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 March 2019

 


 

Commission File Number: 001-38639

 


 

111, Inc.

 

3-4/F, No.295 ZuChongZhi Road,

Pudong New Area

Shanghai, 201203

The 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  x

 

Form 40-F  o

 

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): o

 

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): o

 

 

 


 

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.

 

 

 

111, INC.

 

 

 

 

 

 

 

By

:

/s/ Yang Chen

 

Name

:

Yang Chen

 

Title

:

Chief Financial Officer

 

 

Date: March 8, 2019

 

2


 

Exhibit Index

 

Exhibit 99.1—Press Release

 

3


Exhibit 99.1

 

 

111, Inc. Announces Fourth Quarter and Fiscal Year 2018 Unaudited Financial Results

 

SHANGHAI, CHINA - March 7, 2019 - 111, Inc. (“111” or the “Company”) (NASDAQ: YI), a leading integrated online and offline healthcare platform in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2018.

 

Fourth Quarter 2018 Highlights

 

·                         Net revenues were RMB557.4 million (US$81.1 million), representing an increase of 102.1% year-over-year.

 

·                         Operating expenses1 were RMB155.3 million (US$22.6 million), representing an increase of 75.8% year-over-year.

 

·                         Number of pharmacies served increased to more than 150,000 as of December 31, 2018, compared to more than 130,000 pharmacies as of September 30, 2018.

 

·                         Broadened supplier sources resulted in direct sourcing from 93 pharmaceutical companies, compared to 80 pharmaceutical companies as of September 30, 2018, respectively.

 

Fiscal Year 2018 Highlights

 

·                         Net revenues were RMB1,786.0 million (US$259.8 million), representing an increase of 86.1% year-over-year.

 

·                         Operating expenses1 were RMB504.6 million (US$73.4 million), representing an increase of 46.4% year-over-year.

 

Mr. Junling Liu, Co-Founder, Chairman, and Chief Executive Officer of 111, commented, “I am pleased to report strong results for the fourth quarter and full-year of 2018. Net revenues for the fourth quarter grew at 102.1% year-over-year which exceeded our guidance and were driven primarily by the growth in B2B segment which increased by 424.7% year-over-year.  As of December 31, 2018, we have developed a fast growing virtual pharmacy network in China by serving more than 150,000 pharmacies. We have been also making a great progress in building the strategic partnerships with insurance companies, pharmaceutical companies as well as local municipal health commissions.  Our operating efficiency continued to improve during the quarter, which I believe, demonstrates our effectiveness at executing our growth strategy. Meanwhile, we have restructured our B2C business with a more customer-centric organization structure to enable us to meet the specific needs of different customer segments. Heading into 2019, we will continue to enhance the virtual pharmacy network by adding approximately 80,000 new pharmacies in 2019, which will lead to a network of total 230,000 pharmacies representing more than 50% of the market2.  We will further strengthen our core capabilities in smart supplier chain, medical expertise, big data and cloud solutions, to enable our various partners within our integrated online and offline healthcare ecosystem.  We have confidence to continue our strong revenue growth and further reduce our operating costs and expenses in 2019 and years ahead.”

 


1  Operating expense consists of fulfillment expenses, selling and marketing expenses, general and administrative expenses, technology expenses and other operating expenses.

2  According to analysis made by Chinese Pharmacy Magazine, there are 457,000 Pharmacies existing at the end of 2018.

 

1


 

Fourth Quarter 2018 Financial Results

 

Net revenues were RMB557.4 million (US$81.1 million), representing an increase of 102.1% from RMB275.8 million in the same quarter of last year. The increase was mainly due to the significant increase in product revenues from B2B segment, which increased by 424.7% to RMB330.2 million (US$48.0 million) from RMB62.9 million in the same quarter of last year. Product revenues from B2C segment increased by 6.1% to RMB222.7 million (US$32.4 million) from RMB209.9 million in the same quarter of last year.

 

Operating costs and expenses were RMB689.6 million (US$100.3 million), representing an increase of 101.7% from RMB341.9 million in the same quarter of last year.

 

·                         Cost of products sold was RMB534.3 million (US$77.7 million), representing an increase of 110.7% from RMB253.6 million in the same quarter of last year. The increase was primarily due to the increase in sales and a change in revenue mix with a much higher proportion of B2B business.

 

·                         Fulfillment expenses were RMB22.0 million (US$3.2 million), representing an increase of 51.0% from RMB14.6 million in the same quarter of last year, primarily as a result of growth in B2B business. Fulfillment expenses accounted for 4.0% of net revenue this quarter as compared to 5.3% in the same quarter of last year.

