Form 6-K
false2021-06-30Aurora Mobile Ltd0001737339--12-31Starting from January 1, 2021, the Company has fully exited the Targeted Marketing business and this balance represents the receivables the Company acts as agent and collects on behalf of third party advertising companies for targeted marketing related services. As of December 31, 2020, under prepayments and other current assets includes the impairment charges of RMB4,500 that the Company recognized on loans granted to equity investees. No impairment charges were recognized on loans granted to equity investees for the six months ended June 30, 2021. The Company evaluates the impairment of the equity investments without readily determinable fair value along with loans the Company granted to those investees.Starting from January 1, 2021, the Company has fully exited the Targeted Marketing business and this balance represents the payments to third party advertising companies for targeted marketing related services as the Company acts as agent. 0001737339 2021-01-01 2021-06-30 0001737339 2020-01-01 2020-06-30 0001737339 2021-06-30 0001737339 2020-12-31 0001737339 2020-01-01 2020-12-31 0001737339 2020-12-31 2020-12-31 0001737339 2021-06-30 2021-06-30 0001737339 2019-12-31 0001737339 2020-06-30 0001737339 us-gaap:RetainedEarningsMember 2021-01-01 2021-06-30 0001737339 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-01-01 2021-06-30 0001737339 us-gaap:TransferredAtPointInTimeMember 2021-01-01 2021-06-30 0001737339 us-gaap:TransferredOverTimeMember 2021-01-01 2021-06-30 0001737339 us-gaap:CommonStockMember 2021-01-01 2021-06-30 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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM
6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE
13a-16
OR
15d-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of
November 2021
Commission File Number:
001-38587
 
 
Aurora Mobile Limited
 
 
14/F, China Certification and Inspection Building
No. 8, Keji South 12th Road, Nanshan District
Shenzhen, Guangdong 518057
People’s Republic of China
(Address of principal executive offices)
 
 
Indicate by check mark whether the registrant files or will file annual reports under cover of Form
20-F
or Form
40-F.
Form
20-F  ☒            Form
40-F  ☐
Indicate by check mark if the registrant is submitting the Form
6-K
in paper as permitted by Regulation
S-T
Rule 101(b)(1):  ☐
Indicate by check mark if the registrant is submitting the Form
6-K
in paper as permitted by Regulation
S-T
Rule 101(b)(7):  ☐
 
 
 

EXHIBIT INDEX
 
Exhibit No.
  
Description
99.1
  
Unaudited Consolidated Interim Financial Statements
99.2
  
English translation of Term Loan Agreement, dated April 16, 2021, by and between Aurora Mobile Limited and Shanghai Pudong Development Bank
101.INS*
  
Inline XBRL Instance Document -- this instance document does not appear in the Interactive Data File because its XBRL tags are not embedded within the Inline XBRL document
101.SCH*
  
Inline XBRL Taxonomy Extension Scheme Document
101.CAL*
  
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
  
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
  
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
  
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
  
Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
2

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
AURORA MOBILE LIMITED
By:
 
/s/ Shan-Nen Bong
Name:
 
Shan-Nen Bong
Title:
 
Chief Financial Officer
Date: November 10, 2021
 
3
EX-99.1

AURORA MOBILE LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
          As of  
     Notes    December 31,
2020
     June 30, 2021  
          RMB      RMB      US$  
ASSETS
                               
Current assets:
                               
Cash and cash equivalents
          356,115        102,854        15,930  
Restricted cash
          115        164,356        25,456  
Derivative assets
          100        1,905        295  
Short-term investments
   12      80,000        30,000        4,646  
Accounts and notes receivable, net of allowances of RMB43,820 and RMB39,420 (US$6,105) as of December 31, 2020 and June 30, 2021, respectively
   3      44,886        38,140        5,907  
Prepayments and other current assets
   4      49,013        51,467        7,971  
         
 
 
    
 
 
    
 
 
 
Total current assets
       
 
530,229
 
  
 
388,722
 
  
 
60,205
 
         
 
 
    
 
 
    
 
 
 
Non-current
assets:
                               
Property and equipment, net
          73,522        75,486        11,691  
Intangible assets, net
          9,519        7,555        1,170  
Long-term investments
   5      168,526        167,979        26,017  
Other
non-current
assets
          5,631        2,921        452  
         
 
 
    
 
 
    
 
 
 
Total
non-current
assets
       
 
257,198
 
  
 
253,941
 
  
 
39,330
 
         
 
 
    
 
 
    
 
 
 
Total assets
       
 
787,427
 
  
 
642,663
 
  
 
99,535
 
         
 
 
    
 
 
    
 
 
 
 
F-2

AURORA MOBILE LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
           
As of
 
     Notes      December 31,
2020
     June 30, 2021  
            RMB      RMB      US$  
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                   
Current liabilities:
                                   
Short-term bank loan
                        150,000        23,232  
Accounts payable (including accounts payable of the variable interest entity (“VIE”) without recourse to the Company of RMB16,564 and RMB13,268 (US$2,055) as of December 31, 2020 and June 30, 2021, respectively)
              16,592        13,659        2,116  
Deferred revenue and customer deposits (including deferred revenue and customer deposits of the VIE without recourse to the Company of RMB104,681 and RMB102,198 (US$15,828) as of December 31, 2020 and June 30, 2021, respectively)
     6        109,182        106,265        16,458  
Accrued liabilities and other current liabilities (including accrued liabilities and other current liabilities of the VIE without recourse to the Company of RMB66,772 and RMB64,150 (US$9,936) as of December 31, 2020 and June 30, 2021, respectively)
     7        109,136        90,573        14,027  
Convertible notes
              225,229                      
             
 
 
    
 
 
    
 
 
 
Total current liabilities
           
 
460,139
 
  
 
360,497
 
  
 
55,833
 
             
 
 
    
 
 
    
 
 
 
 
F-3

AURORA MOBILE LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
          As of  
     Notes    December 31,
2020
     June 30, 2021  
          RMB      RMB      US$  
Non-current
liabilities:
                               
Other
non-current
liabilities (including other
non-current
liabilities of the VIE without recourse to the Company of nil and RMB693 (US$107) as of December 31, 2020 and June 30, 2021, respectively)
          —          2,554        396  
Deferred revenue
   6      6,049        5,233        810  
         
 
 
    
 
 
    
 
 
 
Total
non-current
liabilities
       
 
6,049
 
  
 
7,787
 
  
 
1,206
 
         
 
 
    
 
 
    
 
 
 
Total liabilities
       
 
466,188
 
  
 
368,284
 
  
 
57,039
 
         
 
 
    
 
 
    
 
 
 
 
F-4

AURORA MOBILE LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
          As of  
     Notes    December 31,
2020
    June 30, 2021  
          RMB     RMB     US$  
Commitments and contingencies
   9                         
Shareholders’ equity
                             
Class A common shares (par value of US$0.0001 per share as of December 31, 2020 and June 30, 2021; 4,920,000,000 shares authorized as of December 31, 2020 and June 30, 2021, 61,392,170 shares and 61,882,851 shares issued and outstanding as of December 31, 2020 and June 30, 2021, respectively)
          37       38       6  
Class B common shares (par value of US$0.0001 per share as of December 31, 2020 and June 30, 2021; 30,000,000 shares authorized as of December 31, 2020 and June 30, 2021, 17,000,189 shares and 17,000,189 shares issued and outstanding as of December 31, 2020 and June 30, 2021, respectively)
          11       11       2  
Additional
paid-in
capital
          988,812       1,010,731       156,542  
Accumulated deficit
          (678,434     (747,868     (115,830
Accumulated other comprehensive income
          10,813       11,467       1,776  
         
 
 
   
 
 
   
 
 
 
Total shareholders’ equity
       
 
321,239
 
 
 
274,379
 
 
 
42,496
 
         
 
 
   
 
 
   
 
 
 
Total liabilities and shareholders’ equity
       
 
787,427
 
 
 
642,663
 
 
 
99,535
 
         
 
 
   
 
 
   
 
 
 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements
.
 
