| PARENT ONLY FINANCIAL INFORMATION |
| 12 | PARENT ONLY FINANCIAL INFORMATION |
Regulations S-X requires the condensed
financial information of registrant shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated
net assets as of the end of the most recently completed fiscal year. For purposes of the above test, restricted net assets of consolidated
subsidiaries shall mean that amount of the registrant’s proportionate share of net assets of consolidated subsidiaries (after intercompany
eliminations) of which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the
form of loans, advances or cash dividends without the consent of a third party. The condensed parent company financial statements have
been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of the Company’s mainland China
subsidiaries exceed 25% of the consolidated net assets of the company.
Certain information and footnote disclosures
normally included in financial statements prepared in conformity with U.S. GAAP have been condensed or omitted. The Company’s investment
in subsidiary is stated at cost plus equity in undistributed earnings of subsidiaries.
Due from subsidiaries represents net
inter-company receivables from the Company’s subsidiaries. Excess losses over investment represents the Company’s share of cumulative
losses of subsidiaries in excess of its equity investment, recognized as a liability to the extent the Company has related financial obligations.
The following presents condensed parent
company financial information of VSA.
Condensed Balance Sheets
| | |
| | |
| | |
| |
| | |
December 31, | |
| | |
2024 | | |
2025 | | |
2025 | |
| | |
RMB | | |
RMB | | |
US$ | |
| ASSETS | |
| | |
| | |
| |
| Current assets: | |
| | |
| | |
| |
| Cash and cash equivalents | |
| 1,504 | | |
| 317 | | |
| 45 | |
| Prepaid expenses and other current assets | |
| 112 | | |
| 99 | | |
| 14 | |
| Due from subsidiaries | |
| 438,701 | | |
| 536,534 | | |
| 76,723 | |
| Total current assets | |
| 440,317 | | |
| 536,950 | | |
| 76,782 | |
| Non-current assets: | |
| | | |
| | | |
| | |
| Intangible assets, net | |
| — | | |
| 51,430 | | |
| 7,354 | |
| Total non-current assets | |
| — | | |
| 51,430 | | |
| 7,354 | |
| Total assets | |
| 440,317 | | |
| 588,380 | | |
| 84,136 | |
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | |
| | | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | | |
| | |
| Accrued expenses and other current liabilities | |
| 346,837 | | |
| 19,721 | | |
| 2,820 | |
| Due to intercompany | |
| 43,927 | | |
| 423,671 | | |
| 60,584 | |
| Excess losses over investment(a) | |
| 1,852,411 | | |
| 42,246 | | |
| 6,040 | |
| Total current liabilities | |
| 2,243,175 | | |
| 485,638 | | |
| 69,444 | |
| Total liabilities | |
| 2,243,175 | | |
| 485,638 | | |
| 69,444 | |
| | |
| | | |
| | | |
| | |
| Commitments and contingencies | |
| — | | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | |
| Shareholders’ deficit: | |
| | | |
| | | |
| | |
| Class A ordinary shares (US$0.001 par value, 9,860,000,000 shares authorized, 58,730,507 and 560,630,122 shares issued, 42,505,619 and 544,405,234 shares outstanding as of December 31, 2024 and 2025, respectively) | |
| 370 | | |
| 3,955 | | |
| 566 | |
| Class B ordinary shares (US$0.001 par value, 40,000,000 shares authorized, 7,206,059 shares issued and outstanding as of December 31, 2024 and 2025, respectively) | |
| 74 | | |
| 74 | | |
| 11 | |
| Treasury shares (16,224,888 Class A ordinary shares as of December 31, 2024 and 2025, at cost, respectively) | |
| (486,706 | ) | |
| (486,706 | ) | |
| (69,598 | ) |
| Additional paid-in capital | |
| 1,643,672 | | |
| 1,826,214 | | |
| 261,145 | |
| Accumulated other comprehensive income | |
| 54,266 | | |
| 54,850 | | |
| 7,843 | |
| Accumulated deficit | |
| (3,014,534 | ) | |
| (1,295,645 | ) | |
| (185,275 | ) |
| Total shareholders’ (deficit) equity | |
| (1,802,858 | ) | |
| 102,742 | | |
| 14,692 | |
| Total liabilities and shareholders’ equity | |
| 440,317 | | |
| 588,380 | | |
| 84,136 | |
| (a) | Investments in subsidiaries are accounted for using the equity method in parent-only financial statements.
