Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]
October 22 2024 - 6:08AM
Edgar (US Regulatory)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October 2024
Commission File Number: 001-38833
UP Fintech Holding Limited
1 Raffles Place, #35-61 One Raffles Place
Singapore (048616)
(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.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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UP Fintech Holding Limited |
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By: |
/s/ JOHN FEI ZENG |
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Name: |
John Fei Zeng |
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Title: |
Chief Financial Officer |
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Date: October 22, 2024 |
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EXHIBIT INDEX
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Exhibit
No. |
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Description |
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99.1 |
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Unaudited Condensed Consolidated Financial Statements |
101.INS |
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Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
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Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
104 |
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Cover Page formatted as Inline XBRL and contained in Exhibit 101. |
00000000
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UP FINTECH HOLDING LIMITED |
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INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS |
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(All amounts in US$, except for share, per share data, or otherwise noted) |
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As of December 31, |
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As of June 30,
(Unaudited) |
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2023 |
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2024 |
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US$ |
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US$ |
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Assets: |
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Cash and cash equivalents |
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322,599,616 |
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392,528,408 |
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Cash-segregated for regulatory purpose |
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1,617,154,185 |
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1,701,707,286 |
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Term deposits |
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896,683 |
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901,409 |
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Receivables from customers (net of allowance of US$991,286 and US$14,870,240 as of
December 31, 2023 and June 30, 2024) |
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753,361,199 |
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846,675,954 |
|
Receivables from brokers, dealers, and clearing organizations |
|
|
541,876,929 |
|
|
|
1,591,933,989 |
|
Financial instruments held, at fair value |
|
|
428,159,554 |
|
|
|
175,701,579 |
|
Prepaid expenses and other current assets |
|
|
17,936,180 |
|
|
|
17,769,978 |
|
Amounts due from related parties |
|
|
7,987,756 |
|
|
|
9,963,636 |
|
Total current assets |
|
|
3,689,972,102 |
|
|
|
4,737,182,239 |
|
Long-term deposits |
|
|
4,225,412 |
|
|
|
1,376,046 |
|
Right-of-use assets |
|
|
9,067,885 |
|
|
|
13,053,689 |
|
Property, equipment and intangible assets, net |
|
|
16,429,543 |
|
|
|
16,473,565 |
|
Goodwill |
|
|
2,492,668 |
|
|
|
2,492,668 |
|
Long-term investments |
|
|
7,586,483 |
|
|
|
7,326,173 |
|
Other non-current assets |
|
|
5,282,012 |
|
|
|
6,365,576 |
|
Deferred tax assets |
|
|
10,990,998 |
|
|
|
9,103,304 |
|
Total assets |
|
|
3,746,047,103 |
|
|
|
4,793,373,260 |
|
Liabilities: |
|
|
|
|
|
|