F-5

AURORA MOBILE LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
            Six months ended June 30,  
     Notes      2020     2021  
            RMB     RMB     US$  
Revenues
     11        257,018       165,609       25,650  
Cost of revenues
              (162,014     (40,088     (6,209
             
 
 
   
 
 
   
 
 
 
Gross profit
              95,004       125,521       19,441  
             
 
 
   
 
 
   
 
 
 
Operating expenses
                                 
Research and development expenses
              (88,371     (106,219     (16,451
Sales and marketing expenses
              (51,998     (53,904     (8,349
General and administrative expenses
              (51,520     (46,692     (7,232
             
 
 
   
 
 
   
 
 
 
Total operating expenses
              (191,889     (206,815     (32,032
             
 
 
   
 
 
   
 
 
 
Loss from operations
              (96,885     (81,294     (12,591
             
 
 
   
 
 
   
 
 
 
Foreign exchange gain/(loss)
              9       (1,504     (233
Interest income
              2,994       3,330       516  
Interest expense
              (5,930     (4,978     (771
Other income, net
              7,446       13,098       2,029  
Change in fair value of structured notes
              920       20       3  
Change in fair value of foreign currency swap contract
     13                 1,905       295  
             
 
 
   
 
 
   
 
 
 
Loss before income taxes
              (91,446     (69,423     (10,752
             
 
 
   
 
 
   
 
 
 
Income tax expense
     8                 (11     (2
             
 
 
   
 
 
   
 
 
 
Net loss
              (91,446     (69,434     (10,754
             
 
 
   
 
 
   
 
 
 
 
F-6

AURORA MOBILE LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
          Six months ended June 30,  
     Notes    2020     2021  
          RMB     RMB     US$  
Net loss attributable to Aurora Mobile Limited’s shareholders
          (91,446     (69,434     (10,754
         
 
 
   
 
 
   
 
 
 
Net loss attributable to common shareholders
          (91,446     (69,434     (10,754
         
 
 
   
 
 
   
 
 
 
Net loss per share for class A and class B common shares:
   10                         
Class A common shares - basic and diluted
          (1.18     (0.88     (0.14
Class B common shares - basic and diluted
          (1.18     (0.88     (0.14
Shares used in net loss per share computation:
                             
Class A common shares - basic and diluted
          60,190,846       61,668,577       61,668,577  
Class B common shares - basic and diluted
          17,000,189       17,000,189       17,000,189  
Other comprehensive (loss)/income
                             
Foreign currency translation adjustments
          (733     654       101  
         
 
 
   
 
 
   
 
 
 
Total other comprehensive (loss)/income, net of tax
          (733     654       101  
         
 
 
   
 
 
   
 
 
 
Total comprehensive loss
          (92,179     (68,780     (10,653
         
 
 
   
 
 
   
 
 
 
Comprehensive loss attributable to Aurora Mobile Limited
          (92,179     (68,780     (10,653
         
 
 
   
 
 
   
 
 
 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements
.
 
F-7

 
AURORA MOBILE LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
    
Common shares
    
Treasury
shares
   
Additional
paid-in

capital
   
Accumulated
other
comprehensive
income
   
Accumulated
deficit
   
Total
shareholders’
equity
 
    
Number of
shares
    
Amount
 
            RMB      RMB     RMB     RMB     RMB     RMB  
Balance as of January 1, 2020
     77,106,226        48        (1,999     956,735       6,363       (453,359     507,788  
Net loss
     —          —          —         —         —         (91,446     (91,446
Translation adjustments
     —          —          —         —         (733     —         (733
Exercise and vesting of share-based awards
     294,383        —          1,999       (1,611     —         —         388  
Share-based compensation
     —          —          —         16,111       —         —         16,111  
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance as of June 30, 2020
  
 
77,400,609
 
  
 
48
 
  
 
—  
 
 
 
971,235
 
 
 
5,630
 
 
 
(544,805
 
 
432,108
 
    
 
 
    
 
 
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
 
F-8

 
AURORA MOBILE LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
    
Common shares
    
Treasury
shares
    
Additional
paid-in

capital
    
Accumulated
other
comprehensive
income
    
Accumulated
deficit
   
Total
shareholders’
equity
 
    
Number of
shares
    
Amount
 
            RMB      RMB      RMB      RMB      RMB     RMB  
Balance as of January 1, 2021
     78,392,359        48        —          988,812        10,813        (678,434     321,239  
Net loss
     —          —          —          —          —          (69,434     (69,434
Translation adjustments
     —          —          —          —          654        —         654  
Exercise and vesting of share-based awards
     490,681        1        —          2,883        —          —         2,884  
Share-based compensation
     —          —          —          19,036        —          —         19,036  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
 
Balance as of June 30, 2021
  
 
78,883,040
 
  
 
49
 
  
 
—  
 
  
 
1,010,731
 
  
 
11,467
 
  
 
(747,868
 
 
274,379
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
 
Balance as of June 30, 2021 in US$
           
 
8
 
  
 
—  
 
  
 
156,542
 
  
 
1,776
 
  
 
(115,830
 
 
42,496
 
             
 
 
    
 
 
    
 
 
    
 
 
    
 
 
   
 
 
 
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
 
F-9

AURORA MOBILE LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)
 
     Six months ended June 30,  
     2020     2021  
     RMB     RMB     US$  
Cash flows from operating activities:
                        
Net loss
     (91,446     (69,434     (10,754
Adjustments to reconcile net loss to net cash used in operating activities:
                        
Depreciation of property and equipment
     18,648       13,406       2,076  
Amortization of intangible assets
     2,157       2,190       339  
Allowance for doubtful accounts
     8,243       221       34  
Interest expenses, net
     3,870       2,706       419  
Gain on disposal of property and equipment
     (12     (814     (126
Change in fair value of structured notes
     (920     (20     (3
Change in fair value of foreign currency swap contract
     —         (1,905     (295
Share-based compensation expenses
     16,111       19,036       2,948  
    
 
 
   
 
 
   
 
 
 
Changes in operating assets and liabilities:
                        
