RMB9.0 million as well as an increase of RMB9.0 million in deposits and prepayments made to our venders.

 

Investing Activities

 

Net cash used in investing activities for the six months ended June 30,2023 was RMB46.2 million (US$6.4 million), which was primarily attributable to our investment of RMB38.1 million (US$5.3 million) to acquire a 19.64% equity interest in Nassau Enterprises LLC (“Nassau”) in May 2023, and purchase intangible assets and property and equipment of RMB11.3 million (US$1.6 million).

 

Net cash used in investing activities for the six months ended June 30, 2022 was RMB0.8 million, which was primarily related to operating cash used in our discontinued CDA business.

 

Financing Activities

 

Net cash provided by financing activities for the six months ended June 30, 2023 was RMB86.4 million (US$11.9 million), which was primarily attributable to proceeds from a private placement of RMB81.6 million (US$11.3) million and proceeds from the exercise of warrants and options of RMB7.1 million (US$1.0 million).

 

Net cash provided by financing activities for the six months ended June 30, 2022 was RMB29.2 million, which was primarily attributable to the proceeds of RMB31.0 million private placements, offset by operating cash used in our discontinued CDA business of RMB1.6 million.

 

Capital Expenditures

 

Our capital expenditures were RMB11.3 million and nil for the six months ended June 30, 2022 and 2023, respectively. In 2022, these capital expenditures included the purchases of property and equipment and intangible assets related to our discontinued CDA business. We expect to increase the capital expenditures in our e-commerce business to meet the needs of our expected growth.

 

C. Critical Accounting Policies and Estimates

 

We prepare our unaudited condensed consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect our reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although there were no material changes made to the accounting estimates and assumptions in the past three years, we continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.

 

We believe that the following accounting policies involve a higher degree of judgment and complexity in their application and require us to make significant accounting estimates: business combination, goodwill, impairment of long-lived assets other than goodwill, share-based compensation and revenue recognition. These accounting policies and estimates are described in Note 2 of our Unaudited Condensed Financial Statements.

 

 

6

 

 

v3.23.3
Document And Entity Information
 6 Months Ended
Jun. 30, 2023
Document Information Line Items  
Entity Registrant Name Fresh2 Group Limited
Document Type 6-K
Current Fiscal Year End Date --12-31
Amendment Flag false
Entity Central Index Key 0001786511
Document Period End Date Jun. 30, 2023
Document Fiscal Year Focus 2023
Document Fiscal Period Focus Q2
Entity File Number 001-39137
v3.23.3
Unaudited Condensed Consolidated Balance Sheets
¥ in Thousands, $ in Thousands
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Current assets:      
Cash and cash equivalents ¥ 495 $ 68 ¥ 16
Prepayment 3,948 544 1,050
Accounts receivable, net 270 37
Amounts due from related parties, net 864 119
Inventories, net 135 19
Other current assets, net 414 57
Current assets held for sale 9,777 1,348 12,633
Total current assets 27,353 3,771 13,699
Long term -prepayment 4,678 645
Property and equipment, net 4,309 594
Intangible assets, net 45,169 6,229
Goodwill 36,503 5,034
Right of use assets 223 31
Long-term investments, net 39,783 5,486
Noncurrent assets held for sale 20,193 2,785 26,770
TOTAL ASSETS. 178,211 24,575 40,469
Current liabilities:      
Short-term debts 16 2 15
Accounts payable 420 56
Advance from customers 479 66
Lease liability-current 148 20
Accrued expenses and other current liabilities 24,759 3,414 7,535
Current liabilities held for sale 33,421 4,609 33,514
Total current liabilities 59,835 8,249 42,278
Deferred tax liabilities 2,938 405
Lease liability-non-current 37 5
Other long-term liabilities 903 125
Noncurrent liabilities held for sale 2,434 336 7,595
TOTAL LIABILITIES 66,147 9,120 49,873
Commitments and contingencies
Shareholders’ equity (deficit):      
Treasury shares [1] (11,003)
Additional paid-in capital 715,327 98,648 564,869
Accumulated deficit (648,303) (89,405) (577,539)
Accumulated other comprehensive income 13,079 1,804 4,263
Total Fresh2 Group Limited shareholders’ equity (deficit) 92,524 12,760 (13,676)
Non-controlling interest 19,540 2,695 4,272
Total equity (deficit) 112,064 15,455 (9,404)
TOTAL LIABILITIES AND EQUITY (DEFICIT) 178,211 24,575 40,469
Class A Ordinary Shares      
Shareholders’ equity (deficit):      
Ordinary shares 12,181 1,680 5,494
Class B Ordinary Shares      
Shareholders’ equity (deficit):      
Ordinary shares 240 33 240
Related Party      
Current assets:      
Accounts receivable-related party 11,450 1,579
Amounts due from related parties, net 864 119
Current liabilities:      
Amounts due to related parties ¥ 592 $ 82 ¥ 1,214
[1] 12,492,283 shares Class A Ordinary shares were held as treasury shares.
v3.23.3
Unaudited Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares
Jun. 30, 2023
Dec. 31, 2022
Class A Ordinary Shares    
Ordinary shares, shares par value (in Dollars per share) $ 0.01 $ 0.01
Ordinary shares, shares authorized 2,400,000,000 2,400,000,000
Ordinary shares, shares issued 176,070,465 79,536,589
Ordinary shares, shares outstanding 176,070,465 79,536,589
Class B Ordinary Shares    
Ordinary shares, shares par value (in Dollars per share) $ 0.01 $ 0.01
Ordinary shares, shares authorized 30,000,000 30,000,000
Ordinary shares, shares issued 3,573,100 3,573,100
Ordinary shares, shares outstanding 3,573,100 3,573,100
v3.23.3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss
¥ in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2023
CNY (¥)
¥ / shares
shares
Jun. 30, 2023
USD ($)
$ / shares
shares
Jun. 30, 2022
CNY (¥)
¥ / shares
shares
Income Statement [Abstract]      
Total revenues ¥ 4,936 $ 681
Cost of revenues (4,039) (557)
Gross Profit 897 124
Operating expenses:      
Selling and marketing expenses (6,070) (837) (463)
General and administrative expenses (35,680) (4,920) (8,167)
Research and development expenses (2,303) (318)
Loss from operations (43,156) (5,951) (8,630)
Non-operating income and expenses:      
Interest expense, net (309) (43) (31)
Foreign exchange loss, net (513)
Share of net loss in equity method investments (95) (13)
Change in fair value of convertible debt 139
Other income, net 21 3
Loss from continuing operations before income taxes (43,539) (6,004) (9,035)
Income tax benefit 79 11
Loss from continuing operations (43,460) (5,993) (9,035)
Loss from discontinued operations, net of taxes (27,945) (3,854) (39,780)
Net loss (71,405) (9,847) (48,815)
Net loss from discontinued operations attributable to noncontrolling interests (641) (88) (740)
Net loss attributable to ordinary shareholders (70,764) (9,759) (48,075)
Other comprehensive (loss) income, net of tax:      
Foreign currency translation differences 8,816 1,216 (162)
Total comprehensive loss (62,589) (8,631) (48,977)
Total comprehensive loss attributable to noncontrolling interests (641) (88) (740)
Total comprehensive loss attributable to ordinary shareholders (61,948) (8,543) (48,237)
Amounts attributable to ordinary shareholders:      
Net loss from continuing operations (43,460) (5,993) (9,035)
Net loss from discontinued operations (27,304) (3,766) (39,040)
Net loss attributable to ordinary shareholders ¥ (70,764) $ (9,759) ¥ (48,075)
Loss per Class A and B ordinary shares - basic and diluted      
Continuing operations basic (in Dollars per share and Yuan Renminbi per share) | (per share) ¥ (0.35) $ (0.05) ¥ (0.38)
Discontinued operations basic (in Dollars per share and Yuan Renminbi per share) | (per share) (0.22) (0.03) (1.66)
Net Loss basic (in Dollars per share and Yuan Renminbi per share) | (per share) ¥ (0.57) $ (0.08) ¥ (2.04)
Weighted average shares outstanding used in calculating basic and diluted loss per share      
Class A and Class B ordinary shares - basic (in Shares) 124,374,140 124,374,140 23,603,709
v3.23.3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (Parentheticals)
 6 Months Ended
Jun. 30, 2023
$ / shares
shares
Jun. 30, 2023
¥ / shares
shares
Jun. 30, 2022
¥ / shares
shares
Income Statement [Abstract]      
Continuing operations diluted | (per share) $ (0.05) ¥ (0.35) ¥ (0.38)
Discontinued operations diluted | (per share) (0.03) (0.22) (1.66)
Net Loss diluted | (per share) $ (0.08) ¥ (0.57) ¥ (2.04)
Class A and Class B ordinary shares - diluted (in Shares) 124,374,140 124,374,140 23,603,709
v3.23.3
Unaudited Condensed Consolidated Statements of Shareholders’ Equity/(Deficit)
¥ in Thousands, $ in Thousands
Class A
Ordinary Shares
CNY (¥)
shares
Class A
Ordinary Shares
USD ($)
shares
Class B
Ordinary Shares
CNY (¥)
shares
Class B
Ordinary Shares
USD ($)
shares
Treasury shares
CNY (¥)
shares
Treasury shares
USD ($)
shares
Additional Paid-in Capital
CNY (¥)
Additional Paid-in Capital
USD ($)
Accumulated Deficit
CNY (¥)
Accumulated Deficit
USD ($)
Accumulated Other (Loss) Income
CNY (¥)
Accumulated Other (Loss) Income
USD ($)
Total Fresh2 Group Limited Shareholders’ Equity (Deficit)
CNY (¥)
Total Fresh2 Group Limited Shareholders’ Equity (Deficit)
USD ($)
Non-controlling interest
CNY (¥)
Non-controlling interest
USD ($)
CNY (¥)
shares
USD ($)
shares
Balance at June 30, 2023 (US$) (in Dollars) ¥ 1,096   ¥ 185     ¥ 465,334   ¥ (475,646)   ¥ 4,532   ¥ (4,499)   ¥ 5,817   ¥ 1,318  
Balance at June 30, 2023 (US$) (in Shares) | shares 16,604,402 16,604,402 2,773,100 2,773,100                            
Balance at Dec. 31, 2021 ¥ 1,096   ¥ 185     465,334   (475,646)   4,532   (4,499)   5,817   1,318  
Balance (in Shares) at Dec. 31, 2021 | shares 16,604,402 16,604,402 2,773,100 2,773,100                            
Net loss         (48,075)     (48,075)   (740)   (48,815)  
Issuance of shares in private placements, net of offering costs ¥ 961       30,028       30,989     30,989  
Issuance of shares in private placements, net of offering costs (in Shares) | shares 14,382,693 14,382,693                                
Issuance shares for exercise of share option ¥ 27       (27)            
Issuance shares for exercise of share option (in Shares) | shares 417,702 417,702                                
Issuance shares reserved for convertible loan ¥ 381       (381)            
Issuance shares reserved for convertible loan (in Shares) | shares 6,000,000 6,000,000                                
Issuance shares for service ¥ 13       (13)            
Issuance shares for service (in Shares) | shares 187,094 187,094                                
Shares issued in private placement, cancelled subsequently                                 30,989  
Conversion of convertible loans       27,739       27,739     27,739  
Share based compensation       4,528       4,528     4,528  
Foreign currency translation differences           (162)   (162)     (162)  
Balance at Jun. 30, 2022 ¥ 2,478   ¥ 185     527,208   (523,721)   4,370   10,520   5,077   15,597  
Balance (in Shares) at Jun. 30, 2022 | shares 37,591,891 37,591,891 2,773,100 2,773,100                            
Balance at June 30, 2023 (US$) (in Dollars) ¥ 2,478   ¥ 185     527,208   (523,721)   4,370   10,520   5,077   15,597  
Balance at June 30, 2023 (US$) (in Shares) | shares 37,591,891 37,591,891 2,773,100 2,773,100                            
Balance at June 30, 2023 (US$) (in Dollars) ¥ 5,494   ¥ 240   ¥ (11,003)   564,869   (577,539)   4,263   (13,676)   4,272   (9,404)  
Balance at June 30, 2023 (US$) (in Shares) | shares 79,536,589 79,536,589 3,573,100 3,573,100 (12,492,283) (12,492,283)                        
Balance at Dec. 31, 2022 ¥ 5,494   ¥ 240   ¥ (11,003)   564,869   (577,539)   4,263   (13,676)   4,272   (9,404)  
Balance (in Shares) at Dec. 31, 2022 | shares 79,536,589 79,536,589 3,573,100 3,573,100 (12,492,283) (12,492,283)                        
Net loss         (70,764)     (70,764)   (641)   (71,405) $ (9,847)
Issuance of shares in private placements, net of offering costs ¥ 4,355       77,541       81,896     81,896  
Issuance of shares in private placements, net of offering costs (in Shares) | shares 62,885,707 62,885,707                                
Issuance shares for exercise of share option ¥ 46       182       228     228  
Issuance shares for exercise of share option (in Shares) | shares 663,900 663,900                                
Issuance shares for exercise of warrants ¥ 528       6,383       6,911     6,911  
Issuance shares for exercise of warrants (in Shares) | shares 7,584,900 7,584,900                                
Issuance shares for acquisition ¥ 2,174       66,788       68,962     68,962  
Issuance shares for acquisition (in Shares) | shares 31,891,652 31,891,652                                
Issuance shares for service ¥ 243       6,142       6,385     ¥ 6,385  
Issuance shares for service (in Shares) | shares 3,500,000 3,500,000                             3,822,853 3,822,853
Shares issued in private placement, cancelled subsequently ¥ 178       (178)           ¥ 81,643 $ 11,259
Shares issued in private placement, cancelled subsequently (in Shares) | shares 2,500,000 2,500,000                                
Canceled treasure shares ¥ (837)     ¥ 11,003   (10,166)            
Canceled treasure shares (in Shares) | shares (12,492,283) (12,492,283)     12,492,283 12,492,283                        
Share based compensation       3,766       3,766     3,766  
Disposition of Changwei               15,909   15,909  
Foreign currency translation differences           8,816   8,816     8,816  
Balance at Jun. 30, 2023 ¥ 12,181 $ 1,680 ¥ 240 $ 33 715,327 $ 98,648 (648,303) $ (89,405) 13,079 $ 1,804 92,524 $ 12,760 19,540 $ 2,695 112,064 15,455
Balance (in Shares) at Jun. 30, 2023 | shares 176,070,465 176,070,465 3,573,100 3,573,100                        
Balance at June 30, 2023 (US$) (in Dollars) ¥ 12,181 $ 1,680 ¥ 240 $ 33 ¥ 715,327 $ 98,648 ¥ (648,303) $ (89,405) ¥ 13,079 $ 1,804 ¥ 92,524 $ 12,760 ¥ 19,540 $ 2,695 ¥ 112,064 $ 15,455
Balance at June 30, 2023 (US$) (in Shares) | shares 176,070,465 176,070,465 3,573,100 3,573,100                        
v3.23.3
Unaudited Condensed Consolidated Statements of Cash Flows
¥ in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
CNY (¥)
Operating activities:      
Net loss ¥ (71,405) $ (9,847) ¥ (48,815)
Less: net loss from discontinued operations (27,945) (3,854) (39,780)
Net loss from continuing operations (43,460) (5,993) (9,035)
Adjustments to reconcile net loss to net cash provided by operating activities:      
Depreciation and amortization 2,960 408
Share of net loss in equity method investments 95 13
Share-based compensation 2,872 396
Amortization of right of use assets 68 9
Change in fair value of convertible debt (139)
Deferred tax benefits (79) (11)
Changes in operating assets and liabilities:      
Prepayment (699) (96) (9,034)
Accounts receivable (154) (21)
Accounts receivable-related party 962 133
Inventories (129) (18)
Other current assets 742 102 658
Accounts payable (569) (78)
Advance from customers 458 63
Accrued expenses and other current liabilities 1,384 191 (155)
Lease liabilities (60) (8)
Net cash used in operating activities – continuing operations (35,609) (4,910) (17,705)
Net cash used in operating activities –discontinued operations (1,669) (230) (13,497)
Net cash used in operating activities (37,278) (5,140) (31,202)
Investing activities:      
Purchases of property and equipment (2,355) (325)
Purchases of intangible assets (8,980) (1,238)
Cash acquired from acquisition 1,130 156
Long-term investment (38,106) (5,255)
Net cash used in investing activities – continuing operations (48,311) (6,662)
Net cash provided by investing activities –discontinued operations 2,095 289 (817)
Net cash used in investing activities (46,216) (6,373) (817)
Financing activities:      
Proceeds from private placement 81,643 11,259 30,989
Proceeds from exercising of warrants 6,911 953
Proceeds from exercising of options 228 31
Other long-term liabilities 982 135
Payment to related parties (549) (76) (160)
Net cash provided by financing activities – continuing operations 89,215 12,302 30,829
Net cash used in financing activities –discontinued operations (2,799) (386) (1,589)
Net cash provided by financing activities 86,416 11,916 29,240
Effect of exchange rate changes on cash and cash equivalents (2,443) (337) (362)
Net increase (decrease) in cash and cash equivalents 479 66 (3,141)
Cash and cash equivalents at beginning of period 16 2 3,152
Cash and cash equivalents at end of period 495 68 11
Supplemental disclosure of non-cash activities:      
Conversion of convertible loans 27,739
Right of use assets obtained in exchange for lease liabilities 8,954
Receivable from issuance shares for private placement 253 35
Issuances of shares for services 6,385 881
Issuances of shares for acquisitions 68,962 9,510
Additions to intangible assets through accrued expenses and other current liabilities ¥ 1,851 $ 255
v3.23.3
Organization and Principal Activities
 6 Months Ended
Jun. 30, 2023
Organization and Principal Activities [Abstract]  
ORGANIZATION AND PRINCIPAL ACTIVITIES

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

 

Fresh2 Group Limited (Formerly AnPac Bio-Medical Science Co., Ltd., the “Company”) was incorporated in the British Virgin Islands (“the BVI”) in January 2010. The Company incorporated a new subsidiary, Fresh2 Technology Inc. (“Fresh2”) on October 4, 2022. On February 1, 2023, the Group acquired GISN (HK) LIMITED (“GISN”), a technical solution and outsourcing consulting services provider focused on the digital, internet and Web 3 business transformation for start-ups and traditional enterprises. This acquisition is a critical initiative for the Company to improve the efficiency of its e-commerce operations. On February 8, 2023, the Group acquired Fresh 2 Ecommerce Inc. (“Fresh2 Ecommerce”), a business-to-business e-commerce platform focused on connecting Asian food suppliers and restaurants and other retail customers in the U.S. Fresh2 Ecommerce provides an online direct selling platform for food suppliers such as food companies, manufacturers, agents, importers, and wholesalers to restaurants and other retail customers. On March 31, 2023, the Group closed an asset purchase with Easy Hundred Inc. (“Easy Hundred”), a U.S.-based e-commerce startup company in the foodservice industry. On July 17, 2023, the Group entered into a definitive Share Purchase Agreement to purchase 51% of Roxe Holding Inc. (“Roxe”). On July 27, 2023, Roxe entered into a Share Purchase Agreement with SpeedIn INC (“SpeedIn”) to purchase 100% of the shares of SpeedIn. Due to its poor operating results, on October 9, 2023, Roxe sold SpeedIn to Immensus LLC, a company owned by our CEO. On November 4, 2023 the Company and Fresh2 Technology entered into a definitive Share Purchase Agreement to purchase 38.61% of the common stock of Roxe.

 

The Company and its subsidiaries (collectively, the “Group”) provides a business-to-business e-commerce platform focused on connecting Asian food suppliers and restaurants and other retail customers in the U.S.

 

Effective on July 28, 2023, the Group disposed its multi-cancer screening and detection test business (the “CDA Business”) in the People’s Republic of China (the “PRC” or “China”). The Group determined that the disposal of the CDA Business met the criteria to be classified as a discontinued operation (see Note 4) and, as a result, the CDA business’s historical financial results are reflected in the Group’s unaudited condensed consolidated financial statements as a discontinued operation.

 

As of June 30, 2023, the details of the Group’s principal subsidiaries are as follows:

 

Major subsidiaries  Percentage of
Ownership		  

Date of
Incorporation/

Acquisition

  Place of
Incorporation		  Major Operation
Changhe Bio-Medical Technology (Yangzhou) Co., Ltd.    100%  March 2010  the PRC  Cancer screening and detection tests
AnPac Bio-Medical Technology (Lishui) Co., Ltd. (“AnPac Lishui”) *

   100%  October 2012  the PRC  Cancer screening detection tests and device manufacturing
AnPac Bio-Medical Technology (Shanghai) Co., Ltd.*   100%  April 2014  the PRC  Cancer screening and detection tests
AnPac Technology USA Co., Ltd. (“AnPac US”) *

   100%  September 2015  the U.S.  Clinical trials for research on cancer screening and detection tests
Lishui AnPac Medical Laboratory Co., Ltd.*   100%  July 2016  the PRC  Cancer screening and detection tests
Shiji (Hainan) Medical Technology Ltd.*   100%  March 2013  the PRC  Cancer screening and detection research
Shanghai Muqing AnPac Health Technology Co., Ltd. (“AnPac Muqing”) (i)*   51%  March 2019  the PRC  Cancer screening and detection tests
Anpai (Shanghai) Healthcare Management and Consulting Co., Ltd.*   60%  August 15, 2021  the PRC  Cancer screening and detection tests
Fresh 2 Group Inc   100%  December 27, 2022  the U.S.  B2B e-commerce
Fresh 2 Technology Inc (“Fresh2”)   100%  October 4, 2022  the U.S.  B2B e-commerce
Fresh 2 Logistics Inc.   100%  February 22, 2023  the U.S.  B2B e-commerce
Fresh 2 HF Inc   100%  February 21, 2023  the U.S.  B2B e-commerce
Foodbase Group Inc   100%  January 19, 2023  the U.S.  B2B e-commerce
Fresh 2 EZ Inc   100%  March 3, 2023  the U.S.  B2B e-commerce
Fresh 2 information Inc (ii)   100%  April 12, 2023  the U.S.  B2B e-commerce
Fresh 2 Ecommerce (“Fresh2 Ecommerce”)   100%  February 8, 2023  the U.S.  B2B e-commerce
GISN (HK) Limited (“GISN”)   100%  February 1, 2023  Hongkong, PRC,  B2B e-commerce
Hua You Sheng Future (Beijing) Technology Co., Ltd.   100%  February 1, 2023  PRC  B2B e-commerce
Guanshi Technology (Beijing) Co., Ltd.   100%  February 1, 2023  PRC  Software development

 

* Subsidiaries that were sold subsequent to June 30, 2023.
(i) AnPac Muqing closed business in March 2023
(ii) On April 12, 2023, the Company, through its subsidiary, Fresh 2 EZ Inc to acquire 100% of equity interest in Fresh 2 information Inc from Roxe Holding Inc, a company controlled by Mr. Haohan Xu, with a nominal price. Fresh 2 information Inc has not begun operation yet.
v3.23.3
Liquidity and Going Concern Uncertainties
 6 Months Ended
Jun. 30, 2023
Liquidity and Going Concern Uncertainties [Abstract]  
LIQUIDITY AND GOING CONCERN UNCERTAINTIES

2. LIQUIDITY AND GOING CONCERN UNCERTAINTIES

 

The Group’s principal sources of liquidity have been cash generated from financing and operating activities. As of June 30, 2023, the Group had RMB495 (US$68) of cash and cash equivalents and a working capital deficit of RMB34,148 (US$4,710). For the six months ended June 30, 2023, the Group incurred a loss from continuing operations of RMB43,460(US$5,993). For the six months ended June 30, 2023, net cash used in continuing operating activities was RMB35,609 (US$4,910). The above-mentioned facts raise substantial doubt about the Group’s ability to continue as a going concern. In assessing its liquidity, management monitors and analyzes the Group’s cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. With respect to capital funding requirements, the Group budgeted capital spending based on ongoing assessments of needs to maintain adequate cash. The Group intends to finance its future working capital requirements and capital expenditures from financing activities until the Group’s operating activities generate positive cash flows, if ever. Management expects continued capital financing through debt or equity issuances to support its working capital requirements.

 

On September 25, 2023, the Company entered into an agreement with an institutional investor to purchase up to US$2,000 of convertible notes, the convertible notes will be sold in two tranches (i) US$400 (original principal amount) of convertible notes, Series C warrants to purchase 258,065 ADSs (or 5,161,300 Class A ordinary shares) at an exercise price equal to 125% of the lower of (a) $1.86 and (b) the lowest daily volume-weighted average price (“VWAP”) for the 10 trading days prior to the exercise date and Series D warrants to purchase up to 283,688 ADSs (or 5,673,760 Class A ordinary shares) at an exercise price equal to the lower of (x) $1.41 and (y) 75.83% of the lowest daily VWAP for the ten (10) trading days immediately prior to the exercise date, subject to adjustment, and (ii) US$1,600 (original principal amount) of convertible notes, 20,645,160 Series C warrants and 22,695,040 Series D warrants. The Company received the first payment of RMB1,697(US$234) from this offering, excluding related financing costs.

 

The Group can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to the Group, if at all. If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfall, there would likely be a material adverse effect on the Group and its financial statements.

 

The unaudited condensed consolidated financial statements have been prepared assuming that the Group will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.
v3.23.3
Summary of Principal Accounting Policies
 6 Months Ended
Jun. 30, 2023
Summary of Principal Accounting Policies [Abstract]  
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

3. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

 

(a) Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for financial reporting and pursuant to the applicable rules and regulations of the SEC pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2023 and 2022 are not necessarily indicative of the results that may be expected for the full year. The information included in this report should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in the Group’s annual financial statements for the fiscal year ended December 31, 2022 filed with the SEC on May 16, 2023.

