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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2024

OR

          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to                .

Commission File Number: 001-35147

Moatable, Inc.

(Exact Name Of Registrant As Specified In Its Charter)

Cayman Islands

Not Applicable

(State Or Other Jurisdiction Of
Incorporation or Organization)

(IRS Employer Identification No.)

45 West Buchanan Street,

Phoenix, Arizona
(Address of Principal Executive Offices)

85003

(Zip Code)

(833) 258-7482

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

American depositary shares, each representing 45 Class A ordinary shares

 

MTBLY

Class A ordinary shares, par value $0.001 per share*

 

N/A

*Not for trading, but only in connection with the quoting of American depositary shares on the OTC Market.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No

As of May 7, 2024, the registrant had 637,962,549 Class A ordinary shares and 170,258,970 Class B ordinary shares outstanding.

Moatable, Inc.

Form 10-Q

For the Quarterly Period Ended March 31, 2024

TABLE OF CONTENTS

Note About Forward-Looking Statements

ii

Part I.  FINANCIAL INFORMATION

1

Item 1.

Financial Statements

1

Condensed Consolidated Balance Sheets – December 31, 2023 and March 31, 2024

1

Condensed Consolidated Statements of Operations – Three Months Ended March 31, 2023 and 2024

3

Condensed Consolidated Statements of Changes in Equity – Three Months Ended March 31, 2023 and 2024

5

Condensed Consolidated Statements of Cash Flows – Three Months Ended March 31, 2023 and 2024

6

Notes to Condensed Consolidated Financial Statements

7

Item 2.

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

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

26

Item 4.

Controls and Procedures

26

Part II.  OTHER INFORMATION

28

Item 1.

Legal Proceedings

28

Item 1A.

Risk Factors

28

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

28

Item 3.

Defaults Upon Senior Securities

28

Item 4.

Mine Safety Disclosures

28

Item 5.

Other Information

28

Item 6.

Exhibits

29

SIGNATURES

30

i

Note About Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events, financial or operating performance. Forward-looking statements often include words such as “may,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, risks, or intentions. Forward-looking statements include, among other things, statements regarding:

future financial performance including statements about our revenue, cost of revenue, gross margins, operating expenses, and business strategies;
predictions regarding the size and growth potential of the markets for our products or our ability to serve those markets;
ability to retain our customer base, grow the average subscription revenue per customer, or sell additional products and services to the customer base;
ability to expand our sales organization or research and development activities to address existing markets and serve new markets;
anticipate and address the technological or service needs of our customers, to release upgrades to our existing software platforms, and to develop new and enhanced applications to meet the needs of our customers;
likelihood of macro-economic events that may impact the ability to operate within certain markets or disrupt the flow of products and services such as pandemics, wars, and deterioration of relations between sovereign entities;
future regulatory, judicial, and legislative changes or developments in the U.S. and foreign countries, particularly those in which we operate and sell products, including China;
regulatory changes, business relationships, and operating risks that impact our ability to compete within the industries we serve;
anticipated investments, including in sales and marketing, research and development, customer service and support, data center infrastructure, and our expectations relating to such investments;
ability to attract, hire, and retain talent including sales, software development, or management personnel to expand operations;
accuracy of our estimates regarding expenses, future revenues, gross margins, and needs for additional financing;
ability to obtain funding for our operations;
ability to integrate and grow acquired businesses and achieve anticipated results from strategic partnerships;
anticipated effect on the business of litigation to which we are or may become a party;
effectiveness of lead generation, branding, and other demand generation strategies to reach our customers and sustain growth.

ii

Forward-looking statements may appear throughout this report and other documents we file with the Securities and Exchange Commission (“SEC”), including without limitation, the following sections: Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q and Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, and in particular, the risks discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and those discussed in other documents we file with the SEC. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