Accounts and notes receivable
     61,516       6,524       1,010  
Prepayments and other current assets
     11,960       4,885       757  
Amounts due from related parties
     16       —         —    
Other
non-current
assets
     (124     (291     (45
Accounts payable
     (4,036     (2,934     (454
Deferred revenue and customer deposits
     20,137       (3,734     (578
Accrued liabilities and other current liabilities
     (6,305 )     (17,840     (2,763
Amounts due to related parties
     (28     —         —    
Other
non-current
liabilities
     —         1,138       176  
    
 
 
   
 
 
   
 
 
 
Net cash provided by/ (used in) operating activities
     39,787       (46,866     (7,259
    
 
 
   
 
 
   
 
 
 
 
F-10

AURORA MOBILE LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)
 
     Six months ended June 30,  
     2020     2021  
     RMB     RMB     US$  
Cash flows from investing activities:
                        
Purchase of short-term investments
     (360,250     —         —    
Proceeds from short-term investments
     251,450       51,229       7,934  
Purchase of long-term investments
     (36,567     —         —    
Investment in loans
     (5,000     —         —    
Investment in a convertible loan
     —         (4,223     (654
Purchase of property and equipment
     (16,332     (16,212     (2,511
Proceeds from disposal of property and equipment
     18       2,599       403  
Purchase of intangible assets
     (1,201     (1,265     (196
    
 
 
   
 
 
   
 
 
 
Net cash (used in)/ provided by investing activities
     (167,882     32,128       4,976  
    
 
 
   
 
 
   
 
 
 
Cash flows from financing activities:
                        
Proceeds from issuance of common shares
     —         1       —    
Redemption of convertible notes
     —         (228,508     (35,391
Proceeds from short-term bank loan
     —         150,000       23,232  
Proceeds from exercise of share options
     457     2,884       446  
    
 
 
   
 
 
   
 
 
 
Net cash used in financing activities
     457     (75,623     (11,713
    
 
 
   
 
 
   
 
 
 
Effect of exchange rate on cash and cash equivalents and restricted cash
     1,742       1,341       209  
    
 
 
   
 
 
   
 
 
 
Net decrease in cash and cash equivalents and restricted cash
     (125,896     (89,020     (13,787
    
 
 
   
 
 
   
 
 
 
 
F-11

AURORA MOBILE LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)
 
     Six months ended June 30,  
     2020     2021  
     RMB     RMB     US$  
Net decrease in cash and cash equivalents and restricted cash
     (125,896     (89,020     (13,787
    
 
 
   
 
 
   
 
 
 
Cash, cash equivalents and restricted cash at the beginning of the period
     431,574       356,230       55,173  
    
 
 
   
 
 
   
 
 
 
Including:
                        
Cash and cash equivalents at the beginning of the period
     431,459       356,115       55,155  
Restricted cash at the beginning of the period
     115       115       18  
Cash, cash equivalents and restricted cash at the end of the period
     305,678       267,210       41,386  
    
 
 
   
 
 
   
 
 
 
Including:
                        
Cash and cash equivalents at the end of the period
     305,563       102,854       15,930  
Restricted cash at the end of the period
     115       164,356       25,456  
Supplemental disclosures of cash flow information:
                        
Interest paid
     —         1,196       185  
Income tax paid
     —         34       5  
Non-cash
investing and financing activities:
                        
Acquisition of long-term investments
     8,000       —         —    
Purchase of intangible assets
     2,446       —         —    
Purchase of property and equipment
     —         2,297       356  
    
 
 
   
 
 
   
 
 
 
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
 
F-12

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
1 Organization and principal activities
Aurora Mobile Limited (the “Company” and where appropriate, the term “Company” also refers to its subsidiaries and variable interest entity) is a limited company incorporated in the Cayman Islands under the laws of the Cayman Islands on April 9, 2014. The Company, through its subsidiaries and variable interest entity (“VIE”), are principally engaged in providing targeted marketing and SAAS Businesses, which include developer services, financial risk management, market intelligence and location-based intelligence services, in the People’s Republic of China (the “PRC”).
As PRC laws and regulations prohibit and restrict foreign ownership of internet value-added businesses, the Company operates its business, primarily through the VIE. The Company, through JPush Information Consulting (Shenzhen) Co., Ltd. (“Shenzhen JPush” or “WFOE”) entered into powers of attorney and an exclusive option agreement with the nominee shareholders of the VIE, Shenzhen Hexun Huagu Information Technology Co., Ltd., that gave WFOE the power to direct the activities that most significantly affect the economic performance of the VIE and to acquire the equity interests in the VIE when permitted by the PRC laws, respectively. In addition, pursuant to the supplementary agreements signed in March 2018, the rights under the aforementioned power of attorney and the exclusive call option agreements were assigned to the board of directors of the Company (the “Board”) or any officer authorized by the Board, which entitled the Company to receive economic benefits from the VIE that potentially could be significant to the VIE.
Despite the lack of technical majority ownership, the Company has effective control of the VIE through a series of VIE agreements and a parent-subsidiary relationship exists between the Company and the VIE. Through the VIE agreements and the supplementary agreements, the shareholders of the VIE effectively assigned all of their voting rights underlying their equity in the VIE to the Company. In addition, through the exclusive business operation agreement, the Company, through its WFOE in the PRC, have the right to receive economic benefits from the VIE that potentially could be significant to the VIE. Lastly, through the financial support agreement and the shareholder voting proxy agreement, the Company has the obligation to absorb losses of the VIE that could potentially be significant to the VIE. Therefore, the Company is considered the primary beneficiary of the VIE and consolidates the VIE as required by SEC Regulation
S-X
Rule
3A-02
and Accounting Standards Codification (“ASC”) 810.
 
F-13

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
1 Organization and principal activities (continued)
 
