TuanChe(TC) - 2025 Q2 - Quarterly Report

Financial Statements Condensed Consolidated Balance Sheets Total assets increased, shifting from a shareholders' deficit to equity, driven by a surge in prepayments | Metric | December 31, 2024 (RMB thousand) | June 30, 2025 (RMB thousand) | | :-------------------------------- | :--------------------------- | :------------------------- | | Total Assets | 44,143 | 203,702 | | Total Liabilities | 184,950 | 170,716 | | Shareholders' (Deficit)/Equity | (140,807) | 32,986 | | Prepayment and other current assets, net | 14,951 | 175,870 | Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss Net loss significantly decreased to RMB 675 thousand, driven by a substantial gain from warrant liability fair value changes | Metric | 6 Months Ended June 30, 2024 (RMB thousand) | 6 Months Ended June 30, 2025 (RMB thousand) | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Total Net Revenues | 32,305 | 19,777 | | Gross Profit | 22,354 | 15,626 | | Change in fair value of warrant liability | 2,338 | 42,069 | | Net Loss | (40,675) | (675) | | Basic and diluted net loss per share | (0.10) | — | Unaudited Condensed Consolidated Statements of Changes in Equity Shareholders' deficit transitioned to equity, driven by RMB 165,039 thousand in common share issuance | Metric | December 31, 2024 (RMB thousand) | June 30, 2025 (RMB thousand) | | :-------------------------------- | :--------------------------- | :------------------------- | | Total TokenCat Limited shareholders' (deficit)/equity | (140,807) | 32,986 | | Issuance of common shares (6 months ended June 30, 2025) | N/A | 165,039 | | Share-based compensation (6 months ended June 30, 2025) | N/A | 8,994 | | Net loss (6 months ended June 30, 2025) | N/A | (675) | Unaudited Condensed Consolidated Statements of Cash Flows Cash used in operations increased, largely offset by financing activities, primarily from offering proceeds | Metric | 6 Months Ended June 30, 2024 (RMB thousand) | 6 Months Ended June 30, 2025 (RMB thousand) | | :------------------------------------------ | :--------------------------------------- | :--------------------------------------- | | Net cash used in operating activities | (11,088) | (169,500) | | Net cash generated from financing activities | 7,213 | 164,195 | | Proceeds of offering, net of listing fee | — | 165,295 | | Net decrease in cash, cash equivalents and restricted cash | (6,645) | (5,258) | Notes to Unaudited Condensed Consolidated Financial Statements 1. Organization and Reorganization TokenCat Limited operates in the PRC via VIEs, providing auto shows and marketing, facing risks from uncertain PRC legal enforcement - TokenCat Limited (formerly TuanChe Limited) is a Cayman Islands holding company conducting business mainly through its subsidiaries and Variable Interest Entities (VIEs) in the People's Republic of China[15][16] - The Group's primary services include auto shows, special promotion events, online marketing, social CRM cloud services, and referral services[16] - The VIE structure, used to navigate PRC foreign investment restrictions, is subject to substantial uncertainties regarding the interpretation and application of PRC laws, which could limit the Group's ability to enforce contractual arrangements and materially adversely affect its business[19][22] Contractual arrangements with VIEs The Group operates in the PRC through VIEs due to foreign investment restrictions, consolidating them via contractual arrangements that grant control and economic benefits - The Group conducts operations in the PRC partially through VIEs (TuanChe Internet, Drive New Media, Internet Drive Technology, and Hainashuke) due to PRC foreign investment restrictions in value-added telecommunication services[17] - The Company consolidates the VIEs because contractual arrangements (exclusive business cooperation, call option, equity pledge, powers of attorney, spousal consent) enable it to direct activities and receive economic benefits[17][18] Risks in relation to the VIE structure Uncertainties in PRC law interpretation and potential regulatory actions pose significant risks to the Group's ability to enforce VIE contractual arrangements and operate its business - There are substantial uncertainties regarding the interpretation and application of PRC laws governing contractual arrangements, which could limit the Group's ability to enforce these arrangements[19][22] - Potential regulatory actions by PRC authorities could include revoking licenses, restricting operations, blocking websites, or requiring restructuring, which would materially adversely affect the Group's business[22][23] - Management believes the likelihood of losing control over VIEs is remote based on current facts, and contractual arrangements are legally enforceable under PRC law, though enforcement involves uncertainties[22] Combined financial information of VIEs VIEs reported RMB 140,167 in total assets and RMB 288,290 in total liabilities as of June 30, 2025, with net revenues of RMB 21,521 and a net loss of RMB (1,589) for the six months ended June 30, 2025 | Metric | December 31, 2024 (RMB) | June 30, 2025 (RMB) | | :-------------------------- | :---------------------- | :------------------ | | Total Assets | 142,595 | 140,167 | | Total Liabilities | 290,300 | 288,290 | | Net revenues (6 months ended) | 15,360 | 21,521 | | Net loss (6 months ended) | (15,250) | (1,589) | | Net cash used in operating activities (6 months ended) | (6,868) | (3) | - The Company has the power to direct VIE activities and transfer assets, with no assets in VIEs restricted for settling VIE obligations, except for registered capital of approximately RMB 40.1 million[25] 2. Going Concern Recurring losses, negative cash flows, and an accumulated deficit of RMB 1,421.8 million raise substantial doubt about the Group's ability to continue as a going concern, requiring strategic execution and financing - The Group has incurred recurring operating losses and negative cash flows from operations since its inception, including a net loss of RMB 0.7 million for the six months ended June 30, 2025, and an accumulated deficit of RMB 1,421.8 million[27] | Metric | Year Ended Dec 31, 2023 (RMB million) | Year Ended Dec 31, 2024 (RMB million) | 6 Months Ended June 30, 2025 (RMB million) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | :----------------------------------------- | | Net Loss | 83.0 | 188.0 | 0.7 | | Net Cash Used in Operating Activities | 74.9 | 34.7 | 169.5 | | Accumulated Deficit | N/A | N/A | 1,421.8 | | Cash and Cash Equivalents | N/A | N/A | 5.1 | - These conditions, coupled with weak economic growth in China and staff resignations, raise substantial doubt about the Group's ability to continue as a going concern, necessitating successful execution of business plans and potential financing[27][28][29] 3. Significant Accounting Policies This section details the Group's significant accounting policies under U.S. GAAP, covering consolidation, estimates, fair value measurements, asset impairment, revenue recognition, taxation, and risk concentrations - The Group's condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include the Company, its subsidiaries, VIEs, and subsidiaries of VIEs for which the Company is the primary beneficiary[31][33][35] - Significant accounting estimates are made for items such as accounts receivable, deferred tax assets, share-based compensation, impairment of goodwill and long-lived assets, and valuation of warrant liabilities at fair value[37] - Revenue recognition follows