0001104659-21-067017 | 20-F | XBRL Viewer

$ 33,160

$ 334,697

$ 431,404

General and administrative

32,160

340,174

413,971

Gross profit (loss)

1,000

(5,477)

17,433

Operating expenses:

Selling and marketing

2,588

14,364

24,077

Research and development

757

3,357

4,419

6,832

36,145

23,012

Recoverable of detained and impaired assets

2,921

Impairment of goodwill

74,091

Total operating expenses

7,256

127,957

51,508

Loss from operations

(6,256)

(133,434)

(34,075)

Other (expenses) income

586

840

(812)

Fair value change of contingent consideration

65,594

(49,503)

Interest income

575

Interest expenses

(1,183)

(4,057)

(4,261)

Loss before provision of income tax and noncontrolling interest

(6,848)

(70,988)

(88,076)

Income tax (expenses) benefit

1,528

1,920

(862)

Loss from continuing operations

(5,320)

(69,068)

(88,938)

Discontinued operations:

Loss from discontinued operations, net of income taxes of $nil, $nil and $nil for the years ended December 31, 2018, 2019 and 2020

(594)

Net loss attributable to the noncontrolling interest

(5,320)

(69,068)

(89,532)

(17)

(22,952)

(317)

Net loss from continuing operations attributable to Kaixin Auto Holdings' shareholders

(5,303)

(46,116)

(88,621)

Net loss from discontinued operations attributable to Kaixin Auto Holdings' shareholders

(594)

Net loss attributable to Kaixin Auto Holdings' shareholders

$ (5,303)

$ (46,116)

$ (89,215)

Weighted average number of ordinary shares outstanding used in computing net loss per ordinary share - basic and diluted(i)

^[1]

41,715,834

33,146,593

24,984,300

Net loss per share attributable to Kaixin Auto Holdings' shareholders - basic and diluted(i):

Loss per share from discontinued operations(i)

^[1]

$ (0.13)

$ (1.39)

$ (3.56)

^[1]

(0.02)

Net loss per share attributable to Kaixin Auto Holdings' shareholders - basic and diluted(i):

^[1]

$ (0.13)

$ (1.39)

$ (3.58)

COMPREHENSIVE LOSS

Other comprehensive income (loss), net of tax of nil:

$ (5,320)

$ (69,068)

$ (89,532)

Other comprehensive income (loss)

(408)

4,549

(404)

408

(4,549)

404

Comprehensive loss

(4,912)

(73,617)

(89,128)

Less: Comprehensive loss attributable to noncontrolling interest

459

(23,279)

(2,466)

Comprehensive loss attributable to Kaixin Auto Holdings' shareholders

(5,371)

(50,338)

(86,662)

Automobile sales

Revenues:

32,996

332,634

420,005

32,160

338,016

399,274

Financing income

Revenues:

2,317

3,327

Others

Revenues:

$ 164

2,063

9,082

Provision for financing receivable

429

Balance at beginning at Dec. 31, 2017

$ 2,158

$ 10,941

[1]	Share and per share data have been retroactively restated to give effect to the reverse recapitalization that is discussed in Note 1(a)

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF OPERATIONS
Other comprehensive (loss) income, tax	$ 0	$ 0	$ 0

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT) - USD ($)
$ in Thousands

Ordinary shares

Additional paid-in capital

^[1]

Accumulated deficit

Statutory reserves

Accumulated other comprehensive income (loss)

Total Kaixin Auto Holdings' shareholders' equity (deficit)

Non-controlling interest

Total

$ 2

^[1]

$ 18,652

$ (56,858)

$ 4,004

$ 978

$ (33,222)

$ 34,653

$ 1,431

Balance at beginning (in shares) at Dec. 31, 2017

^[1]

24,984,300

CHANGES IN EQUITY (DEFICIT)

Other comprehensive income

2,553

(2,149)

404

Noncontrolling interest arising from acquisitions

(2,588)

6,048

3,460

Disposal of subsidiaries

2,039

439

2,478

(10,621)

(8,143)

Capital contribution from noncontrolling interest shareholders

6,346

4,792

11,138

Contribution from Renren Inc.

404

2,476

Stock-based compensation

9,046

Balance at ending at Dec. 31, 2018

(89,215)

(317)

(89,532)

$ 2

^[1]

38,559

(146,073)

4,004

1,382

(102,126)

32,406

(69,720)

Balance at ending (in shares) at Dec. 31, 2018

^[1]

24,984,300

CHANGES IN EQUITY (DEFICIT)

Other comprehensive income

(4,222)

(327)

(4,549)

Noncontrolling interest arising from acquisitions

1,512

Reverse recapitalization

$ 3

^[1]

(5,050)

(5,047)

Reverse recapitalization (Shares)

^[1]

28,719,425

Issuance of units and conversion of rights to ordinary shares

7,500

Issuance of units and conversion of rights to ordinary shares (in shares)

^[1]

825,000

Beneficial conversion feature of a convertible loan

2,128

Conversion of convertible loans to units and ordinary shares

21,219

Conversion of convertible loans to units and ordinary shares (in shares)

^[1]

2,300,000

Conversion of rights to ordinary shares upon the reverse recapitalization (in shares)

^[1]

2,116,401

Liabilities waived by Renren Inc.

76,007

Issuance of restricted shares (in shares)

^[1]

205,215

Contingent liabilities assumed by Renren Inc.

(4,549)

42,542

Disposal of a dealership

701

782

Acquisition of interest in a dealership held by noncontrolling shareholders

(187)

(1,325)

(1,512)

Contribution from Renren Inc.

109

Stock-based compensation

3,704

Balance at ending at Dec. 31, 2019

(46,116)

(22,952)

(69,068)

$ 5

^[1]

186,450

(192,189)

4,004

(2,840)

(4,570)

7,101

2,531

Balance at ending (in shares) at Dec. 31, 2019

^[1]

59,150,341

CHANGES IN EQUITY (DEFICIT)

Other comprehensive income

408

Liabilities waived by Renren Inc.

(4,213)

Loan from Shareholder Value Fund ("SVF") convertedinto ordinary shares

$ 1

^[1]

4,213

4,214

Loan from Shareholder Value Fund ("SVF") convertedinto ordinary shares (in shares)

^[1]

4,213,629

Issuance of ordinary shares to EarlyBird Capital

1,000

Issuance of ordinary shares to EarlyBird Capital (in shares)

^[1]

450,000

Issuance of ordinary shares to KX Venturas 4 LLC (in shares)

^[1]

4,000

Issuance of ordinary shares for ESOP shares (in shares)

^[1]

294,885

Beneficial conversion feature of preferred shares

(68)

476

408

1,310

Stock-based compensation

3,362

Balance at ending at Dec. 31, 2020

(5,303)

(17)

(5,320)

$ 6

^[1]

$ 196,335

$ (197,492)

$ 4,004

$ (2,908)

$ (55)

$ 7,560

$ 7,505

Balance at ending (in shares) at Dec. 31, 2020

^[1]

64,112,855

[1]	Par value of ordinary shares, additional paid-in capital and share data have been retroactively restated to give effect to the reverse recapitalization discussed in Note 1(a)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net loss	$ (5,320)	$ (69,068)	$ (89,532)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	41	168	161
Reduction in the carrying amount of the right-of-use assets	566	1,494
Impairment of property and equipment		503
Allowances for doubtful accounts	336	214
Write-offs of prepaid expenses and other current assets		22,282
Impairment of goodwill		74,091
Write down of inventory		17,826
Gain on disposal of subsidiary		(710)
Noncash interest expenses		2,347
Share-based compensation	3,362	3,813	11,436
Allowances for financing receivable losses		2,158	11,074
Fair value change in contingent consideration		(65,594)	30,460
Loss on disposal of equipment	68	58	8
Write-offs of inventory related to Ji'nan Dealership			5,912
Recoverable of detained and impaired assets	(2,921)
Provision for inventory			200
Write-offs for advance to supplier related to Ji'nan Dealership			16,840
Changes in operating assets and liabilities:
Accounts receivable	(194)	1,043	(229)
Financing receivable			2
Prepaid expenses and other current assets	19	(12,527)	(22,967)
Inventory	2,002	18,420	30,150
Right-of-use lease assets	1,612	(3,776)
Accounts payable	(3,003)	(847)	(2,426)
Amounts due from/to related parties	819		4,937
Lease liabilities - current	(1,746)	1,807
Accrued expenses and other current liabilities	504	5,380	395
Advance from customers	3,600	(2,378)	(2,275)
Income tax payable	(1,277)	(2,270)	796
Lease liabilities - noncurrent	(784)	821
Payable to investors			(4,691)
Other non-current assets	(1,562)
Net cash used in operating activities	(3,878)	(4,745)	(9,749)
Cash flows from investing activities:
Proceeds from principal repayments of financing receivable		1,291	109,701
Payments to provide financing receivable			(5)
Purchases of property and equipment		(68)	(764)
Acquisition of business, net of cash acquired			(9,950)
Net cash provided by investing activities		1,223	98,982
Cash flows from financing activities:
Proceeds from convertible loan		21,000
Proceeds from issuance of units		7,500
Cash acquired in the reverse recapitalization		6
Proceeds from investors	1,000		57,767
Payment to investors			(187,908)
Repayment of borrowings	(3,238)	(51,214)	(107,500)
Proceeds from borrowings	1,015	18,166	71,640
Repayment of advances from related parties		(116,821)	(143,447)
Proceeds from advances from related parties	2,140	115,035	159,938
Capital injection by noncontrolling shareholders			10,873
Proceeds from preferred shares	3,000
Net cash (used in) provided by financing activities	3,917	(6,328)	(138,637)
Net increase (decrease) in cash and restricted cash	39	(9,850)	(49,404)
Cash and restricted cash at beginning of year	3,190	13,768	64,447
Effect of exchange rate changes	(67)	(728)	(1,275)
Cash and restricted cash at end of year	3,162	3,190	13,768
Supplemental schedule of cash flows information:
Interest paid	839	1,710	7,448
Income taxes paid	8	254	1
Schedule of non-cash investing and financing activities:
Contingent consideration			14,113
Beneficial conversion feature of a convertible loan		2,128
Conversion of convertible loans to units and ordinary shares, including interest of $219		21,219
Acquisition of non-controlling interest		1,512	3,460
Acquisition of business settled by forgiveness of financing receivable			$ 1,428
Net liabilities acquired in the reverse recapitalization, excluding cash acquired		5,053
Net assets disposal of a dealership		62
Liabilities waived by Renren Inc.	$ (4,213)	76,007
Contingent liabilities assumed by Renren Inc.		$ 42,542