Payables to customers |
|
|
2,913,306,558 |
|
|
|
2,805,723,816 |
|
Payables to brokers, dealers and clearing organizations |
|
|
114,771,931 |
|
|
|
1,241,375,223 |
|
Accrued expenses and other current liabilities |
|
|
42,381,946 |
|
|
|
43,395,355 |
|
Deferred income – current |
|
|
819,809 |
|
|
|
— |
|
Lease liabilities – current |
|
|
4,133,883 |
|
|
|
4,445,007 |
|
Amount due to related parties |
|
|
10,148,142 |
|
|
|
21,995,813 |
|
Total current liabilities |
|
|
3,085,562,269 |
|
|
|
4,116,935,214 |
|
Convertible bonds |
|
|
156,887,691 |
|
|
|
158,181,706 |
|
Lease liabilities – non-current |
|
|
4,777,134 |
|
|
|
8,140,018 |
|
Deferred tax liabilities |
|
|
3,397,831 |
|
|
|
2,315,326 |
|
Total liabilities |
|
|
3,250,624,925 |
|
|
|
4,285,572,264 |
|
Commitments and Contingencies (Note 18) |
|
|
|
|
|
|
Mezzanine equity |
|
|
|
|
|
|
Redeemable non-controlling interests |
|
|
6,706,660 |
|
|
|
6,871,175 |
|
Total Mezzanine equity |
|
|
6,706,660 |
|
|
|
6,871,175 |
|
Shareholders’ equity: |
|
|
|
|
|
|
Class A ordinary shares |
|
|
22,528 |
|
|
|
22,725 |
|
Class B ordinary shares |
|
|
976 |
|
|
|
976 |
|
Additional paid-in capital |
|
|
505,448,080 |
|
|
|
510,169,203 |
|
Statutory reserve |
|
|
8,511,039 |
|
|
|
8,511,039 |
|
Accumulated deficit |
|
|
(19,600,434 |
) |
|
|
(4,371,906 |
) |
Treasury stock |
|
|
(2,172,819 |
) |
|
|
(2,172,819 |
) |
Accumulated other comprehensive loss |
|
|
(3,232,993 |
) |
|
|
(10,940,152 |
) |
Total UP Fintech shareholders’ equity |
|
|
488,976,377 |
|
|
|
501,219,066 |
|
Non-controlling interests |
|
|
(260,859 |
) |
|
|
(289,245 |
) |
Total equity |
|
|
488,715,518 |
|
|
|
500,929,821 |
|
Total liabilities, mezzanine equity and equity |
|
|
3,746,047,103 |
|
|
|
4,793,373,260 |
|
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
|
|
|
|
|
|
|
|
|
UP FINTECH HOLDING LIMITED |
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
|
(All amounts in US$, except for share, per share data, or otherwise noted) |
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, |
|
|
|
2023 |
|
|
2024 |
|
|
|
US$ |
|
|
US$ |
|
Revenues(a) |
|
|
|
|
|
|
Commissions |
|
|
47,450,496 |
|
|
|
61,872,996 |
|
Interest related income |
|
|
|
|
|
|
Financing service fees |
|
|
5,696,169 |
|
|
|
5,737,263 |
|
Interest income |
|
|
71,036,277 |
|
|
|
88,035,169 |
|
Other revenues |
|
|
8,197,482 |
|
|
|
10,740,072 |
|
Total revenues |
|
|
132,380,424 |
|
|
|
166,385,500 |
|
Interest expense |
|
|
(18,831,305 |
) |
|
|
(28,371,816 |
) |
Total net revenues |
|
|
113,549,119 |
|
|
|
138,013,684 |
|
Operating cost and expenses: |
|
|
|
|
|
|
Execution and clearing |
|
|
(4,467,162 |
) |
|
|
(5,037,869 |
) |
Employee compensation and benefits |
|
|
(48,315,075 |
) |
|
|
(56,432,447 |
) |
Occupancy, depreciation and amortization |
|
|
(4,961,362 |
) |
|
|
(4,254,025 |
) |
Communication and market data(a) |
|
|
(14,720,003 |
) |
|
|
(17,374,887 |
) |
Marketing and branding |
|
|
(9,905,192 |
) |
|
|
(10,798,731 |
) |
General and administrative |
|
|
(9,049,772 |
) |
|
|
(25,913,265 |
) |
Total operating cost and expenses |
|
|
(91,418,566 |
) |
|
|
(119,811,224 |
) |
Other income: |
|
|
|
|
|
|
Others, net |
|
|
8,087,095 |
|
|
|
5,020,232 |
|
Income before income taxes |
|
|
30,217,648 |
|
|
|
23,222,692 |
|
Income tax expense |
|
|
(8,894,968 |
) |
|
|
(8,014,557 |
) |
Net income |
|
|
21,322,680 |
|
|
|
15,208,135 |
|
Less: net loss attributable to non-controlling interests |
|
|
(75,442 |
) |
|
|
(20,393 |
) |
Accretion of redeemable non-controlling interests to redemption value |
|
|
(248,863 |
) |
|
|
(305,159 |
) |
Net income attributable to ordinary shareholders of UP Fintech |
|
|
21,149,259 |
|
|
|
14,923,369 |
|
Net income per share attributable to ordinary shareholders of
UP Fintech: |
|
|
|
|
|
|
Basic |
|
|
0.009 |
|
|
|
0.006 |
|
Diluted |
|
|
0.009 |
|
|
|
0.006 |
|
Weighted average shares used in calculating net income per
ordinary share: |
|
|
|
|
|
|
Basic |
|
|
2,317,687,839 |
|
|
|
2,348,450,793 |
|
Diluted |
|
|
2,413,294,307 |
|
|
|
2,371,490,247 |
|
Other comprehensive loss, net of tax: |
|
|
|
|
|
|
Change in cumulative foreign currency translation adjustment |
|
|
(6,136,206 |