The following is a summary of the VIE agreements:
Exclusive Option Agreements
Pursuant to the exclusive option agreements entered into between VIE’s nominee shareholders and the WFOE, the nominee shareholders irrevocably granted the WFOE an option to request the nominee shareholders to transfer or sell any part or all of its equity interests in the VIE, or any or all of the assets of the VIE, to the WFOE, or their designees. The purchase price of the equity interests in the VIE is equal to the minimum price required by PRC law. Without the WFOE’s prior written consent, the VIE and its nominee shareholders cannot amend its articles of association, increase or decrease the registered capital, sell or otherwise dispose of its assets or beneficial interest, create or allow any encumbrance on its assets or other beneficial interests and provide any loans or guarantees. The nominee shareholders cannot request any dividends or other form of assets. If dividends or other form of assets were distributed, the nominee shareholders are required to transfer all received distribution to the WFOE or their designees. These agreements are not terminated until all of the equity interest of the VIE is transferred to the WFOE or the person(s) designated by the WFOE. None of the nominee shareholders have the right to terminate or revoke the agreements under any circumstance unless otherwise regulated by law.
Equity Interest Pledge Agreements
Pursuant to the equity interest pledge agreements, each nominee shareholder of the VIE has pledged all of their respective equity interests in the VIE to WFOE as continuing first priority security interest to guarantee the performance of their and the VIE’s obligations under the powers of attorney agreement, the exclusive option agreement and the exclusive business cooperation agreement. WFOE is entitled to all dividends during the effective period of the share pledge except as it agrees otherwise in writing. If VIE or any of the nominee shareholder breaches its contractual obligations, WFOE will be entitled to certain rights regarding the pledged equity interests, including receiving proceeds from the auction or sale of all or part of the pledged equity interests of VIE in accordance with PRC law. None of the nominee shareholders shall, without the prior written consent of WFOE, assign or transfer to any third party, distribute dividends and create or cause any security interest and any liability in whatsoever form to be created on, all or any part of the equity interests it holds in the VIE. This agreement is not terminated until all of the technical support and consulting and service fees have been fully paid under the exclusive business cooperation agreement and all of VIE’s obligations have been terminated under the other controlling agreements. On December 16, 2014, the Company registered the equity pledge with the relevant office of the administration for industry and commerce in accordance with the PRC Property Rights Law.
Exclusive Business Cooperation Agreement
Pursuant to the exclusive business cooperation agreement entered into by WFOE and VIE, WFOE provides exclusive technical support and consulting services in return for an annual service fee based on a certain percentage of the VIE’s audited total operating income, which is adjustable at the sole discretion of WFOE. Without WFOE’s consent, the VIE cannot procure services from any third party or enter into similar service arrangements with any other third party, except for those from WFOE. In addition, the profitable consolidated VIE has granted WFOE an exclusive right to purchase any or all of the business or assets of each of the profitable consolidated VIE at the lowest price permitted under PRC law. This agreement is irrevocable or can only be unilaterally revoked/amended by WFOE.
 
F-14

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
1 Organization and principal activities (continued)
 
Powers of Attorney
Pursuant to the powers of attorney signed between VIE’s nominee shareholders and WFOE, each nominee shareholder irrevocably appointed WFOE as
its attorney-in-fact to
exercise on each shareholder’s behalf any and all rights that each shareholder has in respect of its equity interest in VIE (including but not limited to executing the exclusive right to purchase agreements, the voting rights and the right to appoint directors and executive officers of VIE). This agreement is effective and irrevocable as long as the nominee shareholder remains a shareholder of VIE.
In March 2018, the following supplementary agreements were entered into:
Financial Support Agreement
Pursuant to the financial support undertaking letter dated March 28, 2018, the Company is obligated to provide unlimited financial support to the VIE, to the extent permissible under the applicable PRC laws and regulations. The Company will not request repayment of the loans or borrowings if the VIE or its shareholders do not have sufficient funds or are unable to repay.
Shareholder Voting Proxy Agreement
The Nominee Shareholders also
re-signed
the powers of attorney agreement whereby they granted an irrevocable proxy of the voting rights underlying their respective equity interests in VIE from the WFOE to the Company, which includes, but are not limited to, all the shareholders’ rights and voting rights empowered to the Nominee Shareholders by the company law and the Company’s Article of Association.
Accordingly, as a result of the power to direct the activities of the VIE pursuant to the powers of attorney agreement and the obligation to absorb the expected losses of VIE through the unlimited financial support, the WFOE ceased to be the primary beneficiary and the Company became the primary beneficiary of the VIE on March 28, 2018.
 
F-15

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
1 Organization and principal activities (continued)
 
In the opinion of the Company’s legal counsel, (i) the ownership structure of the PRC subsidiary and the VIE are in compliance with the existing PRC laws and regulations; (ii) each of the VIE agreements is valid, binding and enforceable in accordance with its terms and applicable PRC laws or regulations and will not violate applicable PRC laws or regulations in effect; and (iii) are valid in accordance with the articles of association of the Company.
However, uncertainties in the PRC legal system could cause the Company’s current ownership structure to be found in violation of existing and/or future PRC laws or regulations and could limit the Company’s ability to enforce its rights under these contractual arrangements. Furthermore, the nominee shareholders of the VIE may have interests that are different than those of the Company, which could potentially increase the risk that they would seek to act contrary to the terms of the contractual agreements with the VIE.
In addition, if the current structure or any of the contractual arrangements is found to be in violation of any existing or future PRC laws or regulations, the Company could be subject to penalties, which could include, but not be limited to, revocation of business and operating licenses, discontinuing or restricting business operations, restricting the Company’s right to collect revenues, temporary or permanent blocking of the Company’s internet platforms, restructuring of the Company’s operations, imposition of additional conditions or requirements with which the Company may not be able to comply, or other regulatory or enforcement actions against the Company that could be harmful to its business. The imposition of any of these or other penalties could have a material adverse effect on the Company’s ability to conduct its business.
 
F-16

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
1 Organization and principal activities (continued)
 
The following table set forth the assets and liabilities of the VIE included in the Company’s consolidated balance sheets:
 
     As of  
     December 31,
2020
     June 30, 2021  
     RMB      RMB      US$  
ASSETS:
                          
Current assets:
                          
Cash and cash equivalents
     115,713        63,013        9,759  
Restricted cash
     115        158,356        24,526  
Short-term investments
     50,000        30,000        4,646  
Accounts and notes receivable, net
     44,539        37,521        5,811  
Prepayments and other current assets
     27,915        41,468        6,423  
Amounts due from the Company and its subsidiaries
     58,291        59,922        9,281  
    
 
 
    
 
 
    
 
 
 
Total current assets
     296,573        390,280        60,446  
    
 
 
    
 
 
    
 
 
 
Non-current
assets:
                          
Property and equipment, net
     45,928        52,641        8,153  
Intangible assets, net
     9,491        7,543        1,168  
Long-term investments
     113,408        113,408        17,565  
Other
non-current
assets
     4,719        1,684        261  
    
 
 
    
 
 
    
 
 
 
Total
non-current
assets
     173,546        175,276        27,147  
    
 
 
    
 
 
    
 
 
 
Total assets
     470,119        565,556        87,593  
    
 
 
    
 
 
    
 
 
 
LIABILITIES:
                          
Current liabilities:
                          
Accounts payable
     16,564        13,268        2,055  
Deferred revenue and customer deposits
     104,681        102,198        15,828  
Accrued liabilities and other current liabilities
     66,772        64,150        9,936  
Amounts due to the Company and its subsidiaries
     224,124        282,613        43,771  
    
 
 
    
 
 
    
 
 
 
Total current liabilities
     412,141        462,229        71,590  
    
 
 
    
 
 
    
 
 
 
Non-current
liabilities:
                          
Amounts due to the Company and its subsidiaries
     297,000        377,000        58,390  
Deferred revenue
     561        856        133  
Other
non-current
liabilities
     —          693        107  
    
 
 
    
 
 
    
 
 
 
Total
non-current
liabilities
     297,561        378,549        58,630  
    
 
 
    
 
 
    
 
 
 
Total liabilities
     709,702        840,778        130,220  
    
 
 
    
 
 
    
 
 
 
 
F-17

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
1 Organization and principal activities (continued)
 
The table sets forth the results of operations and cash flows of the VIE included in the Company’s consolidated statements of comprehensive loss and cash flows.
 