 

(b) Principles of consolidation

 

The accompanying unaudited condensed consolidated financial statements include the financial statements of the Group. All inter-company transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.

 

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

 

(c) Use of estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Areas where management uses subjective judgement include, but are not limited to allowance for doubtful accounts, share-based compensation, deferred tax and uncertain tax position, useful lives of intangible assets and property and equipment, impairment of long-lived assets, goodwill and long-term investments and the purchase price allocation with respect to business combinations. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences could be material to the unaudited condensed consolidated financial statements. 

 

(d) Cash and cash equivalents

 

Cash and cash equivalents consist of cash on hand and demand deposits placed with banks which are unrestricted as to withdrawal or use and have original maturities less than three months. All highly liquid investments with a stated maturity of 90 days or less from the date of purchase are classified as cash equivalents.

 

(e) Accounts receivable and allowance for credit losses

 

Accounts receivable represents the amounts that the Group has an unconditional right to consideration and is recorded net of allowance for credit losses.

In 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”), which amends previously issued guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses rather than incurred losses. The Group has adopted this ASC Topic 326 and several associated ASUs on January 1, 2023 using a modified retrospective approach. The adoption has no material impact to the Company’s consolidated financial statements. The Group estimated allowance for credit losses to reserve for potentially uncollectible receivable amounts periodically, considering factors in assessing the collectability of its accounts receivable, such as historical distribution of the age of the amounts due, payment history, creditworthiness, forward-looking factor, historical collections data of the customers, to assess the credit risk characteristics. If there is strong evidence indicating that the accounts receivable is likely to be unrecoverable, the Group also makes specific allowance in the period in which a loss is determined to be probable. Accounts receivable are considered impaired and written-off when it is probable that all contractual payments due will not be collected after all collection efforts have been exhausted.

 

(f) Convenience translation

 

Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB7.2513 on June 30, 2023, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be converted, realized or settled into US$ at such rate or at any other rate.

 

(g) Long-term investments

 

The Group’s long-term investments include equity method investments and equity investments without readily determinable fair values.

 

Investments in entities in which the Group can exercise significant influence but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC 323, Investments-Equity Method and Joint Ventures (“ASC 323”). Under the equity method, the Group initially records its investment at cost and the difference between the cost of the equity investee and the amount of the underlying equity in the net assets of the equity investee is accounted for as if the investee were a consolidated subsidiary. The share of earnings or losses of the investee are recognized in the unaudited condensed consolidated statements of operations and comprehensive loss. Equity method adjustments include the Group’s proportionate share of investee income or loss, adjustments to recognize certain differences between the Group’s carrying value and its equity in net assets of the investee at the date of investment, impairments, and other adjustments required by the equity method. The Group assesses its equity investment for other-than-temporary impairment by considering factors as well as all relevant and available information including, but not limited to, current economic and market conditions, the operating performance of the investees including current earnings trends, the general market conditions in the investee’s industry or geographic area, factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, and cash burn rate and other company-specific information.

 

Investments in equity securities without readily determinable fair values are measured at cost minus impairment adjusted by observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These investments are measured at fair value on a nonrecurring basis when there are events or changes in circumstances that may have a significant adverse effect. An impairment loss is recognized in the unaudited condensed consolidated statements of operations and comprehensive loss equal to the amount by which the carrying value exceeds the fair value of the investment. No impairment on its long-term investments was recognized for the six months ended June 30, 2022 and 2023.

 

(h) Business combinations

 

The cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of the cost of the acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the identifiable net assets of the acquiree, the difference is recognized directly in earnings.

 

The determination and allocation of fair values to the identifiable net assets acquired, liabilities assumed and noncontrolling interest is based on various assumptions and valuation methodologies requiring considerable judgment. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Group determines discount rates to be used based on the risk inherent in the acquiree’s current business model and industry comparisons. Although the Group believes that the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results may differ from forecasted amounts and the differences could be material.

 

(i) Asset Acquisition

 

We evaluate acquisitions pursuant to ASC 805, “Business Combinations,” to determine whether the acquisition should be classified as either an asset acquisition or a business combination. Acquisitions for which substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or a group of similar identifiable assets are accounted for as an asset acquisition.

 

For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition. Common stock issued as consideration in an asset acquisition is generally measured based on the acquisition date fair value of the equity interests issued. Direct transaction costs are recognized as part of the cost of an asset acquisition. The cost of an asset acquisition, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. However, as of the date of acquisition, if certain assets are carried at fair value under other applicable GAAP, the consideration is first allocated to those assets with the remainder allocated to the non-monetary identifiable assets based on relative fair value basis.

 

(j) Goodwill

 

Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable assets acquired less liabilities assumed of an acquired business. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually, or more frequently if certain circumstances indicate a possible impairment may exist.

 

In accordance with ASC 350-20, Intangibles-Goodwill and Other, Goodwill, (“ASC 350-20”) the Group has assigned and assessed goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment. The Group has determined that it has one reporting unit for the six months ended June 30, 2023. The Group has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step test in accordance with ASC 350-20. If the Group believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the two-step quantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, the Group considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing the two-step quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quoted market prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired, and the Group is not required to perform further testing. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, then the Group must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized as an impairment loss.

 

For the six months ended June 30, 2022 and 2023, the Group performed a qualitative assessment for the reporting unit. Based on the requirements of ASC 350-20, the Group evaluated all relevant qualitative and quantitative factors, weighed all factors in their entirety and concluded that it was not more-likely-than-not that the fair value of the reporting unit was less than its carrying amount. Therefore, no goodwill impairment was recognized for the six months ended June 30, 2022 and 2023.

 

(k) Discontinued operations

 

A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Discontinued operations are reported when a component of an entity comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity is classified as held for disposal or has been disposed of, if the component either (1) represents a strategic shift or (2) have a major impact on an entity’s financial results and operations. Included in the unaudited condensed consolidated statements of income and comprehensive income, result from discontinued operations is reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. In order to present the financial effects of the continuing operations and discontinued operations, revenues and expenses arising from intra-group transactions are eliminated except for those revenues and expenses that are considered to continue after the disposal of the discontinued operations.

 

(l) Fair value of financial instruments

 

The Group applies ASC 820, Fair Value Measurements and Disclosures, (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

 

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—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.

  

The Group’s financial instruments include cash and cash equivalents, accounts receivables, accounts payable, other receivables, other payables and short-term debt. The carrying values of these financial instruments approximate their fair values due to their short-term maturities.

 

The Group elected the fair value option to account for its convertible loans. The Group engaged an independent valuation firm to perform the valuation. The fair value of the convertible loans as of December 31, 2022 and June 30, 2023 was RMB15 and RMB16 (US$2) calculated using the binomial tree model. The convertible loans are classified as level 3 instruments as the valuation was determined based on unobservable inputs which are supported by little or no market activity and reflect the Group’s own assumptions in measuring fair value. Significant estimates used in developing the fair value of the convertible loans include time to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected timing of conversion. Refer to Note 11 for additional information.

 

As the inputs used in developing the fair value for level 3 instruments are unobservable, and require significant management estimate, a change in these inputs could result in a significant change in the fair value measurement.

 

The following is a reconciliation of the beginning and ending balances for convertible loans measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2022 and June 30, 2023:

 

   December 31   June 30   June 30 
   2022   2023   2023 
   RMB   RMB   US$ 
Opening balance   27,859    15    2 
Conversion of convertible loans   (27,739)   
—
    
—
 
Loss (gain) on change in fair value of convertible loan   (144)   
—
    
—
 
Other comprehensive income -foreign exchange translations   39    1    
—
 
Total   15    16    2 

 

(m) Property and equipment

 

Property and equipment are stated at cost less accumulated depreciation and any recorded impairment. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, as follows:

 

Category  Estimated useful life
Furniture, fixtures and equipment  3-5 years
Motor vehicles  5 years

 

(n) Intangible assets

 

The Company’s intangible assets mainly include acquired software from business acquisition and asset acquisition. In business combinations, identifiable intangible assets acquired are measured separately at their fair value as of the acquisition date. For asset acquisitions, the cost of the asset acquisition is allocated to identifiable assets acquired based on a relative fair value basis. Intangible assets with finite lives are carried at cost less accumulated amortization. All intangible assets with finite lives are amortized using the straight-line method over the estimated useful lives.

 

Intangible assets have estimated useful lives from the date of purchase as follows:

 

Category  Estimated useful life
Software  5-10 years

 

(o) Impairment of Long-Lived Assets

 

The Company evaluates the recoverability of its long-lived assets, including property and equipment and the intangible assets and for impairment whenever events or changes in circumstances indicate that the carrying amount of its asset may not be fully recoverable. When these events occur, the Company measures impairment by comparing the carrying amount of the assets to the estimated undiscounted future cash flows expected to result from the use of the asset and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the asset, the Company recognizes an impairment loss based on the excess of the carrying amount of the asset over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the asset when the market prices are not readily available. The adjusted carrying amount of the asset is the new cost basis and is depreciated over the asset’s remaining useful life. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. No impairment of long-lived assets was recognized for the six months ended June 30, 2022 and 2023, respectively.

 

(p) Treasury shares

 

The Company accounts for treasury share using the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury shares account on the unaudited condensed consolidated balance sheets. At retirement of the treasury shares, the ordinary shares account is charged only for the aggregate par value of the shares. The excess of the acquisition cost of treasury shares over the aggregate par value is allocated between additional paid in capital (up to the amount credited to the additional paid in capital upon original issuance of the shares) and retained earnings.

 

(q) Revenue recognition

 

The Group applies the ASU 2014-09, Revenue from Contracts with Customers — Topic 606 for its revenue recognition for all periods presented. The majority of the Group’s revenue comes from product sales of Asia food and consumable through its software application (“APP”). Revenue is recognized when the Group satisfies the performance obligations in an amount of consideration to which the Group expects to be entitled to in exchange for those goods. The Group evaluates the presentation of revenue on a gross or net basis based on whether it controls the goods provided to customers and is the principal (i.e., “gross”), or the Group arranges for other parties to provide the goods to the customers and is an agent (i.e., “net”).

 

The Group sells food and consumable products through its own APP. The Group utilizes external delivery service providers to deliver goods to its customers. The customers pay for the goods in advance. The Group recognizes product sales made through APP on a gross basis because the Group is acting as a principal in these transactions as the Company (i) is responsible for fulfilling the promise to provide the specified goods, (ii) takes on inventory risk and (iii) has discretion in establishing price. Revenues are recognized when control is transferred, which typically happens upon delivery. The Group’s contracts with customer are primarily on a fixed-price basis. Discounts and allowances provided to customers are recognized as a reduction in net sales as control of the products is transferred to customers.

 

The Group generally provides a quality assurance warranty related to the sale of products. The Group considered the warranty as an assurance type warranty since the warranty provides the customer the assurance that the product complies with agreed-upon quality. Estimated future warranty obligations are accrued and included in cost of revenues. The Group also estimates returns of the products and estimated returns are deducted from sales in the period in which the related revenue is recognized. The determination of the Group’s warranty and product return accrual is based on actual historical experience with the product and estimates of replacement costs. The Group estimates and adjusts these accruals at each balance sheet date in accordance with changes in these factors.

 

Contract balances

 

Contract assets relate to the Group’s conditional right to consideration for completed performance obligations under the contract. Accounts receivable are recorded when the right to consideration becomes unconditional. The Group does not have contract assets for the periods presented. In instances where the timing of revenue recognition differs from the timing of invoicing, the Group has determined that its contracts generally do not include a significant financing component.

 

Contract liabilities represent considerations received from customers in advance of satisfying the Group’s performance obligations under the contract, which are presented in “advance from customers” in the unaudited condensed consolidated balance sheets. The Group classifies contract liabilities as current based on the timing of when we expect to recognize revenue, which typically occurs within one year. Revenue recognized that was included in contract liabilities at the beginning of the period was nil for the six months ended June 30, 2022 and 2023, respectively. As of December 31, 2022 and June 30, 2023, contract liabilities amounted to nil and RMB479 (US$66), respectively.

 

Practical expedients

 

The Group has applied the following practical expedients:

 

(i) The transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied has not been disclosed, as substantially all of the Group’s contracts have a duration of one year or less.

 

(ii) The Group recognizes incremental costs to obtain a contract as expenses when incurred because the amortization period would be one year or less. These costs are recorded within sales and marketing expenses.

  

(r) Research and development expenses

 

Research and development expenses primarily are comprised of costs incurred in performing research and development activities, including related personnel and consultant’s compensation, benefits, share-based compensation and related materials and supplies costs. The Group expenses research and development expenses as they are incurred.

 

(s) Leases

 

The Group adopted ASU No. 2016-02—Leases (Topic 842) as of January 1, 2022, using a modified retrospective transition method permitted under ASU No. 2018-11. This transition approach provides a method for recording existing leases only at the date of adoption and does not require previously reported balances to be adjusted. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. Adoption of the new standard resulted in the recording of additional lease assets and lease liabilities on the consolidated balance sheets. The standard did not materially impact our unaudited condensed consolidated net earnings and cash flows.

 

Right-of-use (“ROU”) assets represent the Group’s rights to use underlying assets for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term, reduced by lease incentives received, plus any initial direct costs, using the discount rate for the lease at the commencement date. As the implicit rate in lease is not readily determinable for the Group’s operating leases, the Group generally use the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The Group’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Group accounts for lease and non-lease components separately. the Group has no finance leases for any of the periods presented.

 

Prior to the adoption of ASU No. 2016-02, leases were classified at the inception date as either a capital lease or an operating lease. The Group assesses a lease to be a capital lease if any of the following conditions exist: (a) ownership is transferred to the lessee by the end of the lease term, (b) there is a bargain purchase option, (c) the lease term is at least 75% of the property’s estimated remaining economic life, or (d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an occurrence of an obligation at the inception of the lease. The Group has no capital leases for the six months ended June 30, 2022 and 2023.

 

(t) Warrants

 

The Group accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480 “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Group’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Group’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent annual period end date while the warrants are outstanding.

 

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. All warrants outstanding as of June 30, 2023 and December 31, 2022 do not meet the definition of a liability pursuant to ASC 480 and meet all of the requirements for equity classification under ASC 815 and therefore, classified as equity.

 

(u) Share-based compensation

 

The Group accounts for share-based compensation in accordance with ASC 718, Compensation – Stock Compensation (“ASC 718”). In accordance with ASC 718, the Group determines whether an award should be classified and accounted for as a liability award or an equity award. All the Group’s share-based awards were classified as equity awards and are recognized in the unaudited condensed consolidated financial statements based on their grant date fair values.

 

The Group has elected to recognize share-based compensation using the straight-line method for all share-based awards granted with graded vesting based on service conditions. The Group accounts for forfeitures as they occur in accordance with ASU No. 2016-09, Compensation — Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting. The Black-Scholes Model were applied in determining the estimated fair value of the options granted to employees and non-employees.

 

(v) Income taxes

 

The Group follows the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Group records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate.

 

The Group accounted for uncertainties in income taxes in accordance with ASC 740. Interest and penalties related to unrecognized tax benefit recognized in accordance with ASC 740 are classified in the unaudited condensed consolidated statements of operations and comprehensive loss as income tax expenses.

 

For the six months ended June 30, 2022 and 2023, the Group did not have any significant unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefits. The Group does not believe that its uncertain tax benefits position will materially change over the next twelve months.

 

(w) Comprehensive loss

 

Comprehensive loss is defined as the changes in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive Income, requires that all items that are required to be recognized under current accounting standards as components of comprehensive loss be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the periods presented, the Group’s comprehensive loss includes net loss and foreign currency translation differences, and is presented in the unaudited condensed consolidated statements of operations and comprehensive loss.

  

(x) Segment reporting

 

After the Group discontinued CDA business, the Group operates and manages its business as a single segment and the Group’s primary revenue are generated in the U.S. The Group has only one reportable segment for the six months ended June 30, 2023, in accordance with ASC 280, Segment Reporting. The Group’s Chief Executive Officer is the chief operating decision-maker that review the unaudited condensed consolidated financial results when making decisions about allocating resources and assessing the performance of the Group as a whole.

 

(y) Loss per share

 

Loss per share is calculated in accordance with ASC 260, Earnings per Share. Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

 

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 ordinary shares issuable upon the conversion of the share options, using the treasury share method. Ordinary share equivalents are excluded from the computation of diluted loss per share if their effects would be anti-dilutive. Basic and diluted loss per ordinary share is presented in the Group’s unaudited condensed consolidated statements of operations and comprehensive loss.

 

The rights, including the liquidation and dividend rights, of the holders of our Class A and Class B ordinary shares are identical, except with respect to voting. Each Class A ordinary share is entitled to one vote; and each Class B ordinary share is entitled to ten votes and is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. For the six months ended June 30, 2022 and 2023, the net loss per share amounts are the same for Class A and Class B common ordinary shares because the holders of each class are entitled to equal per share dividends or distributions in liquidation.

 

The Group did not include share options, convertible debt and warrants in the computation of diluted earnings per share for the six months ended June 30, 2022 and 2023, because those were anti-dilutive for loss per share.

 

(z) Risks, Uncertainties and Concentrations

 

Concentration of credit risk

 

Financial instruments that potentially subject the Group to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivables. As of December 31, 2022 and June 30, 2023, the aggregate amounts of cash and cash equivalents of RMB14 and RMB62 (US$9), respectively, were held at major financial institutions located in the PRC and RMB1 and RMB268 (US$37), respectively, were deposited at banks located in U.S. and covered by the FDIC insurance program. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions. There is a RMB 500,000 deposit insurance limit for a legal entity’s aggregated balance at each PRC bank.

 

As of December 31, 2022, no customer accounted for more than 10% of total accounts receivables. As of June 30, 2023, four customers accounted for 37%, 20%, 19% and 16% of total accounts receivables. The risk is mitigated by credit evaluations the Group performs on its customers.

 

Business, customer, supplier, political and economic risks

 

The Group’s e-commerce food-related business has a limited operating history. The recently acquired operations are subject to all of the risks inherent in the initial expenses, challenges, complications, and delays frequently encountered in connection with the formation of any new business.

 

The Group participates in a dynamic 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 new entrants; advances and new trends in industry standards; changes in certain strategic relationships or customer relationships; regulatory considerations; intellectual property considerations; and risks associated with the Group’s ability to attract and retain employees necessary to support its growth.

 

For the six months ended June 30, 2022, no customer accounted for more than 10% of the total revenues, respectively. For the six months ended June 30, 2023, the Group had one customer that accounted for 16% of total revenues.

 

For the six months ended June 30, 2022, no supplier accounted for more than for 10% of total cost of revenues. For the six months ended June 30, 2023, two suppliers that accounted for 22% and 22% of total cost of revenues, respectively.

 

As of December 31, 2022, no supplier accounted for more than 10% of total accounts payables As of June 30, 2023, three suppliers accounted for 25%, 14%and 12% of total accounts payables, respectively.

  

(aa) 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.

 

In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective January 1, 2024, for the Group. Early adoption is permitted. Management is currently evaluating the effect of the adoption of ASU 2020-06 on the unaudited condensed consolidated financial statements.

 

In October 2021, the FASB issued ASU No. 2021-08, “‘Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for fiscal years beginning after December 15, 2023, and are applied prospectively to business combinations that occur after the effective date. The Group does not expect the adoption of ASU 2021-04 will have a material effect on the unaudited condensed consolidated financial statements.

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Group adopts as of the specified effective date. Unless otherwise discussed, the Group does not believe that the impact of recently issued standards that are not yet effective will have a material impact on its financial position or results of operations upon adoption.
v3.23.3
Acqusitions
 6 Months Ended
Jun. 30, 2023
Acquisition [Abstract]  
ACQUSITIONS

4. ACQUSITIONS

 

Business Combinations

 

The Group accounted the following acquisitions as business combinations in accordance with ASC 805. Acquisition-related costs incurred for the acquisitions are not material.

 

GISN acquisition

 

On January 28, 2023, the Company, through its subsidiary Fresh2, entered into a Share Purchase Agreement to acquire GISN (HK) LIMITED, a Hongkong corporation (“GISN”), from Mr. Haohan Xu, the Company’s Co-CEO and Co-Chairman of the board of directors. GISN and its subsidiaries provide technical solution and outsourcing consulting services provider focused on the digital, internet and Web 3 business transformation for start-ups and traditional enterprises. This acquisition is a critical initiative for the Group’s efficiency in its e-commerce operations. The acquisition closed on February 1, 2023. The Company issued 8,785,530 Class A ordinary shares with fair value of RMB25,938 (US$3,848) to purchase all the issued and outstanding equity interest of GISN.

 

The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed for the combined entities at the acquisition date, which represents the net purchase price allocation at the date of the acquisition based on a valuation performed by an independent valuation firm engaged by the Group:

 

   Amount 
   RMB 
     
Total consideration   25,938 
      
Assets acquired and liabilities assumed:     
Cash acquired   1,028 
Accounts receivable   100 
Accounts receivable-related parties   12,073 
Other current assets   123 
Property and equipment   1,573 
Intangible assets   11,233 
Advance from customer   (1,013)
Accrued expenses and other current liabilities   (13,705)
Lease liabilities   (239)
Deferred tax liability   (2,808)
Total net assets acquired   8,365 
Goodwill   17,573 

 

The intangible assets are mainly attributable to software acquired through the acquisition, which are amortized over 10 years.

 

The following unaudited pro forma summary presents consolidated information of the Group as of the business combination had occurred on January 1, 2022.

 

   Unaudited Pro Forma 
   For the six months
ended June 30,		 
   2022   2023 
   RMB   RMB 
Revenue   10,149    4,936 
           
Net losses   51,322    (71,405)

 

Fresh2 acquisition

 

On February 7, 2023, the Company, through its subsidiary Fresh2, entered into a Share Purchase Agreement (the “Ecommerce Agreement”) to acquire Fresh 2 Ecommerce Inc, a Delaware corporation (“Fresh2 Ecommerce”), from Mr. Haohan Xu, the Company’s Co-CEO and Co-Chairman of the board of directors. Fresh2 Ecommerce is a business-to-business e-commerce platform focused on connecting Asian food suppliers and restaurants well as other retail customers in the U.S. Fresh2 Ecommerce provides an online direct selling platform for food suppliers such as food companies, manufacturers, agents, importers, and wholesalers to restaurants and other retail customers. The acquisition was closed on February 8, 2023. The Company issued 5,440,420 Class A ordinary shares with fair value of RMB17,304 (US$2,549) to acquire all the issued and outstanding equity interests in Fresh2 Ecommerce.

 

The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed for the combined entities at the acquisition date, which represents the net purchase price allocation at the date of the acquisition based on a valuation performed by an independent valuation firm engaged by the Group:

 

   Amount 
   RMB 
     
Total consideration   17,304 
      
Assets acquired and liabilities assumed:     
Cash acquired   71 
Other current assets   938 
Accounts payables   (950)
Accrued expenses and other current liabilities   (72)
Total net assets acquired   (13)
Goodwill   17,317 

 

None of the goodwill is expected to be deductible for income tax purposes. For the six months ended June 30, 2023, Fresh2 Ecommerce contributed revenue of 199 and loss of 86 to the group from February 8, 2023 to June 30, 2023. Pro forma results reflecting this transaction were not presented because it is not significant to the Group’s consolidated financial results.

 

Asset acquisition

 

On March 31, 2023, the Group closed an asset purchase with Easy Hundred Inc. (“Easy Hundred”), a U.S.-based e-commerce startup company in the foodservice industry. Pursuant to the Asset Purchase Agreement (the “EZ Agreement”), the Group acquired certain fixed assets of Easy Hundred and Easy Hundred’s intellectual property relating to ez100, 2Supply and 100WAY systems with total consideration consisting of RMB5,013(US$730) in cash and 17,665,702 Class A ordinary shares of the Company. The fair value of the shares issued was RMB25,720 (US$3,745).

 

The following table summarizes the fair value of the identifiable assets:

 

   Amount 
   RMB 
Property and equipment- furniture, fixtures and equipment   160 
Property and equipment- motor vehicles   434 
Intangible assets- software*   30,139 
Total consideration   30,733 

 

*Intangible assets refer to intellectual property relating to ez100, 2Supply and 100WAY systems.
v3.23.3
Discontinued Operations
 6 Months Ended
Jun. 30, 2023
Discontinued Operations [Abstract]  
DISCONTINUED OPERATION

5. DISCONTINUED OPERATION

 

In July, 2023, the Board approved the sale of its early cancer screening and detection business (the “CDA Business”), comprised of (i) AnPac Bio-Medical Technology (Lishui) Co., Ltd. (“AnPac Lishui”), a subsidiary based in Lishui, China, (ii) Anpac Technology USA CO., LTD. (“AnPac USA”), a subsidiary based in Pennsylvania and California, and (iii) Changhe Bio-Medical Technology (Yangzhou) Co., Ltd.(“Changhe”), a subsidiary based in Yangzhou, China. Accordingly, on July 28, 2023, the Group entered into Share purchase agreements with New-Horizon Bio-Medical Science Co., Ltd. (“New-Horizon”), a Hong Kong company focused on bio-medical technology, under which the Group agreed to sell 100% of the shares of AnPac Lishui and AnPac USA, which had experienced significant financial losses in its operations and are not expected to achieve a breakeven point in the immediate future, to New-Horizon in consideration of nil and nil, respectively. In addition, on July 28, 2023, the Group entered into a share purchase agreement with Ningkasai Technology (Shanghai) Co., Ltd. (“Ningkasai”), a PRC high-tech company specialized in nanotechnologies for life science applications, under which the Group agreed to sell 100% of the shares of Changhe, to Ningkasai for no consideration. The closing is expected to take place in November 2023..