) |
|
|
(7,700,848 |
) |
Total Comprehensive income |
|
|
15,186,474 |
|
|
|
7,507,287 |
|
Less: comprehensive loss attributable to non-controlling interests |
|
|
(64,296 |
) |
|
|
(14,082 |
) |
Accretion of redeemable non-controlling interests to redemption value |
|
|
(248,863 |
) |
|
|
(305,159 |
) |
Total Comprehensive income attributable to ordinary shareholders
of UP Fintech |
|
|
15,001,907 |
|
|
|
7,216,210 |
|
(a)Includes the following revenues, costs and expenses resulting from transactions with related parties for the six months ended June 30, 2023 and 2024 (Note 16):
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, |
|
|
|
2023 |
|
|
2024 |
|
|
|
US$ |
|
|
US$ |
|
Commissions |
|
|
2,979 |
|
|
|
80,878 |
|
Interest related income |
|
|
|
|
|
|
Interest income |
|
|
75,264 |
|
|
|
1,256,076 |
|
Communication and market data |
|
|
(70,980 |
) |
|
|
(66,150 |
) |
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UP FINTECH HOLDING LIMITED |
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY |
|
(All amounts in US$, except for share, per share data, or otherwise noted) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A ordinary shares |
|
Class B ordinary shares |
|
Treasury stock purchases |
|
Additional paid in capital |
|
Statutory
Reserves |
|
Accumulated
other
comprehensive
loss |
|
Accumulated
deficit |
|
Non-controlling
interests |
|
Total
equity |
|
|
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Shares |
|
Amount |
|
Amount |
|
US$ |
|
US$ |
|
US$ |
|
US$ |
|
US$ |
|
|
|
|
|
US$ |
|
|
|
US$ |
|
|
|
US$ |
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2023 |
|
|
2,221,403,067 |
|
|
22,213 |
|
|
97,611,722 |
|
|
976 |
|
|
10,429,305 |
|
|
(2,172,819 |
) |
|
495,705,684 |
|
|
6,171,627 |
|
|
(2,231,411 |
) |
|
(50,366,734 |
) |
|
(142,644 |
) |
|
446,986,892 |
|
Issuance of Class A ordinary shares upon settlement
of share-based awards |
|
|
16,431,728 |
|
|
164 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
69,592 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
69,756 |
|
Share-based compensation |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,504,775 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,395 |
|
|
4,506,170 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(6,147,353 |
) |
|
— |
|
|
11,147 |
|
|
(6,136,206) |
|
Accretion of redeemable non-controlling interests |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(248,863 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(13,098 |
) |
|
(261,961) |
|
Net income (loss) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
21,398,122 |
|
|
(75,442 |
) |
|
21,322,680 |
|
Balance as of June 30, 2023 |
|
|
2,237,834,795 |
|
|
22,377 |
|
|
97,611,722 |
|
|
976 |
|
|
10,429,305 |
|
|
(2,172,819 |
) |
|
500,031,188 |
|
|
6,171,627 |
|
|
(8,378,764 |
) |
|
(28,968,612 |
) |
|
(218,642 |
) |
|
466,487,331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1, 2024 |
|
|
2,252,892,845 |
|
|
22,528 |
|
|
97,611,722 |
|
|
976 |
|
|
10,429,305 |
|
|
(2,172,819 |
) |
|
505,448,080 |
|
|
8,511,039 |
|
|
(3,232,993 |
) |
|
(19,600,434 |
) |
|
(260,859 |
) |
|
488,715,518 |
|
Issuance of Class A ordinary shares upon settlement
of share-based awards |
|
|
19,669,645 |
|
|
197 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
43,754 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
43,951 |
|
Share-based compensation |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,982,528 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,757 |
|
|
4,984,285 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
(7,707,159 |
) |
|
— |
|
|
6,311 |
|
|
(7,700,848 |
) |
Accretion of redeemable non-controlling interests |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(305,159 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(16,061 |
) |
|
(321,220 |
) |
Net income (loss) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
15,228,528 |
|
|
(20,393 |
) |
|
15,208,135 |
|
Balance as of June 30, 2024 |
|
|
2,272,562,490 |
|
|
22,725 |
|
|
97,611,722 |
|
|
976 |
|
|
10,429,305 |
|
|
(2,172,819 |
) |
|
510,169,203 |
|
|
8,511,039 |
|
|
(10,940,152 |
) |
|
(4,371,906 |
) |
|
(289,245 |
) |
|