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands	Dec. 31, 2018 USD ($)
Reconciliation to amounts on consolidated balance sheets:
Cash and cash equivalents	$ 7,950
Restricted cash	5,818
Total cash and restricted cash	$ 13,768

ORGANIZATION AND PRINCIPAL ACTIVITIES

12 Months Ended

Dec. 31, 2020

ORGANIZATION AND PRINCIPAL ACTIVITIES

ORGANIZATION AND PRINCIPAL ACTIVITIES

1.	ORGANIZATION AND PRINCIPAL ACTIVITIES

Kaixin Auto Group (“KAG”) was founded in 2011 and was incorporated in the Cayman Islands. Renren Inc. (“Renren”) is KAG’s parent company. On November 2, 2018, CM Seven Star Acquisition Corporation (“CM Seven Star”), entered into a share exchange agreement (the “Share Exchange Agreement”) with Renren and KAG. Pursuant to the Share Exchange Agreement, CM Seven Star acquired all of the issued and outstanding ordinary shares of KAG from Renren by newly issuing ordinary shares of CM Seven Star to Renren (“SPAC Transaction”). The SPAC Transaction was consummated on April 30, 2019. Renren retains the ultimate control on KAG after the SPAC Transaction, which was accounted for as a reverse recapitalization and fully described below. In connection with the closing of the SPAC Transaction, CM Seven Star changed its name to Kaixin Auto Holdings (“KAH”).

KAH, its consolidated subsidiaries, variable interest entities (“VIEs”) and VIEs’ subsidiaries (collectively referred to as the “Company”) is primarily engaged in the operation of used car sales business and financing services provided to used car dealerships.

(a)	Reverse recapitalization

On April 30, 2019, KAH consummated the SPAC Transaction pursuant to the Share Exchange Agreement, where KAH acquired 100% of the issued and outstanding ordinary shares of KAG, i.e., 160,000,000 ordinary shares of KAG, in exchange for 28,284,300 ordinary shares of KAH newly issued to Renren. There were 3,300,000 ordinary shares of KAH (“Indemnity Shares”) out of the newly issued shares to Renren held in escrow as potential indemnity for claims that may be asserted under the Share Exchange Agreement. Any Indemnity Shares remaining in escrow on May 2021 will be released to Renren, if they are not disbursed due to indemnification claims prescribed in the Share Exchange Agreement.

KAG was determined to be the accounting acquirer given Renren effectively controlled the combined entity KAH after the SPAC Transaction. The transaction is not a business combination because KAH was not a business. The transaction is accounted for as a reverse recapitalization, which is equivalent to the issuance of shares by KAG for the net monetary assets of KAH, accompanied by a recapitalization. KAG is determined as the predecessor and the historical financial statements of KAG became KAH’s historical financial statements, with retrospective adjustments to give effect of the reverse recapitalization. The equity is restated using the exchange ratio of 0.1562 established in the reverse recapitalization transaction, which is 24,984,300 divided by 160,000,000, to reflect the equity structure of KAH. Loss per share is retrospectively restated using the historical weighted-average number of ordinary shares outstanding multiplied by the exchange ratio. The share and per share data is retrospectively restated using the exchange ratio in the share-based compensation footnote, see Note 15. The adjustments are also applied to financial statement schedule I – condensed financial information of parent company where relevant.

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)

(a) Reverse recapitalization (cont.)

The par value of ordinary shares was adjusted retrospectively from $16 to $2, the subscription receivable was adjusted retrospectively from negative $16 to $nil, and the difference of $2 was adjusted retrospectively as addition paid-in capital as of December 31, 2018. The consolidated statements of changes in equity (deficit) for the year ended December 31 2018 were also adjusted retrospectively to reflect these changes. The weighted average number of ordinary shares outstanding used in computing net loss per ordinary share – basic and diluted was adjusted retrospectively from 160,000,000 to 24,984,300 for the year ended December 31, 2018. The loss per share before and after the retrospective adjustments are as follows.


	Year ended December 31
	2018
	Before	After
	adjustment	adjustment
Net loss per share attributable to KAH's shareholders – basic and diluted:
Loss per share from continuing operations	(0.56)	(3.56)
Loss per share from discontinued operations	(0.00)	(0.02)
Net loss per share attributable to Kaixin Auto Holdings’ shareholders – basic and diluted	(0.56)	(3.58)

Upon the consummation of the SPAC Transaction, the assets and liabilities of KAH were recognized at carrying amount. After the redemption of ordinary shares of CM Seven Star before the closing of the SPAC Transaction, the net liabilities assumed by KAG were in the amount of $5,047, which were recorded as a reduction in additional paid-in capital. Assets and liabilities of KAH upon the consummation of the SPAC Transaction are as follows:


Cash	$	6
Prepaid expenses and other current assets		123
Amounts due to Renren Inc.		(1,050)
Amounts due to SVF		(2,614)
Other liabilities		(1,512)
Net liabilities assumed by KAG as of April 30, 2019	$	(5,047)

In addition, 19.5 million earnout shares (“Earnout Shares”) were issued and held in escrow at the closing of the SPAC Transaction. Renren isentitled to receive Earnout Shares as follows: (1) if KAH’s revenue for the year ended December 31, 2019 is greater than or equal to RMB5 billion, Renren is entitled to receive 1,950,000 ordinary shares of KAH; (2) if KAH’s adjusted EBITDA (net income or loss adjusted for i) the fair value change in contingent consideration, ii) share-based compensation expense, iii) interest expenses, iv) income tax expenses or benefit and v) depreciation) for the year ended December 31, 2019 is greater than or equal to RMB150,000, Renren is entitled to receive 3,900,000 ordinary shares of KAH, increasing proportionally to 7,800,000 ordinary shares if KAH’s adjusted EBITDA is greater than or equal to RMB200,000; and (3) if KAH’s adjusted EBITDA for the year ended December 31, 2020 is greater than or equal to RMB340,000, Renren is entitled to receive 4,875,000 ordinary shares of KAH, increasing proportionally to 9,750,000 ordinary shares if KAH’s adjusted EBITDA is greater than or equal to RMB480,000.

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)

(a) Reverse recapitalization (cont.)

Notwithstanding the revenue and adjusted EBITDA achieved by KAH for any period, Renren will receive 9,750,000 Earnout Shares if the stock price of KAH is higher than $13.00 for any sixty days in any period of ninety consecutive trading days during a fifteen-month period following the closing, and will receive all the 19.5 million Earnout Shares if the stock price of KAH is higher than $13.50 for any sixty days in any period of ninety consecutive trading days during a thirty-month period following the closing.

Renren holds the rights of the 19.5 million Earnout Shares in escrow. Any unearned Earnout Shares will be surrendered to KAH. KAH will cancel all the surrendered Earnout Shares and accrued dividends if any.

On April 30, 2019, Renren also waived all the outstanding loans and receivables in the amount of $76,007 due from KAG and KAG’s subsidiaries without recourse by Renren or any of Renren’s subsidiaries upon consummation of the SPAC Transaction. In addition, Renren assumed and became responsible for all the contingent considerations derived from the acquisition of the dealership and after-sales service centers. The fair value of contingent consideration as of April 30, 2019 was $42,542. The release of these liabilities was recognized as a contribution from Renren, which was recognized as an increase in additional paid-in capital.

On November 13, 2020, the board of directors of KAH has proposed and approved to waive the satisfaction of the earnout shares release condition, and approved to release the Earnout Shares to Renren considering Renren waived all the outstanding loans and receivables upon the SPAC Transaction.

