Exhibit 99.1

ATA Creativity Global Reports 2021 Second Quarter Financial Results

Conference Call on Thursday, August 12, 2021, at 9 p.m. ET with Accompanying Investor Presentation

Beijing, China, August 12, 2021 (NY)/ August 13, 2021 (China) — ATA Creativity Global (“ACG” or the “Company”, Nasdaq: AACG), an international educational services company focused on providing quality learning experiences that cultivate and enhance students’ creativity, today announced preliminary unaudited financial results for the quarter and six months ended June 30, 2021 (“Second Quarter 2021” and “First Half 2021”, respectively).

Second Quarter 2021 and First Half 2021 Highlights

During Second Quarter 2021, student enrollment increased to 1,051, from 772 in the prior-year period. Of these students, 561 were enrolled in ACG’s portfolio training programs. 28,445 credit hours were delivered during Second Quarter 2021, compared to 27,933 in the prior-year period.

Second Quarter 2021 net revenues increased 39.4% to RMB36.8 million (US$5.7 million), from RMB26.4 million in the prior-year period, primarily driven by increased contributions from portfolio training and other educational services.

Second Quarter 2021 net income attributable to ACG was RMB14.1 million (US$2.2 million), compared to net loss attributable to ACG of RMB32.1 million in the prior-year period.

First Half 2021 net revenues increased 25.9% to RMB74.4 million (US$11.5 million), from RMB59.1 million in the prior-year period.

First Half 2021 net loss attributable to ACG improved to RMB4.9 million (US$0.8 million), compared to RMB52.5 million in the prior-year period.

RMB91.4 million (US$14.2 million) in cash and cash equivalents as of June 30, 2021

 

Management Commentary

Mr. Kevin Ma, Chairman and CEO of ACG, stated, “We were gratified to see improving trends from the post-pandemic recovery continue into Second Quarter 2021, during which we achieved over 39% growth on the top line and improved gross margin primarily driven by increased contributions from our core portfolio training services business. During the period, the Company decided to sell one of its legacy businesses in K-12 education assessment services, which will enable us to focus our efforts on growing the core business, international education services. We increased our sales and marketing efforts through various promotional activities, which helped improve our enrollment numbers for the period. For Second Quarter 2021, enrollment in our portfolio training programs increased by 26.4% to 561 students from the prior-year period. As we have made a conscious effort in recent years to shift more portfolio training students toward project-based programs, credit hours delivered for project-based programs increased over 20% during the period, though there was only a slight increase in total credit hours delivered. With the increasing shift to project-based programs, we have restructured compensation for our instructors, motivating them to utilize fewer credit hours for completing a project while continuing to maintain the quality of education and support for students. This has contributed to our top line growth when compared with the prior-year period and has also helped to improve service delivery efficiencies.”

 

 

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Outlook

 

Mr. Jun Zhang, President of ACG, stated, “We continue to see tangible results from the work we did to strengthen our leads and sales management platform, as well as our program offerings in response to the pandemic environment, particularly as we are in the heart of the busier summer travel season. As we shared in May, we are not offering study abroad programs this summer given the lingering impact of the pandemic and are instead working closely with our overseas partners in offering alternative programs, such as online bootcamps, internships and other on-site workshop programs. We are also offering new themed domestic travel programs, similar to those we held last summer, which were well received by students. We believe research-based learning services will continue to contribute to our top line in future periods as we look to expand our experiential offerings beyond the summer months.”

 

Mr. Zhang continued, “A few weeks ago, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a set of guidelines focused on companies providing after-school academic course tutoring services for students receiving compulsory education (the “Guidelines”). As ACG focuses on creative arts education and experiential learning, we do not anticipate our business to be materially impacted by these Guidelines. We remain vigilant in maintaining compliance with applicable rules and regulations relating to our operations. ACG remains well capitalized and well positioned to execute on future business opportunities.”

 

Operating Review

 

Enrollment Update

ACG student enrollment for Second Quarter 2021 was 1,051, of which 561 were enrolled in portfolio training programs, which consisted of time-based programs and project-based programs.

A total of 28,445 credit hours were delivered for portfolio training programs during Second Quarter 2021, of which 14,224 credit hours were delivered for time-based programs and 14,221 credit hours were delivered for project-based programs. These courses were delivered either in person through ACG’s nationwide training center network or via online platform.