500,929,821 |
|
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
|
|
|
|
|
|
|
|
|
UP FINTECH HOLDING LIMITED |
|
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(All amounts in US$, except for share, per share data, or otherwise noted) |
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, |
|
|
|
2023 |
|
|
2024 |
|
|
|
US$ |
|
|
US$ |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net income |
|
|
21,322,680 |
|
|
|
15,208,135 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
Share-based compensation |
|
|
4,506,170 |
|
|
|
4,984,285 |
|
Depreciation and amortization |
|
|
1,426,385 |
|
|
|
1,315,796 |
|
Unrealized fair value change of financial instruments held, at fair value |
|
|
(6,379,516 |
) |
|
|
(6,854,000 |
) |
Loss from investments, including impairments |
|
|
— |
|
|
|
200,000 |
|
Allowance for doubtful accounts |
|
|
156,331 |
|
|
|
13,880,233 |
|
Foreign currency exchange gain |
|
|
(2,186,650 |
) |
|
|
(5,255,760 |
) |
Deferred tax expense |
|
|
2,496,014 |
|
|
|
586,647 |
|
Interest expense from convertible bonds |
|
|
1,257,202 |
|
|
|
1,294,015 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Financial instruments held, at fair value |
|
|
(184,319,756 |
) |
|
|
259,511,975 |
|
Receivables from customers |
|
|
(129,505,159 |
) |
|
|
(107,194,988 |
) |
Receivables from brokers, dealers and clearing organizations |
|
|
302,116,351 |
|
|
|
(1,050,057,060 |
) |
Amounts due from/to related parties |
|
|
(255,633 |
) |
|
|
9,871,791 |
|
Prepaid expenses and other current assets |
|
|
(1,308,454 |
) |
|
|
478,478 |
|
Operating lease right-of-use assets |
|
|
3,628,981 |
|
|
|
(3,985,804 |
) |
Other non-current assets |
|
|
(684,292 |
) |
|
|
(1,748,353 |
) |
Payables to customers |
|
|
(146,852,786 |
) |
|
|
(107,582,742 |
) |
Payables to brokers, dealers and clearing organizations |
|
|
79,265,551 |
|
|
|
1,126,603,292 |
|
Accrued expenses and other current liabilities |
|
|
(5,286,795 |
) |
|
|
1,013,410 |
|
Operating lease liabilities |
|
|
(3,776,878 |
) |
|
|
3,674,008 |
|
Deferred income |
|
|
533,665 |
|
|
|
(819,809 |
) |
Net cash provided by (used in) operating activities |
|
|
(63,846,589 |
) |
|
|
155,123,549 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
Purchase of property, equipment and intangible assets |
|
|
(1,774,179 |
) |
|
|
(1,359,818 |
) |
Maturity of term deposits |
|
|
— |
|
|
|
2,816,941 |
|
Advances to employees |
|
|
(284,827 |
) |
|
|
114,150 |
|
Net cash provided by (used in) investing activities |
|
|
(2,059,006 |
) |
|
|
1,571,273 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
Proceeds received from redeemable non-controlling interests |
|
|
1,680,036 |
|
|
|
— |
|
Proceeds received from issuance of Class A Ordinary Shares upon settlement of share-based awards |
|
|
69,754 |
|
|
|
43,951 |
|
Net cash provided by financing activities |
|
|
1,749,790 |
|
|
|
43,951 |
|
Increase (decrease) in cash, cash equivalents and restricted cash |
|
|
(64,155,805 |
) |
|
|
156,738,773 |
|
Effect of exchange rate changes |
|
|
(3,825,184 |
) |
|
|
(2,256,880 |
) |
Cash, cash equivalents and restricted cash at beginning of the period |
|
|
1,955,728,529 |
|
|
|
1,939,753,801 |
|
Cash, cash equivalents and restricted cash at end of the period |
|
|
1,887,747,540 |
|
|
|
2,094,235,694 |
|
Cash, cash equivalents and restricted cash: |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
324,102,449 |
|
|
|
392,528,408 |
|
Cash-segregated for regulatory purpose |
|
|
1,563,645,091 |
|
|
|
1,701,707,286 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
Income taxes paid (net of refunds) |
|
|
5,513,520 |
|
|
|
3,432,994 |
|
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
UP FINTECH HOLDING LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in US$), except for share, per share data, or otherwise noted)
1.ORGANIZATION AND PRINCIPAL ACTIVITIES
UP Fintech Holding Limited (the “Company”) was incorporated under the laws of Cayman Islands on January 26, 2018. The Company, its subsidiaries, its consolidated variable interest entities (“VIEs”) and VIEs’ subsidiaries (collectively, the “Group”) are primarily engaged in providing online brokerage services.