 

·                         Selling and marketing expenses were RMB78.2 million (US$11.4 million), representing an increase of 67.5% from RMB46.7 million in the same quarter of last year, mainly due to increase in the number of sales staffs and expenses associated with the expansion of B2B business. Selling and marketing expenses accounted for 14.0% of net revenue this quarter as compared to 16.9% in the same quarter of last year.

 

·                         General and administrative expenses were RMB34.1 million (US$5.0 million), representing an increase of 102.2% from RMB16.8 million in the same quarter of last year, mainly due to increases in managerial staffs and share-based compensation expenses.  Non-GAAP general and administrative expenses3, which exclude the share-based compensation expenses of RMB7.6 million this quarter and RMB1.6 million in the same quarter of last year, were RMB26.5 million this quarter, increased 74.3% from the same quarter of last year. Non-GAAP General and administrative expenses accounted for 4.8% of net revenue this quarter as compared to 5.5% in the same quarter of last year.

 

·                         Technology expenses were RMB20.4 million (US$3.0 million), representing an increase of 74.8% from RMB11.7 million in the same quarter of last year, mainly due to investments in platform and product development, including the recruitment of technology-related staffs. Technology expenses accounted for 3.7% of net revenue this quarter as compared to 4.2% in the same quarter of last year.

 

Loss from operations was RMB132.2 million (US$19.2 million), compared to RMB66.1 million in the same quarter of last year.

 

Non-GAAP Loss from operations4 was RMB115.9 million (US$16.9 million), compared to RMB63.1 million in the same quarter of last year.  Non-GAAP loss from operations accounted for 20.8% of net revenue this quarter as compared to 22.9% in the same quarter of last year.

 


3  Non-GAAP general and administrative expenses represents general and administrative excluding share-based compensation.

4  Non-GAAP loss from operations represents loss from operations excluding share-based compensation.

 

2


 

Net loss attributable to ordinary shareholders was RMB125.9 million (US$18.3 million), compared to RMB64.4 million in the same quarter of last year.

 

Non-GAAP net loss attributable to ordinary shareholders5 was RMB109.6 million (US$15.9 million), compared to RMB61.3 million in the same quarter of last year.  Non-GAAP net loss attributable to ordinary shareholders accounted for 19.7% of net revenue this quarter as compared to 22.2% in the same quarter of last year.

 

Loss per ADS was RMB1.54 (US$0.22), compared to RMB1.78 for the same period of last year.

 

Non-GAAP Loss per ADS6 was RMB1.34 (US$0.19), compared to RMB1.70 for the same period of last year.

 

As of December 31, 2018, the Company had cash and cash equivalents and short-term investments of RMB1,106.5 million (US$160.9 million), compared to RMB461.2 million as of December 31, 2017, primarily due to the cash provided by the Company’s initial public offering.

 

Fiscal Year 2018 Financial Results

 

Net revenues were RMB1,786.0 million (US$259.8 million), representing an increase of 86.1% from RMB959.5 million last year. The increase was mainly due to the significant increase in product revenues from B2B segment, which increased by 962.0% to RMB922.8 million (US$134.2 million) from RMB86.9 million last year. Product revenues from B2C segment decreased by 1.7% to RMB847.5 million (US$123.3 million) from RMB862.3 million last year.

 

Operating costs and expenses were RMB2,186.3 million (US$318.0 million), representing an increase of 80.2% from RMB1,213.5 million last year.

 

·                         Cost of products sold was RMB1,681.7 million (US$244.6 million), representing an increase of 93.6% from RMB868.7 million last year. The increase was primarily due to growth in sales and a change in revenue mix with a much higher proportion of B2B business.

 

·                         Fulfillment expenses were RMB73.9 million (US$10.8 million), representing an increase of 32.3% from RMB55.9 million last year, primarily as a result of growth in B2B business.  Fulfillment expenses accounted for 4.1% of net revenue in 2018 as compared to 5.8% last year.

 

·                         Selling and marketing expenses were RMB260.0 million (US$37.8 million), representing an increase of 36.8% from RMB190.1 million last year, mainly due to increase in sales staff and expenses associated with the expansion of B2B business.  Selling and marketing expenses accounted for 14.6% of net revenue in 2018 as compared to 19.8% last year.