(b)Allocation of Expenses

The accompanying consolidated financial statements include the Company’s direct expenses. In addition, prior to January 1, 2019, there was an allocation of certain general and administrative expenses, research and development expenses, selling and marketing expenses and cost of revenues paid by Renren and not directly related to the Company’s used car trading business and financing business. These expenses consist primarily of share-based compensation expenses of senior management and shared marketing and management expenses, including accounting, administrative, marketing, internal control, legal support services, and other expenses to provide operating support to the related businesses. These allocations are made using a proportional cost allocation method and were based on revenues, headcount as well as estimates of time spent on the provision of services attributable to the Company. Since January 1, 2019, the Company has established its own operational functions and separated its operating expenses from its parent, Renren, except for three senior management of Renren continued to take management role of Kaixin before the consummation of the SPAC Transaction. The compensation expenses of the three senior management of Renren were allocated based on the estimated time spent on the services for the Company. After the SPAC Transaction, there is no more expense allocation from Renren due to the Company has separated from its parent.

The total cost of revenues, selling and marketing expenses, research and development expenses and general and administrative expenses allocated from Renren amounted to $23, $54, $204 and $5,394, respectively for the year ended December 31, 2018, and $109 of general and administrative expenses for the year ended December 31, 2019, and no expenses the year ended December 31, 2020. Income tax provision reflected in the Company’s consolidated statement of operations is calculated based on a separate return basis as if the Company had filed a separate tax return.

The allocated expenses above include share compensation cost under Renren’s share awards granted to Renren’s employees amounted to $2,390, $109 and $nil for the years ended December 31, 2018, 2019 and 2020, respectively, which have been reflected as capital contributions as of the date such expenses were originally allocated.

Management believes the basis and amounts of these allocations are reasonable. While the expenses allocated to the Company for these items are not necessarily indicative of the expenses that would have been incurred if the Company had been a separate, stand-alone entity, the Company does not believe that there is any significant difference between the nature and amounts of these allocated expenses and the expenses that would have been incurred if the Company had been a separate, stand-alone entity.

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)

(c)Disruption in operations of Dealerships

In August 2018, Shandong Jieying Huaqi Auto Service Co. (“Ji’nan Dealership”, a subsidiary of the Company’s VIE’s) received a notice from the local police regarding an investigation of the dealership’s premises. Certain assets of Ji’nan Dealership were not accessible pursuant to the investigation. In connection with these events, the Company determined that it was probable that it cannot enforce the realization of inventory value and that suppliers to the Ji’nan Dealership were unable to fulfill the contract obligation by either delivering vehicles or returning money to the Company due to the ongoing investigation. As a result, the Company wrote off all inventory and advances to suppliers of the Ji’nan Dealership, which totaled US$ 5.7 million and US$16.1 million respectively in the third quarter of 2018. In addition, in November 2018, the Company agreed to transfer its equity interest in the Ji’nan Dealership and the related assets to an affiliate of Renren. In exchange, Renren has agreed to waive RMB133.8 million (approximately US$19.5 million) of related amounts due to Renren. The difference between the net book value of the assets transferred to Renren and the waived amount due to Renren was recorded by the Company as a capital contribution from Renren. Refer to Note 4 for further details.

Starting from 2019, due to disagreements with certain noncontrolling shareholders on operational matters, some noncontrolling shareholders detained the Company’s inventories in certain dealerships. Significant uncertainty also arose on the realizability and collectability of the prepayments to purchase used cars for these dealerships and amounts due from these noncontrolling shareholders. Considering the above facts and circumstances, the Company assessed the realizability of its inventory and assets related to all of its dealerships, and wrote down US$17,826 of inventory and wrote off US$22,282 of prepaid expenses and other current assets, which includes prepayments and amounts due from noncontrolling shareholders for the year ended December 31, 2019.

The Company has been negotiating with these noncontrolling shareholders who has such operational disagreements, and in the early of 2021, the Company reached settlement agreements with some of these noncontrolling shareholders where each of the respective noncontrolling shareholders agreed to repay a settlement amount to the Company. The total assets of each dealership or after-sales center primary consist of inventories, prepayment or other current assets due from noncontrolling shareholders. The Company recognized the settlement amount as the new basis of net assets as of December 31, 2020, since each of the settlement amounts was the net realizable amount or recoverable amount of total assets in the respective dealership or after-sales center.

If the settlement amount was greater than the book value of the net assets of each dealership or after-sales center as of December 31, 2020, the Company recorded the excess first to reduce the book value of liabilities due to noncontrolling shareholders as of December 31, 2020, and if there was still excess amounts after such reduction, the Company recognized the amount as a reduction of general and administrative expenses to recover the assets previously impaired in 2019. The gain would not be more than the impairement amount recognized for the dealership in prior year. If the settlement amount was less than the book value of the net assets in the respective dealership or after-sales center, the Company recognized an impairment loss. The Company has classified the settlement amount in prepaid expenses and other current assetsand for those amounts due in the settlement greater than 12 months from December 31, 2020, the Company has classified them in other non-current assets.

As a result of the above negotiation efforts, the net impact on the recoverable amounts of the previously detained and impaired assets was $2,921, which have been recorded as a reduction of general and administrative expense for the year ended December 31, 2020.

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)

(c)Disruption in operations of Dealerships (cont.)

Different from the above noncontrolling shareholders who have entered into settlement agreements with the Company, there are certain noncontrolling shareholders that the Company has not reached settlement agreements yet, but have still maintained a good business partnership with the Company. These noncontrolling shareholders has signed and issued ownership statements certifiying the Company is the owner of certain inventories which also state a guaranteed amount of the inventories that the noncontrolling shareholders agreed to acknowledge for the purpose of a settlement. The Company believes the guaranteed amount is the minimum net recoverable amount of the various assets detained by these noncontrolling shareholders. These amounts have been classified as prepaid expenses and other current assets as of December 31, 2020.

There are also 7 noncontrolling shareholders who have neither entered into settlement agreements, nor have issued ownership statements or equivalents to the Company. For such cases, the Company has full impaired the inventory and prepayments and other current assets due from these noncontrolling shareholders totaling $7,479 as of December 31, 2020.

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)

(d)VIE arrangements

As of December 31, 2020, Kaixin Auto Holdings’ major subsidiaries, VIEs and VIEs’ major subsidiaries are as follows:


			Percentage of
	Later of date		legal ownership
	of incorporation	Place of	by Kaixin Auto
Name of Subsidiaries	or acquisition	incorporation	Holdings	Principal activities
Major subsidiaries:
Kaixin Auto Group	January 25, 2018	Cayman Islands	100%	Investment holding
Renren Finance, Inc.	December 15, 2014	Cayman Islands	100%	Internet business
Jet Sound Hong Kong Company Limited	May 7, 2011	Hong Kong	100%	Investment holding
Shanghai Renren Financial Leasing Co., Ltd. (“Shanghai Financial”)	May 25, 2015	PRC	100%	Financing business
Shanghai Renren Automotive Technology Group Co., Ltd. (“Shanghai Auto”)	August 18, 2017	PRC	100%	Investment holding
Shanghai Lingding Automobile Technology Co., Ltd.	March 3, 2018	PRC	100%	Used car trading business
Variable Interest Entities:
Shanghai Qianxiang Changda Internet Information Technology Development Co., Ltd. (“Shanghai Changda”)	October 25, 2010	PRC	N/A	Internet business
Shanghai Jieying Automobile Sales Co., Ltd. (“Shanghai Jieying”)	February 27, 2017	PRC	N/A	Used car trading business
Major subsidiaries of Variable Interest Entities:
Beijing Kirin Wings Technology Development Co., Ltd.	January 16, 2013	PRC	N/A	Financing business
Shanghai Wangjing Investment Management Co., Ltd	April 20, 2015	PRC	N/A	Financing business
Jieying Baolufeng Automobile Sales (Shenyang) Co., Ltd.	June 14, 2017	PRC	N/A	Used car trading business
Chongqing Jieying Shangyue Automobile Sales Co., Ltd.	July 3, 2017	PRC	N/A	Used car trading business
Dalian Yiche Jieying Automobile Sales Co., Ltd.	June 27, 2017	PRC	N/A	Used car trading business
Neimenggu Jieying Kaihang Automobile Sales Co., Ltd.	July 14, 2017	PRC	N/A	Used car trading business
Hangzhou Jieying Yifeng Automobile Sales Co., Ltd.	August 1, 2017	PRC	N/A	Used car trading business
Jilin Jieying Taocheguan Automobile Sales Co., Ltd.	October 31, 2017	PRC	N/A	Used car trading business
Cangzhou Jieying Bole Automobile Sales Co., Ltd.	August 10, 2017	PRC	N/A	Used car trading business
Wuhan Jieying Chimei Automobile Sales Co., Ltd.	November 20, 2017	PRC	N/A	Used car trading business
Shanxi Jieying Weilan Automobile Sales and Service Co., Ltd.	March 13, 2018	PRC	N/A	Used car trading business

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)

(d)The VIE arrangements (cont.)

PRC regulations currently limit direct foreign ownership of business entities providing value-added telecommunications services and internet services in the PRC where certain licenses are required for the provision of such services. To comply with these PRC regulations, the Company conducts substantially all of its businesses through its VIEs, Shanghai Changda and Shanghai Jieying, which are mainly engaged in the internet finance business and used car trading business, respectively, as well as its respective subsidiaries.

