Financial Performance - Total operating revenues decreased by 23.7% from RMB 345,774,201 in the first half of 2022 to RMB 263,642,156 in the first half of 2023[3] - Gross profit increased by 16.1% from RMB 69,349,743 in the first half of 2022 to RMB 80,546,972 in the first half of 2023[3] - Net loss attributable to MicroAlgo Inc. was RMB 37,073,643 in the first half of 2023 compared to a net income of RMB 15,000,956 in the first half of 2022[3] - The company reported a comprehensive loss of RMB 33,493,252 for the first half of 2023 compared to a comprehensive income of RMB 16,607,196 in the first half of 2022[3] - Total revenues for the six months ended June 30, 2023, were RMB 263,642,156 (approximately USD 38,069,970), a decrease from RMB 345,774,201 in the same period of 2022, representing a decline of 23.7%[48] - Revenue from Central Processing Advertising Algorithm Services was RMB 253,740,318 (approximately USD 36,635,280) for the six months ended June 30, 2023, compared to RMB 260,914,275 in the same period of 2022, a decrease of 2.5%[48] - Revenue from the sale of intelligent chips significantly dropped to RMB 9,935,513 (approximately USD 1,434,690) in the first half of 2023, down from RMB 84,859,926 in the same period of 2022, a decline of 88.3%[48] - The gross profit margin for the intelligent chips and services segment was minimal at RMB 41,454 for the six months ended June 30, 2023, compared to RMB 4,223,178 in 2022[138][139] Assets and Liabilities - Cash and cash equivalents decreased significantly from RMB 302,531,922 at the end of 2022 to RMB 138,675,781 at the end of June 2023[7] - Total current liabilities increased by 150.0% from RMB 33,453,984 in December 2022 to RMB 83,893,146 in June 2023[1] - Total assets increased slightly from RMB 502,055,248 in December 2022 to RMB 518,927,864 in June 2023[2] - The company’s retained earnings decreased from RMB 129,602,088 in December 2022 to RMB 96,798,730 in June 2023[5] - Accounts receivable, net increased from RMB 18,125,011 as of December 31, 2022 to RMB 37,723,534 as of June 30, 2023[74] - Other payables and accrued liabilities increased significantly to RMB 28,867,759 (approximately USD 3,995,095) as of June 30, 2023, compared to RMB 5,523,915 in the previous year[81] Research and Development - Research and development expenses surged by 129.0% from RMB 40,202,571 in the first half of 2022 to RMB 92,239,461 in the first half of 2023[3] - Research and development expenses include salaries, outsourced subcontractors, and related expenses for the company's research and product development team[52] Subsidiaries and Acquisitions - MicroAlgo Inc. completed the Business Combination with VIYI Algorithm Inc. on December 9, 2022, making VIYI a wholly owned subsidiary[10] - MicroAlgo has established a fully owned subsidiary, Shenzhen Weidong Technology Co., Ltd., on March 27, 2023[10] - The company disposed of Fe-da Electronics Company Private Limited and Excel Crest Limited in April 2023[12] Tax and Compliance - Current income tax expenses for the six months ended June 30, 2023, were RMB (52,912) (approximately USD (7,640)), indicating a reduction compared to RMB (286,789) in the same period of 2022[93] - The company has not made any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception[87] - The total deferred tax liabilities related to the excess of intangible assets reporting basis over its income tax basis amounted to RMB 1,679,063 (approximately USD 232,370) as of June 30, 2023[94] Currency and Translation - As of June 30, 2023, MicroAlgo's total assets were translated at an exchange rate of RMB 1.00 to USD 0.1384, reflecting a decrease from RMB 1.00 to USD 0.1436 as of December 31, 2022[20] - The accumulated other comprehensive loss due to translation adjustments increased from RMB 2,834,688 to RMB 7,082,011 (USD 980,100) between December 31, 2022, and June 30, 2023[20] - The average translation rate for the six months ended June 30, 2023, was RMB 1.00 to USD 0.1444, compared to RMB 1.00 to USD 0.1542 for the same period in 2022[20] Legal and Regulatory Matters - The Company has initiated a lawsuit seeking damages against Yolanda Asset Management Corporation for breach of agreements and misuse of Form S-4[134] Shareholder Information - The weighted average number of ordinary shares outstanding was 43,856,706 for both the first half of 2023 and the previous period[3] - The Company had 43,856,706 ordinary shares issued and outstanding with a par value of USD 0.001 each as of June 30, 2023[114] - The Company increased the number of authorized ordinary shares from 50,000,000 to 200,000,000 on October 21, 2022[108] - The Company has 4,600,000 public warrants and 225,000 private warrants outstanding as of June 30, 2023[115] Operational Insights - The Company has two operating segments: central processing algorithm services and intelligent chips and services[70] - The company operates primarily in mainland PRC and has seen a substantial portion of its revenues derived from this market, emphasizing its regional focus[139]
MicroAlgo (MLGO) - 2023 Q2 - Quarterly Report