Agora(API) - 2022 Q4 - Annual Report

Financial Performance - The company recorded an impairment of goodwill amounting to US$11.9 million, reclassified from non-operating to operating expenses [583]. - The company received net proceeds of approximately US$483.6 million from its initial public offering, after incurring total expenses of US$28.9 million related to the issuance and distribution of ADSs [750]. - Approximately 20% of the net proceeds from the initial public offering and concurrent private placement were allocated for research and development, marketing, branding, technology infrastructure, working capital, and other general corporate purposes [751]. - The company intends to utilize the remainder of the net proceeds from the initial public offering as disclosed in the registration statements on Form F-1 [751]. Currency and Foreign Exchange Risk - The company does not hedge against foreign currency risk, with a substantial majority of revenue-generating transactions denominated in Renminbi [728]. - The company has experienced over a 10% appreciation of the Renminbi against the U.S. dollar since June 2010, impacting its foreign exchange risk exposure [729]. - As of December 31, 2022, the company held Renminbi-denominated cash and cash equivalents of RMB65.5 million, with a potential impact of US$0.9 million on cash equivalents from a 10% depreciation of Renminbi against the U.S. dollar [730]. Asset Management and Impairment - The company performs annual impairment tests for goodwill, with qualitative assessments determining if further quantitative tests are necessary [581]. - The company assesses expected credit losses based on historical collection trends and current economic conditions, indicating a proactive approach to managing accounts receivable [580]. - The company’s cash and short-term investments are primarily held in bank and time deposits, which are not significantly affected by interest rate fluctuations [731]. Financial Estimates and Compliance - The company’s financial estimates are based on historical experience and reasonable assumptions, with ongoing evaluations to ensure accuracy [578]. - The company has not made any payments to directors or officers from the net proceeds of the initial public offering, ensuring compliance with regulatory standards [750].