Shanghai Auto (“WFOE”), a wholly owned subsidiary of Jet Sound Hong Kong Company Limited, entered into a series of contractual arrangements with the VIEs that enable the Company to (1) have the power to direct the activities that most significantly affect the economic performance of the VIEs, and (2) receive the economic benefits of the VIEs that could be significant to the VIEs. Accordingly, the WFOE is considered the primary beneficiary of the VIEs and the Company has consolidated the VIEs’ financial results of operations, assets and liabilities in the Company’s consolidated financial statements. In making the conclusion that the WFOE is the primary beneficiary of the VIEs, the Company believes the WFOE’s rights under the terms of the exclusive option agreement provide it with a substantive kick-out right.

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)

(d) The VIE arrangements (cont.)

More specifically, the Company believes the terms of the contractual agreements are valid, binding and enforceable under PRC laws and regulations currently in effect. In particular, the Company also believes that the minimum amount of consideration permitted by the applicable PRC law to exercise the exclusive option does not represent a financial barrier or disincentive for the Company to currently exercise its rights under the exclusive option agreement. A simple majority vote of the Company’s board of directors is required to pass a resolution to exercise the Company’s rights under the exclusive option agreement, for which the consent from Mr. Joseph Chen, who holds the most voting interests in Renren, is not required. The Company’s rights under the exclusive option agreement give the Company the power to control the shareholders of the VIEs and thus the power to direct the activities that most significantly impact the VIEs’ economic performance. In addition, the Company’s rights under the powers of attorney also reinforce the Company’s abilities to direct the activities that most significantly impact the VIEs’ economic performance. The Company also believes that this ability to exercise control ensures that the VIEs will continue to execute and renew service agreements and pay service fees to the Company. By charging service fees at the sole discretion of the Company, and by ensuring that service agreements are executed and renewed indefinitely, the Company has the rights to receive substantially all of the economic benefits from the VIEs.

The VIEs and their subsidiaries hold the requisite licenses and permits necessary to conduct the Company’s business under the current business arrangements.

The contractual agreements below provide the Company with the power to direct the activities that most significantly affect the economic performance of the VIEs and enable the Company to receive substantially all of the economic benefits and absorb the losses of the VIEs.

(1)

Power of Attorney: The WFOE holds irrevocable power of attorney executed by the legal owners of the VIEs to exercise their voting rights on, including but not limited to dividend declaration, all matters at meetings of the legal owners of the VIEs and through such power of attorney has the right to control the operations of the VIEs. The power of attorney for Shanghai Jieying and Shanghai Changda became effective on August 18, 2017 and will remain effective as long as Shanghai Jieying and Shanghai Changda exist. The shareholders of Shanghai Jieying or Shanghai Changda do not have the right to terminate or revoke the power of attorney without the prior written consent of Shanghai Auto.

(2)

Business Operations Agreement: The business operations agreements specifically and explicitly grant the WFOE the principal operating decision making rights, such as the appointment of the directors and executive management, of the VIEs.

The terms of the business operations agreements are ten years and will be extended automatically for another ten years unless the WFOE provides a 30-day advance written notice to the VIEs and to each of the VIEs’ shareholders requesting not to extend the term three months prior to the expiration dates of August 17, 2027. Neither the VIEs nor any of the VIEs’ shareholders may terminate the agreements during the terms or the extensions of the terms.

(3)

Exclusive Equity Option Agreement: Under the exclusive equity option agreement, the WFOE has the exclusive right to purchase the equity interests of the VIEs from the registered legal equity owners as far as PRC regulations permit a transfer of legal ownership to foreign ownership. The WFOE can exercise the purchase right at any portion and any time in the 10-year agreement period.

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)

(d) The VIE arrangements (cont.)

Without the WFOE’s consent, the VIEs’ shareholders shall not transfer, donate, pledge, or otherwise dispose of their equity shareholdings in the VIEs in any way. The equity option agreement will remain in full force and effect until the earlier of (i) the date on which all of the equity interests in the VIEs have been acquired by the respective WFOE or its designated representative(s); or (ii) the receipt of the 30-day advance written termination notice issued by the respective WFOE to the shareholders of the VIEs. The term of these agreements will be automatically renewed upon the extension of the term of the relevant exclusive equity option agreement.

(4)

Spousal Consent Agreement: The spouse of each of the shareholders of Shanghai Jieying and Shanghai Changda acknowledged that certain equity interests of Shanghai Jieying and Shanghai Changda, held by and registered in the name of his/her spouse would be disposed of pursuant to the loan agreement, equity option agreement and equity interest pledge agreement of which they were respectively a party, and they will not take any action to interfere with such arrangement, including claiming that such equity interests constitute property or communal property between his/her spouse and himself/herself.

(5)

Exclusive Technology Support and Technology Service Agreement: The WFOE and registered shareholders irrevocably agree that the WFOE shall be the exclusive technology service provider to the VIEs in return for a service fee, which is determined at the sole discretion of the WFOE.

The term of each agreement is ten years and will be extended automatically for another ten years unless terminated by the WFOE. The WFOE can terminate the agreement at any time by providing a three-month prior written notice. The VIEs are not permitted to terminate the agreements prior to the expiration of the terms by August 17, 2027, respectively, unless the WFOE fails to comply with any of their obligations under this agreement and such breach makes the WFOE unable to continue to perform the agreements.

(6)

Loan Agreements: Under loan agreements between the WFOE and each of the shareholders of the VIEs, the WFOE made interest-free loans to the shareholders of exclusively for the purpose of the initial capitalization and the subsequent financial needs of the VIEs. The loans can only be repaid with the proceeds derived from the sale of all of the equity interests in the VIEs to the WFOE or their designated representatives pursuant to the equity option agreements. The term of each of these loans is ten years from the actual drawing down of such loans by the shareholders of the VIEs, and will be automatically extended for another ten years unless a written notice to the contrary is given by the WFOE to the shareholders of the VIEs three months prior to the expiration of the loan agreements. The VIE shareholders undertake, among other things, not to transfer any of their respective equity interests in the VIEs to any third party.

(7)

Equity Interest Pledge Agreement: The shareholders of the VIEs have pledged all of their equity interests in the VIEs with their respective WFOE and the WFOE are entitled to certain rights to sell the pledged equity interests through auction or other means if the VIEs or the shareholders default in their obligations under other above-stated agreements.

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)

(d) The VIE arrangements (cont.)

These agreements are substantially the same, and that the equity interest pledge has become effective and will expire on the earlier of (i) the date on which the VIEs and their shareholders have fully performed their obligations under the loan agreements, the exclusive technical service agreement, the intellectual property right license agreement and the equity option agreements; (ii) the enforcement of the pledge by the WFOE pursuant to the terms and conditions under this agreement to fully satisfy its rights under such agreements; or (iii) the completion of the transfer of all equity interests of the VIEs by the shareholders of the VIEs to another individual or legal entity designated by the WFOE pursuant to the equity option agreement and no equity interests of the VIEs are held by such shareholders.

Risks in relation to the VIE structure

The Company and the Company’s legal counsel believe that Shanghai Auto’s contractual arrangements with the VIEs are in compliance with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and if the shareholders of the VIEs were to reduce their interest in the Company, their interests may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:

●

Revoke the business and operating licenses of the WFOE, the VIEs and their subsidiaries;

●

Discontinue or restrict the operations of any related-party transactions among the WFOE, the VIEs and their subsidiaries;

●

Impose fines or other requirements on the WFOE, the VIEs and their subsidiaries;

●

Require the WFOE, the VIEs and their subsidiaries to revise the relevant ownership structure or restructure operations; and/or

●

Restrict or prohibit the Company’s use of the proceeds of the additional offering to finance the Company’s business and operations in China.

The Company’s ability to conduct its business, including its used car trading business and its financing services to used car dealerships, may be negatively affected if the PRC government were to carry out any of the aforementioned actions. As a result, the Company may not be able to consolidate the VIEs and the VIEs’ subsidiaries in its consolidated financial statements as it may lose the ability to exert effective control over the VIEs and the VIEs’ subsidiaries and shareholders, and it may lose the ability to receive economic benefits from the VIEs and the VIEs’ subsidiaries.

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)

(d) The VIE arrangements (cont.)

In addition, if the WFOE, VIEs and their subsidiaries or their shareholders fail to perform their obligations under the contractual arrangements, the Company may have to incur substantial costs and expend resources to enforce the Company’s rights under the contracts. The Company may have to rely on legal remedies under PRC law, including seeking specific performance or injunctive relief and claiming damages, which may not be effective. All of these contractual agreements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with the PRC legal procedures. The legal system in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual agreements. Under PRC law, rulings by arbitrators are final, parties cannot appeal the arbitration results in courts, and prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition proceedings, which would incur additional expenses and delay. In the event the Company is unable to enforce these contractual agreements, the Company may not be able to exert effective control over its VIEs, and the Company’s ability to conduct its business may be negatively affected.

Certain shareholders of the VIEs are also shareholders of the Company. The interests of the shareholders of the VIEs may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example, by influencing the VIEs not to pay the service fees when required to do so. The Company cannot assure that when conflicts of interest arise, shareholders of the VIEs will act in the best interests of the Company or that conflicts of interests will be resolved in the Company’s favor. Currently, the Company does not have existing arrangements to address potential conflicts of interest the shareholders of the VIEs may encounter in their capacity as beneficial owners and directors of the VIEs. The Company believes the shareholders of the VIEs will not act contrary to any of the contractual arrangements and the exclusive option agreements provide the Company with a mechanism to remove the current shareholders of the VIEs as beneficial shareholders of the VIEs should they act to the detriment of the Company. The Company relies on the current shareholders of VIEs whom also are directors and executive officers of the Company, to fulfill their fiduciary duties and abide by laws of Cayman Islands and act in the best interest of the Company or that conflicts will be resolved in the Company’s favor. If the Company cannot resolve any conflicts of interest or disputes between the Company and the shareholders of the VIEs, the Company would have to rely on legal proceedings, which could result in disruption of its business, and there is substantial uncertainty as to the outcome of any such legal proceedings.