As of June 30, 2024, details of the Group’s major principal operating subsidiaries, VIEs and VIEs’ subsidiaries were as follows:
|
|
|
|
|
|
|
|
|
Date of
incorporation
or acquisition |
|
Place of
establishment/
incorporation |
|
Percentage of
legal ownership |
Subsidiaries: |
|
|
|
|
|
|
Tiger Brokers (NZ) Limited (“TBNZ”) |
|
August 02, 2016 |
|
New Zealand |
|
100% |
Up Fintech International Limited (“Up International”) |
|
February 08, 2018 |
|
Hong Kong |
|
100% |
Tiger Brokers (Singapore) PTE Ltd. (“Tiger Brokers SG”) |
|
March 27, 2018 |
|
Singapore |
|
100% |
US Tiger Securities, Inc. (“US Tiger Securities”) |
|
March 30, 2018 |
|
United States of
America(“USA”) |
|
100% |
Beijing Bohu Xiangshang Technology Co., LTD (“Beijing BHXS”, “Beijing
WFOE I”) |
|
May 17, 2018 |
|
PRC |
|
100% |
Beijing Xiangshang Yixin Technology Co., Ltd (“Beijing Yixin”, “Beijing
WFOE II”) |
|
July 26, 2018 |
|
PRC |
|
100% |
Wealthn LLC (“Wealthn”) |
|
August 01, 2018 |
|
USA |
|
100% |
Kastle Limited (“Kastle”) |
|
October 15, 2018 |
|
Hong Kong |
|
100% |
TradeUP Securities Inc (US) (“TradeUP Securities”) |
|
July 12, 2019 |
|
USA |
|
100% |
Tradeup Inc. (“Tradeup”) |
|
October 10, 2019 |
|
USA |
|
100% |
Hangzhou U-Tiger Technology Co. LTD (“Hangzhou U-Tiger”) |
|
April 09, 2020 |
|
PRC |
|
100%1 |
Tiger Fintech (NZ) Limited (“TFNZ”) |
|
May 17, 2021 |
|
New Zealand |
|
100% |
Tiger Services (AU) Pty Ltd (“Tiger Services AU”) |
|
August 27, 2021 |
|
Australia |
|
100% |
Tiger Brokers (AU) PTY Limited (“TBAU”) |
|
September 13, 2021 |
|
Australia |
|
100% |
Tiger Brokers (HK) Global Limited (“Tiger Brokers HK”) |
|
October 26, 2021 |
|
Hong Kong |
|
100% |
VIEs: |
|
|
|
|
|
|
Beijing Xiangshang Rongke Technology Co. LTD (“Beijing Rongke”,
“Ningxia VIE”) |
|
June 11, 2014 |
|
PRC |
|
Consolidated VIE |
Beijing Xiangshang Yiyi Laohu Technology Group Co., LTD (“Beijing Yiyi”,
“Beijing VIE”) |
|
October 29, 2018 |
|
PRC |
|
Consolidated VIE |
VIEs’ subsidiaries: |
|
|
|
|
|
|
Beijing U-Tiger Network Technology Co., LTD (“Beijing U-Tiger Network”) |
|
April 20, 2016 |
|
PRC |
|
VIE’s subsidiary |
Beijing U-Tiger Business Service Co., Ltd (“Beijing U-Tiger Business”) |
|
April 21, 2016 |
|
PRC |
|
VIE’s subsidiary |
Beijing Zhijianfengyi Information Technology Co., Ltd (“Beijing ZJFY”) |
|
January 25, 2018 |
|
PRC |
|
VIE’s subsidiary |
Beijing Yixin Xiangshang Technology Co.,LTD (“Beijing Xiangshang”) |
|
September 05, 2018 |
|
PRC |
|
VIE’s subsidiary |
Guangzhou U-Tiger Technology Co., LTD (“Guangzhou U Tiger”) |
|
December 24, 2018 |
|
PRC |
|
VIE’s subsidiary |
1Up Fintech International Limited owns 85% percentage of the shares of Hangzhou U-Tiger, and the holder of the remaining 15% has pledged its voting interest to Up Fintech International Limited, which as a result controls 100% of the voting power of this entity.
UP FINTECH HOLDING LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in US$, except for share, per share data, or otherwise noted)
1.ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)
History of the Group and reorganization under identical common ownership
The Group’s history began in June 2014 with the commencement of operations of Beijing Rongke, as a limited liability company in PRC incorporated by Mr. Tianhua, Wu, Chief Executive Officer (the “CEO”). From December 2014 to January 2017, after the incorporation of the Beijing Rongke, series Angel, A, B, B+ investors (collectively, the “equity investors”) each acquired certain equity interest with preferential rights of Beijing Rongke.
In June 2018, the Company undertook a series of reorganization transactions to re-domicile its business from the PRC to the Cayman Islands (the “Re-domiciliation”). The main purpose of the Re-domiciliation was to establish a Cayman holding company for the existing business in preparation for its overseas initial public offering. At the same shareholding percentages and the rights of each shareholder were substantially the same in Beijing Rongke and the Company, the Re-domiciliation was accounted for as a reorganization of entities under common ownership. As a result, Beijing Rongke’s historical financial information was consolidated in the consolidated financial statements of the Group since the beginning of the periods presented.
The VIE arrangements
To provide the Company control over the VIEs and the rights to the expected residual returns of the VIEs and VIEs’ subsidiaries, on June 7, 2018, Beijing WFOE I, entered into a series of contractual arrangements with Beijing Rongke and its equity investors, which were amended and restated on December 17, 2018 and October 11, 2022, respectively and was terminated on November 1, 2023. On the same date of such termination, the Beijing WFOE I, entered into a series of contractual arrangements with Beijing Rongke and its then shareholders. On October 30, 2018, Beijing WFOE II entered into a series of substantially same contractual arrangements with Beijing Yiyi.