 

The Group determined that the disposal of CDA Business met the criteria to be classified as a discontinued operation and, as a result, CDA business’s historical financial results are reflected in the Group’s unaudited condensed consolidated financial statements as a discontinued operation. The disposal of CDA Business represents a strategic shift that has a significant effect on the Group’s operations and financial results, which trigger discontinued operations accounting in accordance with ASC 205-20-45. The assets and liabilities related to the discontinued operations were retroactively classified as assets/liabilities held for sale, while results of operations related to the discontinued operations, including comparatives, were retroactively reported as income (loss) from discontinued operations for the six months ended June 30, 2022 and 2023, respectively.

 

In connection with the disposal of CDA business, the Group also sold its 70% equity interest in Changwei System Technology (Shanghai) Co., Ltd (“Changwei”) to Jiaxing Changxin Enterprise Management, LLP (“Changxin”) in consideration of US$350 (RMB2,538) and sold the remaining 29% equity interest in Changwei to Shanghai Yiyou Investment Management Co., LTD (“Yiyou”) in consideration of US$150 (RMB1,088). Yiyou further entered into an arrangement with Changxin and Ms. Ruoou Ying, pursuant to which the Group agreed to transfer 29% of Changwei’s shares to Changxin and 1% of the shares to Ms. Ruoou Ying (the “Changwei disposal”). The Group received the consideration in aggregated of RMB3,626 (US$500) from the Changwei disposal. This transaction was a sale to related parties. Ms. Ruoou Ying held the position of Supervisor at Anpac Lishui, while Changxin was under the common control of Ms. Ruoou Ying and Mr. Chris Yu, the Co-Founder and Co-Chairman of the Company. Loss from disposal of Changwei amounted to RMB20,282(US$2,797) and was included in net loss from discontinued operations. This transaction was a sale to related parties. Ms. Ruoou Ying held the position of Supervisor at Anpac Lishui, while Changxin was under the common control of Ms. Ruoou Ying and Mr. Chris Yu, the Co-Founder and Co-Chairman of the Company. Loss from disposal of Changwei amounted to RMB20,282(US$2,797) and was included in net loss from discontinued operations.

 

The results of discontinued operations for the six months ended June 30, 2022 and 2023 were as follows:

 

   Six Months Ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Revenues:            
Revenues-third parties   3,972    2,818    389 
Revenues-related parties   1,241    210    29 
Total revenues   5,213    3,028    418 
Cost of revenues   (1,832)   (1,292)   (178)
Gross Profit   3,381    1,736    240 
Operating expenses:               
Selling and marketing expenses   (4,894)   (3,872)   (534)
General and administrative expenses   (15,629)   (8,593)   (1,185)
Research and development expenses   (4,330)   (3,438)   (474)
Impairment of intangible assets   (7,911)   
—
    
—
 
Impairment of goodwill   (12,758)   
—
    
—
 
Loss from operations   (42,141)   (14,167)   (1,953)
Non-operating income and expenses:               
Interest expense, net   (161)   (81)   (11)
Foreign exchange gain, net   7    9    1 
Share of net loss in equity method investments   (87)   (88)   (12)
Other income, net   472    3,106    428 
Loss from operations for discontinued operations   (41,910)   (11,221)   (1,547)
Loss from disposal of a subsidiary   
—
    (16,724)   (2,307)
Loss from discontinued operations before income taxes   (41,910)   (27,945)   (3,854)
Income tax benefit   2,130    
—
    
—
 
Net Loss from discontinued operations   (39,780)   (27,945)   (3,854)

 

Assets and liabilities of the discontinued operations:

 

   December 31   June 30   June 30 
   2022   2023   2023 
   RMB   RMB   US$ 
ASSETS            
Current assets:            
Cash and cash equivalents   1,854    319    44 
Prepayment   2,692    1,334    184 
Accounts receivable, net   2,235    3,318    458 
Amounts due from related parties, net   2,194    684    94 
Inventories, net   210    178    25 
Other current assets, net   3,448    3,944    543 
Total current assets held for sale   12,633    9,777    1,348 
                
Property and equipment, net   17,182    15,746    2,171 
Land use rights, net   1,111    1,097    151 
Intangible assets, net   185    271    37 
Goodwill               
Right of use assets   7,213    2,088    288 
Long-term investments, net   1,079    991    138 
Total noncurrent assets held for sale   26,770    20,193    2,785 
TOTAL ASSETS HELD FOR SALE   39,403    29,970    4,133 
                
LIABILITIES               
Current liabilities:               
Short-term debts   5,000    5,000    690 
Accounts payable   2,108    2,012    277 
Advance from customers   4,956    7,800    1,076 
Amounts due to related parties   2,280    1,079    149 
Lease liability-current   784    1,042    144 
Accrued expenses and other current liabilities   18,386    16,488    2,273 
Total current liabilities held for sale   33,514    33,421    4,609 
Deferred tax liabilities               
Lease liability-non-current   6,515    1,368    189 
Other long-term liabilities   1,080    1,066    147 
Total noncurrent liabilities held for sale   7,595    2,434    336 
TOTAL LIABILITIES HELD FOR SALE   41,109    35,855    4,945 
v3.23.3
Accounts Receivable, Net
 6 Months Ended
Jun. 30, 2023
Accounts Receivable, Net [Abstract]  
ACCOUNTS RECEIVABLE, NET

6. ACCOUNTS RECEIVABLE, NET

 

Accounts receivable as of December 31, 2022 and June 30, 2023 were as follows:

 

   December 31     
   2022   June 30 2023 
   RMB   RMB   US$ 
             
Accounts receivable   
—
    270    37 
Allowance for credit losses   
—
    
—
    
—
 
Balance at end of year   
—
    270    37 
v3.23.3
Other Current Assets, Net
 6 Months Ended
Jun. 30, 2023
Other Current Assets, Net [Abstract]  
OTHER CURRENT ASSETS, NET

7. OTHER CURRENT ASSETS, NET

 

Other current assets consist of the following:

 

   December 31,     
   2022   June 30, 2023 
   RMB   RMB   US$ 
Deposits   
—
    154    21 
Receivable from private placement investors   
—
    260    36 
Loan to third-parties   422    444    61 
Total   422    858    118 
Allowance for credit losses   (422)   (444)   (61)
Other current assets, net   
—
    414    57 
v3.23.3
Property and Equipment, Net
 6 Months Ended
Jun. 30, 2023
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT, NET

8. PROPERTY AND EQUIPMENT, NET

 

Property and equipment, net consists of the following:

 

   December 31,     
   2022   June 30 2023 
   RMB   RMB   US$ 
Furniture, fixtures and equipment   
—
    3,255    448 
Motor vehicles   
—
    2,007    277 
Total   
—
    5,262    725 
Less: accumulated depreciation   
—
    (953)   (131)
Property and equipment, net   
—
    4,309    594 

 

Depreciation expense was nil and RMB449 (US$62) for the six months ended June 30, 2022 and June 30, 2023, respectively. No impairment charges were recognized on the property and equipment for the six months ended June 30, 2022 and 2023.
v3.23.3
Intangible Assets, Net
 6 Months Ended
Jun. 30, 2023
Intangible Assets, Net [Abstract]  
INTANGIBLE ASSETS, NET

9. INTANGIBLE ASSETS, NET

 

Intangible assets, net consist of the following:

 

   December 31,     
   2022   June 30 2023 
   RMB   RMB   US$ 
Software   
—
    47,798    6,592 
Total   
—
    47,798    6,592 
Less: accumulated amortization   
—
    (2,629)   (363)
Intangible assets, net   
—
    45,169    6,229 

 

Amortization expense for six months ended June 30, 2022 and 2023 amounted to nil and RMB2,511 (US$346), respectively. The estimated aggregate amortization expense for each of the five succeeding years is as follows:

 

Twelve months ending June 30,  RMB 
2024   8,351 
2025   8,351 
2026   8,351 
2027   8,351 
2028   6,226 
Thereafter   5,539 
Total   45,169 
v3.23.3
Long-Term Investments, Net
 6 Months Ended
Jun. 30, 2023
Long-Term Investments, Net [Abstract]  
LONG-TERM INVESTMENTS, NET

10. LONG-TERM INVESTMENTS, NET

 

Long-term investments, net consisted of the following:

 

   December 31,     
   2022   June 30, 2023 
   RMB   RMB   US$ 
Equity method investments               
Advanced Life Therapeutics Co., Ltd. (“Advanced Life”)   
—
    
—
    
—
 
Nassau Enterprises LLC (“Nassau”).   
—
    39,783    5,486 
Total   
—
    39,783    5,486 
Less: Impairment   
—
    
—
    
—
 
Long-term investments, net   
—
    39,783    5,486 

 

Equity method investments

 

Advanced Life

 

On May 15, 2021, the Company and other third parties established Advanced Life Therapeutics Co., Ltd. (“Advanced Life”), of which the Company owned a 40% equity interest in its registered capital. The Company has not made any capital contribution as yet because Advanced Life has not commenced its intended operations. The Group accounts for Advanced Life as long-term investment under the equity method, there’s no carrying value of this investment. Subsequently, the Board has approved the disposition of the 40% of equity interest in Advanced Life to a company controlled by Mr. Chris Yu at a nominal price on October 18, 2023.

 

Nassau

 

On May 24, 2023, the Company, through its subsidiary Foodbase Group Inc. (“Foodbase”), entered into a purchase agreement (the “Nassau Investment Agreement”) with Mr. Haohan Xu (“Mr. Xu”), the CEO of the Company, and Nassau Enterprises LLC, a Delaware limited liability company that was established to engage in real estate development (“Nassau”). Mr. Xu was the sole shareholder and CEO of Nassau prior to the Company’s investment. The Group’s investment in Nassau consisted of a capital injection of RMB39,882 (US$5,500) and a nominal payment to Mr. Xu to acquire 19.64% of the equity interests in Nassau. The transaction closed on May 24, 2023. After the closing, Mr. Xu holds 8,036 voting units in Nassau, representing 80.36% of the outstanding equity interests in Nassau. The Group can exercise significant influence on the management and operation of Nassau. The Group accounts for its investment in Nassau as long-term investment under the equity method. Nassau through its subsidiary intends to develop, market and sell real estate in Savannah Lakes Village (“SLV Project”) and to utilize an EB-5 program to finance the development of the SLV Project, which is expected to provide alternative financing for the Company’s growth.

 

The Group recorded its share of loss in this investment of RMB95 (US$13) for the six months ended June 30, 2023.
v3.23.3
Short-Term Debts
 6 Months Ended
Jun. 30, 2023
Short-Term Debts [Abstract]  
SHORT-TERM DEBTS

11. SHORT-TERM DEBTS

 

   December 31,     
   2022   June 30, 2023 
   RMB   RMB   US$ 
Convertible loan (“CL”) (i)   15    16    2 
Total   15    16    2 

 

(i)On July 22, 2021, the Company issued convertible debentures (the “Convertible Debentures”) to certain investors in a registered direct offering in an aggregate principal amount of US$3,014 (RMB20,788) for the discounted price of US$2,740 (RMB18,898). The Convertible Debentures were originally due in one year and bear interest of 0% per annum if the conversion feature is not triggered. Pursuant to the agreement, the conversion price is lower of (i) US$15 or (ii) the lower of 82% of the closing bid price or 80% of VWAP of the Company’s ADSs during the ten consecutive trading days immediately preceding conversion, but not lower than a Floor Price of US$1 (the “floor price”). Due to significant drop of the ADS market price in 2022, the debenture holders and the Company renegotiated the Floor Price. On February 5, 2022, the Company entered into an amendment agreement, pursuant to which the Floor Price was reduced to US$0.10 per Class A Ordinary Share. The Company has elected to recognize the Convertible Debentures at fair value and therefore there was no further evaluation of embedded features for bifurcation. The Convertible Debentures were partially converted into 114,234 shares on December 10, 2021. The fair value of the Convertible Debentures loan immediately prior to conversion was assessed at RMB1,321. Substantially all of the remaining outstanding Convertible Debentures were converted into 4,842,197 Class A ordinary shares (refer to Note 14) on March 16, 2022. The fair value of the Convertible Debentures on March 16, 2022 immediately prior to conversion was assessed at RMB22,237. As of June 30, 2023, the fair value of the outstanding balance of the Convertible Debentures was RMB16 (US$2).

 

For the six months ended June 30, 2022 and 2023, the Company recognized change in fair value of the Convertible Debenture of RMB139 and nil, respectively.
v3.23.3
Leases
 6 Months Ended
Jun. 30, 2023
Lease [Abstract]  
LEASES

12. LEASES

 

The Group has several operating leases for offices. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

 

Effective on January 1, 2022, the Group adopted the new lease accounting standard using a modified retrospective transition method which allowed the Group not to recast comparative periods presented in its consolidated financial statements. In addition, the Group elected the package of practical expedients, which allowed the Group to not reassess whether any existing contracts contain a lease, to not reassess historical lease classification as operating or finance leases, and to not reassess initial direct costs. The Group has not elected the practical expedient to use hindsight to determine the lease term for its leases at transition. The Group combines the lease and non-lease components in determining the ROU assets and related lease obligation. Adoption of this standard resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities as disclosed below and had no impact on accumulated deficit as of January 1, 2022. ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining lease payments over the lease term.

 

Supplemental balance sheet information related to operating leases was as follows:

 

   December 31,     
   2022   June 30, 2023 
   RMB   RMB   US$ 
             
Right-of-use assets, net   
—
    223    31 
                
Operating lease liabilities - current   
—
    148    20 
Operating lease liabilities - non-current   
—
    37    5 
Total operating lease liabilities   
—
    185    25 

 

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of June 30, 2023:

 

Weighted average remaining lease term (years)   1.51 
Weighted average discount rate   4.75%

 

The following is a schedule of maturities of lease liabilities are as follows:

 

Twelve months ending June 30,  RMB 
2024   150 
2025   37 
Total future minimum lease payments   187 
Less: imputed interest   (2)
Total   185 
v3.23.3
Accrued Expenses and Other Current Liabilities
 6 Months Ended
Jun. 30, 2023
Accrued Expenses and Other Current Liabilities [Abstract]  
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

13. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

 

   December 31     
   2022   June 30, 2023 
   RMB   RMB   US$ 
Salary and welfare payable   1,740    9,312    1,283 
Accrued expenses (1)   5,762    9,057    1,249 
Payable for property and equipment   
—
    2,301    318 
Other payables   33    4,089    564 
Total   7,535    24,759    3,414 

 

(1):the accrued expenses mainly consist of accrued professional fees.
v3.23.3
Shareholders' Equity
 6 Months Ended
Jun. 30, 2023
Shareholders' Equity [Abstract]  
SHAREHOLDERS' EQUITY

14. SHAREHOLDERS’ EQUITY

 

Ordinary Shares

 

On October 14, 2022, the Company amended and restated its memorandum and articles of association to increase the maximum number of authorized shares to 150,000,000 shares divided into 120,000,000 class A ordinary shares with a par value of US$0.01 each and 30,000,000 class B ordinary shares with a par value of US$0.01 each.

 

On February 14, 2023, the Company amended and restated its memorandum and articles of association to increase the maximum number of authorized shares from 150,000,000 shares to 2,430,000,000 shares divided into 2,400,000,000 Class A Ordinary Shares with a par value of US$0.01 each and 30,000,000 Class B Ordinary Shares with a par value of US$0.01 each.

 

As of December 31, 2022 and June 30, 2023, 79,536,589 and 176,070,465 Class A ordinary shares were issued and outstanding, respectively. As of December 31, 2022 and June 30, 2023, 3,573,100 and 3,573,100 Class B ordinary shares were issued and outstanding.

 

Completion of IPO

 

On January 30, 2020, the Company completed its IPO on the Nasdaq Share Exchange. In November 2022, the Company adopted an ordinary share / ADS ratio change from one (1) Class ‘A’ ordinary share being equal to one (1) ADS to 20 Class ‘A’ ordinary shares being equal to one (1) ADS).

 

Conversion of convertible loans

 

On July 22, 2021, the Company issued convertible debentures (the “Convertible Debentures”) to certain investors in a registered direct offering in an aggregate principal amount of US$3,014 (RMB20,788) for the discounted price of US$2,740 (RMB18,898). The Convertible Debentures were partially converted into 114,234 Class ‘A’ ordinary shares on December 10, 2021. On March 16, 2022, substantially all of the remaining outstanding Convertible Debentures were converted into 4,842,197 Class A ordinary shares. The fair value of the Convertible Debentures on March 16, 2022 immediately prior to conversion was assessed at RMB22,237. As of June 30, 2023, the fair value of the outstanding balance of the Convertible Debentures was RMB16 (US$2).

 

On May 31, 2021, the Company issued a convertible note in the principal amount of RMB4,479 to Ascent Investor Relations Inc., (“Ascent”) for public relations services rendered. The convertible note was fully converted into 3,232,397 Class A ordinary shares with conversion prices ranging from US$0.16-0.33 per share by April 27, 2022. The fair value of the convertible note immediately prior to conversion was assessed at RMB5,502.

 

Shares issued for services

 

On June 1, 2022, the Company entered into a service agreement with a public relations firm. Pursuant to the service agreement, the Group was required to pay US$50 as compensation for the public relations services. On June 10, 2022, the Company issued 187,094 class A ordinary shares for the services. The fair value of the PR services was RMB359 (US$54) determined based on the Company’s ADS market price on June 10, 2022.

 

On August 31, 2022, the Company granted 140,000 class A ordinary shares to two employees as bonuses that vested immediately upon grant. On September 16, 2022, the Company issued the 140,000 class A ordinary shares. The fair value of the bonuses was RMB1,341 (US$195) determined based on the Company’s ADS market price on August 31, 2022.

 

On April 20, 2023, the Company entered into a service agreement with a finance service firm, Pursuant to the service agreement, the Company was required to pay 3,500,000 Class A ordinary shares for the service. On May 11, 2023, the Company issued 3,500,000 Class A ordinary shares to the finance service firm. The fair value of the services was RMB6,385 (US$919) determined based on the Company’s ADS market price on May 11, 2023.

 

Shares issued for reserve

 

As of December 31, 2022, the Group had 1,322,853 Class A ordinary shares held in an escrow account as reserve solely for potential convertible loans conversion. During the six months ended June 30, 2023, of 22,000,000 Class A ordinary shares issued in a private placement on June 9, 2023, 2,500,000 class A ordinary shares were subsequently recalled and cancelled on October 30, 2023 due to the inability to timely collect the funds from the investor. Such 2,500,000 class A ordinary shares were included as the shares held as a reserve and not included in the calculation of loss per share. As of June 30, 2023, 3,822,853 Class A ordinary shares were held in an escrow account as a reserve.

 

Private placements

 

On March 16, 2022, the Company entered into a share subscription agreement with a third-party investor, pursuant to which the Company issued 1,235,788 Class A ordinary shares at price of US$0.2563 per share to the investor (the “March 16, 2022 private placement”). In addition, the Company also issued pre-funded warrants to purchase an aggregate of 4,226,135 of Class A ordinary shares for US$0.2563 per share to the investor, equal to the exercise price minus US$0.00001 for the pre-funded warrants. Total gross proceeds of RMB9,395 (US$1,400) was received on May 19, 2022. 2,584,900 pre-funded warrants were exercised during the six months ended June 30, 2023; the remaining pre-funded warrants were exercised on July 13, 2023.

 

On March 29, 2022, the Company entered into a share subscription agreement with a third-party Chinese investor, pursuant to which the Company issued 654,622 Class A ordinary shares at price of US$0.35 to the investor and received gross proceeds of RMB1,500 (US$232) on March 30, 2022.

 

On May 27, 2022, the Company entered into investment agreements with nine third-party investors. The investors agreed to invest up to RMB20,094 (US$3,000) to purchase Class A ordinary shares, at a purchase price of the lower of (i) $0.30 per ADS (the equivalent of 1 Class A ordinary share) and (ii) 80% of the average ten-day trading closing price of the ADSs (the equivalent of 1 Class A ordinary share) for the ten consecutive day trading period ended on the date of investment agreement. On May 27, 2022 and May 30, 2022, the Company issued 6,229,235 and 6,263,048 Class A ordinary shares to the investors, respectively. In addition, warrants to purchase (i) an aggregate of 3,000,000 Class A ordinary shares for US$0.4 per share, (ii) an aggregate of 1,200,000 Class A ordinary shares for US$0.75 per share (ADS), and (iii) an aggregate of 750,000 Class A ordinary shares (ADS) for US$1.2 per share were issued to the investors. No warrants were excised during the year ended December 31, 2022. On September 2, 2022, three of the investors in the Company’s May 2022 private placements filed an action against the Company in the State of Delaware Court of Chancery captioned Chen Wenge, et al. v. Fresh2 Group Limited, C.A. No. 2022-0779-PAF. The Plaintiffs sued the Company for breaches of the investment agreements. The plaintiffs claimed that the entry into certain investment agreements and a merger agreement breached or would breach the terms of the plaintiffs’ (and several other investors’) securities purchase agreements, including a right of first refusal and a prohibition against certain acquisitions and changes of business. The Court issued a temporary restraining order concerning enforcement of the private placements on September 3, 2022, amended the temporary restraining order on September 9, 2022, and further amended the temporary restraining order on September 23, 2022 (“TRO”). In order to settle the litigation, the Company entered into a share repurchase agreement with the three plaintiffs, and all the other investors in the May 2022 private placements on October 15, 2022. The Company agreed to repurchase 12,492,283 Class A ordinary shares and warrants to purchase a total of 2,475,000 Class A ordinary shares from the nine investors for total consideration of RMB11,003(US$1,507). The Company fully settled the litigation on October 27, 2022. In connection with the settlement, Yuyang Cui and Jiawen Kang resigned from our board of directors of the Company and Yuyang Cui resigned as Co-CEO of the Company. The repurchased warrants were canceled and the repurchased Class A ordinary shares are treated a treasury shares as of December 31, 2022. The treasury shares were canceled on January 19, 2023.
  

On September 2, 2022, the Company entered into investment agreements with three third-party investors (the “September 2, 2022 private placement”). The investors agreed to purchase an aggregate of 5,000,000 Class A ordinary shares at price of US$0.1 per share and warrants to purchase an aggregate of 5,000,000 Class A ordinary shares at an exercise price of US$0.4 per share for RMB3,613. The warrants are exercisable within 2 years from the date of issuance. Total gross proceeds of RMB3,613 was received in September, 2022. No warrants were excised during the year ended December 31, 2022 and six months ended June 30, 2023.

 

On September 26, 2022, the Company entered into investment agreements with nine third-party investors, pursuant to which the Company issued 36,729,613 Class A ordinary Shares at price of US$0.10 per share to the investors and received gross proceeds of RMB26,410 (US$3,660) during the period October 2022 to November 2022.

 

In December 2022 and March 2023, the Company signed investment agreements with several third-party investors (the “March 2023 private placement”) to sell 30,885,707 Class A ordinary shares of the Company at a price of US$0.175 per share for a total purchase price of US$5,405. Proceeds of RMB36,608 (US$5,369) were received by June 30, 2023 and the remaining balance subsequently was received on August 10, 2023. For each Class A ordinary share purchased, the investors received two warrants with each warrant to purchase one Class A ordinary share at an exercise price of US$0.21 per share. The warrants are exercisable within 2 years from the date of issuance. No warrants were exercised during the six months ended June 30, 2023.

 

On April 6, 2023, the Company closed a registered direct offering (the “April 2023 private placement”), the Company sold to the institutional investors a total of 12,500,000 Class A ordinary shares priced at $0.2 per ordinary share, pre-funded warrants exercisable for 2,500,000 Class A ordinary shares and warrants exercisable for 15,000,000 Class A ordinary shares. The purchase price of each pre-funded warrant is equal to the offering price per Class A ordinary shares, minus $0.00005, and the exercise price of each pre-funded warrant is equal $0.00005 per share. The pre-funded warrants are immediately exercisable and may be exercised at any time until exercised in full. The warrants are immediately exercisable and expire five (5) years from the original issuance date and have an exercise price of $0.2 per Class A ordinary shares. The Company also issued to Univest Securities, LLC, which acted as the sole placement agent for the offering, warrants exercisable for 750,000 Class A ordinary shares, with an exercise price of $0.24 per share. The net proceeds to the Company from the registered direct offering were RMB17,238 (US$2,510) after deducting the placement agent’s fees and other offering expenses. No pre-funded warrants were exercised during the six months ended June 30, 2023, and 5,000,000 warrants were exercised with proceeds of RMB6,911(US$1,000) during the six months ended June 30, 2023.

 

On June 2, 2023, the Company entered into an agreement with an investor, under which the investor agreed to purchase 22,000,000 Class A ordinary shares and warrants to purchase 22,000,000 Class A ordinary shares at an aggregate purchase price of US$4,400 (the “June 2023 private placement”). The warrants are exercisable within 2 years from the date of issuance and have an exercise price of US$0.21 per share. On June 9, 2023, the Company issued 22,000,000 Class A ordinary shares to the investor, proceeds of RMB27,797 (US$3,900) were received by June 30, 2023. Due to inability to timely collect the remaining proceeds of RMB3,564(US$500) from the investor, the corresponding 2,500,000 shares was recalled and cancelled on October 30, 2023, subsequently. No warrants were exercised during the six months ended June 30, 2023.

 

Shares issued for acquisitions

 

In connection of the GISN acquisition on February 1, 2023, the Company issued 8,785,530 Class A shares to the original shareholders of GISN as consideration of 100% equity interest. The fair value of the shares issued amounted to RMB25,938(US$3,848).

