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Missfresh(MF) - 2022 Q4 - Annual Report
MFMissfresh(MF)2023-08-03 20:12

IPO Proceeds and Allocation - The company raised a total of 247.2millioninnetproceedsfromitsinitialpublicofferingafterselling21,000,000ADSsataninitialpriceof247.2 million in net proceeds from its initial public offering after selling 21,000,000 ADSs at an initial price of 13.00 per ADS [706]. - Approximately 195.0millionoftheIPOproceedswasallocatedtotheon−demandDMWretailbusinessforsalesandmarketing,technologyinfrastructureupgrades,andnetworkexpansion[708].−Thecompanyinvestedaround195.0 million of the IPO proceeds was allocated to the on-demand DMW retail business for sales and marketing, technology infrastructure upgrades, and network expansion [708]. - The company invested around 19.0 million in further expansion of its intelligent fresh market business and technology platform development [708]. - About 8.0millionwasusedforthedevelopmentoftheretailcloudbusiness,focusingonresearchanddevelopment,productdevelopment,andsalesandmarketing[708].−Thecompanyallocatedapproximately8.0 million was used for the development of the retail cloud business, focusing on research and development, product development, and sales and marketing [708]. - The company allocated approximately 11.3 million for general corporate purposes and strategic initiatives, including potential investments and acquisitions [708]. - The total expenses incurred for the IPO amounted to 26.7million,whichincluded26.7 million, which included 19.1 million in underwriting discounts and commissions [707]. Financial Risks and Controls - The company does not currently anticipate material risks from changes in market interest rates, as its short-term bank borrowings bear fixed interest rates [691]. - The company has not used any derivative financial instruments to hedge foreign exchange risks, as it does not believe it has significant direct foreign exchange risk [689]. - The company’s operations in the PRC are primarily denominated in RMB, which may affect the value of investments in its ADSs traded in U.S. dollars [690]. Internal Control Weaknesses - As of December 31, 2022, the company concluded that its disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting [711]. - The company identified two material weaknesses in its internal control over financial reporting as of December 31, 2021 and 2022, including insufficient competent personnel and ineffective controls in the Next-Day Delivery business unit [715][717]. - The company has engaged an independent consulting firm to assist in preparing financial reports that comply with U.S. GAAP and SEC reporting requirements [718]. - The company plans to hire qualified accounting and financial personnel to address the identified weaknesses as its business develops [718]. - The company has terminated the operation of the Next-Day Delivery business unit and will conduct a comprehensive review of related policies and procedures [717]. - The company cannot assure that it will continuously implement measures to effectively remediate its material weaknesses or that additional weaknesses will not be identified in the future [719]. - The annual report on Form 20-F does not include an attestation report from the independent registered public accounting firm on internal control over financial reporting as the company qualified as a "non-accelerated filer" [720]. - There were no changes in internal controls over financial reporting that materially affected or are likely to materially affect the company's internal control during the reporting period [721].