Uxin(US:UXIN)2023-08-13 16:00Financial Instruments and Valuation - The company issued warrants for up to 240,314,593 senior convertible preferred shares for an aggregate amount of US$165 million in July 2021[617]. - The fair value of warrant liabilities is determined using the Black-Scholes option pricing model, which incorporates assumptions such as risk-free interest rate and expected volatility[617]. - The expected volatility of future share prices is a critical assumption affecting the fair value of warrant liabilities and RSUs[618][622]. - The company utilizes a Monte Carlo valuation model to determine the grant-date fair value of RSUs, which is sensitive to expected volatility[620][622]. - The company recognizes share-based compensation expense over the derived service period based on valuation techniques[619]. Employee Compensation and Benefits - The company paid an aggregate of RMB3.0 million (US$0.4 million) in cash to executive officers for the year ended March 31, 2023[639]. - The company has not set aside or accrued any amount for pension or retirement benefits for executive officers and directors[639]. Shareholder Information and Ownership - As of July 31, 2023, the total number of outstanding shares is 3,196,668,081, including 1,370,143,934 Class A ordinary shares[667]. - Bin Li holds 918,189,006 senior convertible preferred shares, representing 38.0% of the total shares on an as-converted basis[669]. - Erhai Liu owns 437,286,192 senior convertible preferred shares, accounting for 22.1% of the total shares on an as-converted basis[669]. - The aggregate ownership of all directors and executive officers is 2,036,591,793 shares, representing 59.4% of the total shares[669]. - GIC Private Limited holds 235,681,860 Class A ordinary shares, representing 7.4% of the total shares[674]. - The beneficial ownership of Class A ordinary shares in the U.S. is approximately 34.8% of the total outstanding ordinary shares[675]. - Xin Gao Group Limited, owned by Kun Dai, holds 40,809,861 Class B ordinary shares, representing 1.3% of the total shares[669]. - The voting power of Class B ordinary shares is ten votes per share, while Class A ordinary shares have one vote per share[671]. Corporate Governance - The board of directors consists of six directors, with one female and five male directors as of July 31, 2023[664]. - The audit committee is responsible for overseeing accounting and financial reporting processes, including appointing independent auditors and reviewing financial statements[658]. - The compensation committee reviews and approves compensation for executive officers and non-employee directors[659]. - The nominating and corporate governance committee assists in selecting qualified individuals for the board and monitoring its composition[661]. - The company has entered into indemnification agreements with directors and executive officers to cover certain liabilities and expenses[645]. Financial Performance and Risks - The allowance for current expected credit losses is not deemed a critical accounting estimate for the fiscal year 2023[624]. - The company has not declared or paid any dividends on its ordinary shares and intends to retain available funds for business operations and expansion[706]. - The company reported that inflation in the PRC has not materially impacted its operations to date, but future inflation could affect operating costs[819]. - The company may face risks related to foreign exchange as substantially all revenues and expenses are denominated in RMB, affecting the value of investments in ADSs traded in U.S. dollars[816]. - The company has not been exposed to material risks from changes in market interest rates and has not used derivative financial instruments for interest rate risk management[815]. - The company has ongoing contractual disputes and may face other legal claims that could divert resources and impact financial condition[704]. Internal Control and Compliance - The company has identified a material weakness in its internal control over financial reporting as of March 31, 2023, impacting the effectiveness of its disclosure controls[836]. - A material weakness in internal control over financial reporting remains unremediated as of March 31, 2023, related to insufficient accounting staff and management resources knowledgeable in U.S. GAAP and SEC compliance[839]. - The company is implementing measures to address the material weakness, including hiring qualified financial personnel and providing continuous U.S. GAAP training[841]. - PricewaterhouseCoopers Zhong Tian LLP audited the effectiveness of the company's internal control over financial reporting as of March 31, 2023[844]. - No changes in internal controls over financial reporting occurred during the reporting period that materially affected the internal control system[845].