 

In connection of the Fresh2 acquisition on February 8, 2023, the Company issued 5,440,420 Class A shares to the original shareholders of Fresh ecommerce as consideration of 100% equity interest. The fair value of the shares issued amounted to RMB17,304(US$2,549).

 

In connection of the assets acquisition from Easy Hundred on March 31, 2023, the Company issued 17,665,702 Class A shares to Easy Hundred as consideration. The fair value of the shares issued amounted to RMB25,720(US$3,745).

 

Warrants

 

As of June 30, 2023, there were 103,702,658 warrants outstanding. A summary of warrants activity for the six months ended June 30 2023 was as follows:

 

       Weighted
average
exercise
price per
share		   Weighted    
  

Number of

warrants

   US$ per
share		   average life
Years		 

Expiration

dates 

Balance of warrants outstanding and exercisable as of December 31, 2022   9,266,135    0.24   1.85 to unlimited  August 31, 2024 to unlimited
—warrants issued in connection with the March 2023 private placement   61,771,423    0.21   1.58 to 1.96  February 3, 2025 to June 16, 2025
—warrants issued in connection with the April 2023 private placement   18,250,000    0.00001-0.24   1.75 to Unlimited  March 31, 2025 to unlimited
—warrants issued in connection with the June 2023 private placement   22,000,000    0.21   1.95  June 9, 2025
Exercised   (7,584,900)   0.00001-0.2       
Balance of warrants outstanding and exercisable as of June 30, 2023   103,702,658    0.21   1.96 to unlimited  August 31, 2024 to unlimited
v3.23.3
Share Based Compensation
 6 Months Ended
Jun. 30, 2023
Share Based Compensation [Abstract]  
SHARE BASED COMPENSATION

15. SHARE BASED COMPENSATION

 

On October 31, 2019, the Board and the Company’s shareholders approved the 2019 Share Incentive Plan (“2019 Plan”) which authorized the compensation committee or such other committee to grant share options to purchase 1,105,300 Class A ordinary shares to directors, service providers, advisors, employees and consultants of the Group. On July 5, 2021, the Board and the Compensation Committee of the Board approved the Amended and Restated 2019 Plan increasing the number of Class A ordinary shares subject to the 2019 Plan to 1,885,300 shares. As of June 30, 2023, no shares remain available to be issued under the Amended and Restated 2019 Plan. On April 14, 2022, the Company’s Board approved and adopted the 2022 Share Incentive Plan (the “2022 Plan”) providing for the grant of options to purchase 2,800,000 Class A ordinary shares. On August 28, 2022, the Board and the Compensation Committee of the Board approved the Amended and Restated 2022 Plan increasing the number of Class A ordinary shares subject to the 2022 Plan to 4,700,000 shares. These options were granted to employees and professionals during 2022 and 2023 and will vest over four years. As of June 30, 2023, options to purchase 182,593 Class A ordinary shares remain available to be issued under the 2022 Plan.

 

On January 6, 2023, the Company’s Board approved and adopted the 2023 Share Incentive Plan (the “2023 Plan”) providing for the grant of restricted share unit (“RSU”) of 4,000,000 Class A ordinary shares. On March 10, 2023, the Board and the Compensation Committee of the Board approved an amended to the 2023 Plan increasing the number of Class A ordinary shares subject to the 2023 Plan to 13,000,000 shares. On August 23, 2023, the Board and the Compensation Committee of the Board further approved a further amendment to 2023 Plan increasing the number of Class A ordinary shares subject to the 2023 Plan to 41,000,000 shares These RSU are to be granted to employees and professionals. During the six months ended June 30, 2023, the Company issued 12,779,670 RSUs to that can be converted to Class A ordinary shares upon vesting to employees, directors and officers the Group under the 2023 Plan. The aggregate fair value of the RSUs granted was RMB32,310 (US$4,456). These RSUs vest over 1-4 years based on the related granted agreements. During six months ended June 30, 2023, 458,452 RSUs was forfeited and none vested. As of June 30, 2023, the Company had 12,321,218 RSUs outstanding. For the six months ended June 30, 2023, the Company recorded related share-based compensation expense of RMB2,872 (US$396).

 

Employees-options

 

The options granted to employees are measured based on the grant date fair value of the equity instrument. They are accounted for as equity awards and contain only service vesting conditions. The following table summarized the Group’s employee share option activities:

 

               Weighted     
       Weighted   Weighted   Average     
       Average   Average   Remaining   Aggregate 
   Number of   Exercise   Grant date   Contractual   Intrinsic 
   Options   Price   Fair Value   Term   Value 
       US$ per   US$ per         
       option   option   Years   US$ 
Share options outstanding at December 31, 2022   2,334,906    1.69    5.08    8.05    452 
Granted   
—
    
—
    
—
    
—
    
—
 
Exercised   (13,900)   0.05    0.05    0.22    
—
 
Share options outstanding at June 30, 2023   2,321,006    1.70    2.32    7.54    306 
Vested and exercisable at June 30, 2023   2,199,006    1.41    2.08    7.54    306 

 

The aggregate intrinsic value in the table above represents the difference between the exercise price of the awards and the fair value of the underlying ordinary shares at each reporting date for those awards that had exercise price below the estimated fair value of the relevant Class A ordinary shares.

 

For the six months ended June 30, 2022 and 2023, the total fair value of the equity awards vested were RMB2,962 and RMB894 (US$123) respectively. As of June 30, 2023, there was RMB2,525 (USD$348) in total unrecognized employee share-based compensation expense related to unvested options, that may be adjusted for actual forfeitures occurring in the future. Total unrecognized compensation cost may be recognized over a weighted-average period of 0.6 years.  

 

Nonemployees-options

 

The options granted to nonemployees are measured based on the grant date fair value of the equity instrument. They are accounted for as equity awards with service and/or performance vesting conditions. The following table summarized the Group’s nonemployee share option activity:

 

               Weighted     
       Weighted   Weighted   Average     
       Average   Average   Remaining   Aggregate 
   Number of   Exercise   Grant date   Contractual   Intrinsic 
   Options   Price   Fair Value   Term   Value 
       US$ per   US$ per         
       option   option   Years   US$ 
Share options outstanding at December 31, 2022   2,651,700    0.86    0.85    9.27    532 
Granted   
—
    
—
    
—
    
—
    
—
 
Exercised   (650,000)   0.05    0.05    0.22    
—
 
Forfeited   (20,000)   
—
    
—
    
—
    
—
 
Share options outstanding at June 30, 2023   1,981,700    1.13    1.04    8.74    315 
Vested and exercisable at June 30, 2023   1,981,700    1.13    1.00    8.74    315 

 

The aggregate intrinsic value in the table above represents the difference between the exercise price of the awards and the fair value of the underlying ordinary shares at each reporting date, for those awards that had exercise price below the estimated fair value of the relevant Class A ordinary shares.

 

The total fair value of the equity awards vested during the six months ended June 30, 2022 and 2023 were RMB1,566 and nil, respectively. There was no unrecognized nonemployee share-based compensation expenses as of June 30, 2023.

 

Fair value of options

 

The Group used Black-Scholes simplified method for the valuation of new options issued during the six months ended June 30, 2022 and 2023. The assumptions used to value the share options granted to employees and nonemployee were as follows:

 

   For the six months ended
June 30,		 
   2022   2023 
Risk-free interest rate   0.34%   
—
%
Expected volatility range   100.2%   
—
%
Fair market value per ordinary share as at grant dates   US$0.29    
—
 

  

The following table sets forth the amount of share-based compensation expense included in each of the relevant financial statement line items:

 

   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Selling and marketing expenses   705    1,712    236 
Research and development expenses   1,263    818    113 
General and administrative expenses   2,560    1,236    170 
Total share-based compensation expenses   4,528    3,766    519 
v3.23.3
Income Taxes
 6 Months Ended
Jun. 30, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES

16. INCOME TAXES

 

BVI

 

The Company is incorporated in the BVI and conducts its primary business operations through the subsidiaries in the U.S. and PRC Under the current laws of the BVI, the Company is not subject to tax on income or capital gains. Additionally, upon payments of dividends by the Company to its shareholders, no BVI withholding tax will be imposed.

 

Hong Kong

 

GISN (HK) Limited is a holding company registered in Hong Kong and had no operating profit and no taxable income for the six months ended June 30, 2023.

 

PRC

 

The Group’s subsidiaries in the PRC are subject to tax at the statutory rate of 25%, in accordance with the Enterprise Income Tax law (the “EIT Law”), which was effective since January 1, 2008. Hua You Sheng Future (Beijing) Technology Co., Ltd. is entitled to a preferential income tax treatment as they qualify as small and micro-sized enterprises. For the six months ended June 30, 2022 and 2023, if the annual taxable income of small and micro- profit enterprises does not exceed RMB 1,000, 12.5% shall be included in the taxable income and the enterprise income tax rate shall be 20%; if the annual taxable income exceeds RMB 1,000 but does not exceed RMB 3,000, 25% shall be included in the taxable income and the enterprise income tax shall be paid at the rate of 20%.

 

Dividends, interests, rent and royalties payable by the Group’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 PRC that provides for a reduced withholding tax rate or an exemption from withholding tax.

 

United States

 

The Group’s subsidiaries in the U.S. are subject to the U.S. federal corporate income tax and New York as well as Delaware state income tax at a rate of 21%, 6.5% and 8.7%, respectively, for the six months ended June 30, 2022 and 2023.

 

The Group’s Chinese subsidiaries tax returns filed with Chinese governments for the years after 2019 remain open for statutory examination by PRC tax authorities. The Group’s US subsidiaries tax returns filed with governments remain open for statutory examination by tax authorities in the future.

 

The Group’s loss before income taxes consisted of:

 

   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Non-US   (9,035)   (23,507)   (3,241)
US   
—
    (20,032)   (2,763)
Total   (9,035)   (43,539)   (6,004)

 

The current and deferred components of income tax benefit appearing in the unaudited condensed consolidated statements of comprehensive income are as follows:

 

   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Current tax expense   
—
    
—
    
—
 
Deferred tax benefit   
—
    79    11 
Total   
—
    79    11 

 

The reconciliation of tax computed by applying the federal statutory income tax rate of 21% for the six months ended June 30, 2022 and 2023 applicable to the U.S. operations to income tax benefit were as follows:

 

   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Loss before income taxes   (9,035)   (43,539)   (6,004)
Income tax benefit computed at the statutory income tax rate at 21%   (1,897)   9,142    1,261 
International rate differences   1,897    (4,726)   (652)
Change in valuation allowance   —    (4,337)   (598)
Income tax benefit   —    79    11 

 

Deferred Taxes

 

The significant components of deferred taxes were as follows:

 

   As of December 31, 
   December 31,   June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Deferred tax assets:            
Net loss carryforward   1,900    9,608    1,325 
Valuation allowance   (1,900)   (9,608)   (1,325)
Total deferred tax assets.   
—
    
—
    
—
 
                
Deferred tax liabilities:               
Long-lived assets arising from acquisitions   
—
    2,938    405 
Total deferred tax liabilities.   
—
    2,938    405 

 

The Group operates through several subsidiaries. Valuation allowance is considered for each of the entities.

 

Realization of the net deferred tax assets is dependent on factors including future reversals of existing taxable temporary differences and adequate future taxable income, exclusive of reversing deductible temporary differences and tax loss carry forwards. The Group evaluates the potential realization of deferred tax assets on an entity-by-entity basis. As of December 31, 2022 and June 30, 2023, the Company and all of its subsidiaries were in a cumulative loss position, valuation allowances were provided against deferred tax assets in entities where it was determined it was more likely than not that the benefits of the deferred tax assets will not be realized.

 

As of June 30, 2023, the Group had PRC net operating losses of RMB10,342 (US$ 1,426), which will expire from 2023 to 2027 if not utilized. As of June 30, 2023, the Group had Hongkong net operating losses of RMB 307 (US$42) that can be carried forward indefinitely for deduction in future periods. As of June 30, 2023, the Group had U.S. net operating losses of RMB33,198 (US$4,578) for U.S. federal and state income tax purposes. The Group files state tax returns in both New York and Delaware. U.S. federal net operating losses are limited to 80% and can be utilized indefinitely. State net operating losses can be carried forward for 20 years and will begin to expire from 2038 to 2042.
v3.23.3
Related Party Transactions and Balances
 6 Months Ended
Jun. 30, 2023
Related Party Transactions and Balances [Abstract]  
RELATED PARTY TRANSACTIONS AND BALANCES

17. RELATED PARTY TRANSACTIONS AND BALANCES

 

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. The related parties that had transactions in the six months ended June 30, 2022 and 2023 or balances with the Group as of December 30, 2022 and June 30, 2023 consisted of:

 

Related Party   Nature of the party   Relationship with the Group
Haohan Xu   Individual   Chief Executive Officer
Apifiny Inc.   Investment management   Controlled by Haohan Xu
Roxe Holding Inc.   Investment management   Controlled by Haohan Xu
Dr. Chris Chang Yu*   Individual   Co-Founder and shareholder
CRS Holdings Inc.   Investor   Controlled by Dr. Chris Chang Yu
Jiaxing Zhijun Sihang Investment Partnership Enterprises (limited partnership) (“Jiaxing Zhijun”)   Private equity investment   Shareholder, due to diluted equity interest, no longer a related party for the six months ended June 30 2023

 

*Dr. Yu resigned from his position as the Chief Executive Officer (“CEO”) of the Company and Chairman of the Board on April 6, 2022 and was appointed as Co-Chairman and Co-CEO in May 2022. On May 17, 2023, Dr. Yu resigned as the Co-Chief Executive Officer of the Company.

 

Related party balances

 

   As of
December 31,		   As of June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Due from related parties:            
Apifiny Inc.   
—
    211    29 
Roxe Holding Inc.   
—
    363    50 
Dr. Chris Chang Yu   
—
    290    40 
Due from related parties, net   
—
    864    119 

 

   As of
December 31,		  

As of June 30,

 
   2022   2023   2023 
   RMB   RMB   US$ 
Due to related parties:            
CRS Holdings Inc.   287    592    82 
Jiaxing Zhijun   927    
—
    
—
 
Due to related parties   1,214    592    82 

 

   As of
December 31,		  

As of June 30,

 
   2022   2023   2023 
   RMB   RMB   US$ 
Accounts receivables-related parties:            
Apifiny Inc.   
—
    3,525    486 
Roxe Holding Inc.   
—
    7,925    1,093 
Accounts Receivables-related parties, net   
—
    11,450    1,579 

 

Accounts receivables-related parties represented receivables from Apifiny Inc. and Roxe Holding Inc. for research and development services provided by the Group’s subsidiaries before the GISN acquisition.

 

Related party transactions

 

For the six months ended June 30, 2022 and 2023, related party transactions consisted of the following:

 

   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Fixed assets purchased from Apifiny Inc.   
—
    970    134 
Consulting service received from Roxe Holding Inc.   
—
    464    64 
Rent expense incurred with Apifiny Inc.   32    624    86 

 

Acquisition, investment and divestitures

 

The Group completed two acquisitions from a related party – Mr. Xu (details refer to Note 4) and completed divestiture transaction with a related party Dr. Chris Yu on July 28, 2023 (details refer to Note 5). On May 24, 2023, the Group completed equity investment in Nassau, controlled by a related party - Mr. Xu (details refer to Note 10).
v3.23.3
Commitments and Contingencies
 6 Months Ended
Jun. 30, 2023
Commitments and Contingencies [Abstract]  
COMMITMENTS AND CONTINGENCIES

18. COMMITMENTS AND CONTINGENCIES

 

Litigation

 

In the ordinary course of the business, the Group is subject to periodic legal or administrative proceedings. As of December 31, 2022 and June 30, 2023, there was no contingent liability accrued relating to legal or administrative proceedings.
v3.23.3
Subsequent Events
 6 Months Ended
Jun. 30, 2023
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

19. SUBSEQUENT EVENTS

 

Recent Development

 

The Company announced that as of June 30, 2023, it no longer qualified as a Foreign Private Issuer, as defined in Rule 405 of Regulation C under the Securities Act of 1933 and Rule 3b-4 under the Securities Exchange Act of 1934. The Company will take all necessary actions to comply with the requirements for a domestic issuer under the federal securities laws, as of January 1, 2024.

 

On July 21, 2023, the Company appointed Mr. Yidong Hu as the Chief Strategy Officer of the Company.

 

On August 25, 2023, Mr. Edwards Jinqiu Tang resigned as the Co-Chief Financial Officer of the Company. Mr. Tang’s resignation did not result from any disagreement with the Company or its management.

 

Divestiture

 

On July 28, 2023, the Group entered into agreements to sell its CDA Business (details refer to Note 5).

 

Acquisition

 

On July 17, 2023, the Group entered into a definitive share purchase agreement with Immensus LLC, Zero2First Capital Limited, Future Capital Tech Pte. Ltd (Singapore), River Hill China Capital Ltd (collectively, the “Sellers”) and Roxe Holding Inc. (“Roxe”) under which Fresh2 Technology purchased 51% of the common share of Roxe (the “Roxe Shares”). As consideration for the purchase of the Roxe Shares, the Company issued an aggregate of 110,476,291 Class A Ordinary Shares of the Company to the Sellers, based on Roxe’s valuation of US$60,000 and the average trading price of the Company’s ADSs for the prior 90 trading days (each ADS represents 20 Class A Ordinary Shares). The closing took place simultaneously with the execution of the Share Purchase Agreement. Unaudited Pro-forma condensed combined financial information in connection with the above acquisition was included in the Company’s filling in a Form 6-K with the SEC on August 21, 2023. On July 27, 2023, Roxe entered into a share purchase agreement with SpeedIn INC (“SpeedIn”), a delivery service provider, and its shareholders, under which Roxe agreed to purchase 100% of the shares of SpeedIn from the Sellers with a nominal price. The closing took place simultaneously with the execution of the share purchase agreement. Due to badly performance, the Board have approved the disposition of SpeedIn to a company controlled by Mr. Haohan Xu on October 9, 2023.

 

On July 28, 2023, the Company, through its subsidiary, Foodbase Group Inc. agreed to acquire 100% of the equity interest in Windfall SLV Development LLC and SLV Windfall Management LLC, from XHome Group Inc, a company controlled by Mr. Haohan Xu, for a nominal price. Windfall SLV Development LLC and SLV Windfall Management LLC have not begun operations as yet.

 

On November 4, 2023 the Company and Fresh2 Technology entered into a definitive Share Purchase Agreement to purchase 38.61% of the common stock of Roxe.

 

Financing activities

 

On September 25, 2023, the Company entered into an agreement with an institutional investor to purchase up to US$2,000 of convertible notes, the convertible notes will be sold in two tranches (i) US$400 (original principal amount) of convertible notes, Series C warrants to purchase 258,065 ADSs (or 5,161,300 Class A ordinary shares) at exercise price equal to 125% of the lower of (a) $1.86 and (b) the lowest daily volume-weighted average price (“VWAP”) for the 10 trading days prior to the exercise date  and Series D warrants to purchase up to 283,688 ADSs (or 5,673,760 Class A ordinary shares) at exercise price equal to the lower of (x) $1.41 and (y) 75.83% of the lowest daily VWAP for the ten (10) trading days immediately prior to the exercise date, subject to adjustment, and (ii) US$1,600 (original principal amount) of convertible notes, 20,645,160 Series C warrants and 22,695,040 Series D warrants. The Company received the first payment RMB1,697(US$234) from this offering, excluding related financing costs.
v3.23.3
Accounting Policies, by Policy (Policies)
 6 Months Ended
Jun. 30, 2023
Summary of Principal Accounting Policies [Abstract]  
Basis of presentation

(a) Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for financial reporting and pursuant to the applicable rules and regulations of the SEC pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2023 and 2022 are not necessarily indicative of the results that may be expected for the full year. The information included in this report should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in the Group’s annual financial statements for the fiscal year ended December 31, 2022 filed with the SEC on May 16, 2023.
Principles of consolidation

(b) Principles of consolidation

The accompanying unaudited condensed consolidated financial statements include the financial statements of the Group. All inter-company transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

 
Use of estimates

(c) Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Areas where management uses subjective judgement include, but are not limited to allowance for doubtful accounts, share-based compensation, deferred tax and uncertain tax position, useful lives of intangible assets and property and equipment, impairment of long-lived assets, goodwill and long-term investments and the purchase price allocation with respect to business combinations. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences could be material to the unaudited condensed consolidated financial statements. 
Cash and cash equivalents

(d) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and demand deposits placed with banks which are unrestricted as to withdrawal or use and have original maturities less than three months. All highly liquid investments with a stated maturity of 90 days or less from the date of purchase are classified as cash equivalents.
Accounts receivable and allowance for credit losses

(e) Accounts receivable and allowance for credit losses

Accounts receivable represents the amounts that the Group has an unconditional right to consideration and is recorded net of allowance for credit losses.

In 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”), which amends previously issued guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses rather than incurred losses. The Group has adopted this ASC Topic 326 and several associated ASUs on January 1, 2023 using a modified retrospective approach. The adoption has no material impact to the Company’s consolidated financial statements. The Group estimated allowance for credit losses to reserve for potentially uncollectible receivable amounts periodically, considering factors in assessing the collectability of its accounts receivable, such as historical distribution of the age of the amounts due, payment history, creditworthiness, forward-looking factor, historical collections data of the customers, to assess the credit risk characteristics. If there is strong evidence indicating that the accounts receivable is likely to be unrecoverable, the Group also makes specific allowance in the period in which a loss is determined to be probable. Accounts receivable are considered impaired and written-off when it is probable that all contractual payments due will not be collected after all collection efforts have been exhausted.
Convenience translation

(f) Convenience translation

Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB7.2513 on June 30, 2023, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be converted, realized or settled into US$ at such rate or at any other rate.
Long-term investments

(g) Long-term investments

The Group’s long-term investments include equity method investments and equity investments without readily determinable fair values.

Investments in entities in which the Group can exercise significant influence but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC 323, Investments-Equity Method and Joint Ventures (“ASC 323”). Under the equity method, the Group initially records its investment at cost and the difference between the cost of the equity investee and the amount of the underlying equity in the net assets of the equity investee is accounted for as if the investee were a consolidated subsidiary. The share of earnings or losses of the investee are recognized in the unaudited condensed consolidated statements of operations and comprehensive loss. Equity method adjustments include the Group’s proportionate share of investee income or loss, adjustments to recognize certain differences between the Group’s carrying value and its equity in net assets of the investee at the date of investment, impairments, and other adjustments required by the equity method. The Group assesses its equity investment for other-than-temporary impairment by considering factors as well as all relevant and available information including, but not limited to, current economic and market conditions, the operating performance of the investees including current earnings trends, the general market conditions in the investee’s industry or geographic area, factors related to the investee’s ability to remain in business, such as the investee’s liquidity, debt ratios, and cash burn rate and other company-specific information.

 

Investments in equity securities without readily determinable fair values are measured at cost minus impairment adjusted by observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These investments are measured at fair value on a nonrecurring basis when there are events or changes in circumstances that may have a significant adverse effect. An impairment loss is recognized in the unaudited condensed consolidated statements of operations and comprehensive loss equal to the amount by which the carrying value exceeds the fair value of the investment. No impairment on its long-term investments was recognized for the six months ended June 30, 2022 and 2023.
Business combinations

(h) Business combinations

The cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of the cost of the acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the identifiable net assets of the acquiree, the difference is recognized directly in earnings.

The determination and allocation of fair values to the identifiable net assets acquired, liabilities assumed and noncontrolling interest is based on various assumptions and valuation methodologies requiring considerable judgment. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Group determines discount rates to be used based on the risk inherent in the acquiree’s current business model and industry comparisons. Although the Group believes that the assumptions applied in the determination are reasonable based on information available at the date of acquisition, actual results may differ from forecasted amounts and the differences could be material.
Asset Acquisition

(i) Asset Acquisition

We evaluate acquisitions pursuant to ASC 805, “Business Combinations,” to determine whether the acquisition should be classified as either an asset acquisition or a business combination. Acquisitions for which substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or a group of similar identifiable assets are accounted for as an asset acquisition.

For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition. Common stock issued as consideration in an asset acquisition is generally measured based on the acquisition date fair value of the equity interests issued. Direct transaction costs are recognized as part of the cost of an asset acquisition. The cost of an asset acquisition, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. However, as of the date of acquisition, if certain assets are carried at fair value under other applicable GAAP, the consideration is first allocated to those assets with the remainder allocated to the non-monetary identifiable assets based on relative fair value basis.
Goodwill

(j) Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the identifiable assets acquired less liabilities assumed of an acquired business. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually, or more frequently if certain circumstances indicate a possible impairment may exist.

In accordance with ASC 350-20, Intangibles-Goodwill and Other, Goodwill, (“ASC 350-20”) the Group has assigned and assessed goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or one level below the operating segment. The Group has determined that it has one reporting unit for the six months ended June 30, 2023. The Group has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step test in accordance with ASC 350-20. If the Group believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the two-step quantitative impairment test described below is required. Otherwise, no further testing is required. In the qualitative assessment, the Group considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. In performing the two-step quantitative impairment test, the first step compares the carrying amount of the reporting unit to the fair value of the reporting unit based on either quoted market prices of the ordinary shares or estimated fair value using a combination of the income approach and the market approach. If the fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired, and the Group is not required to perform further testing. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, then the Group must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit’s goodwill. The fair value of the reporting unit is allocated to its assets and liabilities in a manner similar to a purchase price allocation in order to determine the implied fair value of the reporting unit goodwill. If the carrying amount of the goodwill is greater than its implied fair value, the excess is recognized as an impairment loss.