 

The following is a summary of the credit hours delivered for ACG’s portfolio training programs for Second Quarter 2021, compared to those for the prior-year period:

 


 

 

Second

Quarter Ended June 30, 2021

 

 

Second

Quarter Ended June 30, 2020

 

 

% Change

 

 

 

No. of Credit Hours

 

 

No. of Credit Hours

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time-based Program

 

 

14,224

 

 

 

16,191

 

 

 

(12.1%)

 

Project-based Program

 

 

14,221

 

 

 

11,742

 

 

 

21.1%

 

Total

 

 

28,445

 

 

 

27,933

 

 

 

1.8%

 

During Second Quarter 2021, 490 students were enrolled in ACG’s other programs, which primarily consisted of overseas study counselling services, research-based learning services, as well as foreign language training services.

    

Second Quarter 2021 Financial Review – GAAP Results

 

ACG’s total net revenues for Second Quarter 2021 increased 39.4% to RMB36.8 million (US$5.7 million), from RMB26.4 million in the prior-year period, driven primarily by portfolio training and other educational services as more services were delivered than during the prior-year period when more restrictions on service delivery were in place due to the COVID-19 pandemic. Revenues from portfolio training programs were RMB29.1 million, or 79.1%

 

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of total net revenues, during the period. Revenues from overseas study counselling services, research-based learning services and other educational services were RMB7.7 million, or 20.9% of total net revenues, during the period.

 

Gross profit for Second Quarter 2021 increased 142.4% to RMB16.0 million (US$2.5 million), from RMB6.6 million in the prior-year period. Gross margin improved to 43.4% during the period, compared to 25.1% in the prior-year period. The improvement was contributed by the operating efficiency gained from the ongoing shift of our portfolio training mix toward project-based programs and related cost optimization.

 

Total operating expenses for Second Quarter 2021 decreased 11.9% to RMB39.8 million (US$6.2 million), from RMB45.2 million in the prior-year period. This decrease was primarily due to an RMB12.9 million decrease in G&A expenses as a result of the deferral of the final RMB10.0 million to fund ACG‘s research project with the Research Institute of Future Education and Assessment of Tsinghua University this year and decreased professional fees incurred, which was partially offset by an RMB6.7 million increase in selling expenses primarily related to higher sales performance bonus expense.

 

Loss from operations for Second Quarter 2021 improved to RMB23.8 million (US$3.7 million), from RMB38.5 million in the prior-year period.

 

Net income attributable to ACG for Second Quarter 2021 was RMB14.1 million (US$2.2 million), compared to a net loss attributable to ACG of RMB32.1 million in the prior-year period.

 

For Second Quarter 2021, basic and diluted earnings per common share attributable to ACG were both RMB0.21 (US$0.03), compared to basic and diluted losses per common share of RMB0.54 for the prior-year period. Basic and diluted earnings per ADS attributable to ACG were both RMB0.42 (US$0.06), compared to basic and diluted losses per ADS of RMB1.08 in the prior-year period.

 

First Half 2021 Financial Review – GAAP Results

 

ACG’s total net revenues for First Half 2021 increased 25.9 % to RMB74.4 million (US$11.5 million), from RMB59.1 million in the prior-year period, driven primarily by increased contributions from portfolio training and other educational services. Revenues from portfolio training programs were RMB53.0 million, or 71.2% of total net revenues, during the period. Revenues from overseas study counselling services, research-based learning services and other educational services were RMB21.4 million, or 28.8% of total net revenues, during the period.

 

Gross profit for First Half 2021 increased 67.4% to RMB30.8 million (US$4.8 million), from RMB18.4 million in the prior-year period. Gross margin improved to 41.5% during the period, compared to 31.1% in the prior-year period.

 

Total operating expenses for First Half 2021 decreased 6.9% to RMB77.9 million (US$12.1 million), from RMB83.7 million in the prior-year period. The decrease was primarily due to an RMB15.1 million decrease in G&A expenses, partially offset by an RMB8.5 million increase in selling expenses mainly related to Huanqiuyimeng operations, as described in the Second Quarter 2021 financial review above.

 

Loss from operations for First Half 2021 improved to RMB47.1 million (US$7.3 million), from RMB65.0 million in the prior-year period.

 

Net loss attributable to ACG for First Half 2021 improved to RMB4.9 million (US$0.8 million), compared to RMB52.5 million in the prior-year period.

 

For First Half 2021, basic and diluted losses per common share attributable to ACG were both RMB0.11 (US$0.02), compared to RMB0.89 for the prior-year period. Basic and diluted losses per ADS attributable to ACG were both RMB0.22 (US$0.04), compared to RMB1.78 in the prior-year period.