The carrying value is reduced to zero when the Company’s share of losses equals or exceeds its investment. Additional losses are
recognized as a liability and classified as “Excess losses over investment” if the Company has related financial obligations;
otherwise, they are not recognized. Subsequent profits are recognized only after prior unrecognized losses are recovered. |
Condensed Statements of Comprehensive (Loss)
Income
| | |
Year Ended December 31, | |
| | |
2023 | | |
2024 | | |
2025 | | |
2025 | |
| | |
RMB | | |
RMB | | |
RMB | | |
US$ | |
| Revenue | |
| — | | |
| 7,054 | | |
| — | | |
| — | |
| General and administrative expenses | |
| (11,625 | ) | |
| (123,062 | ) | |
| (62,897 | ) | |
| (8,994 | ) |
| Operating loss | |
| (11,625 | ) | |
| (116,008 | ) | |
| (62,897 | ) | |
| (8,994 | ) |
| Equity in income (loss) of subsidiaries | |
| 20,415 | | |
| (471,086 | ) | |
| 1,781,746 | | |
| 254,786 | |
| Foreign currency exchange gains | |
| 106 | | |
| 620 | | |
| 40 | | |
| 6 | |
| Interest (expense) income | |
| 30 | | |
| (68 | ) | |
| — | | |
| — | |
| Income (Loss) before income taxes | |
| 8,926 | | |
| (586,542 | ) | |
| 1,718,889 | | |
| 245,798 | |
| Income tax expense | |
| — | | |
| — | | |
| — | | |
| — | |
| Net income (loss) | |
| 8,926 | | |
| (586,542 | ) | |
| 1,718,889 | | |
| 245,798 | |
| Other comprehensive (loss) income | |
| | | |
| | | |
| | | |
| | |
| Foreign currency translation adjustment | |
| (1,448 | ) | |
| 6,050 | | |
| 582 | | |
| 83 | |
| Comprehensive income (loss) | |
| 7,478 | | |
| (580,492 | ) | |
| 1,719,471 | | |
| 245,881 | |
Condensed Statements of Cash Flows
| | |
Year Ended December 31, | |
| | |
2023 | | |
2024 | | |
2025 | | |
2025 | |
| | |
RMB | | |
RMB | | |
RMB | | |
US$ | |
| Operating activities: | |
| | |
| | |
| | |
| |
| Net Cash provided by (used in)
operating activities | |
| 4,902 | | |
| (2,234 | ) | |
| (119,088 | ) | |
| (17,030 | ) |
| Investing activities: | |
| | | |
| | | |
| | | |
| | |
| Purchase of intangible assets | |
| — | | |
| — | | |
| (76,262 | ) | |
| (10,905 | ) |
| Net Cash used in investing activities | |
| — | | |
| — | | |
| (76,262 | ) | |
| (10,905 | ) |
| Financing activities: | |
| | | |
| | | |
| | | |
| | |
| Issuance of Class A ordinary shares in connection with exercise of share options | |
| 227 | | |
| 142 | | |
| 185,821 | | |
| 26,572 | |
| Proceeds of borrowings from a related party | |
| — | | |
| 5,000 | | |
| — | | |
| — | |
| Repurchase of treasury shares | |
| (2,428 | ) | |
| (7,360 | ) | |
| — | | |
| — | |
| Net Cash (used in) provided by financing activities | |
| (2,201 | ) | |
| (2,218 | ) | |
| 185,821 | | |
| 26,572 | |
| Changes in cash and cash equivalents | |
| 2,701 | | |
| (4,452 | ) | |
| (9,529 | ) | |
| (1,363 | ) |
| Effect of foreign currency exchange rate changes on cash and cash equivalents | |
| 706 | | |
| 705 | | |
| 8,342 | | |
| 1,193 | |
| Net increase(decrease) in cash and cash equivalents | |
| 3,407 | | |
| (3,747 | ) | |
| (1,187 | ) | |
| (170 | ) |
| Cash and cash equivalents at beginning of year | |
| 1,844 | | |
| 5,251 | | |
| 1,504 | | |
| 215 | |
| Cash and cash equivalents at end of year | |
| 5,251 | | |
| 1,504 | | |
| 317 | | |
| 45 | |
|