 

·                         General and administrative expenses were RMB98.8 million (US$14.4 million), representing an increase of 84.8% from RMB53.4 million last year, mainly due to increases in managerial staffs, IPO consulting fees, and share-based compensation expenses.  Non-GAAP general and administrative expenses, which exclude the share-based compensation expenses of RMB22.5 million for this year and RMB5.2 million for last year, were RMB76.3million, increased 58.1% from last year. Non-GAAP General and administrative expenses accounted for 4.3% of net revenue in 2018 as compared to 5.0% last year.

 


5  Non-GAAP net loss attributable to ordinary shareholders represents net loss attributable to ordinary shareholders excluding share-based compensation.

6  Non-GAAP loss per ADS represents loss per ADS excluding share-based compensation per ADS.

 

3


 

·                         Technology expenses were RMB71.2 million (US$10.4 million), representing an increase of 48.0% from RMB48.1 million last year, mainly due to investments in platform and product development, including the recruitment of technology-related staffs.  Technology expenses accounted for 4.0% of net revenue in 2018 as compared to 5.0% last year.

 

Loss from operations was RMB400.4 million (US$58.2 million), compared to RMB254.0 million last year.

 

Non-GAAP Loss from operations was RMB349.0 million (US$50.8 million), compared to RMB244.1 million last year.  Non-GAAP loss from operations accounted for 19.5% of net revenue in 2018 as compared to 25.4% last year.

 

Net loss attributable to ordinary shareholders was RMB380.1 million (US$55.3 million), compared to RMB248.6 million in 2017.

 

Non-GAAP net loss attributable to ordinary shareholders was RMB328.7 million (US$47.8 million), compared to RMB238.7 million last year.  Non-GAAP net loss attributable to ordinary shareholders accounted for 18.4% of net revenue in 2018 as compared to 24.9% last year.

 

Loss per ADS was RMB7.64 (US$1.12), compared to RMB6.90 for the same period of last year.

 

Non-GAAP Loss per ADS was RMB6.61 (US$0.97), compared to RMB6.62 for the same period of last year.

 

Business Outlook

 

For the first quarter of 2019, the Company expects total net revenues to be between RMB600 million and RMB640 million, representing year-over-year growth of approximately 81.7% to 93.8%.

 

The above outlook is based on the current market conditions and reflects the Company’s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.

 

Conference Call

 

111’s management team will host an earnings conference call at 7:30 AM U.S. Eastern Time on Thursday, March 7, 2019 (8:30 PM Beijing Time on March 7, 2019).

 

Dial-in details for the earnings conference call are as follows:

United States:

+1-866-519-4004

Hong Kong:

+852-3018-6771

China:

400-620-8038

International:

+65-6713-5090

Passcode:

4883857

 

Please dial in 15 minutes before the call is scheduled to begin and provide the passcode to join the call.

 

A telephone replay of the call will be available after the conclusion of the conference call until 7:59 AM ET on March 14, 2019:

 

United States:

+1-855-452-5696

International:

+61-2-8199-0299

Passcode:

4883857

 

A live and archived webcast of the conference call will be available on the Investor Relations section of 111’s website at http://ir.111.com.cn/.

 

4


 

Use of Non-GAAP Financial Measures

 

In evaluating the business, the Company considers and uses non-GAAP general and administrative expenses, non-GAAP loss from operations, non-GAAP net loss attributable to ordinary shareholders and non-GAAP loss per ADS, non-GAAP measures, as supplemental measures to review and assess its operating performance. The Company defines non-GAAP general and administrative expenses as general and administrative expenses excluding share-based compensation. The Company defines non-GAAP loss from operations as loss from operations excluding share-based compensation. The Company defines non-GAAP net loss attributable to ordinary shareholders as net loss attributable to ordinary shareholders excluding share-based compensation. The Company defines non-GAAP loss per ADS as loss per ADS excluding share-based compensation per ADS. 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 U.S. GAAP.

 

The Company believes that non-GAAP general and administrative expenses, non-GAAP loss from operations, non-GAAP net loss attributable to ordinary shareholders and non-GAAP loss per ADS help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that it includes in loss from operations and net loss. Share-based compensation is a non-cash expense that varies from period to period. As a result, management excludes this item from its internal operating forecasts and models. Management believes that this adjustment for share-based compensation provides investors with a basis to measure the company’s core performance, including compared with the performance of other companies, without the period-to-period variability created by share-based compensation. The Company believes that non-GAAP general and administrative expenses, non-GAAP loss from operations, non-GAAP net loss attributable to ordinary shareholders and non-GAAP loss per ADS provide useful information about its operating results, enhances the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the management in their financial and operational decision-making.

