Agora(US:API)2021-03-26 12:21Financial Position - As of December 31, 2020, cash, cash equivalents, and short-term investments totaled $635.4 million, with cash and cash equivalents at $111.2 million and short-term investments at $524.2 million[552]. - Working capital as of December 31, 2020, was $634.4 million, a significant increase from $111.9 million in 2018[552]. - The company has not declared or paid any dividends since inception and does not plan to do so in the foreseeable future, intending to retain available funds for business expansion[694]. - The company is subject to PRC regulations that require at least 10% of after-tax profits to be set aside for a statutory common reserve fund, which is not distributable as dividends[698]. - The company held Renminbi-denominated cash and cash equivalents of RMB42.7 million, with a potential impact of US$6.5 million from a 10% depreciation of Renminbi against the U.S. dollar[747]. Operating Activities - The company reported a net cash generated from operating activities of $6.6 million in 2020, despite a net loss of $3.1 million, driven by a $9.8 million increase in accounts receivable[558]. - The company has not entered into any off-balance sheet financial guarantees or derivative contracts that could affect its financial position[571]. - The COVID-19 pandemic has introduced significant uncertainties that may adversely affect the company's business and financial condition[569]. Investment Activities - Net cash used in investing activities was $535.1 million in 2020, reflecting significant investments in business growth[557]. - Net cash used in investing activities was US$535.1 million in 2020, primarily due to US$522.7 million in short-term investments and US$12.9 million in capital expenditures[562]. - Capital expenditures increased from US$2.3 million in 2018 to US$12.9 million in 2020, reflecting ongoing investments in servers and network equipment[565]. - The company plans to continue making capital expenditures to support expected business growth[565]. Financing Activities - The company raised a total of $654.0 million in equity capital from its inception in 2013 through December 31, 2020, net of share and option repurchases[555]. - Net cash provided by financing activities was US$533.6 million in 2020, driven by US$483.6 million from the initial public offering and US$50.0 million from Series C+ convertible redeemable preferred shares[564]. - The company raised a total of $110 million through private placements in June 2020, selling 22 million Class A ordinary shares[680]. Employee and Management Information - The company had 842 employees as of December 31, 2020, an increase from 447 in 2019, indicating a growth of approximately 88% year-over-year[667]. - The aggregate cash compensation to directors and executive officers in 2020 was approximately US$1.8 million[590]. - The company has maintained a stable core management team and plans to hire additional employees in research and development and sales and marketing[670]. - The company has not experienced any major labor disputes and maintains a good working relationship with its employees[673]. Shareholder and Equity Plans - Directors and executive officers collectively own 28.3% of the beneficial ownership and 82.6% of the aggregate voting power[674]. - Major shareholders include entities affiliated with Bin (Tony) Zhao, owning 18.0% of beneficial ownership and 80.1% of voting power[674]. - The Global Equity Incentive Plan reserves 16,000,000 ordinary shares for issuance, with potential increases based on ungranted shares from the 2014 Plan and annual increases starting in 2022[594][595]. - The maximum number of shares that may be issued upon the exercise of incentive share options is 200% of the aggregate share number described in the Global Plan[594]. - The Global Plan allows for a total of 3,000,000 ordinary shares available for sale under the Employee Stock Purchase Plan (ESPP) with annual increases starting from the 2022 fiscal year[617]. Corporate Governance - The company is classified as a "controlled company," with the CEO holding a majority of the voting power, which allows for certain exemptions from corporate governance requirements[649]. - The board of directors consists of five members, with four identified as independent directors according to SEC and Nasdaq standards[648]. - The company has established three committees under the board of directors: audit, compensation, and nominating and corporate governance[651]. - The audit committee is responsible for overseeing the financial reporting processes and the audits of the financial statements, ensuring compliance with accounting standards[654]. - The compensation committee reviews and approves the compensation structure for directors and executive officers, ensuring alignment with corporate goals[655]. Regulatory and Compliance Matters - The company has not experienced any significant changes since the date of its audited consolidated financial statements[698]. - The company has the right to defer filing a registration statement for up to 90 days if deemed materially detrimental to shareholders[687]. - The company is obligated to effect no more than two demand registrations, excluding unlimited registrations on Form F-3 or Form S-3[688]. - The company will bear all registration expenses, excluding underwriting discounts and selling commissions[690]. - All awards under the Global Plan are subject to clawback provisions in case of misconduct leading to financial restatements[613][615].