 

Non-GAAP Measures

Adjusted net income attributable to ACG for Second Quarter 2021, which excludes share-based compensation expense and foreign currency exchange loss (non-GAAP), was RMB14.7 million (US$2.3 million), compared to adjusted net loss of RMB31.7 million in the prior-year period.

 

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Basic and diluted earnings per common share attributable to ACG excluding share-based compensation expense and foreign currency exchange loss (non-GAAP) for Second Quarter 2021, were RMB0.22 (US$0.03). Basic and diluted earnings per ADS attributable to ACG excluding share-based compensation expense and foreign currency exchange loss (non-GAAP) for Second Quarter 2021 were RMB0.44 (US$0.06).

 

Please see the note about non-GAAP measures and the reconciliation table at the end of this press release.

 

 

Other Data

The number of weighted average ADSs used to calculate basic and diluted earnings per ADS for Second Quarter 2021 were 31.5 million and 31.6 million, respectively. Each ADS represents two common shares.

Balance Sheet Highlights

As of June 30, 2021, ACG’s cash and cash equivalents were RMB91.4 million (US$14.2 million), working capital deficit was RMB183.4 million (US$28.4 million), and total shareholders’ equity was RMB220.3 million (US$34.1 million); compared to cash and cash equivalents of RMB112.7 million, working capital deficit of RMB153.9 million, and total shareholders’ equity of RMB199.2 million, respectively, as of December 31, 2020.

Conference Call and Webcast Information (With Accompanying Presentation)

ACG will host a conference call at 9 p.m. Eastern Time on Thursday, August 12, 2021 (9 a.m. Beijing time on Friday, August 13, 2021), during which management will discuss the results of the quarter ended June 30, 2021.

To participate in the conference call, please use the following dial-in numbers about 10 minutes prior to the scheduled conference call time:

 

U.S. & Canada (Toll-Free):

 

+1 (877) 407-9122

International (Toll):

 

+1 (201) 493-6747

 

 

 

Local Access

 

China:

 

(400) 120 2840

 

Hong Kong:

 

(800) 965561

 

 

 

 

 

 

A live webcast of the conference call can be accessed at: https://78449.themediaframe.com/dataconf/productusers/atac/mediaframe/46104/indexl.html.    

An accompanying slide presentation will also be made available 30 minutes prior to the conference call at the investor relations section of ACG’s website (https://ir.atai.net.cn/). To listen to the webcast, please visit ACG’s website a few minutes prior to the start of the call to register, download, and install any necessary audio software.

A replay will be available shortly after the call and will remain available for 90 days.

About ATA Creativity Global

ATA Creativity Global is an international educational services company focused on providing quality learning experiences that cultivate and enhance students’ creativity. ATA Creativity Global offers a wide range of education services consisting primarily of portfolio training, research-based learning services, overseas study counselling and other educational services through its training center network. For more information, please visit ACG’s website at www.atai.net.cn.

Cautionary Note Regarding Forward-looking Statements

 

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This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995.

These forward-looking statements can be identified by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “future,” “intend,” “look forward to,” “outlook,” “plan,” “should,” “will,” and similar terms and include, among other things, statements regarding ACG’s future growth and results of operations; ACG’s plans for mergers and acquisitions generally; ACG’s ability to operate efficiently and maintain continued financial strength under unusual circumstances; ACG’s growth strategy, anticipated growth prospects and subsequent business activities; market demand for ACG’s portfolio training programs and other education services; the impact of the COVID-19 pandemic and the Guidelines on ACG and its operations; and ACG’s plan and anticipated benefits of the measures implemented in response to the COVID-19 pandemic.

The factors that could cause the Company’s actual financial and operating results to differ from what the Company currently anticipates may include its ability to develop and create content that could accommodate needs of potential students, its ability to provide effective creative related international education services and control sales and marketing expenses, its recognition in the marketplace for services it delivered and branding it established, its ability to integrate the acquired business, its ability to maintain market share amid increasing competition, its ability to identify and execute on M&A opportunities within the education sector, the economy of China, uncertainties with respect to China’s legal and regulatory environments, the impact of the COVID-19 pandemic and other factors stated in the Company’s filings with the U.S. Securities and Exchange Commission (“SEC”).