 

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP general and administrative expenses, non-GAAP loss from operations, non-GAAP net loss attributable to ordinary shareholders or non-GAAP loss per ADS is that it does not reflect all items of income and expense that affect the Company’s operations. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

 

The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP measures, all of which should be considered when evaluating the Company’s performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure.

 

Reconciliation of the non-GAAP financial measures to the most comparable U.S. GAAP measures is included at the end of this press release.

 

Exchange Rate Information Statement

 

This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.8755 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of December 31, 2018.

 

5


 

Safe Harbor Statement

 

This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “target,” “confident” and similar statements. Among other things, the Business Outlook and quotations from management in this announcement, as well as 111’s strategic and operational plans, contain forward-looking statements. 111 may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Such statements are based upon management’s current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company’s control. Forward-looking statements involve inherent risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to the Company’s ability comply with extensive and evolving regulatory requirements, its ability to compete effectively in the evolving PRC general health and wellness market, its ability to manage the growth of its business and expansion plans, its ability to achieve or maintain profitability in the future, its ability to control the risks associated with its pharmaceutical retail and wholesale businesses, and the Company’s ability to meet the standards necessary to maintain listing of its ADSs on the Nasdaq Global Market, including its ability to cure any non-compliance with Nasdaq’s continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and 111 does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

 

About 111, Inc.

 

111, Inc. (NASDAQ: YI) (“111” or the “Company”) is a leading integrated online and offline healthcare platform in China. The Company provides hundreds of millions of consumers with better access to pharmaceutical products and medical services directly through its online retail pharmacy and indirectly through its offline pharmacy network. 111 also offers online medical services through its internet hospital, 1 Clinic, which provides consumers with cost-effective and convenient online consultation and electronic prescription services. In addition to providing direct services to consumers through its online retail pharmacy, 111 also enables offline pharmacies to better serve their customers.  The Company’s online wholesale pharmacy, 1 Drug Mall, serves as a one-stop shop for pharmacies to source a vast selection of pharmaceutical products. The Company’s New Retail platform, by integrating the front and back ends of the pharmaceutical supply chain, has formed a smart supply chain, which transforms the flow of pharmaceutical products to pharmacies and modernizes how they serve their customers.

 

For more information on 111, please visit ir.111.com.cn

 

For more information, please contact:

 

111, Inc.

ir@111.com.cn

 

Christensen

In China

Mr. Christian Arnell

Phone: +86-10-5900-1548

E-mail: carnell@christensenir.com

 

In U.S.

Ms. Linda Bergkamp

Phone: +1-480-614-3004

Email: lbergkamp@ChristensenIR.com

 

---------

 

6


 

111, Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)

 

 

 

As of

 

 

 

 

 

 

 

December 31, 2017

 

December 31, 2018

 

 

 

RMB

 

RMB

 

US$

 

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

167,660

 

853,740

 

124,171

 

Short-term investments

 

293,533

 

252,805

 

36,769

 

Accounts receivable, net of allowance of doubtful accounts of nil at December 31, 2017 and December 31, 2018

 

20,398

 

28,569

 

4,155

 

Inventories

 

144,056

 

210,836

 

30,665

 

Prepayments and other current assets

 

104,818

 

161,147

 

23,438

 

Total current assets

 

730,465

 

1,507,097

 

219,198

 

Property and equipment

 

17,028

 

20,302

 

2,953

 

Intangible assets

 

4,751

 

4,503

 

655

 

Long-term investments

 

11,140

 

11,140

 

1,620

 

Other Non-Current Assets

 

 

3,376

 

491

 

Total Assets

 

763,384

 

1,546,418

 

224,917

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current liabilities including amounts of the consolidated VIE without recourse to the Company

 

 

 

 

 

 

 

Accounts payable

 

128,140

 

212,258

 

30,872

 

Accrued expense and other current liabilities

 

73,018

 

102,261

 

14,873

 

Total Current liability

 

201,158

 

314,519

 

45,745

 

Other Non-Current Liabilities

 

 

8,135

 

1,183

 

Total Liabilities

 

201,158

 

322,654

 

46,928

 

 

 

 

 

 

 

 

 

Mezzanine Equity

 

 

 

 

 

 

 

Series A convertible preferred shares, $0.00005 par value; 4,200,000 and nil shares authorized, issued, and outstanding as of December 31, 2017 and December 31, 2018, respectively