The Company’s ability to control the VIEs also depends on the power of attorney that the WFOE has to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Company believes this power of attorney is legally enforceable but may not be as effective as direct equity ownership.

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)

(d) The VIE arrangements (cont.)

The following financial statement balances and amounts of the Company’s VIEs were included in the accompanying consolidated financial statements after elimination of intercompany balances and transactions between the offshore companies, WFOE, VIEs and VIEs’ subsidiaries. As of December 31, 2019 and 2020, the balance of the amount payable by the VIEs and their subsidiaries to the WFOE related to the service fees were $ nil.


	As of December 31,
	2019		2020
Cash	$	1,080	$	108
Accounts receivable		203		—
Prepaid expenses and other current assets		27,083		43,536
Inventory		20,598		—
Total current assets		48,964		43,644
Property and equipment, net		146		41
Right-of-use assets		1,691		73
Total non-current assets		1,837		114
Total assets	$	50,801	$	43,758
Accounts payable	$	4,035	$	306
Short-term debt (including short-term debt of the consolidated VIEs with recourse to Kaixin Auto Holdings of $7,900 and $nil as of December 31, 2019 and 2020, respectively)		14,630		13,116
Accrued expenses and other current liabilities		13,770		12,394
Amounts due to related parties		—		2,725
Advance from customers		1,622		—
Income tax payable		4,469		3,391
Deferred revenue		—		1,862
Lease liabilities - current		1,224		39
Total current liabilities		39,750		33,833
Lease liabilities - non-current		810		26
Total non-current liabilities		810		26
Total liabilities	$	40,560	$	33,859


	Years ended December 31,
	2018		2019		2020
Revenues	$	428,492	$	332,629	$	32,823
Net loss	$	(38,561)	$	(2,151)	$	(653)
Loss from discontinued operations	$	(594)	$	—	$	—

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)

(d) The VIE arrangements (cont.)


	Years ended December 31,
	2018		2019		2020
Net cash used in operating activities	$	(8,433)	$	(3,948)	$	(395)
Net cash used in investing activities	$	(9,980)	$	(68)	$	—
Net cash provided by (used in) financing activities	$	22,193	$	(1,205)	$	(634)

The VIEs contributed an aggregate of 99.3%, 99.4% and 99.0% of the consolidated revenues for the years ended December 31, 2018, 2019 and 2020, respectively. As of December 31, 2019 and 2020, the VIEs accounted for an aggregate of 93.4% and 90.3%, respectively, of the consolidated total assets, and 78.2% and 82.7%, respectively, of the consolidated total liabilities. The assets not associated with the VIEs primarily consist of cash as of December 31, 2019 and 2020

There are no consolidated VIEs’ assets that are collateral for the VIEs’ obligations and can only be used to settle the VIEs’ obligations. The creditors of the VIEs who provided short-term loans of $nil to VIE have recourse to the general credit of WFOE. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests, which require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholders of the VIEs or entrustment loans to the VIEs.

Relevant PRC laws and regulations restrict the VIEs from transferring a portion of its net assets, equivalent to the balance of its statutory reserve and its share capital, to the Company in the form of loans and advances or cash dividends.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)	Basis of presentation

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

(b)

Liquidity

The Company has experienced recurring losses from operations. For the year ended December 31, 2018, 2019 and 2020, the Company generated negative cash flows from operating activities of $9,749, $4,745, and $3,878.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(b) Liquidity (cont.)

The Company had working capital of $5,850 as of December 31, 2020, and Renren Inc., the shareholder of the Company, purchased $6,000 convertible preferred shares of the Company on March 31, 2021. Furthermore, KX Venturas 4 LLC invested $3,000 in newly designated convertible preferred shares of the Company on December 29, 2020, another investment of $3,000 is expected to close in June 2021(see note 13). The Company has also acquired the financial support letter from Renren Inc., who have expressed the willingness and intention to provide the necessary financial support to the Company, so as to enable the Company to carry on its business without a significant curtailment of operations for the next 12 months from the issuance date of these financial statements.

(c)Principles of consolidation

The consolidated financial statements of the Company include the financial statements of KAH, its subsidiaries, its VIEs and VIEs’ subsidiaries. All inter-company transactions and balances are eliminated upon consolidation.

(d)	Business combinations

Business combinations are recorded using the acquisition method of accounting. The Company uses a screen to evaluate whether a transaction should be accounted for as an acquisition and/or disposal of a business versus assets. In order for a purchase to be considered an acquisition of a business, and receive business combination accounting treatment, the set of transferred assets and activities must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then the set of transferred assets and activities is not a business.

The purchase price of business acquisition is allocated to the tangible assets, liabilities, identifiable intangible assets acquired and noncontrolling interest, if any, based on their estimated fair values as of the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses and restructuring costs are expensed as incurred.

Where the consideration in an acquisition includes contingent consideration and the payment of which depends on the achievement of certain specified conditions post-acquisition, the contingent consideration is recognized and measured at its fair value at the acquisition date and if recorded as a liability, it is subsequently carried at fair value with changes in fair value reflected in earnings.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(e)	Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses in the financial statements and accompanying notes. Significant accounting estimates reflected in the Company’s consolidated financial statements include, but are not limited to, the net realizable value of inventory, warrant liabilities, the valuation of prepaid expenses and other current assets, deferred tax valuation allowance, income taxes, value-added taxes, impairment of goodwill, allocation of expenses, share-based compensation expense, the beneficial conversion feature of preferred shares, the purchase price allocation associated with business combinations and the fair value of contingent consideration related to business acquisitions.

(f)	Cash and cash equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

(g)	Fair value

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows:

●

Level 1 — inputs are based upon unadjusted quoted prices for identical assets or liabilities traded in active markets.

●

Level 2 — inputs are based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

●

Level 3 — inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(h)

Inventory

Inventory consists of the purchased used and new automobiles. Inventory is stated at the lower of cost or net realizable value. Inventory cost is determined by specific identification. Net realizable value is the estimated selling price less costs to complete, dispose and transport the vehicles. Selling prices are derived from historical data and trends, such as sales price and inventory turn times of similar vehicles, as well as independent, market resources. Each reporting period the Company recognizes any necessary adjustments to reduce the cost of vehicle inventory to its net realizable value through cost of sales in the accompanying consolidated statements of operations.

Vehicle are considered slow moving if they have not been sold within a 90 days period since procurement. In estimating the level of inventory write-downs for slow moving vehicles, the Company considers historical data and forecasted customer demand, such as sales price and inventory turnover of similar vehicles with similar mileage and condition, as well as independent, market information. This valuation process requires management to make judgments, based on currently available information, and assumptions about future demand and market conditions, which are inherently uncertain. To the extent that there are significant changes to estimated vehicle selling prices or decreases in demand for used vehicles, there could be significant adjustments to reflect inventory at net realizable value. In addition, the Company writes down inventories to zero if they are lost or detained by noncontrolling shareholders.

(i)Property and equipment, net

Property and equipment, net is carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives:


Computer equipment and application software	2 – 3 years
Furniture and vehicles	5 years

(j)

Goodwill

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(j) Goodwill (cont.)

In January 2017, the FASB issued ASU 2017-04, simplifying the Test for Goodwill Impairment, which simplifies the accounting for goodwill impairment by eliminating Step two from the goodwill impairment test. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, versus determining an implied fair value in Step two to measure the impairment loss. On January 1, 2019, the Company elected to early adopt ASU 2017-04, and prospectively applied the guidance to the annual impairment test.

The Company assesses goodwill for impairment on annual basis in accordance with ASC 350-20, Intangibles – Goodwill and Other: Goodwill, which permits the Company to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test. If this is the case, the quantitative goodwill impairment test is required. If it is more likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the quantitative goodwill impairment test is not required.

Quantitative goodwill impairment test is used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired. If the fair value of the reporting unit is less than its carrying amount, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

For the year ended December 31, 2019, in performing a qualitative goodwill impairment analysis, the Company concluded that it was more likely than not that the fair value of a reporting unit is less than its carrying amount and performed the quantitative test. The Company recorded a fullimpairment of the goodwill amounting to USD74,091 for the year ended December 31, 2019. There is no goodwill balance as of December 31, 2020.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(k)	Revenue recognition

The Company recognizes revenue when control of the good or service has been transferred to the customer generally upon delivery to a customer. The contracts have a fixed contract price and revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The Company’s revenues are presented net of value-added tax collected on behalf of governments. The Company records sales commissions as selling and marketing expenses when incurred because the amortization period would have been less than one year. These costs are recorded within selling expenses. The Company does not have any significant financing payment terms as payment is received at or shortly after the point of sale.