 

For the six months ended June 30, 2022 and 2023, the Group performed a qualitative assessment for the reporting unit. Based on the requirements of ASC 350-20, the Group evaluated all relevant qualitative and quantitative factors, weighed all factors in their entirety and concluded that it was not more-likely-than-not that the fair value of the reporting unit was less than its carrying amount. Therefore, no goodwill impairment was recognized for the six months ended June 30, 2022 and 2023.
Discontinued operations

(k) Discontinued operations

A component of a reporting entity or a group of components of a reporting entity that are disposed or meet the criteria to be classified as held for sale, such as the management, having the authority to approve the action, commits to a plan to sell the disposal group, should be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Discontinued operations are reported when a component of an entity comprising operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity is classified as held for disposal or has been disposed of, if the component either (1) represents a strategic shift or (2) have a major impact on an entity’s financial results and operations. Included in the unaudited condensed consolidated statements of income and comprehensive income, result from discontinued operations is reported separately from the income and expenses from continuing operations and prior periods are presented on a comparative basis. In order to present the financial effects of the continuing operations and discontinued operations, revenues and expenses arising from intra-group transactions are eliminated except for those revenues and expenses that are considered to continue after the disposal of the discontinued operations.
Fair value of financial instruments

(l) Fair value of financial instruments

The Group applies ASC 820, Fair Value Measurements and Disclosures, (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

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—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.

The Group’s financial instruments include cash and cash equivalents, accounts receivables, accounts payable, other receivables, other payables and short-term debt. The carrying values of these financial instruments approximate their fair values due to their short-term maturities.

The Group elected the fair value option to account for its convertible loans. The Group engaged an independent valuation firm to perform the valuation. The fair value of the convertible loans as of December 31, 2022 and June 30, 2023 was RMB15 and RMB16 (US$2) calculated using the binomial tree model. The convertible loans are classified as level 3 instruments as the valuation was determined based on unobservable inputs which are supported by little or no market activity and reflect the Group’s own assumptions in measuring fair value. Significant estimates used in developing the fair value of the convertible loans include time to maturity, risk-free interest rate, straight debt discount rate, probability to convert and expected timing of conversion. Refer to Note 11 for additional information.

As the inputs used in developing the fair value for level 3 instruments are unobservable, and require significant management estimate, a change in these inputs could result in a significant change in the fair value measurement.

 

The following is a reconciliation of the beginning and ending balances for convertible loans measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2022 and June 30, 2023:

   December 31   June 30   June 30 
   2022   2023   2023 
   RMB   RMB   US$ 
Opening balance   27,859    15    2 
Conversion of convertible loans   (27,739)   
—
    
—
 
Loss (gain) on change in fair value of convertible loan   (144)   
—
    
—
 
Other comprehensive income -foreign exchange translations   39    1    
—
 
Total   15    16    2 
Property and equipment

(m) Property and equipment

Property and equipment are stated at cost less accumulated depreciation and any recorded impairment. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, as follows:

Category  Estimated useful life
Furniture, fixtures and equipment  3-5 years
Motor vehicles  5 years
Intangible assets

(n) Intangible assets

The Company’s intangible assets mainly include acquired software from business acquisition and asset acquisition. In business combinations, identifiable intangible assets acquired are measured separately at their fair value as of the acquisition date. For asset acquisitions, the cost of the asset acquisition is allocated to identifiable assets acquired based on a relative fair value basis. Intangible assets with finite lives are carried at cost less accumulated amortization. All intangible assets with finite lives are amortized using the straight-line method over the estimated useful lives.

Intangible assets have estimated useful lives from the date of purchase as follows:

Category  Estimated useful life
Software  5-10 years
Impairment of Long-Lived Assets

(o) Impairment of Long-Lived Assets

The Company evaluates the recoverability of its long-lived assets, including property and equipment and the intangible assets and for impairment whenever events or changes in circumstances indicate that the carrying amount of its asset may not be fully recoverable. When these events occur, the Company measures impairment by comparing the carrying amount of the assets to the estimated undiscounted future cash flows expected to result from the use of the asset and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the asset, the Company recognizes an impairment loss based on the excess of the carrying amount of the asset over their fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the asset when the market prices are not readily available. The adjusted carrying amount of the asset is the new cost basis and is depreciated over the asset’s remaining useful life. Long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. No impairment of long-lived assets was recognized for the six months ended June 30, 2022 and 2023, respectively.
Treasury shares

(p) Treasury shares

The Company accounts for treasury share using the cost method. Under this method, the cost incurred to purchase the shares is recorded in the treasury shares account on the unaudited condensed consolidated balance sheets. At retirement of the treasury shares, the ordinary shares account is charged only for the aggregate par value of the shares. The excess of the acquisition cost of treasury shares over the aggregate par value is allocated between additional paid in capital (up to the amount credited to the additional paid in capital upon original issuance of the shares) and retained earnings.

 
Revenue recognition

(q) Revenue recognition

The Group applies the ASU 2014-09, Revenue from Contracts with Customers — Topic 606 for its revenue recognition for all periods presented. The majority of the Group’s revenue comes from product sales of Asia food and consumable through its software application (“APP”). Revenue is recognized when the Group satisfies the performance obligations in an amount of consideration to which the Group expects to be entitled to in exchange for those goods. The Group evaluates the presentation of revenue on a gross or net basis based on whether it controls the goods provided to customers and is the principal (i.e., “gross”), or the Group arranges for other parties to provide the goods to the customers and is an agent (i.e., “net”).

The Group sells food and consumable products through its own APP. The Group utilizes external delivery service providers to deliver goods to its customers. The customers pay for the goods in advance. The Group recognizes product sales made through APP on a gross basis because the Group is acting as a principal in these transactions as the Company (i) is responsible for fulfilling the promise to provide the specified goods, (ii) takes on inventory risk and (iii) has discretion in establishing price. Revenues are recognized when control is transferred, which typically happens upon delivery. The Group’s contracts with customer are primarily on a fixed-price basis. Discounts and allowances provided to customers are recognized as a reduction in net sales as control of the products is transferred to customers.

The Group generally provides a quality assurance warranty related to the sale of products. The Group considered the warranty as an assurance type warranty since the warranty provides the customer the assurance that the product complies with agreed-upon quality. Estimated future warranty obligations are accrued and included in cost of revenues. The Group also estimates returns of the products and estimated returns are deducted from sales in the period in which the related revenue is recognized. The determination of the Group’s warranty and product return accrual is based on actual historical experience with the product and estimates of replacement costs. The Group estimates and adjusts these accruals at each balance sheet date in accordance with changes in these factors.

Contract balances

Contract assets relate to the Group’s conditional right to consideration for completed performance obligations under the contract. Accounts receivable are recorded when the right to consideration becomes unconditional. The Group does not have contract assets for the periods presented. In instances where the timing of revenue recognition differs from the timing of invoicing, the Group has determined that its contracts generally do not include a significant financing component.

Contract liabilities represent considerations received from customers in advance of satisfying the Group’s performance obligations under the contract, which are presented in “advance from customers” in the unaudited condensed consolidated balance sheets. The Group classifies contract liabilities as current based on the timing of when we expect to recognize revenue, which typically occurs within one year. Revenue recognized that was included in contract liabilities at the beginning of the period was nil for the six months ended June 30, 2022 and 2023, respectively. As of December 31, 2022 and June 30, 2023, contract liabilities amounted to nil and RMB479 (US$66), respectively.

Practical expedients

The Group has applied the following practical expedients:

(i) The transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied has not been disclosed, as substantially all of the Group’s contracts have a duration of one year or less.
(ii) The Group recognizes incremental costs to obtain a contract as expenses when incurred because the amortization period would be one year or less. These costs are recorded within sales and marketing expenses.
Research and development expenses

(r) Research and development expenses

Research and development expenses primarily are comprised of costs incurred in performing research and development activities, including related personnel and consultant’s compensation, benefits, share-based compensation and related materials and supplies costs. The Group expenses research and development expenses as they are incurred.

 
Leases

(s) Leases

The Group adopted ASU No. 2016-02—Leases (Topic 842) as of January 1, 2022, using a modified retrospective transition method permitted under ASU No. 2018-11. This transition approach provides a method for recording existing leases only at the date of adoption and does not require previously reported balances to be adjusted. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us to carry forward the historical lease classification. Adoption of the new standard resulted in the recording of additional lease assets and lease liabilities on the consolidated balance sheets. The standard did not materially impact our unaudited condensed consolidated net earnings and cash flows.

Right-of-use (“ROU”) assets represent the Group’s rights to use underlying assets for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term, reduced by lease incentives received, plus any initial direct costs, using the discount rate for the lease at the commencement date. As the implicit rate in lease is not readily determinable for the Group’s operating leases, the Group generally use the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The Group’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Group accounts for lease and non-lease components separately. the Group has no finance leases for any of the periods presented.

Prior to the adoption of ASU No. 2016-02, leases were classified at the inception date as either a capital lease or an operating lease. The Group assesses a lease to be a capital lease if any of the following conditions exist: (a) ownership is transferred to the lessee by the end of the lease term, (b) there is a bargain purchase option, (c) the lease term is at least 75% of the property’s estimated remaining economic life, or (d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an occurrence of an obligation at the inception of the lease. The Group has no capital leases for the six months ended June 30, 2022 and 2023.
Warrants

(t) Warrants

The Group accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480 “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Group’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Group’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent annual period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. All warrants outstanding as of June 30, 2023 and December 31, 2022 do not meet the definition of a liability pursuant to ASC 480 and meet all of the requirements for equity classification under ASC 815 and therefore, classified as equity.
Share-based compensation

(u) Share-based compensation

The Group accounts for share-based compensation in accordance with ASC 718, Compensation – Stock Compensation (“ASC 718”). In accordance with ASC 718, the Group determines whether an award should be classified and accounted for as a liability award or an equity award. All the Group’s share-based awards were classified as equity awards and are recognized in the unaudited condensed consolidated financial statements based on their grant date fair values.

The Group has elected to recognize share-based compensation using the straight-line method for all share-based awards granted with graded vesting based on service conditions. The Group accounts for forfeitures as they occur in accordance with ASU No. 2016-09, Compensation — Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting. The Black-Scholes Model were applied in determining the estimated fair value of the options granted to employees and non-employees.
Income taxes

(v) Income taxes

The Group follows the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Group records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax rate.

 

The Group accounted for uncertainties in income taxes in accordance with ASC 740. Interest and penalties related to unrecognized tax benefit recognized in accordance with ASC 740 are classified in the unaudited condensed consolidated statements of operations and comprehensive loss as income tax expenses.

For the six months ended June 30, 2022 and 2023, the Group did not have any significant unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefits. The Group does not believe that its uncertain tax benefits position will materially change over the next twelve months.
Comprehensive loss

(w) Comprehensive loss

Comprehensive loss is defined as the changes in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220, Comprehensive Income, requires that all items that are required to be recognized under current accounting standards as components of comprehensive loss be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the periods presented, the Group’s comprehensive loss includes net loss and foreign currency translation differences, and is presented in the unaudited condensed consolidated statements of operations and comprehensive loss.
Segment reporting

(x) Segment reporting

After the Group discontinued CDA business, the Group operates and manages its business as a single segment and the Group’s primary revenue are generated in the U.S. The Group has only one reportable segment for the six months ended June 30, 2023, in accordance with ASC 280, Segment Reporting. The Group’s Chief Executive Officer is the chief operating decision-maker that review the unaudited condensed consolidated financial results when making decisions about allocating resources and assessing the performance of the Group as a whole.
Loss per share

(y) Loss per share

Loss per share is calculated in accordance with ASC 260, Earnings per Share. Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

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 ordinary shares issuable upon the conversion of the share options, using the treasury share method. Ordinary share equivalents are excluded from the computation of diluted loss per share if their effects would be anti-dilutive. Basic and diluted loss per ordinary share is presented in the Group’s unaudited condensed consolidated statements of operations and comprehensive loss.

The rights, including the liquidation and dividend rights, of the holders of our Class A and Class B ordinary shares are identical, except with respect to voting. Each Class A ordinary share is entitled to one vote; and each Class B ordinary share is entitled to ten votes and is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. For the six months ended June 30, 2022 and 2023, the net loss per share amounts are the same for Class A and Class B common ordinary shares because the holders of each class are entitled to equal per share dividends or distributions in liquidation.

The Group did not include share options, convertible debt and warrants in the computation of diluted earnings per share for the six months ended June 30, 2022 and 2023, because those were anti-dilutive for loss per share.
Risks, Uncertainties and Concentrations

(z) Risks, Uncertainties and Concentrations

Concentration of credit risk

Financial instruments that potentially subject the Group to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivables. As of December 31, 2022 and June 30, 2023, the aggregate amounts of cash and cash equivalents of RMB14 and RMB62 (US$9), respectively, were held at major financial institutions located in the PRC and RMB1 and RMB268 (US$37), respectively, were deposited at banks located in U.S. and covered by the FDIC insurance program. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions. There is a RMB 500,000 deposit insurance limit for a legal entity’s aggregated balance at each PRC bank.

 

As of December 31, 2022, no customer accounted for more than 10% of total accounts receivables. As of June 30, 2023, four customers accounted for 37%, 20%, 19% and 16% of total accounts receivables. The risk is mitigated by credit evaluations the Group performs on its customers.

Business, customer, supplier, political and economic risks

The Group’s e-commerce food-related business has a limited operating history. The recently acquired operations are subject to all of the risks inherent in the initial expenses, challenges, complications, and delays frequently encountered in connection with the formation of any new business.

The Group participates in a dynamic 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 new entrants; advances and new trends in industry standards; changes in certain strategic relationships or customer relationships; regulatory considerations; intellectual property considerations; and risks associated with the Group’s ability to attract and retain employees necessary to support its growth.

For the six months ended June 30, 2022, no customer accounted for more than 10% of the total revenues, respectively. For the six months ended June 30, 2023, the Group had one customer that accounted for 16% of total revenues.

For the six months ended June 30, 2022, no supplier accounted for more than for 10% of total cost of revenues. For the six months ended June 30, 2023, two suppliers that accounted for 22% and 22% of total cost of revenues, respectively.

As of December 31, 2022, no supplier accounted for more than 10% of total accounts payables As of June 30, 2023, three suppliers accounted for 25%, 14%and 12% of total accounts payables, respectively.
Recent accounting pronouncements

(aa) 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.

In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective January 1, 2024, for the Group. Early adoption is permitted. Management is currently evaluating the effect of the adoption of ASU 2020-06 on the unaudited condensed consolidated financial statements.

In October 2021, the FASB issued ASU No. 2021-08, “‘Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for fiscal years beginning after December 15, 2023, and are applied prospectively to business combinations that occur after the effective date. The Group does not expect the adoption of ASU 2021-04 will have a material effect on the unaudited condensed consolidated financial statements.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Group adopts as of the specified effective date. Unless otherwise discussed, the Group does not believe that the impact of recently issued standards that are not yet effective will have a material impact on its financial position or results of operations upon adoption.
v3.23.3
Organization and Principal Activities (Tables)
 6 Months Ended
Jun. 30, 2023
Organization and Principal Activities [Abstract]  
Schedule of Group’s Principal Subsidiaries As of June 30, 2023, the details of the Group’s principal subsidiaries are as follows:
Major subsidiaries  Percentage of
Ownership		  

Date of
Incorporation/

Acquisition

  Place of
Incorporation		  Major Operation
Changhe Bio-Medical Technology (Yangzhou) Co., Ltd.    100%  March 2010  the PRC  Cancer screening and detection tests
AnPac Bio-Medical Technology (Lishui) Co., Ltd. (“AnPac Lishui”) *

   100%  October 2012  the PRC  Cancer screening detection tests and device manufacturing
AnPac Bio-Medical Technology (Shanghai) Co., Ltd.*   100%  April 2014  the PRC  Cancer screening and detection tests
AnPac Technology USA Co., Ltd. (“AnPac US”) *

   100%  September 2015  the U.S.  Clinical trials for research on cancer screening and detection tests
Lishui AnPac Medical Laboratory Co., Ltd.*   100%  July 2016  the PRC  Cancer screening and detection tests
Shiji (Hainan) Medical Technology Ltd.*   100%  March 2013  the PRC  Cancer screening and detection research
Shanghai Muqing AnPac Health Technology Co., Ltd. (“AnPac Muqing”) (i)*   51%  March 2019  the PRC  Cancer screening and detection tests
Anpai (Shanghai) Healthcare Management and Consulting Co., Ltd.*   60%  August 15, 2021  the PRC  Cancer screening and detection tests
Fresh 2 Group Inc   100%  December 27, 2022  the U.S.  B2B e-commerce
Fresh 2 Technology Inc (“Fresh2”)   100%  October 4, 2022  the U.S.  B2B e-commerce
Fresh 2 Logistics Inc.   100%  February 22, 2023  the U.S.  B2B e-commerce
Fresh 2 HF Inc   100%  February 21, 2023  the U.S.  B2B e-commerce
Foodbase Group Inc   100%  January 19, 2023  the U.S.  B2B e-commerce
Fresh 2 EZ Inc   100%  March 3, 2023  the U.S.  B2B e-commerce
Fresh 2 information Inc (ii)   100%  April 12, 2023  the U.S.  B2B e-commerce
Fresh 2 Ecommerce (“Fresh2 Ecommerce”)   100%  February 8, 2023  the U.S.  B2B e-commerce
GISN (HK) Limited (“GISN”)   100%  February 1, 2023  Hongkong, PRC,  B2B e-commerce
Hua You Sheng Future (Beijing) Technology Co., Ltd.   100%  February 1, 2023  PRC  B2B e-commerce
Guanshi Technology (Beijing) Co., Ltd.   100%  February 1, 2023  PRC  Software development
* Subsidiaries that were sold subsequent to June 30, 2023.
(i) AnPac Muqing closed business in March 2023
(ii) On April 12, 2023, the Company, through its subsidiary, Fresh 2 EZ Inc to acquire 100% of equity interest in Fresh 2 information Inc from Roxe Holding Inc, a company controlled by Mr. Haohan Xu, with a nominal price. Fresh 2 information Inc has not begun operation yet.
v3.23.3
Summary of Principal Accounting Policies (Tables)
 6 Months Ended
Jun. 30, 2023
Summary of Principal Accounting Policies [Abstract]  
Schedule of Convertible Loans Measured at Fair Value on a Recurring Basis The following is a reconciliation of the beginning and ending balances for convertible loans measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2022 and June 30, 2023:
   December 31   June 30   June 30 
   2022   2023   2023 
   RMB   RMB   US$ 
Opening balance   27,859    15    2 
Conversion of convertible loans   (27,739)   
—
    
—
 
Loss (gain) on change in fair value of convertible loan   (144)   
—
    
—
 
Other comprehensive income -foreign exchange translations   39    1    
—
 
Total   15    16    2 
Schedule of Property and Equipment are Stated at Cost Less Accumulated Depreciation and Any Recorded Impairment Property and equipment are stated at cost less accumulated depreciation and any recorded impairment. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, as follows:
Category  Estimated useful life
Furniture, fixtures and equipment  3-5 years
Motor vehicles  5 years
Schedule of Intangible Assets Have Estimated Useful Lives Intangible assets have estimated useful lives from the date of purchase as follows:
Category  Estimated useful life
Software  5-10 years
v3.23.3
Acqusitions (Tables)
 6 Months Ended
Jun. 30, 2023
Acquisition [Abstract]  
Schedule of Summarizes the Fair Value of the Identifiable Assets Acquired and Liabilities The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed for the combined entities at the acquisition date, which represents the net purchase price allocation at the date of the acquisition based on a valuation performed by an independent valuation firm engaged by the Group:
   Amount 
   RMB 
     
Total consideration   25,938 
      
Assets acquired and liabilities assumed:     
Cash acquired   1,028 
Accounts receivable   100 
Accounts receivable-related parties   12,073 
Other current assets   123 
Property and equipment   1,573 
Intangible assets   11,233 
Advance from customer   (1,013)
Accrued expenses and other current liabilities   (13,705)
Lease liabilities   (239)
Deferred tax liability   (2,808)
Total net assets acquired   8,365 
Goodwill   17,573 
The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed for the combined entities at the acquisition date, which represents the net purchase price allocation at the date of the acquisition based on a valuation performed by an independent valuation firm engaged by the Group:
   Amount 
   RMB 
     
Total consideration   17,304 
      
Assets acquired and liabilities assumed:     
Cash acquired   71 
Other current assets   938 
Accounts payables   (950)
Accrued expenses and other current liabilities   (72)
Total net assets acquired   (13)
Goodwill   17,317 
Schedule of Pro Forma of Group Business Combination The following unaudited pro forma summary presents consolidated information of the Group as of the business combination had occurred on January 1, 2022.
   Unaudited Pro Forma 
   For the six months
ended June 30,		 
   2022   2023 
   RMB   RMB 
Revenue   10,149    4,936 
           
Net losses   51,322    (71,405)

 
Schedule of Fair Value of Identifiable Assets The following table summarizes the fair value of the identifiable assets:
   Amount 
   RMB 
Property and equipment- furniture, fixtures and equipment   160 
Property and equipment- motor vehicles   434 
Intangible assets- software*   30,139 
Total consideration   30,733 
*Intangible assets refer to intellectual property relating to ez100, 2Supply and 100WAY systems.
v3.23.3
Discontinued Operations (Tables)
 6 Months Ended
Jun. 30, 2023
Discontinued Operations [Abstract]  
Schedule of Results of Discontinued Operations The results of discontinued operations for the six months ended June 30, 2022 and 2023 were as follows:
   Six Months Ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Revenues:            
Revenues-third parties   3,972    2,818    389 
Revenues-related parties   1,241    210    29 
Total revenues   5,213    3,028    418 
Cost of revenues   (1,832)   (1,292)   (178)
Gross Profit   3,381    1,736    240 
Operating expenses:               
Selling and marketing expenses   (4,894)   (3,872)   (534)
General and administrative expenses   (15,629)   (8,593)   (1,185)
Research and development expenses   (4,330)   (3,438)   (474)
Impairment of intangible assets   (7,911)   
—
    
—
 
Impairment of goodwill   (12,758)   
—
    
—
 
Loss from operations   (42,141)   (14,167)   (1,953)
Non-operating income and expenses:               
Interest expense, net   (161)   (81)   (11)
Foreign exchange gain, net   7    9    1 
Share of net loss in equity method investments   (87)   (88)   (12)
Other income, net   472    3,106    428 
Loss from operations for discontinued operations   (41,910)   (11,221)   (1,547)
Loss from disposal of a subsidiary   
—
    (16,724)   (2,307)
Loss from discontinued operations before income taxes   (41,910)   (27,945)   (3,854)
Income tax benefit   2,130    
—
    
—
 
Net Loss from discontinued operations   (39,780)   (27,945)   (3,854)

 
Schedule of Assets and Liabilities of the Discontinued Operations Assets and liabilities of the discontinued operations:
   December 31   June 30   June 30 
   2022   2023   2023 
   RMB   RMB   US$ 
ASSETS            
Current assets:            
Cash and cash equivalents   1,854    319    44 
Prepayment   2,692    1,334    184 
Accounts receivable, net   2,235    3,318    458 
Amounts due from related parties, net   2,194    684    94 
Inventories, net   210    178    25 
Other current assets, net   3,448    3,944    543 
Total current assets held for sale   12,633    9,777    1,348 
                
Property and equipment, net   17,182    15,746    2,171 
Land use rights, net   1,111    1,097    151 
Intangible assets, net   185    271    37 
Goodwill               
Right of use assets   7,213    2,088    288 
Long-term investments, net   1,079    991    138 
Total noncurrent assets held for sale   26,770    20,193    2,785 
TOTAL ASSETS HELD FOR SALE   39,403    29,970    4,133 
                
LIABILITIES               
Current liabilities:               
Short-term debts   5,000    5,000    690 
Accounts payable   2,108    2,012    277 
Advance from customers   4,956    7,800    1,076 
Amounts due to related parties   2,280    1,079    149 
Lease liability-current   784    1,042    144 
Accrued expenses and other current liabilities   18,386    16,488    2,273 
Total current liabilities held for sale   33,514    33,421    4,609 
Deferred tax liabilities               
Lease liability-non-current   6,515    1,368    189 
Other long-term liabilities   1,080    1,066    147 
Total noncurrent liabilities held for sale   7,595    2,434    336 
TOTAL LIABILITIES HELD FOR SALE   41,109    35,855    4,945 
v3.23.3
Accounts Receivable, Net (Tables)
 6 Months Ended
Jun. 30, 2023
Accounts Receivable, Net [Abstract]  
Schedule of Accounts Receivable Accounts receivable as of December 31, 2022 and June 30, 2023 were as follows:
   December 31     
   2022   June 30 2023 
   RMB   RMB   US$ 
             
Accounts receivable   
—
    270    37 
Allowance for credit losses   
—
    
—
    
—
 
Balance at end of year   
—
    270    37 
v3.23.3
Other Current Assets, Net (Tables)
 6 Months Ended
Jun. 30, 2023
Other Current Assets, Net [Abstract]  
Schedule of Other Current Assets Other current assets consist of the following:
   December 31,     
   2022   June 30, 2023 
   RMB   RMB   US$ 
Deposits   
—
    154    21 
Receivable from private placement investors   
—
    260    36 
Loan to third-parties   422    444    61 
Total   422    858    118 
Allowance for credit losses   (422)   (444)   (61)
Other current assets, net   
—
    414    57 
v3.23.3
Property and Equipment, Net (Tables)
 6 Months Ended
Jun. 30, 2023
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment, Net Consists Property and equipment, net consists of the following:
   December 31,     
   2022   June 30 2023 
   RMB   RMB   US$ 
Furniture, fixtures and equipment   
—
    3,255    448 
Motor vehicles   
—
    2,007    277 
Total   
—
    5,262    725 
Less: accumulated depreciation   
—
    (953)   (131)
Property and equipment, net   
—
    4,309    594 
v3.23.3
Intangible Assets, Net (Tables)
 6 Months Ended
Jun. 30, 2023
Intangible Assets, Net [Abstract]  
Schedule of Intangible Assets Net Intangible assets, net consist of the following:
   December 31,     
   2022   June 30 2023 
   RMB   RMB   US$ 
Software   
—
    47,798    6,592 
Total   
—
    47,798    6,592 
Less: accumulated amortization   
—
    (2,629)   (363)
Intangible assets, net   
—
    45,169    6,229 