 

12,922

 

 

 

Series B convertible preferred shares, $0.00005 par value; 11,396,178 and nil shares authorized, issued, and outstanding as of December 31, 2017 and December 31, 2018, respectively

 

57,980

 

 

 

Series C convertible preferred shares, $0.00005 par value; 31,739,234 and nil shares authorized, issued, and outstanding as of December 31, 2017 and December 31, 2018, respectively

 

450,324

 

 

 

Series D convertible preferred shares, $0.00005 par value; 27,783,584 and nil shares authorized, issued, and outstanding as of December 31, 2017 and December 31, 2018, respectively

 

1,263,523

 

 

 

Subscription receivable of Series D convertible preferred shares

 

(277,819

)

 

 

Total Mezzanine Equity

 

1,506,930

 

 

 

 

7


 

111, Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)

 

 

 

As of

 

 

 

 

 

 

 

December 31, 2017

 

December 31, 2018

 

 

 

RMB

 

RMB

 

US$

 

Shareholders’ Equity (Deficit)

 

 

 

 

 

 

 

Ordinary shares Class A ($0.00005 par value per share; 72,000,000 shares, and 800,000,000 shares authorized, 72,000,000 shares and 91,088,106 shares issued and outstanding as of December 31, 2017 and September 30, 2018, respectively)

 

25

 

29

 

4

 

Ordinary shares Class B ($0.00005 par value per share; 839,209,895 shares, and 72,000,000 shares authorized, nil and 72,000,000 shares issued and outstanding as of December 31, 2017 and September 30, 2018, respectively)

 

 

25

 

4

 

Ordinary shares Class C ($0.00005 par value per share; 13,671,109 shares, and nil authorized, 1,607,901 shares, and nil issued and outstanding as of December 31, 2017 and September 30, 2018, respectively)

 

 

 

 

Subscription receivable

 

(2,200

)

 

 

Additional paid in capital

 

12,121

 

2,540,878

 

369,555

 

Accumulated deficit

 

(1,003,638

)

(1,383,729

)

(201,255

)

Accumulated other Comprehensive Income

 

47,550

 

67,073

 

9,755

 

Total shareholders’ equity (deficit)

 

(946,142

)

1,224,276

 

178,063

 

Non-controlling interest

 

1,438

 

(512

)

(74

)

Total equity (deficit)

 

(944,704

)

1,223,764

 

177,989

 

Total liabilities, mezzanine equity and equity

 

763,384

 

1,546,418

 

224,917

 

 

8


 

111, Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

 

 

 

For the three months ended December 31,

 

For the year ended December 31,

 

 

 

2017

 

2018

 

2017

 

2018

 

 

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

Net Revenues

 

275,831

 

557,401

 

81,070

 

959,486

 

1,785,970

 

259,759

 

Operating Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product sold

 

(253,584

)

(534,282

)

(77,708

)

(868,719

)

(1,681,700

)

(244,592

)

Fulfillment expenses

 

(14,603

)

(22,045

)

(3,206

)

(55,880

)

(73,930

)

(10,753

)

Selling and marketing expenses

 

(46,697

)

(78,218

)

(11,376

)

(190,074

)

(260,040

)

(37,822

)

General and administrative expenses

 

(16,849

)

(34,071

)

(4,955

)

(53,434

)

(98,759

)

(14,364

)

Technology expenses

 

(11,696

)

(20,444

)

(2,973

)

(48,133

)

(71,248

)

(10,363

)

Other operating (expenses)/ income, net

 

1,494

 

(554

)

(81

)

2,732

 

(668

)

(97

)

Total Operating costs and expenses

 

(341,935

)

(689,614

)

(100,299

)

(1,213,508

)

(2,186,345

)

(317,991

)

Loss from operations

 

(66,104

)

(132,213

)

(19,229

)

(254,022

)

(400,375

)

(58,232

)

Interest income

 

555

 

3,850

 

560

 

4,013

 

4,352

 

633

 

Interest expense

 

(2

)

 

 

(55

)

 

 

Other Income, net

 

1,594

 

2,722

 

396

 

4,229

 

11,531

 

1,676

 

Foreign exchange gain (loss)

 

(604

)

(529

)

(77

)

(3,492

)

2,459

 

358

 

Loss before income taxes

 

(64,561

)

(126,170

)

(18,350

)

(249,327

)

(382,033

)

(55,565

)

Income tax expense

 

 

(8

)

(1

)

 

(8

)

(1

)