As used herein, (i) “Moatable,” “the company,” “we,” “us,” “our,” and similar terms include Moatable Inc. and its subsidiaries and, in the context of describing our consolidated financial information, also include the VIE and its subsidiaries, unless the context indicates otherwise; (ii) “ADSs” refers to American depositary shares, each of which represents 45 of our Class A ordinary shares, par value $0.001 per share; (iii) “Lofty” refers to Lofty, Inc., our majority-owned subsidiary incorporated in the state of Delaware and formerly known as Chime Technologies, Inc.; (iv) “PRC” or “China” refers to the People’s Republic of China, excluding, for purposes of this Quarterly Report on Form 10-Q only, Hong Kong, Macau, and Taiwan; (v) “Qianxiang Shiji” refers to Qianxiang Shiji Technology Development (Beijing) Co., Ltd., our wholly-owned subsidiary incorporated in China; (vi) “Qianxiang Tiancheng” or “VIE” refers to Beijing Qianxiang Tiancheng Technology Development Co., Ltd., a company incorporated in China; (vii) “Shares” or “ordinary shares” refers to our Class A ordinary shares and Class B ordinary shares, par value $0.001 per share; (viii) “Trucker Path” refers to Trucker Path, Inc., our majority-owned subsidiary incorporated in the state of Delaware; and (ix) all dollar amounts refer to United States (U.S.) dollars unless otherwise indicated.

“Moatable,” “Lofty,” “Trucker Path,” and other trademarks of ours appearing in this report are our property. We do not intend our use or display of other companies’ trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.

iii

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MOATABLE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2023 AND MARCH 31, 2024

(In thousands, except per share amounts and shares) (Unaudited)

As of 

December 31,

March 31,

2023

2024

ASSETS

 

  

 

  

Current assets

 

  

 

  

Cash and cash equivalents

$

33,913

$

33,774

Restricted cash

 

5,056

5,113

Accounts receivable, net

 

2,603

3,041

Amounts due from related parties

684

670

Prepaid expenses and other current assets, net

 

3,928

4,337

Total current assets

 

46,184

46,935

Non-current assets

Property and equipment, net

 

6,157

6,155

Intangible assets, net

 

727

457

Long-term investments

 

15,733

13,728

Right-of-use assets

 

744

623

Other non-current assets

 

155

198

Total non-current assets

23,516

21,161

TOTAL ASSETS

$

69,700

$

68,096

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

  

 

  

Current liabilities

 

  

 

  

Accounts payable

$

2,064

$

1,759

Accrued expenses and other current liabilities

 

10,557

10,673

Operating lease liabilities - current

 

461

432

Amounts due to related parties

 

655

626

Deferred revenue

4,322

4,333

Income tax payable

3,381

3,436

Total current liabilities

21,440

21,259

Non-current liabilities

Operating lease liabilities - non-current

189

98

Total non-current liabilities

189

98

TOTAL LIABILITIES

$

21,629

$

21,357

1

MOATABLE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS- continued

DECEMBER 31, 2023 AND MARCH 31, 2024

(In thousands, except per share amounts and shares) (Unaudited)

As of 

December 31,

March 31,

2023

2024

Commitments and contingencies

Shareholders’ equity

Class A ordinary shares, $0.001 par value, 3,000,000,000 shares authorized; 607,424,941 shares issued and 550,232,776 shares outstanding as of December 31, 2023; 703,529,281 shares issued and 638,345,746 shares outstanding as of March 31, 2024

$

608

$

704

Class B ordinary shares, $0.001 par value, 500,000,000 shares authorized; 170,258,970 shares issued and outstanding as of December 31, 2023 and March 31, 2024; each Class B ordinary share is convertible into one Class A ordinary share

 

170

170

Treasury stock

(2,002)

(2,157)

Additional paid in capital

 

782,365

783,864

Accumulated deficit

 

(716,315)

(719,129)

Statutory reserves

 

6,712

6,712

Accumulated other comprehensive loss

 

(8,778)

(8,825)

Total Moatable, Inc. shareholders’ equity

 

62,760

61,339

Non-controlling interest

 

(14,689)

(14,600)

Total equity

 

48,071

46,739

TOTAL LIABILITIES AND EQUITY

$

69,700

$

68,096

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

2

MOATABLE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2023 and 2024

(In thousands, except per share amounts and shares) (Unaudited)