As a result of entering into these contractual agreements, the Company through its wholly owned subsidiaries, Beijing WFOE I and Beijing WFOE II (the “WFOEs”), has (1) power to direct the activities of the VIEs that most significantly affect the entities’ economic performance and (2) the right to receive economic benefits of the VIEs that could be significant to the VIEs. Accordingly, The Company is considered the primary beneficiary of the VIEs and consolidate the VIEs’ financial results of operations, assets, and liabilities in the Company’s consolidated financial statements. The Company also believes that this ability to exercise control ensures that the VIEs will continue to execute and renew the exclusive business cooperation agreements and pay service fees to the Company. The ability to charge service fees in amounts determined at the Company’s sole discretion, and by ensuring that the exclusive business cooperation agreements are executed and renewed indefinitely, the Company has the right to receive substantially all of the economic benefits from the VIEs.
Agreements that were entered to provide the Company effective control over the VIEs
Exclusive Option Agreements. The respective equity investors of the VIEs entered into Exclusive Option Agreements with the WFOEs respectively, pursuant to which the equity investors of the VIEs grant the WFOEs an irrevocable and exclusive right to purchase or designate one or more persons to purchase the equity interests in the VIEs then held by the equity investors of the VIEs once or at multiple times at any time in part or in whole at the WFOEs’ sole and absolute discretion to the extent permitted by PRC laws. The standard equity interest purchase price is US$1.5 (RMB10). If a minimum price limited by PRC law applicable is more than US$1.5 (RMB10), the purchase price of the equity interest shall equal such minimum price. The agreement shall remain effective for a term of ten years and renewable at the WFOEs’ election.
UP FINTECH HOLDING LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in US$, except for share, per share data, or otherwise noted)
1.ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)
The VIE arrangements (Continued)
Powers of Attorney. The equity investors of the VIEs signed the irrevocable Powers of Attorney to appoint the WFOEs as the attorney-in-fact to act on the equity investors’ behalf on all rights that the equity investors have in respect of their equity interest in the VIEs conferred by relevant laws and regulations and the articles of association of the VIEs. The rights include but not limited to attending shareholders meeting, exercising voting rights, designating and appointing on behalf of the equity investors, the legal representative (chairperson), the director, supervisor, the chief executive officer and other senior management members of the VIEs. Powers of attorney are coupled with an interest and shall be irrevocable and continuously valid from the date of execution of the Powers of Attorney.
Spousal Consent letters. The spouse of each married equity investors of the VIEs has signed a spousal consent letter, which unconditionally and irrevocably agreed not to assert any rights over the equity interest in the VIEs held by and registered in the name of their spouse. In addition, in the event that the spouse obtains any equity interest in the VIEs for any reason, they agreed to be bound by the contractual arrangements.
Commitment letters. The respective equity investors of the VIEs entered into Commitment letters with the WFOEs respectively. The equity investors of the VIEs undertake that, when exercising their options, they will refund, without any conditions, any amount and fees to the WFOEs which exceed the share purchase price provided in the Exclusive Option Agreements.
Agreements that were entered to transfer economic benefits to the Company
Exclusive Business Cooperation Agreements. The WFOEs entered into Exclusive Business Cooperation Agreements with the VIEs and their equity investors. Under the agreements, VIEs agree to appoint the WFOEs as their exclusive services provider to provide the business support, technical and consulting services at a determined price. The WFOEs shall have exclusive and proprietary rights and interests in all rights, ownership, interests and intellectual properties arising out of or created during the performance of the agreement. The annual service fee should not be less than 99% of VIEs’ total net profit and could be decided and adjusted by the WFOEs. The service agreements shall remain effective for ten years. The WFOEs has the right to unilaterally extend the agreement and the VIEs shall accept the extended term unconditionally.
Equity Pledge Agreements. The equity investors of the VIEs entered into Equity Pledge Agreements with the WFOEs, under which the equity investors pledged all of the equity interest in the VIEs to the WFOEs to ensure that the WFOEs collect all payments due by the VIEs, including without limitation the consulting and service fees regularly from the VIEs under the Exclusive Business Cooperation Agreements. The WFOEs shall have the right to collect dividends generated by the equity interest during the term of pledge. If any event of default, the WFOEs, as the pledgee, will be entitled to take possession of the equity interest pledged and to dispose of the pledged equity interest. The Equity Pledge Agreements remain continuously valid until all payments due under the Exclusive Business Cooperation Agreements have been fulfilled by the VIEs.
Risks in relation to the VIE structure
The Company believes that the WFOEs’ contractual arrangements with the VIEs and their respective subsidiaries are in compliance with PRC laws and are legally enforceable. The equity investors of the VIEs are also major shareholders of the Company and therefore have no current interest in seeking to act contrary to the contractual arrangements. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and if the shareholders were to reduce their interest in the Company, their interests may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so.
UP FINTECH HOLDING LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in US$, except for share, per share data, or otherwise noted)
1.ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)
Risks in relation to the VIE structure (Continued)
The Company’s ability to control the VIEs also depends on the Powers of attorney. The WFOEs have to vote on all matters requiring shareholders’ approval in the VIEs. As noted above, the Company believes this Powers of attorney is legally enforceable but may not be as effective as direct equity ownership.