Net Loss

 

(64,561

)

(126,178

)

(18,351

)

(249,327

)

(382,041

)

(55,566

)

Net Loss attributable to non-controlling interest

 

181

 

287

 

42

 

747

 

1,950

 

285

 

Net Loss attributable to ordinary shareholders

 

(64,380

)

(125,891

)

(18,309

)

(248,580

)

(380,091

)

(55,281

)

Other comprehensive Income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains of available -for-sale securities, net of tax of nil for three months ended December 31, 2017 and 2018

 

1,052

 

2,650

 

385

 

5,181

 

8,734

 

1,270

 

Realized gain of available-for-sale debt securities, net of tax

 

235

 

(3,526

)

(513

)

(1,154

)

(10,869

)

(1,581

)

Foreign currency translation adjustments

 

(4,424

)

208

 

30

 

(21,347

)

21,658

 

3,150

 

Comprehensive loss

 

(67,517

)

(126,559

)

(18,407

)

(265,900

)

(360,568

)

(52,442

)

Loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

(0.89

)

(0.77

)

(0.11

)

(3.45

)

(3.82

)

(0.56

)

Loss per ADS:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

(1.78

)

(1.54

)

(0.22

)

(6.90

)

(7.64

)

(1.12

)

Weighted average number of shares used in computation of loss per share

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

72,000,000

 

163,088,106

 

163,088,106

 

72,000,000

 

99,451,210

 

99,451,210

 

 

9


 

111, Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

For the three months ended December 31,

 

For the year ended December 31,

 

 

 

2017

 

2018

 

2017

 

2018

 

 

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

Net cash used in operating activities

 

(59,338

)

(127,762

)

(18,582

)

(204,372

)

(343,017

)

(49,891

)

Net cash provided by/(used in) investing activities

 

33,630

 

103,943

 

15,118

 

(36,125

)

44,454

 

6,466

 

Net cash provided by financing activities

 

 

 

 

49,500

 

972,696

 

141,473

 

Effect of exchange rate changes on cash and cash equivalents

 

(10,379

)

(2,767

)

(403

)

(14,848

)

11,947

 

1,738

 

Net increase in cash and cash equivalents

 

(36,087

)

(26,586

)

(3,867

)

(205,845

)

686,080

 

99,786

 

Cash and cash equivalents at the beginning of the period

 

203,747

 

880,326

 

128,038

 

373,505

 

167,660

 

24,385

 

Cash and cash equivalents at the end of the period

 

167,660

 

853,740

 

124,171

 

167,660

 

853,740

 

124,171

 

 

10


 

111, Inc.

Unaudited Reconciliation of GAAP and Non-GAAP Results

(In thousands, except percentage data)

 

 

 

For the three months ended December 31,

 

For the year ended December 31,

 

 

 

2017

 

2018

 

2017

 

2018

 

 

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

Loss from operations

 

(66,104

)

(132,213

)

(19,229

)

(254,022

)

(400,375

)

(58,232

)

Add: Share-based compensation expenses

 

3,053

 

16,291

 

2,369

 

9,921

 

51,359

 

7,470

 

Non-GAAP loss from operations

 

(63,051

)

(115,922

)

(16,860

)

(244,101

)

(349,016

)

(50,762

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

16,849

 

34,071

 

4,955

 

53,434

 

98,759

 

14,364

 

Less: Share-based compensation expenses

 

(1,577

)

(7,553

)

(1,099

)

(5,176

)

(22,477

)

(3,269

)

Non-GAAP General and administrative expenses

 

15,272

 

26,518

 

3,856

 

48,258

 

76,282

 

11,095

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss attributable to ordinary shareholders

 

(64,380

)

(125,891

)

(18,309

)

(248,580

)

(380,091

)

(55,281

)

Add: Share-based compensation expenses

 

3,053

 

16,291

 

2,369

 

9,921

 

51,359

 

7,470

 

Non-GAAP net Loss attributable to ordinary shareholders

 

(61,327

)

(109,600

)

(15,940

)

(238,659

)

(328,732

)

(47,811

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per ADS:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

(1.78

)

(1.54

)

(0.22

)

(6.90

)

(7.64

)

(1.12

)

Add: Share-based compensation expenses per ADS

 

0.08

 

0.20

 

0.03

 

0.28

 

1.03

 

0.15

 

Non-GAAP Loss per ADS

 

(1.70

)

(1.34

)

(0.19

)

(6.62

)

(6.61

)

(0.97

)

 

11