For the three months ended March 31,

    

2023

    

2024

Revenues:

 

  

 

  

SaaS revenue

$

12,080

$

13,982

Other services

69

 

41

Total revenues

 

12,149

14,023

Cost of revenues:

 

 

  

SaaS business

2,674

3,280

Other services

49

 

36

Total cost of revenues

 

2,723

3,316

Gross profit

 

9,426

 

10,707

Operating expenses

 

  

 

  

Selling and marketing

 

4,896

3,787

Research and development

 

4,902

4,458

General and administrative

 

3,047

3,398

Impairment of intangible assets

 

 

207

Total operating expenses

 

12,845

 

11,850

Loss from operations

 

(3,419)

 

(1,143)

Other (expense) income, net

 

(23)

 

34

Gain (Loss) from fair value change of a long-term investment

 

8,276

 

(1,488)

Interest income

356

362

Income (Loss) before provision of income tax and loss in equity method investments and non-controlling interest, net of tax

 

5,190

 

(2,235)

Income tax expenses

(115)

Income (Loss) before loss in equity method investments and noncontrolling interest, net of tax

 

5,190

 

(2,350)

Impairment on and income (loss) in equity method investments, net of tax

144

(491)

Net income (loss)

$

5,334

$

(2,841)

Net loss attributable to non-controlling interests

(636)

(27)

Net income (loss) attributable to Moatable Inc.

$

5,970

$

(2,814)

 

 

Net income (loss) per share:

Net income (loss) per share attributable to Moatable Inc. shareholders:

 

 

Basic

$

0.005

$

(0.004)

Diluted

0.005

(0.004)

Weighted average number of shares used in calculating net income (loss) per share attributable to Moatable Inc. shareholders:

Basic

1,143,950,029

719,825,245

Diluted

1,240,257,189

719,825,245

3

MOATABLE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 and 2024

(In thousands) (Unaudited)

Net income (loss)

$

5,334

$

(2,841)

Other comprehensive income (loss), net of tax

Foreign currency translation, net of nil income taxes

132

(48)

Net unrealized loss on available-for-sale investments, net of nil income taxes for the three months ended March 31, 2023 and 2024, respectively

(42)

Other comprehensive income (loss)

90

(48)

Comprehensive income (loss)

5,424

(2,889)

Less: total comprehensive loss attributable to non-controlling interest

(631)

(28)

Comprehensive income (loss) attributable to Moatable Inc.

$

6,055

$

(2,861)

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

4

MOATABLE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2024

(In thousands, except share amounts and shares) (Unaudited)

Accumulated

other

Total

Non-

Class A Ordinary shares

Class B Ordinary shares

Treasury stock

Additional

Accumulated

Statutory

comprehensive

Moatable

controlling

Total

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

paid-in capital

    

deficit

    

reserves

    

loss

    

Inc.’s Equity

    

interest

    

equity

Balance as of December 31, 2022

832,736,562

$

833

305,388,450

$

305

$

$

779,002

$

(697,299)

$

6,712

$

(8,951)

$

80,602

$

(13,888)

$

66,714

Stock-based compensation

644

644

121

765

Repurchase of Class A ordinary shares

 

 

 

 

 

(30,549,690)

(1,249)

 

 

 

 

(1,249)

 

 

(1,249)

Unrealized loss on short-term investments

 

 

 

 

 

 

 

 

(42)

 

(42)

 

 

(42)

Other comprehensive income

127

127

5

132

Reclassification of additional paid-in capital

 

 

 

 

 

838

 

(838)

 

 

 

 

 

Net income (loss)

 

 

 

 

 

 

5,970

 

 

 

5,970

 

(636)

 

5,334

Exercise of share options and restricted shares vesting

30,645,751

3

33

36

36

Balance as of March 31, 2023

863,382,313

836

305,388,450

305

(30,549,690)

(1,249)

780,517

(692,167)

6,712

(8,866)

86,088

(14,398)