     For the six months ended June 30,  
     2020      2021  
     RMB      RMB      US$  
Revenues
     253,197        162,605        25,184  
Cost of revenues
     (152,732      (34,489      (5,342
Net loss
     (69,950      (41,793      (6,473
Net cash provided by operating activities
     83,618        19,773        3,062  
Net cash (used in) / provided by investing activities
     (133,308      5,768        893  
Net cash (used in) / provided by financing activities
     (13,084      80,000        12,390  
There were no pledges or collateralization of the VIE’s assets as of December 31, 2020. As of June 30, 2021, RMB157,900 (US$24,456) of the restricted cash balance represents deposits held as collateral for the Company’s short-term loan with Shanghai Pudong Development Bank.
The amount of net liabilities of the VIE was RMB239,583 and RMB275,222 (US$42,627) as of December 31, 2020 and June 30, 2021, respectively. Creditors of the VIE have no recourse to the general credit of the primary beneficiary of the VIE, and such amounts have been parenthetically presented on the face of the consolidated balance sheets. The VIE holds certain assets, including data servers and related equipment for use in their operations. The VIE does not own any facilities except for the rental of certain office premises and data centers from third parties under operating lease arrangements. The VIE also holds certain value-added technology licenses, registered copyrights, trademarks and registered domain names, including the official website, which are also considered as revenue-producing assets. However, none of such assets was recorded on the Company’s consolidated balance sheets as such assets were all internally developed and expensed as incurred as they did not meet the capitalization criteria. The Company has not provided any financial or other support that it was not previously contractually required to provide to the VIE during the periods presented.
2 Summary of Significant Accounting Policies
Basis of presentation
The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information using accounting policies that are consistent with those used in the preparation of the Company’s audited consolidated financial statements for the year ended December 31, 2020. Accordingly, these unaudited interim condensed consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for annual financial statements.
 
F-18


AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
2 Summary of Significant Accounting Policies (continued)
 
Basis of presentation (continued)
 
In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the financial position, operating results and cash flows of the Company for each of the periods presented. The results of operations for the six months ended June 30, 2021 are not necessarily indicative of results to be expected for any other interim period or for the full year of 2021. The consolidated balance sheet as of December 31, 2020 was derived from the audited consolidated financial statements at that date but does not include all of the disclosures required by U.S. GAAP for annual financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2020.
Principles of consolidation
The consolidated financial statements include the financial statements of the Company, its subsidiaries, and the VIE. All significant intercompany transactions and balances have been eliminated upon consolidation.
Use of estimates
T
he preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts in the consolidated financial statements and accompanying notes. These estimates form the basis for judgments that management make about the carrying values of assets and liabilities, which are not readily apparent from other sources. Management base their estimates and judgments on historical information and on various other assumptions that they believe are reasonable under the circumstances. U.S. GAAP requires management to make estimates and judgments in several areas, including, but not limited to, those related to allowance for doubtful accounts, volume rebates relates to targeted marketing service, useful lives of property and equipment and intangible assets, valuation of intangible asset acquisition, impairment of long-lived assets, fair value measurements and impairment for equity investments without readily determinable fair value, impairment of loans receivables, including due from related parties, valuation allowance for deferred tax assets, uncertain tax position, fair value change of derivative assets and share-based compensation. These estimates are based on management’s knowledge about current events and expectations about actions that the Company may undertake in the future. Actual results could differ from those estimates.
Convenience translation
Translations of amounts from RMB into US$ for the convenience of the reader have been calculated at the exchange rate of RMB6.4566 per US$1.00 on June 30, 2021, as published on the website of the United States Federal Reserve Board. No representation is made that the RMB amounts could have
been, or could be, converted into US$ at such rate.
 
F-19

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
2 Summary of Significant Accounting Policies (continued)
 
Restricted cash
Restricted cash balance mainly represents (a) cash granted by the government for certain approved technology research and development projects, which are not available for use until the Company obtains
pre-approval
from the government; and (b) deposits held in designated bank accounts as collateral for the Company’s short-term bank loan and foreign exchange swap contract, which are not available for the Company’s general use for operations.
Derivative assets
Derivative assets include (a) embedded derivatives separated from the host contract of bank structured deposits with interest rates indexed to the gold price index, which are measured at fair value in the condensed consolidated balance sheets; and (b) balances from the Company’s foreign currency swap contract with Shanghai Pudong Development Bank to reduce volatility in the Company’s economic value caused by foreign currency fluctuations. The foreign currency swap contract is not designated as hedges. Both embedded derivatives and the foreign currency swap contract are marked to market at each reporting date, with changes in fair value recognized in the condensed consolidated statements of comprehensive loss.
Revenue recognition
Targeted Marketing
The Company generates targeted marketing revenue by providing targeted marketing solution in the form of integrated marketing campaign to advertiser through the
 XiaoGuoTong
 marketing platform and built upon its multi-dimensional device-level mobile behavioral data or other third-party marketing platforms such as Guangdiantong of Tencent, which is identified as one performance obligation. The ads are displayed on a wide spectrum of reputable publishers, through bidding for ad slots using rates directly negotiated with the various publishers. Moreover, volume rebates to customers under targeted marketing revenue applied on a prospective basis when they recharge their target marketing accounts above a specific threshold are material rights. Such rebates are accounted for as changes in total transaction price and allocated directly to the separate performance obligations.
 
F-20

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
2 Summary of Significant Accounting Policies (continued)
 
Targeted Marketing (continued)
 
The Company enters into contractual arrangements with advertisers that stipulate the types of advertising to be delivered and the pricing. Advertising customers pay for the targeted marketing solutions primarily based on
a cost-per-click (“CPC”)
or cost-per-action (“CPA”)
basis. Majority of the contract duration is less than one year. For certain arrangements, customers are required to pay the Company before the services are delivered. For other arrangements, the Company provided customers with a credit term less than one year. The Company acts as the principal in the targeted marketing arrangements under which the Company has control over the fulfillment of the service and has discretion in establishing price. Accordingly, the Company recognizes revenue on a gross basis and at a point in time once agreed actions are performed. Revenues are presented net of value-added tax collected on behalf of the government.
Starting from January 1, 2021, the Company has fully exited the Target Marketing business and financial results since then only reflect SAAS Businesses.
SAAS Businesses
The Company generates SAAS Businesses revenue primarily from developer services and vertical applications. For developer services, there are three types of contracts, subscription-based contracts, project-based contracts and consumption-based contracts. The Company primarily enters into subscription-based contracts with its customers to provide push notification or instant messaging (collectively “notification services”), which the Company provides its customers with access to its notification services platform. This enables customers to send notifications and messages to users. The Company generally recognizes revenue ratably over time under the subscription-based contracts as stand-ready obligations because the customer simultaneously receives and consumes the benefits as the Company provides subscription services throughout a fixed contract term. The Company uses an output method of progress based on fixed contract term as it best depicts the transfer of control to the customer.
The Company primarily enters into consumption-based contracts with its customers to provide value-added services. For value-added services, the Company built an APP Alliance which connects advertisers and APP developers, who are the suppliers of avenue where the advertisements will be displayed. The Company enters into contractual arrangements with advertisers that stipulate the types of advertising to be delivered and priced. Advertising customers pay for the value-added service primarily based on
cost-per-action (“CPA”)
basis or
cost-per-click
(“CPC”) basis. All of the contractual arrangements’ duration is less than one year. For certain arrangements, customers are required to pay the Company before the services are delivered. For other arrangements, the Company provides customers with a credit term less than six months. The Company acts as the principal in the value-added services in which the Company has control over the fulfillment of the service and has discretion in establishing price. Accordingly, the Company recognizes revenue on a gross basis and at a point in time once agreed actions are performed.
 