 
Schedule of Estimated Aggregate Amortization Expense Amortization expense for six months ended June 30, 2022 and 2023 amounted to nil and RMB2,511 (US$346), respectively. The estimated aggregate amortization expense for each of the five succeeding years is as follows:
Twelve months ending June 30,  RMB 
2024   8,351 
2025   8,351 
2026   8,351 
2027   8,351 
2028   6,226 
Thereafter   5,539 
Total   45,169 
v3.23.3
Long-Term Investments, Net (Tables)
 6 Months Ended
Jun. 30, 2023
Long-Term Investments, Net [Abstract]  
Schedule of Long-Term Investments Long-term investments, net consisted of the following:
   December 31,     
   2022   June 30, 2023 
   RMB   RMB   US$ 
Equity method investments               
Advanced Life Therapeutics Co., Ltd. (“Advanced Life”)   
—
    
—
    
—
 
Nassau Enterprises LLC (“Nassau”).   
—
    39,783    5,486 
Total   
—
    39,783    5,486 
Less: Impairment   
—
    
—
    
—
 
Long-term investments, net   
—
    39,783    5,486 
v3.23.3
Short-Term Debts (Tables)
 6 Months Ended
Jun. 30, 2023
Short-Term Debts [Abstract]  
Schedule of Short-Term Debts
   December 31,     
   2022   June 30, 2023 
   RMB   RMB   US$ 
Convertible loan (“CL”) (i)   15    16    2 
Total   15    16    2 
(i)On July 22, 2021, the Company issued convertible debentures (the “Convertible Debentures”) to certain investors in a registered direct offering in an aggregate principal amount of US$3,014 (RMB20,788) for the discounted price of US$2,740 (RMB18,898). The Convertible Debentures were originally due in one year and bear interest of 0% per annum if the conversion feature is not triggered. Pursuant to the agreement, the conversion price is lower of (i) US$15 or (ii) the lower of 82% of the closing bid price or 80% of VWAP of the Company’s ADSs during the ten consecutive trading days immediately preceding conversion, but not lower than a Floor Price of US$1 (the “floor price”). Due to significant drop of the ADS market price in 2022, the debenture holders and the Company renegotiated the Floor Price. On February 5, 2022, the Company entered into an amendment agreement, pursuant to which the Floor Price was reduced to US$0.10 per Class A Ordinary Share. The Company has elected to recognize the Convertible Debentures at fair value and therefore there was no further evaluation of embedded features for bifurcation. The Convertible Debentures were partially converted into 114,234 shares on December 10, 2021. The fair value of the Convertible Debentures loan immediately prior to conversion was assessed at RMB1,321. Substantially all of the remaining outstanding Convertible Debentures were converted into 4,842,197 Class A ordinary shares (refer to Note 14) on March 16, 2022. The fair value of the Convertible Debentures on March 16, 2022 immediately prior to conversion was assessed at RMB22,237. As of June 30, 2023, the fair value of the outstanding balance of the Convertible Debentures was RMB16 (US$2).
v3.23.3
Leases (Tables)
 6 Months Ended
Jun. 30, 2023
Lease [Abstract]  
Schedule of Operating Leases Supplemental balance sheet information related to operating leases was as follows:
   December 31,     
   2022   June 30, 2023 
   RMB   RMB   US$ 
             
Right-of-use assets, net   
—
    223    31 
                
Operating lease liabilities - current   
—
    148    20 
Operating lease liabilities - non-current   
—
    37    5 
Total operating lease liabilities   
—
    185    25 

 
Schedule of Weighted Average Remaining Lease Terms and Discount Rates The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of June 30, 2023:
Weighted average remaining lease term (years)   1.51 
Weighted average discount rate   4.75%
Schedule of Maturities of Lease Liabilities The following is a schedule of maturities of lease liabilities are as follows:
Twelve months ending June 30,  RMB 
2024   150 
2025   37 
Total future minimum lease payments   187 
Less: imputed interest   (2)
Total   185 
v3.23.3
Accrued Expenses and Other Current Liabilities (Tables)
 6 Months Ended
Jun. 30, 2023
Accrued Expenses and Other Current Liabilities [Abstract]  
Schedule of Accrued Expenses and Other Current Liabilities
   December 31     
   2022   June 30, 2023 
   RMB   RMB   US$ 
Salary and welfare payable   1,740    9,312    1,283 
Accrued expenses (1)   5,762    9,057    1,249 
Payable for property and equipment   
—
    2,301    318 
Other payables   33    4,089    564 
Total   7,535    24,759    3,414 
(1):the accrued expenses mainly consist of accrued professional fees.
v3.23.3
Shareholders' Equity (Tables)
 6 Months Ended
Jun. 30, 2023
Shareholders' Equity [Abstract]  
Sechedule of Warrants Activity As of June 30, 2023, there were 103,702,658 warrants outstanding. A summary of warrants activity for the six months ended June 30 2023 was as follows:
       Weighted
average
exercise
price per
share		   Weighted    
  

Number of

warrants

   US$ per
share		   average life
Years		 

Expiration

dates 

Balance of warrants outstanding and exercisable as of December 31, 2022   9,266,135    0.24   1.85 to unlimited  August 31, 2024 to unlimited
—warrants issued in connection with the March 2023 private placement   61,771,423    0.21   1.58 to 1.96  February 3, 2025 to June 16, 2025
—warrants issued in connection with the April 2023 private placement   18,250,000    0.00001-0.24   1.75 to Unlimited  March 31, 2025 to unlimited
—warrants issued in connection with the June 2023 private placement   22,000,000    0.21   1.95  June 9, 2025
Exercised   (7,584,900)   0.00001-0.2       
Balance of warrants outstanding and exercisable as of June 30, 2023   103,702,658    0.21   1.96 to unlimited  August 31, 2024 to unlimited
v3.23.3
Share Based Compensation (Tables)
 6 Months Ended
Jun. 30, 2023
Share Based Compensation (Tables) [Line Items]  
Schedule of Black-Scholes Simplified Method for the Valuation of New Options Issued The Group used Black-Scholes simplified method for the valuation of new options issued during the six months ended June 30, 2022 and 2023. The assumptions used to value the share options granted to employees and nonemployee were as follows:
   For the six months ended
June 30,		 
   2022   2023 
Risk-free interest rate   0.34%   
—
%
Expected volatility range   100.2%   
—
%
Fair market value per ordinary share as at grant dates   US$0.29    
—
 
Schedule of Table Sets Forth the Amount of Share-Based Compensation Expense The following table sets forth the amount of share-based compensation expense included in each of the relevant financial statement line items:
   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Selling and marketing expenses   705    1,712    236 
Research and development expenses   1,263    818    113 
General and administrative expenses   2,560    1,236    170 
Total share-based compensation expenses   4,528    3,766    519 
Share-Based Payment Arrangement, Employee [Member]  
Share Based Compensation (Tables) [Line Items]  
Schedule of Options Granted to Nonemployees are Measured Based on the Grant Date Fair Value of the Equity Instrument The options granted to employees are measured based on the grant date fair value of the equity instrument. They are accounted for as equity awards and contain only service vesting conditions. The following table summarized the Group’s employee share option activities:
               Weighted     
       Weighted   Weighted   Average     
       Average   Average   Remaining   Aggregate 
   Number of   Exercise   Grant date   Contractual   Intrinsic 
   Options   Price   Fair Value   Term   Value 
       US$ per   US$ per         
       option   option   Years   US$ 
Share options outstanding at December 31, 2022   2,334,906    1.69    5.08    8.05    452 
Granted   
—
    
—
    
—
    
—
    
—
 
Exercised   (13,900)   0.05    0.05    0.22    
—
 
Share options outstanding at June 30, 2023   2,321,006    1.70    2.32    7.54    306 
Vested and exercisable at June 30, 2023   2,199,006    1.41    2.08    7.54    306 
Share-Based Payment Arrangement, Nonemployee [Member]  
Share Based Compensation (Tables) [Line Items]  
Schedule of Options Granted to Nonemployees are Measured Based on the Grant Date Fair Value of the Equity Instrument The options granted to nonemployees are measured based on the grant date fair value of the equity instrument. They are accounted for as equity awards with service and/or performance vesting conditions. The following table summarized the Group’s nonemployee share option activity:
               Weighted     
       Weighted   Weighted   Average     
       Average   Average   Remaining   Aggregate 
   Number of   Exercise   Grant date   Contractual   Intrinsic 
   Options   Price   Fair Value   Term   Value 
       US$ per   US$ per         
       option   option   Years   US$ 
Share options outstanding at December 31, 2022   2,651,700    0.86    0.85    9.27    532 
Granted   
—
    
—
    
—
    
—
    
—
 
Exercised   (650,000)   0.05    0.05    0.22    
—
 
Forfeited   (20,000)   
—
    
—
    
—
    
—
 
Share options outstanding at June 30, 2023   1,981,700    1.13    1.04    8.74    315 
Vested and exercisable at June 30, 2023   1,981,700    1.13    1.00    8.74    315 
v3.23.3
Income Taxes (Tables)
 6 Months Ended
Jun. 30, 2023
Income Tax Disclosure [Abstract]  
Schedule of Loss Before Income Taxes The Group’s loss before income taxes consisted of:
   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Non-US   (9,035)   (23,507)   (3,241)
US   
—
    (20,032)   (2,763)
Total   (9,035)   (43,539)   (6,004)

 
Schedule of Current and Deferred Components of Income Tax Benefit The current and deferred components of income tax benefit appearing in the unaudited condensed consolidated statements of comprehensive income are as follows:
   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Current tax expense   
—
    
—
    
—
 
Deferred tax benefit   
—
    79    11 
Total   
—
    79    11 
Schedule of Reconciliation of Tax Computed by Applying the Statutory Income Tax Rate The reconciliation of tax computed by applying the federal statutory income tax rate of 21% for the six months ended June 30, 2022 and 2023 applicable to the U.S. operations to income tax benefit were as follows:
   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Loss before income taxes   (9,035)   (43,539)   (6,004)
Income tax benefit computed at the statutory income tax rate at 21%   (1,897)   9,142    1,261 
International rate differences   1,897    (4,726)   (652)
Change in valuation allowance   —    (4,337)   (598)
Income tax benefit   —    79    11 
Schedule of Significant Components of Deferred Taxes The significant components of deferred taxes were as follows:
   As of December 31, 
   December 31,   June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Deferred tax assets:            
Net loss carryforward   1,900    9,608    1,325 
Valuation allowance   (1,900)   (9,608)   (1,325)
Total deferred tax assets.   
—
    
—
    
—
 
                
Deferred tax liabilities:               
Long-lived assets arising from acquisitions   
—
    2,938    405 
Total deferred tax liabilities.   
—
    2,938    405 
v3.23.3
Related Party Transactions and Balances (Tables)
 6 Months Ended
Jun. 30, 2023
Related Party Transactions and Balances [Abstract]  
Schedule of Related Parties Financial and Operational The related parties that had transactions in the six months ended June 30, 2022 and 2023 or balances with the Group as of December 30, 2022 and June 30, 2023 consisted of:
Related Party   Nature of the party   Relationship with the Group
Haohan Xu   Individual   Chief Executive Officer
Apifiny Inc.   Investment management   Controlled by Haohan Xu
Roxe Holding Inc.   Investment management   Controlled by Haohan Xu
Dr. Chris Chang Yu*   Individual   Co-Founder and shareholder
CRS Holdings Inc.   Investor   Controlled by Dr. Chris Chang Yu
Jiaxing Zhijun Sihang Investment Partnership Enterprises (limited partnership) (“Jiaxing Zhijun”)   Private equity investment   Shareholder, due to diluted equity interest, no longer a related party for the six months ended June 30 2023
*Dr. Yu resigned from his position as the Chief Executive Officer (“CEO”) of the Company and Chairman of the Board on April 6, 2022 and was appointed as Co-Chairman and Co-CEO in May 2022. On May 17, 2023, Dr. Yu resigned as the Co-Chief Executive Officer of the Company.
Schedule of Related Party Transactions Related party balances
   As of
December 31,		   As of June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Due from related parties:            
Apifiny Inc.   
—
    211    29 
Roxe Holding Inc.   
—
    363    50 
Dr. Chris Chang Yu   
—
    290    40 
Due from related parties, net   
—
    864    119 
   As of
December 31,		  

As of June 30,

 
   2022   2023   2023 
   RMB   RMB   US$ 
Due to related parties:            
CRS Holdings Inc.   287    592    82 
Jiaxing Zhijun   927    
—
    