71,690

Balance as of December 31, 2023

607,424,941

$

608

170,258,970

$

170

(57,192,165)

$

(2,002)

$

782,365

$

(716,315)

$

6,712

$

(8,778)

$

62,760

$

(14,689)

$

48,071

Stock-based compensation

555

555

117

672

Repurchase of Class A ordinary shares

 

 

 

 

 

(7,991,370)

(155)

 

 

 

 

(155)

 

 

(155)

Other comprehensive loss

 

 

 

 

 

 

 

 

(47)

 

(47)

 

(1)

 

(48)

Net loss

 

 

(2,814)

(2,814)

(27)

(2,841)

Exercise of share option and restricted shares vesting

96,104,340

96

944

1,040

1,040

Balance as of March 31, 2024

703,529,281

$

704

170,258,970

$

170

(65,183,535)

$

(2,157)

$

783,864

$

(719,129)

$

6,712

$

(8,825)

$

61,339

$

(14,600)

$

46,739

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

5

MOATABLE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2023 and 2024

(In thousands) (Unaudited)

For the three months ended March 31,

    

2023

    

2024

Cash flows from operating activities:

 

  

 

  

Net income (loss)

$

5,334

$

(2,841)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Share-based compensation expense

 

765

 

672

Impairment on and (loss) gain in equity method investments

 

(144)

 

491

Amortization of the right-of-use assets

 

165

 

107

Depreciation and amortization

64

126

Impairment on intangible asset

 

 

207

Fair value change on long-term investment

(8,276)

1,488

Changes in operating assets and liabilities:

Accounts receivable

 

(490)

 

(438)

Prepaid expenses and other current assets

 

31

 

(409)

Other non-current assets

(43)

Accounts payable

(1)

(305)

Amounts due from/to related parties

1

Accrued expenses and other current liabilities

 

(50)

 

116

Deferred revenue

 

(11)

 

11

Operating lease liabilities

 

(215)

 

(123)

Income tax payable

 

 

55

Net cash used in operating activities

 

(2,827)

 

(886)

Cash flows from investing activities:

Purchase of short-term investments

(305)

Dividend received from equity investment

52

Proceeds from disposal of equipment and property

1

Purchases of property and refurbishment construction

(811)

(106)

Purchases of intangible assets

 

(25)

 

Net cash used in investing activities

(1,088)

(106)

Cash flows from financing activities:

Proceeds from exercise of share options

36

1,040

Ordinary share buyback

(1,249)

(155)

Dividend received from stipulation settlement

2,630

Net cash provided by financing activities

1,417

885

Net decrease in cash and cash equivalents and restricted cash

(2,498)

(107)

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

27,960

38,969

Effect of exchange rate changes

151

25

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

$

25,613

$

38,887

Reconciliation of cash, cash equivalents, and restricted cash reported within the condense consolidated balance sheets

Cash and cash equivalents

$

25,613

$

33,774

Restricted cash

5,113

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

$

25,613

$

38,887

Schedule of non-cash activities:

 

 

Obtaining right-of-use assets in exchange for operating lease liabilities

$

262

$

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

6

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.   ORGANIZATION AND PRINCIPAL ACTIVITIES

Moatable, Inc. was incorporated in the Cayman Islands. Moatable, Inc., which includes its consolidated subsidiaries, variable interest entity (“VIE”) and VIE’s subsidiaries (collectively referred to as the “Company”), operates two SaaS businesses, Lofty and Trucker Path. Lofty offers an all-in-one real estate sales acceleration and client lifecycle management platform that allows real estate professionals to obtain and nurture leads, close transactions, and retain their clients. Trucker Path provides trip planning, navigation, freight sourcing, and a marketplace that offers truckers goods and services to operate their businesses. The Company’s SaaS businesses currently generate 100% of their revenue from the U.S. market and comprise the majority of the revenue.

As of March 31, 2024, Moatable, Inc.’s major subsidiaries, VIE and VIE’s subsidiaries are as follows:

Later of date

Percentage of

of incorporation

Place of

legal ownership

Principal

Name of Subsidiaries

   

or acquisition

   

incorporation

   

by Moatable Inc.