The Company adopted the Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”) on January 1, 2018 using the modified retrospective method. ASC 606 prescribes a five-step model to recognize revenue. Based on the manner in which the Company historically recognized revenue, the adoption of ASC 606 did not have a material impact on the amount or timing of its revenue recognition and the Company recorded no cumulative effect adjustment upon adoption. Additionally, the Company concluded that revenue generated from used car financing services is excluded from the scope of the new revenue standard as it represents revenue within the scope of ASC 310, Receivables, which is explicitly excluded from the scope of ASC 606.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(k) Revenue recognition (cont.)

Disaggregation of Revenue

Automobile sales related to used car and new car sales. Financing income related to revenue generated from its used car financing services. Other revenue mainly included revenue generated from agency fees in connection with arrangements with third-party dealers, whereas the Company facilitates sales of their cars, and commissions received by the Company from insurance companies and other financial institutions.


	Years ended December 31,
	2018		2019		2020
Automobile sales	$	420,005	$	332,634	$	32,996
Used car financing income		2,317		—		—
Others		9,082		2,063		164
Total	$	431,404	$	334,697	$	33,160

Automobile sales

The Company purchases automobiles from unrelated individuals, third party dealerships or manufacturers and suppliers and sells them directly to its customers through its local dealerships. The prices of used vehicles are set forth in the customer contracts, which are agreed prior to delivery. The Company satisfies its performance obligation for used vehicle sales upon delivery whereby customers pick up the vehicles from the dealerships. The Company recognizes revenue at the agreed-upon purchase price stated in the contract. When cash is received from customers prior to delivery of the vehicle, the Company records such cash as advance from customers (a contract liability) in its consolidated balance sheet.

Used car financing

The Company generates revenue from its financing services business primarily through financing provided to third party used car dealers. Specifically, the Company provides short-term financing services to third party used car dealers to fund the car dealers’ cash needs for used car purchasing. The financing period is no more than six months and is secured by a pledge of the dealers’ used car with total value exceeding the principal of the financing. The Company charges a one-time upfront service fee as well as financing income on a monthly basis. The Company records financing income and service fees related to those services over the life of the underlying financing using the effective interest method on the unpaid principal amounts. The service fees collected upfront, netting the direct origination costs of the financing, are deferred and recognized as financing income as an adjustment to the yield on a straight line basis over the life of the used car financing. The Company has ceased granting new loans for the used car financing since January 2018.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(k) Revenue recognition (cont.)

Other revenue

The Company’s other revenues mainly include revenue generated from agency fees in connection with arrangement with third party dealers, whereas the company facilitates sales of their cars. The Company does not control the ownership of the automobiles, but rather is acting as an agent for the third party dealers. Revenue is recognized for the net amount of commission the Company is entitled to retain in exchange for the agency service. Other revenues also include commissions received by the Company from insurance companies and other financial institutions for its facilitation services provided to assist customers in obtaining related insurance and financing for their automobile purchases.

Value added taxes

Value-added tax (“VAT”) is reported as a deduction to revenue when incurred. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in accrued expense and other current liabilities on the consolidated balance sheet.

In 2018, the Company entered into a series of ancillary agreements to facilitate its sale of used cars for value-added tax optimization purposes. Under these ancillary agreements, when the Company sources a used car, the legal ownership of the car is transferred to Shanghai Jieying and Shanghai Financial’s executives, and the registration is normally under the name of one of the dealership’s employees. The Company viewed itself as a service provider in the used car transactions, and therefore is only subject to value-added tax on the difference between the original purchase price and the retail price of the used cars.

(l)	Income taxes

Current income taxes are provided for in accordance with the laws of the relevant tax authorities.

Deferred income taxes are recognized when temporary differences exist between the tax basis of assets and liabilities and their reported amounts in the financial statements. Net operating loss carryforwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are presented as non-current in the consolidated balance sheets.

The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. The Company did not recognize any income tax due to uncertain tax position or incur any interest and penalties related to potential underpaid income tax expenses for the years ended December 31, 2018, 2019 and 2020, respectively. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(m)	Research and development expenses

Research and development expenses are primarily incurred for the development of new services, features and products for the Company’s financing business, used automotive business as well as the further improvement of the Company’s technology infrastructure to support these businesses. The Company has expensed all research and development costs when incurred.

(n)	Financial instruments

Financial instruments include cash, restricted cash, accounts receivable, amounts due to related parties, accounts payable, short-term debt and lease liabilities. Refer to Note 15 for further details.

(o)	Foreign currency translation adjustments

The functional and reporting currency of the Company and its subsidiaries in Hong Kong is the United States dollar (“US dollar”). The functional currency for the Company’s subsidiaries and VIEs located in the PRC is the Renminbi (“RMB”).

Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations.

The Company’s entities with the functional currency of RMB, translate their operating results and financial positions into the US dollar, the Company’s reporting currency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Equity amounts are translated at historical exchange rates. Revenues, expenses, gains and losses are translated using the average rates for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as accumulated other comprehensive income (loss), which is a component of total equity (deficit).

(p)	Comprehensive loss

Comprehensive loss includes net loss and foreign currency translation adjustments and is reported in the consolidated statements of comprehensive loss.

(q)	Share-based Compensation

Share-based compensation expense arises from the Company’s share-based awards granted to its employees. The Company also recorded allocated share-based compensation expenses of Renren’s share-based awards granted to certain members of Renren’s management who, to some extent, provide services to the Company.

In determining the fair value of share options granted, a binomial option pricing model is applied. In determining the fair value of restricted shares granted, the fair value of the underlying shares on the grant date is applied.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(q) Share-based Compensation (cont.)

Share-based compensation expense for share options and restricted shares granted is recognized on a straight-line method over the requisite service period. The Company elected to not estimate the forfeiture rate, but to account for the forfeiture when forfeitures occur.

A change in any of the terms or conditions of share awards is accounted for as a modification. The Company calculates the incremental compensation cost of modification as the excess of the fair value of the modified awards over the fair value of the original awards immediately before its terms are modified, measured based on the share price and other pertinent factors at the modification date. The Company recognizes, over the remaining requisite service period of the modified awards, the sum of the incremental compensation cost and the remaining unrecognized compensation cost, if any, for the original award on the modification date.

(r)

Leases

The Company leases premises for offices under non-cancellable operating leases. Prior to January 1, 2019, payments made under the operating lease were charged to the consolidated statements of operations on a straight-line basis over the term of underlying lease. Leases with escalated rent provisions are recognized on a straight-line basis commencing with the beginning of the lease term. There are no capital improvement funding, lease concessions or contingent rent in the lease agreements. The Company has no legal or contractual asset retirement obligations at the end of the lease term.

The Company early adopted Accounting Standards Codification Topic 842, Leases (“ASC 842”) as of January 1, 2019, using a modified retrospective method for leases that exist at, or are entered into after, January 1, 2019, and has not recast the comparative periods presented in the consolidated financial statements. The adoption of ASC 842 requires the recognition of right-of-use assets and lease liabilities on the balance sheet for both operating and finance leases. The Company elected the package of practical expedients that not to reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any expired or existing leases. The Company also elected the hindsight practical expedient to determine the reasonably certain lease term for existing leases. Upon the adoption of ASC842, the Company recognized the right-of-use assets and lease liabilities of approximately US$5,141 and US$3,735, respectively, as of January 1, 2019.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(r) Leases (cont.)

The Company used its estimated incremental borrowing rate based on information available at the date of adoption in calculating the present value of its existing lease payments. The following table summarizes the effect on the consolidated balance sheet as a result of adopting ASC 842.


	As of December 31,		Effect of		As of January 1,
	2018		Adoption		2019
Right-of-use assets	$	—	$	5,141	$	5,141
Lease liabilities - current		—		(1,760)		(1,760)
Lease liabilities - non-current		—		(1,975)		(1,975)
Prepaid expenses and other current assets		38,714		(1,422)		37,292
Accrued expenses and other current liabilities		(10,644)		16		(10,628)

Upon adoption of ASC 842, the lease liabilities are recognized upon lease commencement for operating leases based on the present value of lease payments over the lease term. The right-of-use assets are initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. As the rate implicit in the lease cannot be readily determined, the Company’s incremental borrowing rate at the lease commencement date is used in determining the imputed interest and present value of lease payments. The incremental borrowing rate was determined using a portfolio approach based on the rate of interest that the Company would have to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company recognizes the single lease cost on a straight-line basis over the remaining lease term for operating leases.

The Company has elected not to recognize right-of-use assets or lease liabilities for leases with an initial term of 12 months or less; expenses for these leases are recognized on a straight-line basis over the lease term.

(s)	Contingencies

In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, and non-income tax matters. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, is disclosed.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(t)Loss per share

The Company computes loss per ordinary shares in accordance with ASC 260, Earnings Per Share (“ASC 260”). Under the provisions of ASC 260, basic loss per share is computed using the weighted average number of ordinary shares outstanding during the period except that it does not include unvested ordinary shares subject to repurchase or cancellation. Diluted net income per share is computed using the weighted average number of ordinary shares and, if dilutive, potential ordinary shares outstanding during the period. Potentially dilutive securities have been excluded from the computation of diluted net income per share if their inclusion is anti-dilutive. Potential ordinary shares consist of the incremental ordinary shares issuable upon the exercise of stock options, warrants, and unvested restricted shares. The dilutive effect of outstanding stock options, warrants, and restricted shares is reflected in diluted earnings per share by application of the treasury stock method and the if-converted method, respectively. Contingently issuable shares were not included in the computation of diluted shares outstanding if they were not issuable should the end of the reporting period have been the end of the contingency period.