—
 
Due to related parties   1,214    592    82 

 
Schedule of Accounts Receivables
   As of
December 31,		  

As of June 30,

 
   2022   2023   2023 
   RMB   RMB   US$ 
Accounts receivables-related parties:            
Apifiny Inc.   
—
    3,525    486 
Roxe Holding Inc.   
—
    7,925    1,093 
Accounts Receivables-related parties, net   
—
    11,450    1,579 
Schedule of Related Party Transactions For the six months ended June 30, 2022 and 2023, related party transactions consisted of the following:
   For the six months ended June 30, 
   2022   2023   2023 
   RMB   RMB   US$ 
Fixed assets purchased from Apifiny Inc.   
—
    970    134 
Consulting service received from Roxe Holding Inc.   
—
    464    64 
Rent expense incurred with Apifiny Inc.   32    624    86 
v3.23.3
Organization and Principal Activities (Details)
Jul. 17, 2023
Apr. 12, 2023
Jun. 30, 2023
Organization and Principal Activities (Details) [Line Items]      
Percentage of share purchase agreement 51.00%    
Purchase percentage 51.00%    
Purchase agreement rate 38.61%   100.00%
Percentage of equity interest   100.00%  
Fresh2 Group Limited [Member]      
Organization and Principal Activities (Details) [Line Items]      
Purchase percentage 100.00%    
v3.23.3
Organization and Principal Activities (Details) - Schedule of Group’s Principal Subsidiaries
 6 Months Ended
Jun. 30, 2023
Changwei System Technology (Shanghai) Co., Ltd. [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00% [1]
Date of Incorporation/ Acquisition March 2010 [1]
Place of Incorporation the PRC [1]
Major Operation Cancer screening and detection tests [1]
AnPac Bio-Medical Technology (Lishui) Co., Ltd. (“AnPac Lishui”) [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00% [2]
Date of Incorporation/ Acquisition October 2012 [2]
Place of Incorporation the PRC [2]
Major Operation Cancer screening detection tests and device manufacturing [2]
AnPac Bio-Medical Technology (Shanghai) Co., Ltd. [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00% [2]
Date of Incorporation/ Acquisition April 2014 [2]
Place of Incorporation the PRC [2]
Major Operation Cancer screening and detection tests [2]
AnPac Technology USA Co., Ltd. (“AnPac US”) [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00% [2]
Date of Incorporation/ Acquisition September 2015 [2]
Place of Incorporation the U.S. [2]
Major Operation Clinical trials for research on cancer screening and detection tests [2]
Lishui AnPac Medical Laboratory Co., Ltd. [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00% [2]
Date of Incorporation/ Acquisition July 2016 [2]
Place of Incorporation the PRC [2]
Major Operation Cancer screening and detection tests [2]
Shiji (Hainan) Medical Technology Ltd. [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00% [2]
Date of Incorporation/ Acquisition March 2013 [2]
Place of Incorporation the PRC [2]
Major Operation Cancer screening and detection research [2]
Shanghai Muqing AnPac Health Technology Co., Ltd. (“AnPac Muqing”) [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 51.00% [2],[3]
Date of Incorporation/ Acquisition March 2019 [2],[3]
Place of Incorporation the PRC [2],[3]
Major Operation Cancer screening and detection tests [2],[3]
Anpai (Shanghai) Healthcare Management and Consulting Co., Ltd. [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 60.00% [2]
Date of Incorporation/ Acquisition August 15, 2021 [2]
Place of Incorporation the PRC [2]
Major Operation Cancer screening and detection tests [2]
Fresh 2 Group Inc [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00%
Date of Incorporation/ Acquisition December 27, 2022
Place of Incorporation the U.S.
Major Operation B2B e-commerce
Fresh 2 Technology Inc. (“Fresh2”) [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00%
Date of Incorporation/ Acquisition October 4, 2022
Place of Incorporation the U.S.
Major Operation B2B e-commerce
Fresh 2 Logistics Inc [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00%
Date of Incorporation/ Acquisition February 22, 2023
Place of Incorporation the U.S.
Major Operation B2B e-commerce
Fresh 2 HF Inc [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00%
Date of Incorporation/ Acquisition February 21, 2023
Place of Incorporation the U.S.
Major Operation B2B e-commerce
Foodbase Group Inc [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00%
Date of Incorporation/ Acquisition January 19, 2023
Place of Incorporation the U.S.
Major Operation B2B e-commerce
Fresh 2 EZ Inc [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00%
Date of Incorporation/ Acquisition March 3, 2023
Place of Incorporation the U.S.
Major Operation B2B e-commerce
Fresh 2 information Inc [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00% [4]
Date of Incorporation/ Acquisition April 12, 2023 [4]
Place of Incorporation the U.S. [4]
Major Operation B2B e-commerce [4]
Fresh 2 Ecommerce (“Fresh2 Ecommerce”) [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00%
Date of Incorporation/ Acquisition February 8, 2023
Place of Incorporation the U.S.
Major Operation B2B e-commerce
GSIN (HK) Limited (“GISN”) [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00%
Date of Incorporation/ Acquisition February 1, 2023
Place of Incorporation Hongkong, PRC,
Major Operation B2B e-commerce
Hua You Sheng Future (Beijing) Technology Co., Ltd [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00%
Date of Incorporation/ Acquisition February 1, 2023
Place of Incorporation PRC
Major Operation B2B e-commerce
Guanshi Technology (Beijing) Co., Ltd [Member]  
Schedule of Group’s Principal Subsidiaries [Abstract]  
Percentage of Ownership 100.00%
Date of Incorporation/ Acquisition February 1, 2023
Place of Incorporation PRC
Major Operation Software development
[1] On June 1, 2023, the Group complete the disposal of Changwei System Technology (Shanghai) Co., Ltd.
[2] Subsidiaries that were sold subsequent to June 30, 2023.
[3] AnPac Muqing closed business in March 2023
[4] On April 12, 2023, the Company, through its subsidiary, Fresh 2 EZ Inc to acquire 100% of equity interest in Fresh 2 information Inc from Roxe Holding Inc, a company controlled by Mr. Haohan Xu, with a nominal price. Fresh 2 information Inc has not begun operation yet.
v3.23.3
Liquidity and Going Concern Uncertainties (Details)
¥ in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
CNY (¥)
Sep. 25, 2023
USD ($)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Liquidity and Going Concern Uncertainties (Details) [Line Items]            
Cash and cash equivalents ¥ 495       $ 68 ¥ 16
Working capital deficit 34,148 $ 4,710        
Loss from continuing operations (43,460) (5,993) ¥ (9,035)      
Net cash used in operating activities ¥ (35,609) $ (4,910) ¥ (17,705)      
Investor agreement, description (i) US$400 (original principal amount) of convertible notes, Series C warrants to purchase 258,065 ADSs (or 5,161,300 Class A ordinary shares) at an exercise price equal to 125% of the lower of (a) $1.86 and (b) the lowest daily volume-weighted average price (“VWAP”) for the 10 trading days prior to the exercise date and Series D warrants to purchase up to 283,688 ADSs (or 5,673,760 Class A ordinary shares) at an exercise price equal to the lower of (x) $1.41 and (y) 75.83% of the lowest daily VWAP for the ten (10) trading days immediately prior to the exercise date, subject to adjustment, and (ii) US$1,600 (original principal amount) of convertible notes, 20,645,160 Series C warrants and 22,695,040 Series D warrants. The Company received the first payment of RMB1,697(US$234) from this offering, excluding related financing costs. (i) US$400 (original principal amount) of convertible notes, Series C warrants to purchase 258,065 ADSs (or 5,161,300 Class A ordinary shares) at an exercise price equal to 125% of the lower of (a) $1.86 and (b) the lowest daily volume-weighted average price (“VWAP”) for the 10 trading days prior to the exercise date and Series D warrants to purchase up to 283,688 ADSs (or 5,673,760 Class A ordinary shares) at an exercise price equal to the lower of (x) $1.41 and (y) 75.83% of the lowest daily VWAP for the ten (10) trading days immediately prior to the exercise date, subject to adjustment, and (ii) US$1,600 (original principal amount) of convertible notes, 20,645,160 Series C warrants and 22,695,040 Series D warrants. The Company received the first payment of RMB1,697(US$234) from this offering, excluding related financing costs.        
Forecast [Member]            
Liquidity and Going Concern Uncertainties (Details) [Line Items]            
Convertible notes       $ 2,000    
v3.23.3
Summary of Principal Accounting Policies (Details)
¥ in Thousands, $ in Thousands
 6 Months Ended
Dec. 31, 2022
CNY (¥)
Jun. 30, 2023
CNY (¥)
Jun. 30, 2022
CNY (¥)
Jun. 30, 2023
USD ($)
Summary of Principal Accounting Policies [Line Items]        
Fair value of convertible loans ¥ 15 ¥ 16   $ 2
Contract liabilities    
Contract liabilities amounted 479   66
Cash and cash equivalents 14 62   9
Financial institutions deposited ¥ 1 268   $ 37
Deposit insurance limit (in Yuan Renminbi)   ¥ 500,000    
Accounts receivables 10.00%      
Customers accounted, description   As of June 30, 2023, four customers accounted for 37%, 20%, 19% and 16% of total accounts receivables. The risk is mitigated by credit evaluations the Group performs on its customers.    
Minimum [Member]        
Summary of Principal Accounting Policies [Line Items]        
Lease term   75.00%    
Maximum [Member]        
Summary of Principal Accounting Policies [Line Items]        
Lease term   90.00%    
Other Customer [Member]        
Summary of Principal Accounting Policies [Line Items]        
Percentage of revenue   16.00%    
Two Customers [Member]        
Summary of Principal Accounting Policies [Line Items]        
Percentage of revenue   22.00%    
Three Customers [Member]        
Summary of Principal Accounting Policies [Line Items]        
Percentage of revenue   22.00%    
One Suppliers [Member]        
Summary of Principal Accounting Policies [Line Items]        
Percentage of revenue     10.00%  
Two Suppliers [Member]        
Summary of Principal Accounting Policies [Line Items]        
Percentage of revenue     10.00%  
Percentage of total accounts payable   25.00%    
Three Suppliers [Member]        
Summary of Principal Accounting Policies [Line Items]        
Percentage of revenue     10.00%  
Percentage of total accounts payable   12.00%    
Four Suppliers [Member]        
Summary of Principal Accounting Policies [Line Items]        
Percentage of total accounts payable   14.00%    
v3.23.3
Summary of Principal Accounting Policies (Details) - Schedule of Convertible Loans Measured at Fair Value on a Recurring Basis
¥ in Thousands, $ in Thousands
 6 Months Ended 12 Months Ended
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Schedule of Convertible Loans Measured at Fair Value on A Recurring Basis [Abstract]      
Opening balance ¥ 15 $ 2 ¥ 27,859
Conversion of convertible loans (27,739)
Loss (gain) on change in fair value of convertible loan (144)
Other comprehensive income -foreign exchange translations 1 39
Total ¥ 16 $ 2 ¥ 15
v3.23.3
Summary of Principal Accounting Policies (Details) - Schedule of Property and Equipment are Stated at Cost Less Accumulated Depreciation and Any Recorded Impairment
Jun. 30, 2023
Furniture, fixtures and equipment [Member] | Minimum [Member]  
Public Utility, Property, Plant and Equipment [Line Items]  
Estimated useful life 3 years
Furniture, fixtures and equipment [Member] | Maximum [Member]  
Public Utility, Property, Plant and Equipment [Line Items]  
Estimated useful life 5 years
Motor vehicles [Member]  
Public Utility, Property, Plant and Equipment [Line Items]  
Estimated useful life 5 years
v3.23.3
Summary of Principal Accounting Policies (Details) - Schedule of Intangible Assets Have Estimated Useful Lives
Jun. 30, 2023
Sep. 30, 2008
Summary of Principal Accounting Policies (Details) - Schedule of Intangible Assets Have Estimated Useful Lives [Line Items]    
Software   10 years
Minimum [Member]    
Summary of Principal Accounting Policies (Details) - Schedule of Intangible Assets Have Estimated Useful Lives [Line Items]    
Software 5 years  
v3.23.3
Acqusitions (Details)
¥ in Thousands
 6 Months Ended 12 Months Ended
Jun. 30, 2023
CNY (¥)
shares
Jun. 30, 2023
USD ($)
shares
Jun. 30, 2022
CNY (¥)
Dec. 31, 2022
shares
Acqusitions (Details) [Line Items]        
Ordinary shares issued (in Shares) | shares 17,665,702 17,665,702    
Fair value ¥ 25,720 $ 3,745,000    
Amortized over year       10 years
Revenue | ¥ 4,936   ¥ 10,149  
Loss | ¥ ¥ (71,405)   ¥ 51,322  
Total consideration | $   730    
Asset Acquisition [Member]        
Acqusitions (Details) [Line Items]        
Total consideration | $   $ 5,013,000    
Class A ordinary shares [Member]        
Acqusitions (Details) [Line Items]        
Ordinary shares issued (in Shares) | shares 176,070,465 176,070,465   79,536,589
Class A ordinary shares [Member] | GISN Acquisition [Member]        
Acqusitions (Details) [Line Items]        
Ordinary shares issued (in Shares) | shares 8,785,530 8,785,530    
Fair value ¥ 25,938 $ 3,848,000    
Class A ordinary shares [Member] | Fresh2 Acquisition [Member]        
Acqusitions (Details) [Line Items]        
Ordinary shares issued (in Shares) | shares 5,440,420 5,440,420    
Fair value ¥ 17,304 $ 2,549,000    
Pro Forma [Member] | Fresh2 Acquisition [Member]        
Acqusitions (Details) [Line Items]        
Revenue | $   199,000    
Loss | $   $ 86,000    
v3.23.3
Acqusitions (Details) - Schedule of Summarizes the Fair Value of the Identifiable Assets Acquired and Liabilities
$ in Thousands
 6 Months Ended
Jun. 30, 2023
USD ($)
GISN Acquisition [Member]  
Acqusitions (Details) - Schedule of Summarizes the Fair Value of the Identifiable Assets Acquired and Liabilities [Line Items]  
Total consideration $ 25,938
Assets acquired and liabilities assumed:  
Cash acquired 1,028
Accounts receivable 100
Accounts receivable-related parties 12,073
Other current assets 123
Property and equipment 1,573
Intangible assets 11,233
Advance from customer (1,013)
Accrued expenses and other current liabilities (13,705)
Lease liabilities (239)
Deferred tax liability (2,808)
Total net assets acquired 8,365
Goodwill 17,573
Fresh2 Acquisition [Member]  
Acqusitions (Details) - Schedule of Summarizes the Fair Value of the Identifiable Assets Acquired and Liabilities [Line Items]  
Total consideration 17,304
Assets acquired and liabilities assumed:  
Cash acquired 71
Other current assets 938
Accounts payables (950)
Accrued expenses and other current liabilities (72)
Total net assets acquired (13)
Goodwill $ 17,317
v3.23.3
Acqusitions (Details) - Schedule of Pro Forma of Group Business Combination - CNY (¥)
¥ in Thousands
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Schedule Of Pro Forma Of Group Business Combination Abstract    
Revenue ¥ 4,936 ¥ 10,149
Net losses ¥ (71,405) ¥ 51,322
v3.23.3
Acqusitions (Details) - Schedule of Fair Value of Identifiable Assets
¥ in Thousands
Jun. 30, 2023
CNY (¥)
Acqusitions (Details) - Schedule of Fair Value of Identifiable Assets [Line Items]  
Property and equipment- furniture, fixtures and equipment ¥ 30,733
Furniture, fixtures and equipment [Member]  
Acqusitions (Details) - Schedule of Fair Value of Identifiable Assets [Line Items]  
Property and equipment- furniture, fixtures and equipment 160
Motor vehicles [Member]  
Acqusitions (Details) - Schedule of Fair Value of Identifiable Assets [Line Items]  
Property and equipment- furniture, fixtures and equipment 434
software [Member]  
Acqusitions (Details) - Schedule of Fair Value of Identifiable Assets [Line Items]  
Property and equipment- furniture, fixtures and equipment ¥ 30,139 [1]
[1] Intangible assets refer to intellectual property relating to ez100, 2Supply and 100WAY systems.
v3.23.3
Discontinued Operations (Details) - USD ($)
 6 Months Ended
Jun. 30, 2023
Jul. 17, 2023
Discontinued Operations [Line Items]    
Agreement percentage 100.00%  
Consideration amount $ 730  
Agreement rate 100.00% 38.61%
Disposal description In connection with the disposal of CDA business, the Group also sold its 70% equity interest in Changwei System Technology (Shanghai) Co., Ltd (“Changwei”) to Jiaxing Changxin Enterprise Management, LLP (“Changxin”) in consideration of US$350 (RMB2,538) and sold the remaining 29% equity interest in Changwei to Shanghai Yiyou Investment Management Co., LTD (“Yiyou”) in consideration of US$150 (RMB1,088). Yiyou further entered into an arrangement with Changxin and Ms. Ruoou Ying, pursuant to which the Group agreed to transfer 29% of Changwei’s shares to Changxin and 1% of the shares to Ms. Ruoou Ying (the “Changwei disposal”). The Group received the consideration in aggregated of RMB3,626 (US$500) from the Changwei disposal. This transaction was a sale to related parties. Ms. Ruoou Ying held the position of Supervisor at Anpac Lishui, while Changxin was under the common control of Ms. Ruoou Ying and Mr. Chris Yu, the Co-Founder and Co-Chairman of the Company. Loss from disposal of Changwei amounted to RMB20,282(US$2,797) and was included in net loss from discontinued operations. This transaction was a sale to related parties. Ms. Ruoou Ying held the position of Supervisor at Anpac Lishui, while Changxin was under the common control of Ms. Ruoou Ying and Mr. Chris Yu, the Co-Founder and Co-Chairman of the Company. Loss from disposal of Changwei amounted to RMB20,282(US$2,797) and was included in net loss from discontinued operations.  
Minimum [Member]    
Discontinued Operations [Line Items]    
Consideration amount  
Maximum [Member]    
Discontinued Operations [Line Items]    
Consideration amount  
v3.23.3
Discontinued Operations (Details) - Schedule of Results of Discontinued Operations - Discontinued Operations [Member]
¥ in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
CNY (¥)
Revenues:      
Revenues parties ¥ 3,028 $ 418 ¥ 5,213
Cost of revenues (1,292) (178) (1,832)
Gross Profit 1,736 240 3,381
Operating expenses:      
Selling and marketing expenses (3,872) (534) (4,894)
General and administrative expenses (8,593) (1,185) (15,629)
Research and development expenses (3,438) (474) (4,330)
Impairment of intangible assets (7,911)
Impairment of goodwill (12,758)
Loss from operations (14,167) (1,953) (42,141)
Non-operating income and expenses:      
Interest expense, net (81) (11) (161)
Foreign exchange gain, net 9 1 7
Share of net loss in equity method investments (88) (12) (87)
Other income, net 3,106 428 472
Loss from operations for discontinued operations (11,221) (1,547) (41,910)
Loss from disposal of a subsidiary (16,724) (2,307)
Loss from discontinued operations before income taxes (27,945) (3,854) (41,910)
Income tax benefit 2,130
Net Loss from discontinued operations (27,945) (3,854) (39,780)
Revenues-Third Parties      
Revenues:      
Revenues parties 2,818 389 3,972
Revenues-Related Parties      
Revenues:      
Revenues parties ¥ 210 $ 29 ¥ 1,241
v3.23.3
Discontinued Operations (Details) - Schedule of Assets and Liabilities of the Discontinued Operations - Discontinued Operations [Member]
¥ in Thousands, $ in Thousands
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Current assets:      
Cash and cash equivalents ¥ 319 $ 44 ¥ 1,854
Prepayment 1,334 184 2,692
Accounts receivable, net 3,318 458 2,235
Amounts due from related parties, net 684 94 2,194
Inventories, net 178 25 210
Other current assets, net 3,944 543 3,448
Total current assets held for sale 9,777 1,348 12,633
Property and equipment, net 15,746 2,171 17,182
Land use rights, net 1,097 151 1,111
Intangible assets, net 271 37 185
Right of use assets 2,088 288 7,213
Long-term investments, net 991 138 1,079
Total noncurrent assets held for sale 20,193 2,785 26,770
TOTAL ASSETS HELD FOR SALE 29,970 4,133 39,403
Current liabilities:      
Short-term debts 5,000 690 5,000
Accounts payable 2,012 277 2,108
Advance from customers 7,800 1,076 4,956
Amounts due to related parties 1,079 149 2,280
Lease liability-current 1,042 144 784
Accrued expenses and other current liabilities 16,488 2,273 18,386
Total current liabilities held for sale 33,421 4,609 33,514
Lease liability-non-current 1,368 189 6,515
Other long-term liabilities 1,066 147 1,080
Total noncurrent liabilities held for sale 2,434 336 7,595
TOTAL LIABILITIES HELD FOR SALE ¥ 35,855 $ 4,945 ¥ 41,109
v3.23.3
Accounts Receivable, Net (Details) - Schedule of Accounts Receivable
¥ in Thousands, $ in Thousands
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Schedule of Accounts Receivable [Abstract]      
Accounts receivable ¥ 270 $ 37
Allowance for credit losses
Balance at end of year ¥ 270 $ 37
v3.23.3
Other Current Assets, Net (Details) - Schedule of Other Current Assets
¥ in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Jun. 30, 2023
USD ($)
Schedule of Other Current Assets [Abstract]        
Deposits ¥ 154   $ 21
Receivable from private placement investors 260 $ 36  
Loan to third-parties 444   422 61
Total 858   422 118
Allowance for credit losses (444)   (422) (61)
Other current assets, net ¥ 414   $ 57
v3.23.3
Property and Equipment, Net (Details)
¥ in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
CNY (¥)
Property, Plant and Equipment [Abstract]      
Depreciation expense $ 62 ¥ 449
v3.23.3
Property and Equipment, Net (Details) - Schedule of Property and Equipment, Net Consists
¥ in Thousands, $ in Thousands
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Schedule Of Property And Equipment Net Consists Abstract      
Furniture, fixtures and equipment ¥ 3,255 $ 448
Motor vehicles 2,007 277
Total 5,262 725
Less: accumulated depreciation (953) (131)
Property and equipment, net ¥ 4,309 $ 594
v3.23.3
Intangible Assets, Net (Details)
¥ in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
CNY (¥)
Intangible Assets, Net [Abstract]      
Amortization expense ¥ 2,511 $ 346
Estimated aggregate amortization expense year 5 years 5 years  
v3.23.3
Intangible Assets, Net (Details) - Schedule of Intangible Assets Net
¥ in Thousands, $ in Thousands
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Finite-Lived Intangible Assets [Line Items]      
Total ¥ 47,798 $ 6,592
Less: accumulated amortization (2,629) (363)
Intangible assets, net 45,169 6,229
Software [Member]      
Finite-Lived Intangible Assets [Line Items]      
Total ¥ 47,798 $ 6,592
v3.23.3
Intangible Assets, Net (Details) - Schedule of Estimated Aggregate Amortization Expense
¥ in Thousands
Jun. 30, 2023
CNY (¥)
Schedule Of Estimated Aggregate Amortization Expense Abstract  
2024 ¥ 8,351
2025 8,351
2026 8,351
2027 8,351
2028 6,226
Thereafter 5,539
Total ¥ 45,169
v3.23.3
Long-Term Investments, Net (Details)
 6 Months Ended
May 15, 2021
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
May 24, 2023
CNY (¥)
May 24, 2023
USD ($)
Long-Term Investments, Net (Details) [Line Items]          
Capital amount       ¥ 39,882 $ 5,500
voting units description       Mr. Xu holds 8,036 voting units in Nassau Mr. Xu holds 8,036 voting units in Nassau
Full impairment loss   ¥ 95,000 $ 13    
Advanced Life Therapeutics Co., Ltd. (“Advanced Life”) [Member]          
Long-Term Investments, Net (Details) [Line Items]          
Registered capital, percentage 40.00%        
Equity interest 40.00%        
Nassau Enterprises LLC (“Nassau”) [Member]          
Long-Term Investments, Net (Details) [Line Items]          
Percentage of investment, owned   19.64% 19.64% 80.36% 80.36%
v3.23.3
Long-Term Investments, Net (Details) - Schedule of Long-Term Investments
¥ in Thousands, $ in Thousands
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Schedule of Equity Method Investments [Line Items]      
Equity method investments ¥ 39,783 $ 5,486
Less: Impairment
Long-term investments, net 39,783 5,486
Advanced Life Therapeutics Co., Ltd. (“Advanced Life”) [Member]      
Schedule of Equity Method Investments [Line Items]      
Equity method investments
Nassau Enterprises LLC (“Nassau”) [Member]      
Schedule of Equity Method Investments [Line Items]      
Equity method investments ¥ 39,783 $ 5,486
v3.23.3
Short-Term Debts (Details)
$ / shares in Units, $ in Thousands
 6 Months Ended
Mar. 31, 2023
CNY (¥)
Apr. 27, 2022
CNY (¥)
Mar. 16, 2022
CNY (¥)
shares
Mar. 16, 2022
USD ($)
shares
Dec. 10, 2021
CNY (¥)
shares
Jul. 22, 2021
CNY (¥)
Jul. 22, 2021
USD ($)
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
CNY (¥)
Feb. 05, 2022
$ / shares
Jul. 22, 2021
USD ($)
Short-Term Debts (Details) [Line Items]                        
Aggregate principal amount           ¥ 20,788,000           $ 3,014
Discounted value           ¥ 18,898,000 $ 2,740          
Fixed interest rate           0.00%           0.00%
Conversion price ¥ 160           $ 15          
Consecutive trading days           10 10          
Conversion price | $             $ 1          
Converted shares         114,234              
Principal balance of debt converted | ¥         ¥ 1,321,000              
Number of shares issued upon conversion of loan     4,842,197 4,842,197                
Debt Conversion, Converted Instrument, Amount   ¥ 5,502,000 ¥ 22,237,000 $ 22,237       ¥ 16,000 $ 2      
Convertible debentures outstanding               ¥ 16,000 2      
Convertible debenture                 ¥ 139,000    
Maximum [Member]                        
Short-Term Debts (Details) [Line Items]                        
Bid price percentage           82.00% 82.00%          
Minimum [Member]                        
Short-Term Debts (Details) [Line Items]                        
Bid price percentage           80.00% 80.00%          
Class A Ordinary Shares [Member]                        
Short-Term Debts (Details) [Line Items]                        
Conversion price per share | $ / shares                     $ 0.1  
v3.23.3
Short-Term Debts (Details) - Schedule of Short-Term Debts
¥ in Thousands, $ in Thousands
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Schedule Of Short Term Debts Abstract      
Convertible loan (“CL”) [1] ¥ 16 $ 2 ¥ 15
Total ¥ 16 $ 2 ¥ 15
[1] On July 22, 2021, the Company issued convertible debentures (the “Convertible Debentures”) to certain investors in a registered direct offering in an aggregate principal amount of US$3,014 (RMB20,788) for the discounted price of US$2,740 (RMB18,898). The Convertible Debentures were originally due in one year and bear interest of 0% per annum if the conversion feature is not triggered. Pursuant to the agreement, the conversion price is lower of (i) US$15 or (ii) the lower of 82% of the closing bid price or 80% of VWAP of the Company’s ADSs during the ten consecutive trading days immediately preceding conversion, but not lower than a Floor Price of US$1 (the “floor price”). Due to significant drop of the ADS market price in 2022, the debenture holders and the Company renegotiated the Floor Price. On February 5, 2022, the Company entered into an amendment agreement, pursuant to which the Floor Price was reduced to US$0.10 per Class A Ordinary Share. The Company has elected to recognize the Convertible Debentures at fair value and therefore there was no further evaluation of embedded features for bifurcation. The Convertible Debentures were partially converted into 114,234 shares on December 10, 2021. The fair value of the Convertible Debentures loan immediately prior to conversion was assessed at RMB1,321. Substantially all of the remaining outstanding Convertible Debentures were converted into 4,842,197 Class A ordinary shares (refer to Note 14) on March 16, 2022. The fair value of the Convertible Debentures on March 16, 2022 immediately prior to conversion was assessed at RMB22,237. As of June 30, 2023, the fair value of the outstanding balance of the Convertible Debentures was RMB16 (US$2).
v3.23.3
Leases (Details) - Schedule of Operating Leases
¥ in Thousands, $ in Thousands
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Schedule of Operating Leases [Abstract]      
Right-of-use assets, net ¥ 223 $ 31
Operating lease liabilities - current 148 20
Operating lease liabilities - non-current 37 5
Total operating lease liabilities ¥ 185 $ 25
v3.23.3
Leases (Details) - Schedule of Weighted Average Remaining Lease Terms and Discount Rates
Jun. 30, 2023
Schedule of Weighted Average Remaining Lease Terms and Discount Rates [Abstract]  
Weighted average remaining lease term (years) 1 year 6 months 3 days
Weighted average discount rate 4.75%
v3.23.3
Leases (Details) - Schedule of Maturities of Lease Liabilities
¥ in Thousands
Jun. 30, 2023
CNY (¥)
Schedule of Maturities of Lease Liabilities [Abstract]  
2024 ¥ 150
2025 37
Total future minimum lease payments 187
Less: imputed interest (2)
Total ¥ 185
v3.23.3
Accrued Expenses and Other Current Liabilities (Details) - Schedule of Accrued Expenses and Other Current Liabilities
¥ in Thousands, $ in Thousands
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Schedule of Accrued Expenses and Other Current Liabilities [Abstract]      
Salary and welfare payable ¥ 9,312 $ 1,283 ¥ 1,740
Accrued expenses [1] 9,057 1,249 5,762
Payable for property and equipment 2,301 318
Other payables 4,089 564 33
Total ¥ 24,759 $ 3,414 ¥ 7,535
[1] the accrued expenses mainly consist of accrued professional fees.
v3.23.3
Shareholders' Equity (Details)
 1 Months Ended 6 Months Ended 12 Months Ended
Jun. 09, 2023
shares
May 11, 2023
CNY (¥)
shares
May 11, 2023
USD ($)
shares
Mar. 31, 2023
CNY (¥)
shares
Mar. 31, 2023
USD ($)
$ / shares
shares
Feb. 14, 2023
$ / shares
shares
Feb. 08, 2023
CNY (¥)
shares
Feb. 08, 2023
USD ($)
shares
Feb. 01, 2023
CNY (¥)
shares
Feb. 01, 2023
USD ($)
shares
Dec. 31, 2022
CNY (¥)
shares
Sep. 26, 2022
CNY (¥)
shares
Sep. 26, 2022
USD ($)
shares
Sep. 02, 2022
CNY (¥)
shares
Sep. 02, 2022
CNY (¥)
$ / shares
Jun. 10, 2022
CNY (¥)
shares
Jun. 10, 2022
USD ($)
shares
May 19, 2022
CNY (¥)
May 19, 2022
USD ($)
Apr. 27, 2022
CNY (¥)
Mar. 30, 2022
CNY (¥)
Mar. 30, 2022
USD ($)
Mar. 16, 2022
CNY (¥)
shares
Mar. 16, 2022
USD ($)
$ / shares
shares
Dec. 10, 2021
shares
Jul. 22, 2021
CNY (¥)
Jul. 22, 2021
USD ($)
Jul. 28, 2020
shares
Oct. 14, 2019
$ / shares
shares
Oct. 30, 2023
shares
Aug. 31, 2022
CNY (¥)
shares
May 27, 2022
CNY (¥)
May 27, 2022
USD ($)
$ / shares
shares
Mar. 16, 2022
CNY (¥)
Mar. 16, 2022
USD ($)
$ / shares
shares
Jun. 30, 2023
CNY (¥)
shares
Jun. 30, 2023
USD ($)
$ / shares
shares
Dec. 31, 2022
CNY (¥)
shares
Aug. 10, 2023
$ / shares
Jun. 01, 2023
USD ($)
Mar. 10, 2023
shares
Dec. 31, 2022
USD ($)
$ / shares
shares
Sep. 16, 2022
shares
Sep. 02, 2022
$ / shares
Aug. 31, 2022
USD ($)
May 30, 2022
shares
Mar. 29, 2022
$ / shares
shares
Shareholders' Equity (Details) [Line Items]                                                                                              
Number of shares authorized                                                         150,000,000                                    
Ordinary shares, shares issued                                                                         17,665,702                    
Principal amount       ¥ 4,479,000                                           ¥ 20,788,000 $ 3,014,000                                        
Discounted price                                                   ¥ 18,898,000 2,740,000                                        
Converted shares                                                                       12,779,670 12,779,670                    
Debt conversion                                       ¥ 5,502,000     ¥ 22,237,000 $ 22,237,000                       ¥ 16,000 $ 2,000                    
Shares issued                                               30,885,707                     30,885,707                        
Conversion loan (in Yuan Renminbi)       ¥ 160                                             $ 15,000                                        
Service agreement pay (in Dollars) | $                                                                               $ 50,000              
Fair value   ¥ 6,385,000 $ 919,000                         ¥ 359,000 $ 54,000                                                            
Share issued                                                                                 13,000,000            
fair market value                                                             ¥ 1,341,000                           $ 195,000    
Ordinary shares issued                                                                       3,822,853 3,822,853                    
Price per share (in Dollars per share) | $ / shares                                                                 $ 0.3                            
Gross proceeds                       ¥ 26,410,000 $ 3,660,000 ¥ 3,613,000                                                                  
Investment amount                                                               ¥ 20,094,000 $ 3,000,000                            
Trading percentage                                                               80.00% 80.00%                            
Purchase of aggregate shares                     1,200,000                                                     1,200,000       1,200,000          
Price per share (in Dollars per share) | $ / shares                                                                                   $ 0.75   $ 0.1      
Total consideration | $                                                                                   $ 1,507,000          
Purchased shares                           5,000,000                                                                  
Warrants exercisable term                           2 years                                           2 years 2 years                    
Proceeds received                                                                       ¥ 36,608 $ 5,369                    
(in Dollars per share) | $ / shares                                                                             $ 1                