   

activities

Subsidiaries:

 

  

 

  

 

  

 

  

Lofty, Inc.(“Lofty”)

September 7, 2012

 

Delaware, USA

 

77.8

%  

SaaS business

Trucker Path, Inc. (“Trucker Path”)

December 28, 2017

 

Delaware, USA

 

77.8

%  

SaaS business

Renren Giantly Philippines Inc.

March, 2018

 

Philippines

 

100

%  

SaaS business

Qianxiang Shiji Technology Development (Beijing) Co., Ltd. (“Qianxiang Shiji”)

March 21, 2005

 

PRC

 

100

%  

Investment holding

 

 

Variable Interest Entity:

 

 

Beijing Qianxiang Tiancheng Technology Development Co., Ltd. (“Qianxiang Tiancheng”)

October 28, 2002

 

PRC

 

N/A

Internet business

 

 

Subsidiaries of Variable Interest Entity:

 

 

Beijing Qianxiang Wangjing Technology Development Co., Ltd. (“Qianxiang Wangjing”)

November 11, 2008

 

PRC

 

N/A

Internet business

Shandong Jieying Huaqi Automobile Service Co., Ltd (“Shandong Jieying”)

July 20, 2017

 

PRC

 

N/A

Internet business

The VIE arrangements

PRC regulations limit direct foreign ownership of business entities providing value-added telecommunications services, online advertising services and internet services in the PRC where certain licenses are required for the provision of such services. Although the Company no longer operates businesses requiring the VIE, historically, the Company provided online advertising, internet value-added services (“IVAS”), and internet finance services through its VIE, Qianxiang Tiancheng, which is referred to as the “VIE”.

Qianxiang Shiji (“WFOE”), the Company’s Wholly Foreign-Owned Enterprise, entered into a series of contractual arrangements, including: (1) Power of Attorney; (2) Business Operation Agreements; (3) Exclusive Equity Option Agreement; (4) Spousal Consent Agreement; (5) Exclusive Technical and Consulting Services Agreement; (6) Intellectual Property Licenses Agreement; (7) Loan Agreements, and (8) Equity Interest Pledge Agreement with the VIE that enable the Company to (1) have power to direct the activities that most significantly affects the economic performance of the VIE, and (2) receive the economic benefits of the VIE that could be significant to the VIE. Accordingly, the WFOE is considered the primary beneficiary of the VIE and has consolidated the VIE’s financial results of operations, assets and liabilities in the Company’s consolidated financial statements. In making the conclusion that the Company is the primary beneficiary of the VIE, the Company believes the Company’s rights under the terms of the exclusive option agreement and power of attorney are substantive as they relate to operating matters, which provide the Company with a substantive kick-out right.

7

More specifically, the Company believes the terms of the contractual agreements are valid, binding, and enforceable under PRC laws and regulations currently in effect. In particular, the Company believes that the minimum amount of consideration permitted by the applicable PRC law to exercise the exclusive option does not represent a financial barrier or disincentive for the Company to exercise its rights under the exclusive option agreement. A simple majority vote of the Company’s board of directors is required to pass a resolution to exercise the Company’s rights under the exclusive option agreement, for which the consent from Mr. Joe Chen, who holds the most voting interests in the Company and is also the Company’s chairman and CEO, is not required. The Company’s rights under the exclusive option agreement give the Company the power to control the shareholders of the VIE and thus the power to direct the activities that most significantly impact the VIE’s economic performance. In addition, the Company’s rights under powers of attorney also reinforce the Company’s abilities to direct the activities that most significantly impact the VIE’s economic performance. The Company also believes that this ability to exercise control ensures that the VIE will continue to execute and renew service agreements that benefit the Company, currently largely comprised of Research and Development services to the Company’s SaaS businesses. By charging service fees at the sole discretion of the Company, and by ensuring that service agreements are executed and renewed indefinitely, the Company has the right to receive substantially all of the economic benefits from the VIE.