The Company uses loss from continuing operations as the control number in determining whether potential ordinary shares are dilutive or antidilutive. That is, the same number of potential ordinary shares used in computing the diluted per-share amount for income from continuing operations shall be used in computing all other reported diluted per-share amounts even if those amounts will be antidilutive to their respective basic per-share amounts.

(u)Segment Reporting

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company's chief operating decision maker (“CODM”). The Company’s CODM has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. For the years ended December 31, 2018, 2019 and 2020, the Company’s CODM reviewed the financial information of the used car sales business and used car financing business carried out by the Company on a consolidated basis. Therefore, the Company has one operating and reportable segment. The Company operates solely in the PRC and all of the Company's long- lived assets are located in the PRC.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(v)Recent accounting pronouncements not yet adopted

In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity (“ASU 2020-06”), which focuses on amending the legacy guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity. ASU 2020-06 simplifies an issuer's accounting for convertible instruments by reducing the number of accounting models that require separate accounting for embedded conversion features. ASU 2020-06 also simplifies the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification. Further, ASU2020-06 enhances information transparency by making targeted improvements to the disclosures for convertible instruments and earnings-per-share (EPS) guidance, i.e., aligning the diluted EPS calculation for convertible instruments by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in the diluted EPS calculation when an instrument may be settled in cash or shares, adding information about events or conditions that occur during the reporting period that cause conversion contingencies to be met or conversion terms to be significantly changed. This update will be effective for the Company's fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Entities can elect to adopt the new guidance through either a modified retrospective method of transition or a fully retrospective method of transition. The Company is currently in the process of evaluating the impact of adopting ASU 2020-06 on its consolidated financial statements and related disclosure.

Recently issued ASUs by the FASB, except for the ones mentioned above, have no material impact on the Company's consolidated results of operations or financial position.

SIGNIFICANT RISKS AND UNCERTAINTIES

12 Months Ended

Dec. 31, 2020

SIGNIFICANT RISKS AND UNCERTAINTIES

SIGNIFICANT RISKS AND UNCERTAINTIES

3. SIGNIFICANT RISKS AND UNCERTAINTIES

Foreign currency risk

The Renminbi (“RMB”) is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Cash of the Company included aggregate amounts of $2,410 and $132 as of December 31, 2019 and 2020, respectively, which were denominated in RMB.

Concentration of credit risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company places its cash and restricted cash with financial institutions with high-credit ratings and quality.

There were no customers that accounted for 10% or more of total revenues for the years ended December 31, 2018, 2019 and 2020.

No customers accounted for 10% or more of the balance of accounts receivable as of December 31, 2019 and 2020.

DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2020

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

4. DISCONTINUED OPERATIONS

Deconsolidation of Ji’nan Dealership

In order to focus on the used car business, the Company reached the resolution in the third quarter of 2018 to dispose its Ji’nan Dealership, which is primarily engaged in new car sales, to an affiliate of Renren, along with related assets residing in Shanghai Jieying.

The disposal of Ji’nan Dealership represented a strategic shift and had a major effect on the Company’s results of operations. Accordingly, assets, liabilities, revenue and expenses to those businesses have been reclassified in the accompanying consolidated financial statements as discontinued operations for the year ended December 31, 2018.

All of the the Ji’nan Dealership assets and liabilities had been disposed of as of December 31, 2018 and there were no transactions that were recorded in the statements of operations for the years ended December 31, 2019 and 2020.

The operating results from discontinued operations included in the Company’s consolidated statement of operations were as follows for the year ended December 31, 2018.


	Year ended December 31,
	2018
Major classes of line items constituting pretax profit of discontinued operations:
Revenues	$	47,672
Cost of revenues		50,531
Selling, research and development, and general and administrative expenses		16,777
Fair value change of contingent consideration		19,042
Loss from the operations of the discontinued operations, before income tax		(594)
Loss from the operations of the discontinued operations, net of tax	$	(594)

The condensed cash flow related to the discontinued operations were as follows for the year ended December 31, 2018:


	Year ended December 31,
	2018
Net cash provided by operating activities	$	516
Net cash used in investing activities	$	(1)
Net cash provided by financing activities	$	—

All notes to the accompanying consolidated financial statements, except for the cash flow statement, have been retrospectively adjusted to reflect the effect of the discontinued operations, where applicable.

BUSINESS ACQUISITION

12 Months Ended

Dec. 31, 2020

BUSINESS ACQUISITION

BUSINESS ACQUISITION

5. BUSINESS ACQUISITION

Acquisition of used car dealers and after-sales service centers in 2018

During the year ended December 31, 2018, KAG completed the acquisition of three after-sales centers, Jinan Zhoushuo Yidong Automobile Trading Co., Ltd. (“Jinan Zhoushuo”), Chongqing Zhoushuo Xingqi Automobile Service Co., Ltd. (“Chongqing Zhoushuo”) and Suzhou Zhoushuo Lujie Automobile Service Co., Ltd. (“Suzhou Zhoushuo”), and one additional dealership, Shanxi Jieying Weilan Automobile Sales Co., Ltd. (“Shanxi”). KAG initially purchased all inventories, from each dealership and after-sales service center, KAG subsequently entered into equity purchase agreement to purchase the new entity set up by the owners of each dealership and after-sales service center.

Subsequent to the date of each acquisition, the Company measured the estimated fair values of the contingent consideration at each reporting date. For the year ended December 31, 2018, the Company recorded $49,503 in fair value change of contingent consideration, which was recorded as other expenses in the Company’s consolidated statements of operations as a result of the re -measurement of the estimated fair value of the contingent consideration at the reporting date.

Acquisition of Shanxi in 2018

On April 8, 2018, KAG entered into an equity purchase agreement with Shanxi. KAG initially purchased the car inventories from the dealership which were recorded at fair value. KAG subsequently entered into equity purchase agreement to purchase the new entity set up by the owner of Shanxi used car dealership. As consideration for the transaction, KAG agreed to (1) pay cash consideration which includes partial consideration for the cars purchased as well as capital injection to the entities acquired, (2) forgive financing receivable outstanding that was previously provided by KAG to the used car dealerships and (3) provide contingent consideration to be paid upon the successful offering of KAG.

The following information summarizes the results of operations attributable to the acquisition included in the Company’s consolidated statement of operations since the acquisition date:


	Year ended December 31, 2018
Revenues	$	20,135
Net gain	$	752

Acquisitions of after-sales service centers

During the first half of 2018, KAG further entered into separate equity purchase agreements with three after-sales service centers individually. Each acquisition, negotiated independently, was structured in a similar manner whereby, Shanghai Zhoushuo Automobile Technology Co., Ltd, (“Shanghai Zhoushuo”), a subsidiary of KAG, initially purchased all inventories from each after-sales service center. Subsequent to the purchase, Shanghai Zhoushuo and the shareholder of each of the existing after-sales service center (the “Seller”) entered into an equity purchase agreement which requires the Seller to transfer majority interest of the dealership as follows:

5. BUSINESS ACQUISITION (cont.)

Acquisitions of after-sales service centers (cont.)

(1)

The Seller agrees to set up a new entity to which it transfers the remaining eligible assets of the after-sales service center, employees, and business contracts owned and leased by the existing after-sales service center. In turn, Shanghai Zhoushuo agrees to subscribe for 70% of the equity interest in this entity.

(2)	Shanghai Zhoushuo agrees to inject cash to the newly formed entity described in the preceding paragraph as well as to pay the Seller contingent consideration in the form of shares of KAG, the parent of Shanghai Zhoushuo.

The Company believes that structuring the acquisitions as described above allows them to avoid potential exposures or liabilities associated with the acquired entities. The purchase of inventories and acquisition of the new entity were accounted for as a single transaction.

The payment of the contingent consideration is contingent upon the successful offering of KAG as well as the meeting performance targets of the acquired after-sales service centers. The amount of consideration is measured based on the operating performance of the acquired after-sales service centers both prior to and subsequent to the future offering transaction of KAG, and the number of shares expected to be issued will be calculated based on the offering price. Such contingent consideration will require KAG to issue the shares at different times. The issuance will be made in four installments, 12- month apart, upon the successful offering of KAG and is calculated based on a percentage of each 12-months cumulative operating results of the acquired after-sales service centers after the acquisition date under different multiples. The contingent issuance of shares is not dependent on whether the previous after-sales service centers owner remains employed with KAG.

Acquired assets and liabilities were recorded at their fair value at the date of acquisition. The purchase price allocation described below was based on a valuation analysis that utilized and considered generally accepted valuation methodologies such as the income, market and cost approach. The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and noncontrolling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons. Terminal values are based on the expected life of assets, forecasted life cycle and forecasted cash flows over that period.

As consideration for the transactions, KAG agreed to (1) pay cash consideration which includes capital injection to the entity acquired and (2) contingent consideration to be paid upon the successful offering of KAG.

The following information summarizes the results of operations attributable to the acquisitions included in the Company’s consolidated statement of operations since the acquisition dates:


	Year ended December 31, 2018
	Chongqing/
	Suzhou/ Jinan
	Zhoushuo
Revenues	$	341
Net loss	$	582

5. BUSINESS ACQUISITION (cont.)

Acquisitions of after-sales service centers (cont.)