Shareholders' equity, description                                                                       On April 6, 2023, the Company closed a registered direct offering (the “April 2023 private placement”), the Company sold to the institutional investors a total of 12,500,000 Class A ordinary shares priced at $0.2 per ordinary share, pre-funded warrants exercisable for 2,500,000 Class A ordinary shares and warrants exercisable for 15,000,000 Class A ordinary shares. The purchase price of each pre-funded warrant is equal to the offering price per Class A ordinary shares, minus $0.00005, and the exercise price of each pre-funded warrant is equal $0.00005 per share. The pre-funded warrants are immediately exercisable and may be exercised at any time until exercised in full. The warrants are immediately exercisable and expire five (5) years from the original issuance date and have an exercise price of $0.2 per Class A ordinary shares. The Company also issued to Univest Securities, LLC, which acted as the sole placement agent for the offering, warrants exercisable for 750,000 Class A ordinary shares, with an exercise price of $0.24 per share. The net proceeds to the Company from the registered direct offering were RMB17,238 (US$2,510) after deducting the placement agent’s fees and other offering expenses. No pre-funded warrants were exercised during the six months ended June 30, 2023, and 5,000,000 warrants were exercised with proceeds of RMB6,911(US$1,000) during the six months ended June 30, 2023. On April 6, 2023, the Company closed a registered direct offering (the “April 2023 private placement”), the Company sold to the institutional investors a total of 12,500,000 Class A ordinary shares priced at $0.2 per ordinary share, pre-funded warrants exercisable for 2,500,000 Class A ordinary shares and warrants exercisable for 15,000,000 Class A ordinary shares. The purchase price of each pre-funded warrant is equal to the offering price per Class A ordinary shares, minus $0.00005, and the exercise price of each pre-funded warrant is equal $0.00005 per share. The pre-funded warrants are immediately exercisable and may be exercised at any time until exercised in full. The warrants are immediately exercisable and expire five (5) years from the original issuance date and have an exercise price of $0.2 per Class A ordinary shares. The Company also issued to Univest Securities, LLC, which acted as the sole placement agent for the offering, warrants exercisable for 750,000 Class A ordinary shares, with an exercise price of $0.24 per share. The net proceeds to the Company from the registered direct offering were RMB17,238 (US$2,510) after deducting the placement agent’s fees and other offering expenses. No pre-funded warrants were exercised during the six months ended June 30, 2023, and 5,000,000 warrants were exercised with proceeds of RMB6,911(US$1,000) during the six months ended June 30, 2023.                    
Shares, issued       17,665,702 17,665,702   5,440,420 5,440,420 8,785,530 8,785,530                                                                          
Equity interest, percentage             100.00% 100.00% 100.00% 100.00%                                                                          
      ¥ 25,720 $ 3,745   ¥ 17,304 $ 2,549 ¥ 25,938 $ 3,848                                                                          
Minimum [Member]                                                                                              
Shareholders' Equity (Details) [Line Items]                                                                                              
Number of shares authorized           150,000,000                                                                                  
Prices, Per share (in Dollars per share) | $ / shares         $ 0.33                                                                                    
Maximum [Member]                                                                                              
Shareholders' Equity (Details) [Line Items]                                                                                              
Number of shares authorized           2,430,000,000                                                                                  
Warrant [Member]                                                                                              
Shareholders' Equity (Details) [Line Items]                                                                                              
Purchase of aggregate shares                     750,000                                                     750,000       750,000          
Price per share (in Dollars per share) | $ / shares                                                                                   $ 1.2          
Shares, outstanding       103,702,658 103,702,658                                                                                    
Private Placements [Member]                                                                                              
Shareholders' Equity (Details) [Line Items]                                                                                              
Pre-funded warrants                                                                       2,584,900 2,584,900                    
Investing amount (in Yuan Renminbi) | ¥                           ¥ 3,613,000 ¥ 3,613,000                                                                
Shareholders' equity, description                                                                       On June 2, 2023, the Company entered into an agreement with an investor, under which the investor agreed to purchase 22,000,000 Class A ordinary shares and warrants to purchase 22,000,000 Class A ordinary shares at an aggregate purchase price of US$4,400 (the “June 2023 private placement”). The warrants are exercisable within 2 years from the date of issuance and have an exercise price of US$0.21 per share. On June 9, 2023, the Company issued 22,000,000 Class A ordinary shares to the investor, proceeds of RMB27,797 (US$3,900) were received by June 30, 2023. Due to inability to timely collect the remaining proceeds of RMB3,564(US$500) from the investor, the corresponding 2,500,000 shares was recalled and cancelled on October 30, 2023, subsequently. No warrants were exercised during the six months ended June 30, 2023. On June 2, 2023, the Company entered into an agreement with an investor, under which the investor agreed to purchase 22,000,000 Class A ordinary shares and warrants to purchase 22,000,000 Class A ordinary shares at an aggregate purchase price of US$4,400 (the “June 2023 private placement”). The warrants are exercisable within 2 years from the date of issuance and have an exercise price of US$0.21 per share. On June 9, 2023, the Company issued 22,000,000 Class A ordinary shares to the investor, proceeds of RMB27,797 (US$3,900) were received by June 30, 2023. Due to inability to timely collect the remaining proceeds of RMB3,564(US$500) from the investor, the corresponding 2,500,000 shares was recalled and cancelled on October 30, 2023, subsequently. No warrants were exercised during the six months ended June 30, 2023.                    
Class A ordinary shares [Member]                                                                                              
Shareholders' Equity (Details) [Line Items]                                                                                              
Number of shares authorized                     2,400,000,000                                                   2,400,000,000 2,400,000,000       2,400,000,000          
Ordinary shares           2,400,000,000                                             120,000,000                                    
Par value (in Dollars per share) | $ / shares           $ 0.01                                             $ 0.01                                    
Ordinary shares, shares outstanding                     79,536,589                                                   176,070,465 79,536,589       79,536,589          
Ordinary shares, shares issued                     79,536,589                                                   176,070,465 79,536,589       79,536,589          
Converted shares                                             4,842,197 4,842,197 114,234                                            
Shares issued       3,232,397 3,232,397                                                                                    
Company issued                               187,094 187,094                                                            
Ordinary shares granted                                                             140,000                                
Share issued                       36,729,613 36,729,613                                                           140,000        
Service agreement   3,500,000 3,500,000                                                 3,500,000                                      
Company deposited                     1,322,853                                                                        
Stockholders equity                                                                       22,000,000 22,000,000                    
Ordinary shares issued 2,500,000                                                                                            
Price per share (in Dollars per share) | $ / shares                                                                                       $ 0.1      
Purchase of aggregate shares                     3,000,000                                                     3,000,000       3,000,000          
Price per share (in Dollars per share) | $ / shares                                                                                   $ 0.4          
Warrants purchase                                                                           2,475,000                  
Total consideration | ¥                     ¥ 11,003,000                                                     ¥ 11,003,000                  
Purchased shares                           5,000,000                                                                  
Exercise price (in Dollars per share) | $ / shares                             ¥ 0.4                                                                
Convertible debentures                                                                   ¥ 175 $ 5,405,000                        
Exercise price per share (in Dollars per share) | $ / shares                                                                             $ 0.21                
Class B Ordinary Shares [Member]                                                                                              
Shareholders' Equity (Details) [Line Items]                                                                                              
Number of shares authorized                     30,000,000                                                   30,000,000 30,000,000       30,000,000          
Ordinary shares           30,000,000                                             30,000,000                                    
Par value (in Dollars per share) | $ / shares           $ 0.01                                             $ 0.01                                    
Ordinary shares, shares outstanding                     3,573,100                                                   3,573,100 3,573,100       3,573,100          
Ordinary shares, shares issued                     3,573,100                                                   3,573,100 3,573,100       3,573,100          
Forecast [Member] | Class A ordinary shares [Member]                                                                                              
Shareholders' Equity (Details) [Line Items]                                                                                              
Ordinary shares issued                                                           2,500,000                                  
Investor [Member] | Class A ordinary shares [Member]                                                                                              
Shareholders' Equity (Details) [Line Items]                                                                                              
Share issued                                               1,235,788                 6,229,235   1,235,788   4,226,135                 6,263,048 654,622
Price per share (in Dollars per share) | $ / shares                                               $ 0.2563                     $ 0.2563   $ 0.2563                   $ 0.35
Gross proceeds                                         ¥ 1,500,000 $ 232,000   $ 0.01000                                              
Total gross proceeds                                   ¥ 9,395,000 $ 1,400,000                                                        
Nine investors [Member] | Class A ordinary shares [Member]                                                                                              
Shareholders' Equity (Details) [Line Items]                                                                                              
Share issued                     12,492,283                                                     12,492,283       12,492,283          
v3.23.3
Shareholders' Equity (Details) - Sechedule of Warrants Activity - $ / shares
 6 Months Ended
Dec. 31, 2022
Jun. 30, 2023
Class of Warrant or Right [Line Items]    
Number of warrants, Balance of warrants outstanding as of December 31, 2020 and 2021 (in Shares) 9,266,135  
Weighted average exercise price per share, warrants issued in connection with the March 16, 2022 private placement $ 0.24  
Weighted average life, warrants issued in connection with the September 2, 2022 private placement 1 year 10 months 6 days  
Expiration dates, warrants issued to 3rd party service providers  
Number of warrants, warrants issued in connection with the March 16, 2022 private placement (in Shares)   61,771,423
Weighted average exercise price per share, warrants issued in connection with the March 16, 2022 private placement   $ 0.21
Expiration dates, warrants issued in connection with the March 16, 2022 private placement   February 3, 2025 to June 16, 2025
Number of warrants, warrants issued in connection with the September 2, 2022 private placement (in Shares)   18,250,000
Weighted average life, warrants issued in connection with the September 2, 2022 private placement   1 year 9 months
Expiration dates, warrants issued in connection with the September 2, 2022 private placement   March 31, 2025 to unlimited
Number of warrants, warrants issued in connection with the June 2023 private placement (in Shares)   22,000,000
Weighted average exercise price per share, warrants issued in connection with the June 2023 private placement   $ 0.21
Weighted average life, warrants issued in connection with the June 2023 private placement   1 year 11 months 12 days
Expiration dates, warrants issued in connection with the June 2023 private placement   Jun. 09, 2025
Number of warrants, Exercised (in Shares)   (7,584,900)
Number of warrants, Balance of warrants outstanding and exercisable as of December 31, 2022 (in Shares)   103,702,658
Weighted average exercise price per share, Balance of warrants outstanding and exercisable as of December 31, 2022   $ 0.21
Weighted average life, Balance of warrants outstanding and exercisable as of December 31, 2022   1 year 11 months 15 days
Expiration dates, Balance of warrants outstanding and exercisable as of December 31, 2022   August 31, 2024 to unlimited
Minimum [Member]    
Class of Warrant or Right [Line Items]    
Weighted average life, warrants issued in connection with the March 16, 2022 private placement   1 year 6 months 29 days
Weighted average exercise price per share, warrants issued in connection with the September 2, 2022 private placement   $ 0.00001
Weighted average exercise price per share, Exercised   $ 0.00001
Maximum [Member]    
Class of Warrant or Right [Line Items]    
Weighted average life, warrants issued in connection with the March 16, 2022 private placement   1 year 11 months 15 days
Weighted average exercise price per share, warrants issued in connection with the September 2, 2022 private placement   $ 0.24
Weighted average exercise price per share, Exercised   $ 0.2
v3.23.3
Share Based Compensation (Details)
 1 Months Ended 6 Months Ended 12 Months Ended
Apr. 14, 2022
shares
Mar. 16, 2022
shares
Dec. 10, 2021
shares
Jan. 31, 2023
shares
Aug. 28, 2022
shares
Oct. 31, 2019
shares
Jun. 30, 2023
CNY (¥)
shares
Jun. 30, 2023
USD ($)
shares
Jun. 30, 2022
CNY (¥)
Dec. 31, 2022
shares
Mar. 10, 2023
shares
Sep. 26, 2022
shares
Sep. 16, 2022
shares
Jul. 05, 2021
shares
Share Based Compensation [Line Items]                            
Share options purchase                   182,593        
Shares subject plan         4,700,000                  
Granted to employees year term                   4 years        
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures       4,000,000                    
Shares issued                     13,000,000      
Rsu shares             41,000,000 41,000,000            
Conversion shares             12,779,670 12,779,670            
Restricted stock expense             ¥ 32,310 $ 4,456            
Forfeited shares             2,199,006 2,199,006            
Outstandingof shares             12,321,218 12,321,218            
Share-Based Payment Arrangement, Expense             ¥ 2,872 $ 396            
Minimum [Member]                            
Share Based Compensation [Line Items]                            
Related option agreements             1 year 1 year            
Maximum [Member]                            
Share Based Compensation [Line Items]                            
Related option agreements             4 years 4 years            
Class A Ordinary Shares [Member]                            
Share Based Compensation [Line Items]                            
Share options purchase 2,800,000         1,105,300                
Shares issued                           1,885,300
Shares issued                       36,729,613 140,000  
Conversion shares   4,842,197 114,234                      
Employees [Member]                            
Share Based Compensation [Line Items]                            
Total fair value of the equity awards vested             ¥ 894,000 $ 123,000 ¥ 2,962,000          
Total unrecognized employee share-based compensation expense             ¥ 2,525,000 $ 348,000            
Weighted-average period             7 months 6 days 7 months 6 days            
Non Employees [Member]                            
Share Based Compensation [Line Items]                            
Related option agreements             9 years 3 months 7 days 9 years 3 months 7 days            
Total fair value of the equity awards vested | ¥               ¥ 1,566,000          
RSU [Member]                            
Share Based Compensation [Line Items]                            
Forfeited shares             458,452 458,452            
v3.23.3
Share Based Compensation (Details) - Schedule of Options Granted to Employees are Measured Based on the Grant Date Fair Value of the Equity Instrument
$ / shares in Units, $ in Thousands
 6 Months Ended
Jun. 30, 2023
USD ($)
$ / shares
shares
Schedule of Options Granted to Employees are Measured Based on the Grant Date Fair Value of the Equity Instrument [Abstract]  
Number of Options, outstanding ending balance (in Shares) | shares 2,334,906
Weighted Average Exercise Price, outstanding ending balance $ 1.69
Weighted Average Grant date Fair Value, outstanding ending balance $ 5,080.00
Weighted Average Remaining Contractual Term, outstanding ending balance 8 years 18 days
Aggregate Intrinsic Value, outstanding ending balance (in Dollars) | $ $ 452
Number of Options Granted (in Shares) | shares
Weighted Average Exercise Price Granted
Weighted Average Grant date Fair Value Granted
Weighted Average Remaining Contractual Term Granted
Aggregate Intrinsic Value Granted (in Dollars) | $
Number of Options Exercised (in Shares) | shares (13,900)
Weighted Average Exercise Price Exercised $ 0.05
Weighted Average Grant date Fair Value Exercised $ 50.00
Weighted Average Remaining Contractual Term Exercised 2 months 19 days
Aggregate Intrinsic Value Exercised (in Dollars) | $
Number of Options, outstanding ending balance (in Shares) | shares 2,321,006
Weighted Average Exercise Price, outstanding ending balance $ 1.7
Weighted Average Grant date Fair Value, outstanding ending balance $ 2,320
Weighted Average Remaining Contractual Term, outstanding ending balance 7 years 6 months 14 days
Aggregate Intrinsic Value, outstanding ending balance (in Dollars) | $ $ 306
Number of Options Vested and exercisable (in Shares) | shares 2,199,006
Weighted Average Exercise Price Vested and exercisable $ 1.41
Weighted Average Grant date Fair Value Vested and exercisable $ 2,080.00
Weighted Average Remaining Contractual Term Vested and exercisable 7 years 6 months 14 days
Aggregate Intrinsic Value Vested and exercisable (in Dollars) | $ $ 306
v3.23.3
Share Based Compensation (Details) - Schedule of Options Granted to Nonemployees are Measured Based on the Grant Date Fair Value of the Equity Instrument - Non Employees [Member]
$ / shares in Units, $ in Thousands
 6 Months Ended
Jun. 30, 2023
USD ($)
$ / shares
shares
Share Based Compensation (Details) - Schedule of Options Granted to Nonemployees are Measured Based on the Grant Date Fair Value of the Equity Instrument [Line Items]  
Number of Options, Outstanding Beginning balance (in Shares) | shares 2,651,700
Weighted Average Exercise Price, Outstanding Beginning balance $ 0.86
Weighted Average Grant date Fair Value, Outstanding Beginning balance $ 0.85
Weighted Average Remaining Contractual Term, Outstanding Beginning balance 9 years 3 months 7 days
Aggregate Intrinsic Value, Outstanding Beginning balance (in Dollars) | $ $ 532
Number of Options, Granted (in Shares) | shares
Weighted Average Exercise Price, Granted
Weighted Average Grant date Fair Value, Granted
Weighted Average Remaining Contractual Term, Granted (in Shares) | shares
Aggregate Intrinsic Value, Granted (in Dollars) | $
Number of Options, Exercised (in Shares) | shares (650,000)
Weighted Average Exercise Price, Exercised $ 0.05
Weighted Average Grant date Fair Value, Exercised $ 0.05
Weighted Average Remaining Contractual Term, Exercised (in Shares) | shares 0.22
Aggregate Intrinsic Value, Exercised (in Dollars) | $
Number of Options, Forfeited (in Shares) | shares (20,000)
Weighted Average Exercise Price, Forfeited
Weighted Average Grant date Fair Value,
Forfeited (in Shares) | shares
Aggregate Intrinsic Value, (in Dollars) | $
Number of Options, Outstanding Beginning balance (in Shares) | shares 1,981,700
Weighted Average Exercise Price, Outstanding Beginning balance $ 1.13
Weighted Average Grant date Fair Value, Outstanding Beginning balance $ 1.04
Weighted Average Remaining Contractual Term, Outstanding Beginning balance 8 years 8 months 26 days
Aggregate Intrinsic Value, Outstanding Beginning balance (in Dollars) | $ $ 315
Number of Options, Vested and Exercisable (in Shares) | shares 1,981,700
Weighted Average Exercise Price, Vested and Exercisable $ 1.13
Weighted Average Grant date Fair Value, Vested and Exercisable $ 1
Weighted Average Remaining Contractual Term, Vested and Exercisable 8 years 8 months 26 days
Aggregate Intrinsic Value, Vested and Exercisable (in Dollars) | $ $ 315
v3.23.3
Share Based Compensation (Details) - Schedule of Black-Scholes Simplified Method for the Valuation of New Options Issued - Minimum [Member] - $ / shares
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Share Based Compensation (Details) - Schedule of Black-Scholes Simplified Method for the Valuation of New Options Issued [Line Items]    
Risk-free interest rate 0.34%
Expected volatility range 100.20%
Fair market value per ordinary share as at grant dates (in Dollars per share) $ 0.29
v3.23.3
Share Based Compensation (Details) - Schedule of Table Sets Forth the Amount of Share-Based Compensation Expense
¥ in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
CNY (¥)
Schedule of Share Based Compensation Expense Included in Each of the Relevant Financial Statement [Abstract]      
Selling and marketing expenses ¥ 1,712 $ 236 ¥ 705
Research and development expenses 818 113 1,263
General and administrative expenses 1,236 170 2,560
Total share-based compensation expenses ¥ 3,766 $ 519 ¥ 4,528
v3.23.3
Income Taxes (Details)
¥ in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
CNY (¥)
Income Taxes (Details) [Line Items]      
Statutory income tax rate 21.00% 21.00% 21.00%
Taxable income (in Yuan Renminbi) ¥ 1,000   ¥ 1,000
Taxable income percentage 12.50% 12.50% 12.50%
Enterprise income tax rate percentage 20.00% 20.00%  
Taxable income does not exceeds (in Yuan Renminbi) ¥ 3,000    
Withholding tax percentage 10.00% 10.00%  
U.S. federal corporate income tax percentage     21.00%
Operating loss ¥ (43,156) $ (5,951) ¥ (8,630)
U.S. Federal [Member]      
Income Taxes (Details) [Line Items]      
Statutory income tax rate 80.00% 80.00%  
United States [Member]      
Income Taxes (Details) [Line Items]      
Income tax percentage 21.00% 21.00% 21.00%
New York [Member]      
Income Taxes (Details) [Line Items]      
Income tax percentage 6.50% 6.50% 6.50%
Deleware [Member]      
Income Taxes (Details) [Line Items]      
Income tax percentage 8.70% 8.70% 8.70%
Hong Kong [Member]      
Income Taxes (Details) [Line Items]      
Operating loss ¥ 307 $ 42  
PRC [Member]      
Income Taxes (Details) [Line Items]      
Taxable income percentage 25.00% 25.00%  
Non-PRC [Member]      
Income Taxes (Details) [Line Items]      
Adjusted tax loss before income taxes ¥ 33,198 $ 4,578  
Interest Income [Member]      
Income Taxes (Details) [Line Items]      
Enterprise income tax rate percentage 20.00% 20.00%  
Fresh 2 Technology Inc [Member]      
Income Taxes (Details) [Line Items]      
U.S. federal corporate income tax percentage 21.00% 21.00%  
PRC [Member]      
Income Taxes (Details) [Line Items]      
Statutory income tax rate 25.00% 25.00%  
Net operating losses ¥ 10,342 $ 1,426  
v3.23.3
Income Taxes (Details) - Schedule of Loss Before Income Taxes
¥ in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
CNY (¥)
Income Taxes (Details) - Schedule of Loss Before Income Taxes [Line Items]      
Total ¥ (43,539) $ (6,004) ¥ (9,035)
Non-US [Member]      
Income Taxes (Details) - Schedule of Loss Before Income Taxes [Line Items]      
Total (23,507) (3,241) (9,035)
US [Member]      
Income Taxes (Details) - Schedule of Loss Before Income Taxes [Line Items]      
Total ¥ (20,032) $ (2,763)
v3.23.3
Income Taxes (Details) - Schedule of Current and Deferred Components of Income Tax Benefit
¥ in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
CNY (¥)
Schedule of Current and Deferred Components of Income Tax Benefit [Abstract]      
Current tax expense
Deferred tax benefit 79 11
Total ¥ 79 $ 11
v3.23.3
Income Taxes (Details) - Schedule of Reconciliation of Tax Computed by Applying the Statutory Income Tax Rate
¥ in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
CNY (¥)
Schedule of Reconciliation of Tax Computed by Applying the Statutory Income Tax Rate [Abstract]      
Loss before income taxes ¥ (43,539) $ (6,004) ¥ (9,035)
Income tax benefit computed at the statutory income tax rate at 21% 9,142 1,261 (1,897)
International rate differences (4,726) (652) ¥ 1,897
Change in valuation allowance (4,337) (598)  
Income tax benefit ¥ 79 $ 11  
v3.23.3
Income Taxes (Details) - Schedule of Reconciliation of Tax Computed by Applying the Statutory Income Tax Rate (Parentheticals)
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Schedule of Reconciliation of Tax Computed by Applying the Statutory Income Tax Rate [Abstract]    
Statutory income tax rate 21.00% 21.00%
v3.23.3
Income Taxes (Details) - Schedule of Significant Components of Deferred Taxes
¥ in Thousands, $ in Thousands
Dec. 31, 2023
CNY (¥)
Dec. 31, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Schedule Of Significant Components Of Deferred Taxes Abstract      
Net loss carryforward ¥ 9,608 $ 1,325 ¥ 1,900
Valuation allowance (9,608) (1,325) (1,900)
Total deferred tax assets.
Long-lived assets arising from acquisitions 2,938 405
Total deferred tax liabilities. ¥ 2,938 $ 405
v3.23.3
Related Party Transactions and Balances (Details) - Schedule of Related Parties Financial and Operational
 6 Months Ended
Jun. 30, 2023
Haohan Xu [Member]  
Related Party Transactions and Balances (Details) - Schedule of Related Parties Financial and Operational [Line Items]  
Nature of the party Individual
Relationship with the Group Chief Executive Officer
Apifiny Inc.[Member]  
Related Party Transactions and Balances (Details) - Schedule of Related Parties Financial and Operational [Line Items]  
Nature of the party Investment management
Relationship with the Group Controlled by Haohan Xu
Roxe Holding Inc.[Member]  
Related Party Transactions and Balances (Details) - Schedule of Related Parties Financial and Operational [Line Items]  
Nature of the party Investment management
Relationship with the Group Controlled by Haohan Xu
Dr. Chris Chang Yu [Member]  
Related Party Transactions and Balances (Details) - Schedule of Related Parties Financial and Operational [Line Items]  
Nature of the party Individual [1]
Relationship with the Group Co-Founder and shareholder [1]
CRS Holdings Inc. [Member]  
Related Party Transactions and Balances (Details) - Schedule of Related Parties Financial and Operational [Line Items]  
Nature of the party Investor
Relationship with the Group Controlled by Dr. Chris Chang Yu
Jiaxing Zhijun Sihang Investment Partnership Enterprises [Member]  
Related Party Transactions and Balances (Details) - Schedule of Related Parties Financial and Operational [Line Items]  
Nature of the party Private equity investment
Relationship with the Group Shareholder, due to diluted equity interest, no longer a related party for the six months ended June 30 2023
[1] Dr. Yu resigned from his position as the Chief Executive Officer (“CEO”) of the Company and Chairman of the Board on April 6, 2022 and was appointed as Co-Chairman and Co-CEO in May 2022. On May 17, 2023, Dr. Yu resigned as the Co-Chief Executive Officer of the Company.
v3.23.3
Related Party Transactions and Balances (Details) - Schedule of Related Party Balances
¥ in Thousands, $ in Thousands
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Related Party Transactions and Balances (Details) - Schedule of Related Party Balances [Line Items]      
Due from related parties, net ¥ 864 $ 119
Due to related parties 592 82 1,214
Related Party [Member]      
Related Party Transactions and Balances (Details) - Schedule of Related Party Balances [Line Items]      
Due from related parties, net 864 119
Related Party [Member] | Apifiny Inc.[Member]      
Related Party Transactions and Balances (Details) - Schedule of Related Party Balances [Line Items]      
Due from related parties, net 211 29
Related Party [Member] | Roxe Holding Inc.[Member]      
Related Party Transactions and Balances (Details) - Schedule of Related Party Balances [Line Items]      
Due from related parties, net 363 50
Related Party [Member] | Dr. Chris Chang Yu [Member]      
Related Party Transactions and Balances (Details) - Schedule of Related Party Balances [Line Items]      
Due from related parties, net 290 40
Related Party [Member] | CRS Holdings Inc.[Member]      
Related Party Transactions and Balances (Details) - Schedule of Related Party Balances [Line Items]      
Due to related parties 592 82 287
Related Party [Member] | Jiaxing Zhijun Investment Management Co., Ltd. (“Zhijun”) [Member]      
Related Party Transactions and Balances (Details) - Schedule of Related Party Balances [Line Items]      
Due to related parties ¥ 927
v3.23.3
Related Party Transactions and Balances (Details) - Schedule of Accounts Receivables
¥ in Thousands, $ in Thousands
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Dec. 31, 2022
CNY (¥)
Variable Interest Entity [Line Items]      
Accounts receivables-related parties ¥ 11,450 $ 1,579
Related Party [Member] | Apifiny Inc.[Member]      
Variable Interest Entity [Line Items]      
Accounts receivables-related parties 3,525 486
Related Party [Member] | Roxe Holding Inc.[Member]      
Variable Interest Entity [Line Items]      
Accounts receivables-related parties ¥ 7,925 $ 1,093
v3.23.3
Related Party Transactions and Balances (Details) - Schedule of Related Party Transactions
¥ in Thousands, $ in Thousands
 6 Months Ended
Jun. 30, 2023
CNY (¥)
Jun. 30, 2023
USD ($)
Jun. 30, 2022
CNY (¥)
Related Party Transaction [Line Items]      
Related party transactions ¥ 624 $ 86 ¥ 32
AnPac Beijing [Member]      
Related Party Transaction [Line Items]      
Related party transactions 970 134
Xudong Du [Member]      
Related Party Transaction [Line Items]      
Related party transactions ¥ 464 $ 64
v3.23.3
Subsequent Events (Details) - USD ($)
$ in Thousands
 1 Months Ended 6 Months Ended
Nov. 04, 2023
Sep. 25, 2023
Jul. 17, 2023
Jul. 17, 2022
Jun. 30, 2023
Subsequent Events (Details) [Line Items]          
Purchase percentage     51.00%    
Cash (in Dollars)         $ 60,000
Purchase of shareholders percentage 38.61%     100.00%  
Ordinary share and warrants, description         (i) US$400 (original principal amount) of convertible notes, Series C warrants to purchase 258,065 ADSs (or 5,161,300 Class A ordinary shares) at exercise price equal to 125% of the lower of (a) $1.86 and (b) the lowest daily volume-weighted average price (“VWAP”) for the 10 trading days prior to the exercise date  and Series D warrants to purchase up to 283,688 ADSs (or 5,673,760 Class A ordinary shares) at exercise price equal to the lower of (x) $1.41 and (y) 75.83% of the lowest daily VWAP for the ten (10) trading days immediately prior to the exercise date, subject to adjustment, and (ii) US$1,600 (original principal amount) of convertible notes, 20,645,160 Series C warrants and 22,695,040 Series D warrants. The Company received the first payment RMB1,697(US$234) from this offering, excluding related financing costs.
Subsequent Event [Member]          
Subsequent Events (Details) [Line Items]          
Issued and outstanding equity interests (in Dollars)   $ 2,000      
Class A Ordinary Shares [Member]          
Subsequent Events (Details) [Line Items]          
Aggregate shares (in Shares)         110,476,291
Fresh2 (NASDAQ:FRES)
Historical Stock Chart
From Oct 2024 to Nov 2024 Click Here for more Fresh2 Charts.
Fresh2 (NASDAQ:FRES)
Historical Stock Chart
From Nov 2023 to Nov 2024 Click Here for more Fresh2 Charts.