The shareholders are required to complete the registration of the equity pledge under the agreements with competent government authorities. In case any of the shareholders is in breach, the WFOEs will be entitled to certain right, including the right to dispose the pledged equity interest and to receive proceeds from the auction or sale of the pledge equity interests. The Company has completed the registration of the equity pledges relating to the VIEs with the local government authorities.
In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the PRC regulatory authorities could:
•revoke the Group’s business and operating licenses;
•require the Group to discontinue or restrict its operations;
•restrict the Group’s right to collect revenues;
•restrict or prohibit the Group to finance its business and operations in China;
•require the Group to restructure the operations;
•impose additional conditions or requirements with which the Group might not be able to comply, levy fines, confiscate the Group’s income or the income of its PRC subsidiary or affiliated PRC entities; or
•take other regulatory or enforcement actions against the Group that could be harmful to its business.
The imposition of any of these penalties could result in a material adverse effect on the Group’s ability to conduct the Group’s business. In addition, if the imposition of any of these penalties causes the Group to lose the rights to direct the activities of the VIEs, VIEs’ subsidiaries, or the right to receive their economic benefits, the Group would no longer be able to consolidate the VIEs and VIEs’ subsidiaries. The Group does not believe that any penalties imposed or actions taken by the PRC government would result in the liquidation or dissolution of the Company, the WFOEs, the VIEs and their respective subsidiaries.
There are no consolidated VIEs’ assets that are collateralized for the VIEs’ obligations and can only be used to settle the VIEs’ obligations. There are no creditors (or beneficial interest holders) of the VIEs that have recourse to the general credit of the Company or any of its consolidated subsidiaries. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholders of the VIEs or entrustment loans to the VIEs.
Relevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of their statutory reserve and their share capital, to the Company in the form of loans and advances or cash dividends.
UP FINTECH HOLDING LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in US$, except for share, per share data, or otherwise noted)
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and principle of consolidation
The unaudited interim condensed consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The unaudited interim condensed consolidated financial statements of the Group include the financial statements of the Company, its wholly-owned subsidiaries, its VIEs and the VIEs’ subsidiaries. The Company believes that the disclosures are adequate to make the information presented not misleading.
Redeemable non-controlling interests
Redeemable non-controlling interests represent preferred shares financing by a consolidated VIE’s subsidiary of the Group from preferred shareholders. As the preferred shares could be redeemed by such shareholders upon the occurrence of certain events that are not solely within the control of the Group, these preferred shares are accounted for as redeemable non-controlling interests. The Group accounts for the changes in accretion to the redemption value in accordance with ASC topic 480, Distinguishing Liabilities from Equity and recorded accretions on the preferred shares to the redemption value from the issuance dates to the earliest redemption dates.
Concentration of credit risk
The Group’s exposure to credit risk associated with its trading and other activities is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. Concentrations of credit risk can be affected by changes in political, industry, or economic factors. To reduce the potential for risk concentration, credit limits are established and exposure is monitored in light of changing counterparty and market conditions. As of December 31, 2023 and June 30, 2024, the Group did not have any material concentrations of credit risk outside the ordinary course of business.
Concentration of revenue
There is no customer accounting for 10% or more of total revenues for the six months ended June 30, 2023 and 2024, respectively.
Concentration of supplier
The Group relies on third parties for the execution and clearing of trade requests made by customers. In instances where these parties fail to perform their obligations, the Group may be temporarily unable to find alternative suppliers to satisfactorily deliver services to its customers in a timely manner, if at all.
For the six months ended June 30, 2023 and 2024, 17.3% and 11.5% of its total net revenues were executed and cleared by one supplier.
Recent Accounting Pronouncements
In October 2023, FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative, which modifies the disclosure or presentation requirements of various FASB topics in the Codification. The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-K becomes effective, with early adoption prohibited. The Group does not expect adoption of this standard will have a material impact on its financial statements.
UP FINTECH HOLDING LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in US$, except for share, per share data, or otherwise noted)
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements (Continued)
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures introducing key amendments to enhance disclosures in public entities reportable segments. Notable changes include the mandatory disclosure of significant segment expenses regularly provided to the chief operating decision maker (“CODM”), disclosure of other segment items, and requirements for consistency in reporting measures used by the CODM. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Group is currently assessing the impact to its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures. ASU No. 2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Group is currently assessing the impact to its consolidated financial statements.
In March 2024, FASB issued ASU 2024-02, Codification Improvements: Amendments to Remove References to the Concepts Statements. ASU No. 2024-02 contains amendments to the Codification that remove references to various Concepts Statements. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Group does not expect adoption of this standard will have a material impact on its financial statements.