F-21

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
2 Summary of Significant Accounting Policies (continued)
 
SAAS Businesses (continued)
 
The Company primarily enters into project-based contracts with its customers to provide private cloud-based developer services, which are designed to provide customizable services to customers who want a more controlled software environment and more comprehensive technology and customer support. The Company provides its customers one combined performance obligation including customized APP push notification system or instant messaging system and related system training services as both performance obligations are incapable of being distinct because the customer cannot derive economic benefit from the related system training services on its own. Meanwhile, the Company also provides post contract assurance-type maintenance services, which usually have a duration of one year. Under ASC 606, the Company recognize revenue at the point in time when the system is implemented, and the training service is provided, which is represented by the customer acceptance received by the Company. Meanwhile, the estimated cost of assurance-type maintenance services is accrued as “Costs of revenues”, which is not material.
For vertical applications, the Company enters into agreements with its customers to provide data analytic solutions and there are three types of contracts, including subscription-based contracts, project-based contracts and consumption-based contracts. The Company primarily enters into subscription-based contracts with its customers to provide customizable service package for a fixed contract term, which allows the customers to subscribe a fixed number of apps to obtain unlimited volume of queries to the Company’s analytic results. The Company generally recognizes revenue ratably over time under the subscription-based contracts because the customer simultaneously receives and consumes the benefits as the Company provides subscription services throughout a fixed contract term.
The Company primarily enters into project-based contracts with its customers to provide
in-depth
analytics services and generate customized reports based on the customers’ specific requirements. The Company recognizes revenue at the point in time when the customized reports are provided.
The Company primarily enters into consumption-based contracts with its customers to process the queries or provide features based on the customers’ requirements. When the Company receives a placed order, it recognizes revenue at a point in time when the queries are processed, or the features are utilized by the customers.
 
F-22

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
2 Summary of Significant Accounting Policies (continued)
 
SAAS Businesses (continued)
 
For certain arrangements, customers are required to pay the Company before the services are delivered. For other arrangements, the Company provides customers with a credit term under six months.
Other revenue recognition related policies
Timing of revenue recognition may differ from the timing of invoicing to customers. Some customers are required to pay before the services are delivered to the customer. When either party to a revenue contract has performed, the Company recognizes a contract asset or a contract liability on the consolidated balance sheet, depending on the relationship between the Company’s performance and the customer’s payment.
Contract assets represent amounts related to the Company’s rights to consideration received for private-cloud-based service and are included in “Prepayments and other assets” on the condensed consolidated balance sheets. Amount of contract assets was not material as of December 31, 2020 and June 30, 2021, respectively.
Contract liabilities are mainly related to fees for services to be provided over the service period, which are presented as “Deferred revenue” on the condensed consolidated balance sheets. Revenue recognized for the six months ended June 30, 2021 that was included in contract liabilities as of January 1, 2021 was RMB44,405 (US$6,877). Revenue recognized for the six months ended June 30, 2020 that was included in contract liabilities as of January 1, 2020 was RMB25,368. A summary of contract liabilities is as follows:
 
     As of  
     December 31, 2020      June 30, 2021  
     RMB      RMB      US$  
Contract liabilities
     71,141        70,166        10,867  
Customer deposits relate to customer’s unused balances that are refundable. Once this balance is utilized by the customer, the corresponding amount would be recognized as revenue.
A
s of June 30, 2021, the Company’s unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was RMB31,425 (US$4,867). The Company expects to recognize the majority of its remaining performance obligations as revenue within the next year.
Costs of revenues
Cost of revenues consists primarily of the cost of purchasing ad inventory associated with targeted marketing services, bandwidth cost, staff costs and depreciation of servers used for revenue generating services. Starting from January 1, 2021, the Company had fully exited the targeted marketing business and the cost of revenues since then is only incurred from SAAS Businesses.
 
F-23

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
2 Summary of Significant Accounting Policies (continued)
 
Fair value measurements
The carrying amounts of financial assets and liabilities, such as cash equivalents, restricted cash, accounts receivable, other receivables within prepayments and other current assets, balances with related parties, accounts payable, and other payables with accrued liabilities and other current liabilities, approximate their fair values because of the short maturity of these instruments. The carrying amounts of convertible notes were recognized based on residual proceeds after allocation to the derivative liabilities at fair market value. The estimated fair values of the convertible notes are based on a valuation methodology using market approach since it bears interest rates which approximate market interest rates of issuers of similar credit risk profile.
Concentration of risks
Concentration of credit risk
F
inancial assets that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, derivative assets, other receivables within prepayments and other current assets, short-term investments and accounts receivable.
The Company places its cash and cash equivalents with reputable financial institutions which have high-credit ratings. As of December 31, 2020, and June 30, 2021, the aggregate amount of cash and cash equivalents, restricted cash, derivative assets and short-term investments of RMB322,183 and RMB277,979 (US$43,053), respectively, were held at major financial institutions located in the PRC, and US$17,494 and US$3,274 (RMB21,136), respectively, were deposited with major financial institutions located outside the PRC. There has been no recent history of default related to these financial institutions. The Company continues to monitor the financial strength of the financial institutions. The Company manages credit risk of accounts receivable through ongoing monitoring of the outstanding balances.
Concentration of suppliers
Approximately 76.1% and 49.2% of advertising costs were paid to three suppliers for the six months ended June 30, 2020 and 2021, respectively.
Foreign currency exchange rate risk
The functional currency and the reporting currency of the Company are the US$ and the RMB, respectively. On June 19, 2010, the PBOC announced the end of the RMB’s de facto peg to the US$, a policy which was instituted in late 2008 in the face of the global financial crisis, to further reform the RMB exchange rate regime and to enhance the RMB’s exchange rate flexibility. On March 15, 2014, the People’s Bank of China announced the widening of the daily trading band for RMB against US$. The depreciation of the US$ against RMB was approximately 1.05% for the six months ended June 30, 2021. Most of the Company’s revenues and costs are denominated in RMB, while a portion of cash and cash equivalents, short-term investments, and accounts payable are denominated in US$. Any significant revaluation of RMB may materially and adversely affect the Company’s consolidated
revenues, earnings and financial position in US$.
 