The VIE and its subsidiaries hold the requisite licenses and permits necessary to conduct the Company’s business in PRC under the current business arrangements.

The following financial statement balances and amounts of the Company’s VIE were included in the accompanying condensed consolidated financial statements after elimination of intercompany balances and transactions between the offshore companies, WFOE, VIE and VIE’s subsidiaries (in thousands). As of December 31, 2023 and March 31, 2024, the balance of the amounts payable by the VIE and its subsidiaries to the WFOE related to the service fees were nil.

As of December 31,

As of March 31,

    

2023

    

2024

Total assets

$

7,001

 

$

6,443

Total liabilities

$

11,877

$

8,179

For the three months ended March 31,

    

2023

    

2024

Revenues

$

34

 

$

20

Net Loss

$

(4,383)

$

(2,746)

For the three months ended March 31,

    

2023

    

2024

Net cash provided by operating activities

$

306

 

$

167

Net cash used in investing activities

$

(8)

$

(88)

Net cash used in financing activities

$

 

$

There are no consolidated VIE assets that are collateral for the VIE obligations and can only be used to settle the VIE obligations. There are no creditors (or beneficial interest holders) of the VIE that have recourse to the general credit of the Company or any of its consolidated subsidiaries. However, if the VIE ever needs financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIE through loans to the shareholders of the VIE or entrustment loans to the VIE.

Relevant PRC laws and regulations restrict the VIE from transferring a portion of its net assets, equivalent to the balance of its statutory reserve and its share capital, to the Company in the form of loans and advances or cash dividends.

8

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and E Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with audited consolidated financial statements and accompanying notes in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Principles of consolidation

The condensed consolidated financial statements of the Company include the financial statements of Moatable, Inc., its subsidiaries, its VIE and VIE’s subsidiaries. All inter-company transactions and balances are eliminated upon consolidation.

Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses in the financial statements and accompanying notes. Significant accounting estimates reflected in the Company’s consolidated financial statements include, but are not limited to, allowance for doubtful accounts, the fair value of share-based compensation awards, the realization of deferred income tax assets, impairment of long-lived assets, and impairment of long-term investments.

Fair value

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows:

Level 1-inputs are based upon unadjusted quoted prices for identical assets or liabilities traded in active markets.

Level 2-inputs are based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3-inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

Restricted Cash

On August 28, 2023, the Company entered into an Escrow Agreement with U.S. Bank National Association to enhance directors and officers’ insurance coverage. The Company set aside $5 million restricted cash into an escrow account with U.S. Bank as required by the contractual agreement with U.S. Bank National Association.

9

Accounts receivable and allowance for credit loss

Accounts receivable are stated at the original amount less an allowance for credit loss. Accounts receivable are recognized in the period when the Company has provided services to its customers and when its right to consideration is unconditional. The Company evaluates its accounts receivable for expected credit losses on a regular basis. The Company maintains an estimated allowance for credit losses to reduce its accounts receivable to the amount that it believes will be collected. The Company considers factors in assessing the collectability of its receivables, such as the age of the amounts due, the customer’s payment history, credit-worthiness, current market conditions, reasonable and supportable forecasts of future economic conditions, and other specific circumstances related to the accounts. The Company adjusts the allowance percentage periodically when there are significant differences between estimated bad debts and actual bad debts. If there is strong evidence indicating that the accounts receivable is likely to be unrecoverable, the Company also makes specific allowance in the period in which a loss is determined to be probable. Accounts receivable balances are written off after all collection efforts have been exhausted. For the three months ended March 31, 2023 and 2024, the Company recorded nil allowance for credit loss for accounts receivable, respectively.

Revenue recognition

The Company recognizes revenue when control of the service has been transferred to the customer, generally upon delivery to a customer. The contracts have a fixed contract price and revenue is measured as the amount of consideration the Company expects to receive in exchange for providing services. The Company collects taxes from customers on behalf of governmental authorities at the time of sale. These taxes are accounted for on a net basis and are not included in revenues and cost of revenues. The Company generally expenses sales commissions when incurred because the amortization period is less than one year. These costs are recorded within selling and marketing expenses. The Company does not have any significant financing payment terms as payment is received at or shortly after the point of sale.

