MicroCloud Hologram (HOLO) - 2023 Q2 - Quarterly Report

Financial Performance - Total operating revenues decreased by 61.2% from RMB 252,146,638 in the first half of 2022 to RMB 97,914,825 in the first half of 2023[3] - Gross profit fell to RMB 49,960,116 in the first half of 2023, down 60.3% from RMB 125,770,369 in the same period of 2022[3] - Net loss attributable to Microcloud Hologram Inc. was RMB 28,671,078 for the first half of 2023, compared to a net income of RMB 36,733,613 in the first half of 2022[3] - The company reported a comprehensive loss of RMB 25,951,967 for the first half of 2023, compared to a comprehensive income of RMB 37,294,226 in the first half of 2022[3] - For the six months ending June 30, 2023, MicroCloud reported a net loss of RMB 29,020,010 (approximately USD 4,190,494), compared to a net income of RMB 36,670,583 in the same period of 2022[7] - Cash flows from operating activities showed a net outflow of RMB 16,315,431 (USD 2,355,952) for the first half of 2023, a decline from a net inflow of RMB 20,476,716 in the same period of 2022[7] Assets and Liabilities - Total current assets decreased by 10.7% from RMB 239,460,075 as of December 31, 2022, to RMB 213,796,777 as of June 30, 2023[1] - Cash and cash equivalents decreased from RMB 151,119,985 as of December 31, 2022, to RMB 136,273,128 as of June 30, 2023, a decline of 9.5%[1] - Total liabilities decreased by 3.4% from RMB 85,227,575 as of December 31, 2022, to RMB 82,083,682 as of June 30, 2023[1] - Total shareholders' equity decreased from RMB 196,602,405 as of December 31, 2022, to RMB 170,999,370 as of June 30, 2023, a decline of 13.0%[1] - As of June 30, 2023, net accounts receivable decreased to RMB 65,412,415 from RMB 80,352,463 as of December 31, 2022, reflecting a decline of approximately 18.6%[74] - The allowance for doubtful accounts increased significantly to RMB 20,534,926 as of June 30, 2023, compared to RMB 4,862,941 as of December 31, 2022, indicating a rise of approximately 321%[74] Research and Development - Research and development expenses were RMB 49,469,390 in the first half of 2023, down 34.7% from RMB 75,812,189 in the first half of 2022[3] - Research and development expenses include salaries, outsourced subcontractors, and related office expenses[56] Revenue Recognition - The Company adopted ASC Topic 606 for revenue recognition effective January 1, 2019, recognizing revenue when control of goods or services is transferred to customers[41] - The Company recognizes revenue from Holographic Technology LiDAR Products at a point in time when control is transferred, with no separate sales rebates or discounts[42] - Revenue from Holographic Technology Intelligence Vision software is recognized over time based on progress towards completion, measured by labor hours[43] Investments and Capital - The company made investments in unconsolidated entities amounting to RMB 600,000 (USD 86,640) during the first half of 2023[7] - MicroCloud's registered capital for its subsidiary Beijing Xihuiyun Technology Co., Ltd. is RMB 207,048,000 (USD 30,000,000), indicating a strong investment in its operational capabilities[14] - The Company reported a registered capital of RMB 50,000,000 (USD 7,846,707) for Shenzhen Haiyun Xinsheng Technology Co., Ltd. as of its formation on December 3, 2021[16] Shareholder Information - The weighted average number of ordinary shares decreased significantly from 132,000,000 in the first half of 2022 to 20,071,595 in the first half of 2023[3] - As of June 30, 2023, the Company had 50,812,035 shares outstanding with a par value of USD 0.0001 each[117] - The Company issued 44,554,455 ordinary shares to the former shareholders of MC at the closing of the Business Combination, with public shareholders redeeming 2,182,470 ordinary shares[116] Legal and Compliance - The Company is involved in litigation against Greenland Asset Management Corporation, seeking damages related to breaches of investment agreements and noncompliance in share registration[112] - As of June 30, 2023, the company changed its reporting currency from USD to RMB, qualifying as a foreign private issuer[23] Miscellaneous - The Company accounts for Public Warrants as equity and Private Warrants as liabilities, with changes in estimated fair value recognized as non-cash gains or losses[39] - The Company recognized a benefit of income taxes totaling RMB 993,927 (USD 143,523) for the six months ended June 30, 2023, compared to RMB 1,669,761 for the same period in 2022[11] - The Company had net operating loss carry forwards of approximately RMB 40,980,173 (USD 5,671,368) as of June 30, 2023, which will expire between 2023 and 2027[90]