The financial information contained in this release should be read in conjunction with the consolidated financial statements and related notes included in the Company’s annual report on Form 20-F for its fiscal year ended December 31, 2020, and other filings that ACG has made with the SEC. The filings are available on the SEC’s website at www.sec.gov and at ACG’s website at www.atai.net.cn. For additional information on the risk factors that could adversely affect the Company’s business, financial conditions, results of operations, and prospects, please see the “Risk Factors” section of the Company’s Form 20-F for the fiscal year ended December 31, 2020.

The forward-looking statements in this release involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates, and projections about ACG and the markets in which it operates. The Company undertakes no obligation to update forward-looking statements, which speak only as of the date of this release, to reflect subsequent events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that its expectations and assumptions expressed in these forward-looking statements are reasonable, the Company cannot assure you that its expectations and assumptions will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

Currency Convenience Translation

The Company’s financial information is stated in Renminbi (“RMB”), the currency of the People’s Republic of China. The translations of RMB amounts for the quarter ended June 30, 2021, into U.S. dollars are included solely for the convenience of readers and have been made at the rate of RMB6.4566 to US$1.00, the noon buying rate as of June 30, 2021, in New York for cable transfers in RMB per U.S. dollar as set forth in the H.10 weekly statistical release of the Federal Reserve Board. Such translations should not be construed as representations that RMB amounts could be converted into U.S. dollars at that rate or any other rate, or to be the amounts that would have been reported under U.S. generally accepted accounting principles (“GAAP”).

About Non-GAAP Financial Measures

To supplement ACG’s consolidated financial information presented in accordance with U.S. GAAP, ACG uses the following non-GAAP financial measures: net income (loss) excluding share-based compensation expense and foreign currency exchange gain or loss, and basic and diluted earnings (losses) per common share and ADS excluding share-based compensation expense and foreign currency exchange gain or loss.

 

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The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. ACG believes these non-GAAP financial measures provide meaningful supplemental information about its performance by excluding share- based compensation expense and foreign currency exchange gain or loss, which may not be indicative of its operating performance.

ACG believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to ACG’s historical performance. ACG computes its non-GAAP financial measures using a consistent method from period to period. ACG believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP net income (loss) excluding share-based compensation expense and foreign currency exchange gain or loss and basic and diluted earnings (losses) per common share and per ADS excluding share-based compensation expense and foreign currency exchange gain or loss is that share-based compensation charges and foreign currency exchange gain or loss have been, and are expected to continue to be for the foreseeable future, a significant recurring expense in ACG’s business.

Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The table captioned “Reconciliations of Non-GAAP Measures to the Most Comparable GAAP Measures” shown at the end of this news release has more details on the reconciliations between GAAP financial measures that are most directly comparable to the non-GAAP financial measures used by ACG.

 

For more information on our company, please contact the following individuals:

 

At the Company

 

Investor Relations

ATA Creativity Global

 

The Equity Group Inc.

Amy Tung, CFO

 

Carolyne Y. Sohn, Vice President

+86 10 6518 1133 x 5518

 

415-568-2255

amytung@acgedu.cn

 

csohn@equityny.com

 

 

 

 

 

Adam Prior, Senior Vice President

 

 

212-836-9606

 

 

aprior@equityny.com

 

 


 

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ATA CREATIVITY GLOBAL AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

December 31,

 

June 30,

 

June 30,

 

 

 

2020

 

2021

 

2021

 

 

 

RMB

 

RMB

 

USD

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

112,723,433

 

91,364,510

 

14,150,561

 

Accounts receivable, net

 

2,245,194

 

711,400

 

110,182

 

Prepaid expenses and other current assets

 

5,970,973

 

5,974,167

 

925,281

 

Total current assets

 

120,939,600

 

98,050,077

 

15,186,024

 

 

 

 

 

 

 

 

 

Long-term investments

 

44,000,000

 

44,000,000

 

6,814,732

 

Goodwill

 

194,754,963

 

194,754,963

 

30,163,703

 

Property and equipment, net

 

38,119,216

 

37,830,868

 

5,859,255

 

Intangible assets, net

 

110,586,111

 

101,969,444

 

15,793,056

 

Right-of-use assets

 

41,779,086

 

42,146,872

 

6,527,719

 

Deferred income tax assets

 

2,491,792

 

2,535,181

 

392,650

 

Other non-current assets

 

22,950,264

 

25,828,596

 

4,000,340

 

Total assets

 

575,621,032

 

547,116,001

 

84,737,479

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accrued expenses and other payables

 