F-24

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
2 Summary of Significant Accounting Policies (continued)
 
Impact of
COVID-19
During the six months ended June 30, 2020 and 2021,
COVID-19
has had limited impact on the Company’s operations, including revenues declined compared to the prior period partly due to weakness in demand as its customers in certain industries are negatively impacted by
COVID-19.
There are still uncertainties of
COVID-19’s
future impact, and the extent of the impact will depend on a number of factors, including the duration and severity of the pandemic; the uneven impact to certain industries; and the macroeconomic impact of government measures to contain the spread of
COVID-19
and related government stimulus measures. As a result, certain of the Company’s estimates and assumptions, including the allowance for accounts and the valuation of certain equity investments subject to impairment assessments, require significant judgments and carry a higher degree of variabilities and volatilities that could result in material changes to the Company’s current estimates in future periods. The extent of the impact of the
COVID-19
on the Company’s operational and financial performance in the longer term will depend on future developments, including the duration of the outbreak and related travel advisories and restrictions and the impact of the
COVID-19
on overall demand for travel, all of which are highly uncertain and beyond the control of the Company and the impact cannot be reasonably estimated at this time.
 
F-25

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
3 Accounts and notes receivable, net
 
     As of  
     December 31,
2020
     June 30, 2021  
     RMB      RMB      US$  
Accounts and notes receivable
     88,706        77,560        12,012  
Less: allowance for doubtful accounts
     (43,820      (39,420      (6,105
    
 
 
    
 
 
    
 
 
 
Total accounts and notes receivable, net
     44,886        38,140        5,907  
    
 
 
    
 
 
    
 
 
 
The following table presents the movement in the allowance for doubtful accounts:
 
     As of  
     December 31,
2020
     June 30, 2021  
     RMB      RMB      US$  
Balance at beginning of the period
     28,516        43,820        6,787  
Provisions
     18,732        221        34  
Write-offs
     (3,428      (4,621      (716
    
 
 
    
 
 
    
 
 
 
Balance at end of the period
     43,820        39,420        6,105  
    
 
 
    
 
 
    
 
 
 
 
F-26


AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
4 Prepayments and other current assets
Prepayments and other current assets consist of the following:
 
            As of  
            December 31,
2020
     June 30, 2021  
            RMB      RMB      US$  
Prepaid service fee
              12,028        8,389        1,299  
Investment in a convertible loan
              —          4,223        654  
VAT and other surcharges
              10,467        10,336        1,601  
Office rental deposit
              636        342        53  
Receivables from sales of shares on behalf of employees
              11,060        364        56  
Refund from prepaid media cost
              6,838        1,095        170  
Receivables on behalf of third party advertising companies
    
(i
     —          16,966        2,628  
Loans granted to equity investees
     (ii
     500        3,500        542  
Others
              7,484        6,252        968  
             
 
 
    
 
 
    
 
 
 
Total prepayments and other current assets
              49,013        51,467        7,971  
             
 
 
    
 
 
    
 
 
 
 
(i)
Starting from January 1, 2021, the Company has fully exited the Targeted Marketing business and this balance represents the receivables the Company acts as agent and collects on behalf of third party advertising companies for targeted marketing related services.
 
(ii)
As of December 31, 2020, under prepayments and other current assets includes the impairment charges of RMB4,500 that the Company recognized on loans granted to equity investees. No impairment charges were recognized on loans granted to equity investees for the six months ended June 30, 2021. The Company evaluates the impairment of the equity investments without readily determinable fair value along with loans the Company granted to those investees.
 
F-27

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
5 Long-term investments
Equity investments without readily determinable fair value
As of June 30, 2021, the carrying amount of the Company’s equity investments was RMB167,979 (US$26,017), net of RMB38,662 (US$5,988) in accumulated impairment. As of December 31, 2020, the carrying amount of the Company’s equity investments was RMB168,526, net of RMB38,739 in accumulated impairment. No impairment charges were recognized on equity investments without readily determinable fair value for the six months ended June 30, 2020 and 2021. The Company does not have any downward adjustments for the six months ended June 30, 2020 and 2021.
Total unrealized and realized gains and losses of equity investments without readily determinable fair values for the six months ended June 30, 2020 and 2021 were nil and nil, respectively.
6 Deferred revenue and customer deposits
Deferred revenue and customer deposits consist of the following:
 
     As of  
     December 31, 2020      June 30, 2021  
     RMB      RMB      US$  
Deferred revenue
     71,141        70,166        10,867  
Customer deposits
     38,041        36,099        5,591  
    
 
 
    
 
 
    
 
 
 
Total deferred revenue and customer deposits - current
     109,182        106,265        16,458  
    
 
 
    
 
 
    
 
 
 
Deferred revenue -
non-current
     6,049        5,233        810  
    
 
 
    
 
 
    
 
 
 
 
F-28

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
7 Accrued liabilities and other current liabilities
Accrued liabilities and other current liabilities consist of the following:
 
            As of  
            December 31,2020      June 30, 2021  
            RMB      RMB      US$  
Accrued payroll and welfare payables
              59,511        52,232        8,090  
Other taxes and surcharge
              19,360        11,891        1,842  
Service fees
              5,481        5,960        923  
Acquisition of property and equipment
              3,858        1,757        272  
Government grant
              4,564        4,526        701  
Rental and property management fee
              3,278        4,045        626  
Payables for sales of employees’ shares
              10,308        228        35  
Payables to third party advertising companies
     (i      —          5,414        839  
Others
              2,776        4,520        699  
             
 
 
    
 
 
    
 
 
 
Total accrued liabilities and other current liabilities
              109,136        90,573        14,027  
             
 
 
    
 
 
    
 
 
 
 
(i)
Starting from January 1, 2021, the Company has fully exited the Targeted Marketing business and this balance represents the payments to third party advertising companies for targeted marketing related services as the Company acts as agent.
8
Income taxes
The Company has holding companies in Cayman Island, British Virgin Islands, Hong Kong and its main operations is in the PRC. The Company’s entities are subject to local statutory income tax rate in these jurisdictions. Specifically, the Company’s PRC entities are subject to a statutory income tax rate of 25%, in accordance with the Enterprise Income Tax Law (the “EIT Law”). The Company’s Hong Kong entity is subject to a statutory income tax rate of 16.5%, in accordance with the Hong Kong tax laws.

The Company recorded an income tax expense of nil and RMB11 (US$2), representing an effective tax rate of 0.00% and (0.03%) respectively for the six months ended June 30, 2020 and June 30, 2021. The slight fluctuation came from the Company’s Hong Kong entity, while the other entities in the Company were in a current loss position for each of the periods presented and they recorded a full valuation allowance against all deferred tax assets due to historical losses and no future profits forecasted for the foreseeable future as of each of the periods presented.
 
F-29

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
9 Commitments and contingencies
Operating lease commitments
The Company leases office premises in the PRC under
non-cancellable
operating leases ranging from six months to five years. Payments under operating leases are expensed on a straight-line basis over the periods of the respective leases.
Total operating lease expenses were RMB7,640 and RMB6,509 (US$1,008) for the six months ended June 30, 2020 and 2021, respectively.
As of June 30, 2021, future minimum payments under
non-cancellable
operating leases were as follows:
 
     RMB      US$  
For the six months ended December 31, 2021
     4,477        693  
For the years ended December 31,
                 
2022
     9,333        1,445  
2023
     6,577        1,019  
2024
     5,381        833  
    
 
 
    
 
 
 
Total
     25,768        3,990  
    
 
 
    
 
 
 
The Company’s operating lease commitments have no renewal options, rent escalation clauses and restrictions or contingent rents. There are no lease payments in 2025 and after.
Capital commitments
As of June 30, 2021, future minimum payment under
non-cancellable
purchase commitment is nil.
 