Revenue from Contracts with Customers (“ASC 606”) prescribes a five-step model that includes: (1) identify the contract; (2) identify the performance obligations; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when (or as) performance obligations are satisfied.

The Company generated the majority of revenue from SaaS services.

SaaS revenue: SaaS revenue mainly includes the revenue generated from the subscription and advertising services provided by Lofty and Trucker Path. The Company recognizes revenue for subscription services over the life of the subscription. For Lofty’s advertising service, the Company acts as an agent to place advertisements on third-party websites or platforms. For Trucker Path’s advertising service, the Company acts as principal to place advertisements on Trucker Path’s platform. The Company recognizes revenue for advertising services over the advertising periods.

Other services: Other services mainly include revenue from the provision of back-office services to Oak Pacific Investment (“OPI”) and revenue from non-recurring sources.

The Company provides back-office services including accounting, legal, and business-related consulting services, which is a single performance obligation provided over the contract periods with pre-determined stand-alone selling price. The Company recognizes revenue over the contract periods.

Contract balances: Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represent amounts invoiced and revenue recognized when the Company has satisfied the Company’s performance obligation and has the unconditional right to payment. There were no contract assets recorded as of December 31, 2023 and March 31, 2024.

Deferred revenue mainly represents payments received from customers related to unsatisfied performance obligations for SaaS. The Company’s total deferred revenue was $4,322 and $4,333 as of December 31, 2023 and March 31, 2024, respectively, which is substantially recognized as revenue within one year. The amount of revenue recognized during the three months ended March 31, 2023 and 2024 that was previously included in the deferred revenue as of December 31, 2022 and 2023 were $2,228 and $2,445 respectively.

10

Recent accounting pronouncements not yet adopted

In November 2023, the FASB issued ASU 2023-07, which modifies the disclosure and presentation requirements of reportable segments. The new guidance requires the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit and loss. In addition, the new guidance enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and contains other disclosure requirements. The update is to be adopted retrospectively to all periods presented and is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company .is in the process of evaluation the impact of adopting this new guidance on its consolidated financial statement.

In December 2023, the FASB issued ASU 2023-09, Improvement to Income Tax Disclosure. This standard requires more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This standard also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is to be adopted on a prospective basis with the option to apply retrospectively and is effective for public business entities, for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. The Company is in the process of evaluation the impact of adopting this new guidance on its consolidated financial statement.

Recently issued ASUs by the FASB, except for the ones mentioned above, have no material impact on the Company’s consolidated results of operations or financial position.

3.   LONG-TERM INVESTMENTS

Long-term investments consisted of the following (in thousands):

As of December 31,

As of March 31,

    

Note

    

2023

    

2024

Equity method investments:

 

  

 

  

 

  

Fundrise, L.P.

 

(i)

$

12,504

$

12,601

Other

(ii)

600

Total equity method investments

 

  

 

13,104

 

12,601

Equity investment with readily determinable fair values

 

Kaixin Auto Holdings

(iii)

$

1,921

$

435

Equity investment without readily determinable fair values

 

  

 

  

 

  

Suzhou Youge Interconnection Venture Capital Center

708

692

Total equity investments without readily determinable fair values

 

  

 

708

 

692

Total long-term investments

 

  

$

15,733

$

13,728

(i)In October 2014, the Company entered into an agreement to purchase limited partnership interest of Fundrise, L.P. for a total consideration of $10,000. The Company held 98.04% equity interest as limited partner as of December 31, 2023 and March 31, 2024 and recognized its share of income of $92 and $97 for the three months ended March 31, 2023 and 2024, respectively.
(ii)In May 2014, the Company entered into an agreement to purchase limited partnership interest of Beijing Fenghou Tianyuan Investment and Management Center L.P. for a total consideration of $1,385 (RMB10 million). The Company held 12.38% partnership interest as of December 31, 2023 and March 31, 2024 and recognized no share of income for the three months ended March 31, 2023 and 2024, respectively. For the three months ended March 31, 2024, the Company recognized an impairment loss of $588.