47,020,182

 

39,998,217

 

6,194,935

 

Short-term loans

 

6,801,000

 

 

 

Payable for business acquisition

 

4,642,082

 

 

 

Lease liabilities-current

 

16,972,187

 

17,065,279

 

2,643,075

 

Deferred revenues

 

199,448,112

 

224,376,519

 

34,751,498

 

Total current liabilities

 

274,883,563

 

281,440,015

 

43,589,508

 

 

 

 

 

 

 

 

 

Lease Liabilities-non-current

 

24,005,765

 

22,807,040

 

3,532,361

 

Deferred income tax liabilities

 

28,985,472

 

22,616,674

 

3,502,877

 

Total liabilities

 

327,874,800

 

326,863,729

 

50,624,746

 

 

 

 

 

 

 

 

 

Mezzanine equity-redeemable non-controlling interests

 

48,498,368

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

Common shares

 

4,716,675

 

4,720,147

 

731,058

 

Treasury shares

 

(11,625,924)

 

(10,277,602)

 

(1,591,798)

 

Additional paid-in capital

 

541,272,503

 

540,507,303

 

83,713,921

 

Accumulated other comprehensive loss

 

(37,424,722)

 

(37,467,613)

 

(5,802,994)

 

Retained earnings (accumulated deficit)

 

(298,533,669)

 

(281,405,049)

 

(43,584,092)

 

Total shareholders’ equity attributable to ACG

 

198,404,863

 

216,077,186

 

33,466,095

 

Non-redeemable non-controlling interests

 

843,001

 

4,175,086

 

646,638

 

Total shareholders’ equity

 

199,247,864

 

220,252,272

 

34,112,733

 

Commitments and contingencies

 

 

 

 

 

 

 

Total liabilities, mezzanine equity and shareholders’ equity

 

575,621,032

 

547,116,001

 

84,737,479

 

 


 

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ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 

 

Three-month Period Ended

 

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2021

 

 

2021

 

 

 

RMB

 

 

RMB

 

 

USD

 

Net revenues

 

 

26,396,218

 

 

 

36,760,950

 

 

 

5,693,546

 

Cost of revenues

 

 

19,764,559

 

 

 

20,808,818

 

 

 

3,222,876

 

Gross profit

 

 

6,631,659

 

 

 

15,952,132

 

 

 

2,470,670

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

2,025,581

 

 

 

2,729,866

 

 

 

422,802

 

Sales and marketing

 

 

9,943,378

 

 

 

16,648,618

 

 

 

2,578,543

 

General and administrative

 

 

33,277,466

 

 

 

20,426,090

 

 

 

3,163,598

 

Total operating expenses

 

 

45,246,425

 

 

 

39,804,574

 

 

 

6,164,943

 

Other operating income, net

 

 

111,483

 

 

 

5,625

 

 

 

871

 

Loss from operations

 

 

(38,503,283)

 

 

 

(23,846,817)

 

 

 

(3,693,402)

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Investment income (loss)

 

 

(1,092,035)

 

 

 

33,542,154

 

 

 

5,195,018

 

Interest income, net of interest expenses

 

 

263,513

 

 

 

294,033

 

 

 

45,540

 

Foreign currency exchange gain (loss), net

 

 

8,104

 

 

 

(244,406)

 

 

 

(37,854)

 

Income (loss) before income taxes

 

 

(39,323,701)

 

 

 

9,744,964

 

 

 

1,509,302

 

Income tax benefit

 

 

(5,386,716)

 

 

 

(3,687,455)

 

 

 

(571,114)

 

Net income (loss)

 

 

(33,936,985)

 

 

 

13,432,419

 

 

 

2,080,416

 

Net loss attributable to redeemable non-controlling interests

 

 

(575,117)

 

 

 

(277,089)

 

 

 

(42,916)

 

Net loss attributable to non-redeemable non-controlling interests

 

 

(1,281,273)

 

 

 

(435,626)

 

 

 

(67,470)

 

Net income (loss) attributable to ACG

 

 

(32,080,595)

 

 

 

14,145,134

 

 

 

2,190,802

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment, net of nil income taxes

 

 

(1,222,042)

 

 

 

(133,390)

 

 

 

(20,659)

 

Comprehensive income (loss) attributable to ACG

 

 

(33,302,637)

 

 

 

14,011,744

 

 

 

2,170,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings (losses) per common share attributable to ACG

 

 

(0.54)

 

 

 

0.21

 

 