F-30

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
10 Loss per share
Basic and diluted loss per share is calculated as follows:
 
     For the six months ended June 30,  
     2020     2021  
     Class A     Class B     Class A     Class B  
     RMB     RMB     RMB     US$     RMB     US$  
Numerator:
                                                
Net loss attributable to Class A and Class B common shareholders
     (71,306     (20,140     (54,429     (8,430     (15,005     (2,324
Net loss attributable to common shareholders
     (71,306     (20,140     (54,429     (8,430     (15,005     (2,324
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Denominator:
                                                
Weighted average number of shares used in calculating basic and diluted loss per share
     60,190,846       17,000,189       61,668,577       61,668,577       17,000,189       17,000,189  
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Basic and diluted loss per share
     (1.18     (1.18     (0.88     (0.14     (0.88     (0.14
    
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
For the six months ended June 30, 2020 and 2021, the
two-class
method is applicable because the Company has Class A and Class B ordinary shares outstanding, and both classes have contractual rights with regards to dividends and distributions upon liquidation of the Company. As the Company is in a net loss position, the effect of share options, restricted share units and convertible notes were excluded from the computation of diluted loss per share for the six months ended June 30, 2020 and 2021 as they would be anti-dilutive.​​​​​​​
 
F-31

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
11 Revenues
Revenues consist of the following:
 
     For the six months ended June 30,  
     2020      2021  
     RMB      RMB      US$  
Targeted Marketing
     141,282                      
    
 
 
    
 
 
    
 
 
 
SAAS Businesses
                          
Developer Services
     77,216        113,608        17,596  
Vertical Applications
     38,520        52,001        8,054  
    
 
 
    
 
 
    
 
 
 
Total SAAS Businesses
     115,736        165,609        25,650  
    
 
 
    
 
 
    
 
 
 
Total revenues
     257,018        165,609        25,650  
    
 
 
    
 
 
    
 
 
 
For the six months ended June 30, 2020 and 2021, revenues recognized at the point in time are RMB196,006 and RMB98,405 (US$15,241), respectively. For the six months ended June 30, 2020 and 2021, revenues recognized over time are RMB61,012 and RMB67,204 (US$10,409), respectively.
 
F-32

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)

12 Short-term investments
The Company accounts for its short-term investments which were mainly deposits in commercial banks with maturities less than one year and structured deposits issued by commercial banks and other financial intuitions in accordance with ASC Topic 320, Investments—Debt Securities (“ASC 320”) and as the Company has the positive intent and ability to hold them to maturity, the short-term investments are classified as
held-to-maturity
securities and stated at amortized cost less impairment.
Short-term investments classification as of December 31, 2020 and June 30, 2021 were shown as below:
 
     As of December 31, 2020  
     Cost or
Amortized
cost
     Gross
unrecognized
holding gains
     Gross
unrecognized
holding losses
     Gross
unrecognized
gains
     Gross
unrecognized
losses
     Fair value  
     RMB                                  RMB  
Held-to-maturity
debt investments
     80,000        —          —          —          —          80,000  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
 
     As of June 30, 2021  
     Cost or
Amortized
cost
     Gross
unrecognized
holding gains
     Gross
unrecognized
holding losses
     Gross
unrecognized
gains
     Gross
unrecognized
losses
     Fair value  
     RMB      US$                                  RMB      US$  
Held-to-maturity
debt investments
     30,000        4,646        —          —          —          —          30,000        4,646  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
 
 
F-33

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
12 Short-term investments (continued)
 
As of December 31, 2020, the Company’s short-term investments comprise primarily of principal guaranteed structured deposits placed with financial institutions with maturities within twelve months and interest rates indexed to gold price. The indexation of interest rates to gold prices are considered embedded derivatives that are separated from the host contract of bank structured deposits and are recorded separately in “Derivative assets” and measured at fair value in the consolidated balance sheets. The fair value of the derivatives assets is disclosed in Note 13 - Fair value measurements.​​​​​​​
As of June 30, 2021, the Company’s short-term investments only comprises of time deposits with original maturities over three months.
13 Fair value measurements
ASC
820-10,
Fair Value Measurements and Disclosures: Overall
, establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets
Level 2 — Include other inputs that are directly or indirectly observable in the marketplace
Level 3 — Unobservable inputs which are supported by little or no market activity
ASC
820-10
describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.
Assets and liabilities measured or disclosed at fair value
The Company measures derivative assets at fair value on a recurring basis. The derivative assets are classified within Level 2 as the fair value is measured by using inputs derived from or corroborated by observable market data.
 
F-34

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
 
13 Fair value measurements (continued)
 
The Company’s
non-financial
long-lived assets, such as intangible assets and property and equipment, would be measured at fair value only if they were determined to be impaired. Company uses a combination of valuation methodologies, including market approach based on the Company’s best estimate to determine the fair value of these
non-financial
assets. The Company measures
non-recurring
fair value measurements as of the observable transaction dates. The fair value (level 2) was evaluated for certain property and equipment based on quoted prices for similar assets in markets that are not active.
For equity investments accounted for under the measurement alternative, when there are observable price changes in orderly transactions for identical or similar investments of the same issuer, the investments are
re-measured
to fair value (Note 5). The
non-recurring
fair value measurements to the carrying amount of an investment usually requires management to estimate a price adjustment for the different rights and obligations between a similar instrument of the same issuer with an observable price change in an orderly transaction and the investment held by the Company. These
non-recurring
fair value measurements were measured as of the observable transaction dates. The valuation methodologies involved require management to use the observable transaction price at the transaction date and other unobservable inputs (level 3) such as volatility of comparable companies and probability of exit events as it relates to liquidation, redemption preferences and qualified IPO.
The Company measures certain financial assets, including equity securities accounted for at fair value using measurement alternative at fair value on a
non-recurring
basis only if an impairment loss or upward valuation were to be recognized.

 
F-35

AURORA MOBILE LIMITED
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for number of shares and per share data)
13 Fair value measurements (continued)
 
As of December 31, 2020, and June 30, 2021, assets measured or disclosed at fair value are summarized below:
 
           
Fair value measurement or disclosure

at December 31, 2020 using
        
    
Total Fair
Value at
December 31,
2020
    
Quoted prices in
active markets
for identical
assets (Level 1)
    
Significant
other
observable
inputs (Level 2)
    
Significant
unobservable
inputs (Level 3)
    
Fair value
adjustment
 
    
RMB
    
RMB
    
RMB
    
RMB
    
RMB
 
Fair value measurements on a recurring basis
                                            
Derivative assets
     100        —          100        —          —    
Fair value measurement on a
non-recurring
basis
                                            
Equity investments accounted for at fair value using the alternative measurement
     —          —          —          —          (38,739
Property and equipment, net
     4,505