3.RECEIVABLES FROM CUSTOMERS
Receivables from customers include the margin loans extended to consolidated accounts customers by the Group. Securities owned by the customers, which are not recorded in the unaudited interim condensed consolidated balance sheets, are held as collateral for amounts due on the loan receivables. Receivables from customers are recorded net of allowance for doubtful accounts. Revenues earned from the margin loan transactions are included in interest income. The amounts receivable from customers that are determined by management to be uncollectible when the fair value of the collaterals fall under the carrying value of the receivables are recorded as bad debt expense in the unaudited interim condensed consolidated statements of comprehensive income.
For six months ended June 30, 2023 and 2024, US$156,331 and US$13,878,954 of allowance for doubtful accounts were recorded, respectively.
The table below presents the movement of allowance for doubtful accounts from customers for the six months ended June 30, 2023 and 2024.
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, |
|
|
|
2023 |
|
|
2024 |
|
|
|
US$ |
|
|
US$ |
|
Balance as of January 1, |
|
|
696,508 |
|
|
|
991,286 |
|
Additional/(Reversal) |
|
|
156,331 |
|
|
|
13,878,954 |
|
Write-off |
|
|
— |
|
|
|
— |
|
Balance as of June 30, |
|
|
852,839 |
|
|
|
14,870,240 |
|
As of June 30, 2024, the allowance balance of receivables from customers was US$14.9 million compared to US$0.9 million as of June 30, 2023, which was due to a bad debt provision concerning the recoverability of a specific Hong Kong stock pledge business faced with extreme market situation and significant price drop, leading to a provision for the loan balance.
UP FINTECH HOLDING LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in US$, except for share, per share data, or otherwise noted)
4.PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other currents assets consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
As of June 30, |
|
|
|
2023 |
|
|
2024 |
|
|
|
US$ |
|
|
US$ |
|
IPO distribution service and promotional and advertisement service receivables |
|
|
2,707,740 |
|
|
|
4,938,279 |
|
Advances to employees |
|
|
2,190,106 |
|
|
|
2,591,247 |
|
Prepaid data and IT service expenses |
|
|
2,741,338 |
|
|
|
2,384,865 |
|
Prepaid marketing expenses |
|
|
552,565 |
|
|
|
2,180,017 |
|
Wealth management service fees receivables |
|
|
1,823,331 |
|
|
|
1,976,440 |
|
Prepaid professional service fees |
|
|
1,008,341 |
|
|
|
690,746 |
|
Input VAT receivables |
|
|
569,813 |
|
|
|
872,093 |
|
Rental and other deposits |
|
|
611,140 |
|
|
|
817,463 |
|
Interest receivables from term deposits |
|
|
611,083 |
|
|
|
206,697 |
|
Prepaid income tax |
|
|
2,178,658 |
|
|
|
150,632 |
|
Others |
|
|
2,942,065 |
|
|
|
961,499 |
|
Total |
|
|
17,936,180 |
|
|
|
17,769,978 |
|
5.PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS, NET
Property, equipment and intangible assets, net, consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
As of June 30, |
|
|
|
2023 |
|
|
2024 |
|
|
|
US$ |
|
|
US$ |
|
Electronic Equipment |
|
|
7,809,971 |
|
|
|
8,810,410 |
|
Office Equipment |
|
|
873,192 |
|
|
|
836,762 |
|
Leasehold improvement |
|
|
1,657,837 |
|
|
|
1,641,913 |
|
Software |
|
|
1,379,299 |
|
|
|
1,687,910 |
|
Less: accumulated depreciation |
|
|
(6,525,834 |
) |
|
|
(7,723,190) |
|
Property and equipment, net |
|
|
5,194,465 |
|
|
|
5,253,805 |
|
Licenses |
|
|
10,004,563 |
|
|
|
10,004,563 |
|
Trademark |
|
|
115,140 |
|
|
|
112,490 |
|
Trading right |
|
|
128,026 |
|
|
|
127,566 |
|
Others |
|
|
1,057,434 |
|
|
|
1,051,506 |
|
Less: accumulated amortization |
|
|
(70,085 |
) |
|
|
(76,365 |
) |
Intangible assets, net |
|
|
11,235,078 |
|
|
|
11,219,760 |
|
Total |
|
|
16,429,543 |
|
|
|
16,473,565 |
|
Depreciation and amortization expenses for the six months ended June 30, 2023 and 2024 were US$1,426,385 and US$1,315,796, respectively.
UP FINTECH HOLDING LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All amounts in US$, except for share, per share data, or otherwise noted)
There were no changes in the carrying amount of goodwill for the six months ended June 30, 2024.
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
As of June 30, |
|
|
|
2023 |
|
|
2024 |
|
|
|
US$ |
|
|
US$ |
|
Balance at the beginning of period |
|
|
2,492,668 |
|
|
|
2,492,668 |
|
Balance at the end of period |
|
|
|