 

0.03

 

Basic and diluted earnings (losses) per ADS attributable to ACG

 

 

(1.08)

 

 

 

0.42

 

 

 

0.06

 

 


 

8

 


 

 

ATA CREATIVITY GLOBAL AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

 

 

Six-month Period Ended

 

 

 

June 30,

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2021

 

 

2021

 

 

 

RMB

 

 

RMB

 

 

USD

 

Net revenues

 

 

59,099,623

 

 

 

74,350,495

 

 

 

11,515,425

 

Cost of revenues

 

 

40,744,111

 

 

 

43,524,823

 

 

 

6,741,137

 

Gross profit

 

 

18,355,512

 

 

 

30,825,672

 

 

 

4,774,288

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

4,406,670

 

 

 

5,246,592

 

 

 

812,594

 

Sales and marketing

 

 

21,446,003

 

 

 

29,971,605

 

 

 

4,642,011

 

General and administrative

 

 

57,819,609

 

 

 

42,690,348

 

 

 

6,611,893

 

Total operating expenses

 

 

83,672,282

 

 

 

77,908,545

 

 

 

12,066,498

 

Other operating income, net

 

 

346,935

 

 

 

11,863

 

 

 

1,837

 

Loss from operations

 

 

(64,969,835)

 

 

 

(47,071,010)

 

 

 

(7,290,373)

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Investment income (loss)

 

 

(1,124,462)

 

 

 

33,542,154

 

 

 

5,195,018

 

Interest income, net of interest expenses

 

 

651,092

 

 

 

574,772

 

 

 

89,021

 

Foreign currency exchange loss, net

 

 

(61,024)

 

 

 

(156,786)

 

 

 

(24,283)

 

Loss before income taxes

 

 

(65,504,229)

 

 

 

(13,110,870)

 

 

 

(2,030,617)

 

Income tax benefit

 

 

(8,173,252)

 

 

 

(6,407,151)

 

 

 

(992,341)

 

Net loss

 

 

(57,330,977)

 

 

 

(6,703,719)

 

 

 

(1,038,276)

 

Net loss attributable to redeemable non-controlling interests

 

 

(1,147,865)

 

 

 

(714,121)

 

 

 

(110,603)

 

Net loss attributable to non-redeemable non-controlling interests

 

 

(3,646,060)

 

 

 

(1,090,975)

 

 

 

(168,971)

 

Net loss attributable to ACG

 

 

(52,537,052)

 

 

 

(4,898,623)

 

 

 

(758,702)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment, net of nil income taxes

 

 

1,573,460

 

 

 

(42,891)

 

 

 

(6,643)

 

Comprehensive loss attributable to ACG

 

 

(50,963,592)

 

 

 

(4,941,514)

 

 

 

(765,345)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted losses per common share attributable to ACG

 

 

(0.89)

 

 

 

(0.11)

 

 

 

(0.02)

 

Basic and diluted losses per ADS attributable to ACG

 

 

(1.78)

 

 

 

(0.22)

 

 

 

(0.04)

 


 

9

 


 

 

RECONCILIATIONS OF NON-GAAP MEASURES

TO THE MOST COMPARABLE GAAP MEASURES

 

 

 

 

Three-month Period Ended

 

 

 

Six-month Period Ended

 

 

 

 

June 30,

 

 

 

June 30,

 

 

 

June 30,

 

 

 

June 30,

 

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

 

RMB

 

 

 

RMB

 

 

 

RMB

 

 

 

RMB

 

GAAP net income (loss) attributable to ACG

 

 

(32,080,595)

 

 

 

14,145,134

 

 

 

(52,537,052)

 

 

 

(4,898,623)

 

Share-based compensation expenses

 

 

411,293

 

 

 

264,067

 

 

 

996,092

 

 

 

489,298

 

Foreign currency exchange loss (gain), net

 

 

(8,104)

 

 

 

244,406

 

 

 

61,024

 

 

 

156,786

 

Non-GAAP net income (loss) attributable to ACG

 

 

(31,677,406)

 

 

 

14,653,607

 

 

 

(51,479,936)

 

 

 

(4,252,539)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP earnings (losses) per common share attributable to ACG

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

(0.54)

 

 

 

0.21

 

 

 

(0.89)

 

 

 

(0.11)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP earnings (losses) per common share attributable to ACG

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

(0.53)

 

 

 

0.22

 

 

 

(0.87)

 

 

 

(0.10)

 

 

 

10