11

(iii)As of March 31, 2024, the Company’s equity interest in Kaixin was 16.6% and the investment in Kaixin was accounted for as equity investment with readily determinable fair value. For the three months ended March 31, 2023 and 2024, the Company recognized a $8,276 unrealized income and $1,488 unrealized loss as a change of fair value to the investment of Kaixin, which was booked in gain (loss) from fair value change of a long-term investment. As of March 31, 2024, the market value of the Company’s equity investment in Kaixin Auto Holdings decreased to $435 from $1,921 as of December 31, 2023. The decrease in value is a result of a change in the quoted share price.

4.   OPERATING LEASES

The Company leases its facilities and offices under non-cancellable operating lease agreements. These leases expire through 2025 and are renewable upon negotiation.

For the three months ended March 31, 2023 and 2024, cash paid for amounts included in the measurement of lease liabilities was $215 and $123, respectively.

The operating lease cost and short-term lease cost for the three months ended March 31, 2023 and 2024 were as follows (in thousands):

For the three months ended March 31,

    

2023

    

2024

Selling expenses

$

48

$

18

Research and development expenses

70

121

General and administrative expenses

51

20

Total operating lease cost

169

159

Short-term lease cost

59

9

Total lease cost

$

228

$

168

The weighted average remaining lease term as of December 31, 2023 and March 31, 2024 was 1.64 and 1.40 years, and the weighted average discount rate of the operating leases was 10.30% and 10.30%, respectively.

Maturities of lease liabilities as of March 31, 2024 were as follows (in thousands):

    

Operating Lease

Remainder of 2024

 

$

373

2025

 

 

191

Total undiscounted lease payment

 

 

564

Less: Imputed interest

 

 

(34)

Present value of lease liabilities

 

$

530

5.   ORDINARY SHARES

Exercise of share options and restricted shares vesting

During the three months ended March 31, 2023 and 2024, 30,645,751 and 96,104,340 Class A ordinary shares were issued due to the exercise of share options or vesting of restricted share units under share-based compensation, respectively. The vesting of 21,267,315 restricted shares during the three months ended March 31, 2023 was suspended due to the Stipulation Settlement until January 13, 2023, but expensed according to the original vesting schedule. The catch-up vesting of all suspended shares was applied upon the completion of the settlement.

12

Stock Repurchase from public market

On November 7, 2022, the Company’s Board of Directors (the “Board”) authorized the repurchase of up to an aggregate of $10.0 million of the Company’s Class A ordinary shares, par value $0.001 per share, to be executed from time to time in open market transactions effected through a broker at prevailing market prices under ordinary principles of best execution within one year after commencement (the “Stock Repurchase Program”). The Stock Repurchase Program took effect on January 16, 2023. On October 13, 2023, the Board approved an extension and extra funding of the existing Stock Repurchase Program whereby the expiration date was extended to December 31, 2024 and the authorized repurchase amount was increased from $10.0 million to $15.0 million.

The Stock Repurchase Program does not obligate the Company to repurchase any amount of the Company’s ordinary shares, and may be modified, extended, suspended, or discontinued at any time. The timing and amount of repurchases will be determined by the Company’s management based on a variety of factors such as the market price of the Company’s ordinary shares, the Company’s corporate cash requirements, and overall market conditions. The Stock Repurchase Program is subject to applicable legal requirements, including federal and state securities laws.

For the three months ended March 31, 2023 and 2024, the Company repurchased 678,882 and 177,586 ADSs, representing 30,549,690 and 7,991,370 Class A ordinary shares (each ADS is equivalent to 45 Ordinary Shares) for $1,249 and $155 on the open market, at a weighted average price of nil and $1.83 and $0.87 per ADS, respectively.

The following table sets forth repurchase activity under the Stock Repurchase Program for the three months ended March 31, 2024 (amount in thousands, except share and per share amounts):

Approximate Dollar