In December 2018, KAG disposed 70% equity interest of Chongqing Zhoushuo to the minority shareholder and received US$0.1 million consideration. The transfer of equity interest registration of Chongqing Zhoushuo was completed on December 6, 2018. As a result, an immaterial gain from disposal of Chongqing Zhoushuo was recorded during the year ended December 31, 2018.

The disposal of Chongqing Zhoushuo does not constitute a strategic shift that will have a major effect on the Company’s operations or financial results and as such, the disposal is not classified as discontinued operations in the Company’s consolidated financial statements.

Pro forma information of acquisitions in 2018

Supplementary pro-forma revenues and net earnings for the combined entity, as if business combination had been acquired as of January 1, 2018 were not included as it is impracticable since the used car dealerships and after-sales service centers historically did not have sound accounting systems to maintain reliable accounting records prior to the acquisitions and creating reliable accounting records would require an unreasonably significant amount of effort and resources. Post-acquisition, the newly established entities began to create and maintain accounting records.

In January 2019, KAG entered into amendment agreements with the dealership and after-sales service center operators that updated the offering price in the calculation of shares for contingent consideration to the initial public offering price of CM Seven Star, i.e. US$10.00, and allowed the contingent consideration to be settled by shares of KAH. Upon the consummation of the SPAC Transaction, the contingent consideration was assumed by Renren. For the year ended December 31, 2019, the Company recorded a gain of fair value change in contingent consideration in the amount of $65,594, which represents the fair value changes before it was transferred to Renren.

PREPAID EXPENSES AND OTHER CURRENT ASSETS

12 Months Ended

Dec. 31, 2020

PREPAID EXPENSES AND OTHER CURRENT ASSETS

PREPAID EXPENSES AND OTHER CURRENT ASSETS

6. PREPAID EXPENSES AND OTHER CURRENT ASSETS


		As of December 31,
	Note	2019		2020
Advances for purchasing cars	(i)	$	25,017	$	41,700
Others			2,569		1,924
Total		$	27,586	$	43,624

(i)	The balance represents cash advances paid to noncontrolling shareholders for purchasing cars.

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2020

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

7. PROPERTY AND EQUIPMENT, NET


	As of December 31,
	2019		2020
Computer equipment and application software	$	293	$	336
Furniture and vehicles		309		223
Leasehold improvements		321		321
Total		923		880
Less: Provision for impairment		(503)		(503)
Less: Accumulated depreciation		(267)		(332)
Property and equipment, net	$	153	$	45

Depreciation expense from continuing operations was $161, $168 and $41 for the years ended December 31, 2018, 2019 and 2020, respectively.

Impairment loss was $nil, $503, and $nil for the years ended December 31, 2018, 2019 and 2020, respectively.

GOODWILL

12 Months Ended

Dec. 31, 2020

GOODWILL

GOODWILL

8. GOODWILL

The Company’s goodwill reflects the excess of the consideration paid or transferred, including the fair value of contingent consideration over the fair values of the identifiable net assets acquired. The Company engages in the used car business and has one reporting unit for goodwill impairment test purposes.

For the year ended December 31, 2019, the Company elected to perform a qualitative assessment, considering the suspension of operation in dealerships due to disagreements with certain non-controlling shareholders on operational matters, declining revenues, significant write-down of the Company’s inventory, write-off of the prepaid expenses and other current assets, and continuous decrease in the Company’s share price, the Company assessed it is not more likely than not that the fair value of the reporting unit is greater than its carrying amount. The Company performed a quantitative impairment assessment using the discounted cash flow method. The Company performed the quantitative analysis using the discounted cash flow method when determining the fair value of the reporting unit. Key assumptions used to determine the estimated fair value include: (a) internal cash flows forecasts including expected revenue growth, operating margins and estimated capital needs, (b) an estimated terminal value using a terminal year long-term future growth rate determined based on the growth prospects of the reporting unit; and (c) a discount rate that reflects the weighted-average cost of capital adjusted for the relevant risk associated with the reporting unit’s operations and the uncertainty inherent in the Company’s internally developed forecasts. The Company recognized a full impairment of goodwill for the year ended December 31, 2019. There was no goodwill as of December 31, 2020. The net balances of the goodwill was $nil as of December 31, 2019 and 2020.

SHORT-TERM DEBT

12 Months Ended

Dec. 31, 2020

SHORT-TERM DEBT

SHORT-TERM DEBT

9. SHORT-TERM DEBT


		As of December 31,
	Note	2019		2020
Bank of Beijing	(i)	$	718	$	307
East West Bank	(ii)		9,182		8,130
Others	(iii)		6,730		6,820
Total		$	16,630	$	15,257

(i)

In April 2019, the Company entered into a loan agreement with Bank of Beijing for $718 in aggregate. The loan bears annual interest rates of 5.665%. The Company has repaid $411 before the end of 2020 and the remaining balance of the loan was fully paid on April 25, 2021.

(ii)

The annum interest rate of borrowings from East West Bank was range from 2.800% to 6.000%. As of December 31, 2020, the Company has two outstanding loans of amount $6,130 and $2,000, which maturity date is June 30, 2021 and August 31, 2021, respectively. The loan with amount of $6,130 was guaranteed by a wholly-owned subsidiary of Renren Inc, Qianxiang Shiji Technology Development (Beijing) Co., Ltd.

The loan with amount of $2,000 was under an irrevocable standby letter of credit issued by East West Bank to Renren in April 2019 with Renren’s restricted cash pledged as security.

(iii)

These loans were borrowed from individuals or other financing institution other than banks, the annum interest rate was range from 10.800% to 14.000%. As of December 31, 2020, the Company has defaulted and delayed the repayment of three loans with amount of $383, $3,065, $3,372, which has been fully repaid in January 2021.

The interest expense was $4,261, $4,057, and $1,183 for the years ended December 31, 2018, 2019 and 2020, respectively.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

12 Months Ended

Dec. 31, 2020

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES


	As of December 31,
	2019		2020
Other taxes payable	$	4,604	$	4,423
Other payables of used car trading business		5,357		3,308
Accrued professional fee		3,043		2,804
Others		4,298		4,148
Total	$	17,302	$	14,683

INCOME TAXES

12 Months Ended

Dec. 31, 2020

INCOME TAXES

INCOME TAXES

11. INCOME TAXES

The Company, Kaixin Auto Group and Renren Finance Inc. are both incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the companies are not subject to income or capital gains taxes.

Jet Sound Hong Kong Company Limited was incorporated in Hong Kong and is subjected to Hong Kong profits tax. With effect from April 1, 2018, a two-tiered profit tax rate regime applies. The profits tax rate for the first HKD2 million of corporate profits is 8.25%, while the standard profits tax rate of 16.5% remains for profits exceeding HKD2 million. No provision for Hong Kong profits tax has been made as Jet Sound Hong Kong Company Limited has no assessable profits in Hong Kong in the fiscal years ended December 31, 2018, 2019 and 2020.

Other subsidiaries and VIEs of the Company domiciled in the PRC were subject to 25% statutory income tax rate in the years presented.

The PRC Enterprise Income Tax Law (“EIT Law”) includes a provision specifying that legal entities organized outside PRC will be considered residents for Chinese income tax purposes if their place of effective management or control is within PRC. If legal entities organized outside PRC were considered residents for Chinese income tax purposes, they would become subject to the EIT Law on their worldwide income. This would cause any income from legal entities organized outside PRC earned to be subject to PRC’s 25% EIT. The Implementation Rules to EIT Law provide that non-resident legal entities will be considered as PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc. reside within PRC.

11. INCOME TAXES (cont.)

Beijing Kirin Wings Technology Development Co., Ltd., incorporated in the PRC on January 16, 2013, qualified as a “High and New Tech Enterprise” in 2017, and therefore was entitled to a preferential tax rate of 15% for the following three years.

Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Company does not believe that the legal entities organized outside PRC should be characterized as PRC residents for EIT Law purposes.

Under the EIT Law and its implementation rules which became effective on January 1, 2008, dividends generated after January 1, 2008 and payable by a foreign-invested enterprise in PRC to its foreign investors who are non-resident enterprises are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with PRC that provides for a different withholding arrangement. The Cayman Islands, where the Company is incorporated, does not have a tax treaty with PRC.

The Company’s subsidiaries and VIEs located in the PRC had aggregate accumulated deficits as of December 31, 2020. Accordingly, no deferred tax liability had been accrued for the Chinese dividend withholding taxes as of December 31, 2020.

The current and deferred component of income tax expenses (benefit) which were attributable to the Company’s PRC subsidiaries and VIEs and VIEs’ subsidiaries are as follows:


	Years ended December 31,
	2018		2019		2020
Current income tax expense (benefit)	$	862	$	(1,920)	$	(1,528)
Deferred income tax expense		—		—		—
Total income tax expense (benefit)	$	862	$	(1,920)	$	(1,528)

11. INCOME TAXES (cont.)

The principal components of the deferred tax assets and liabilities are as follows:


	As of December 31,
	2019		2020
Deferred tax assets
Provision for doubtful accounts	$	2,165	$	2,249
Inventory		4,510		4,510
Prepaid expenses and other current assets		5,629		4,865
Property and equipment, net		124		124
Accrued payroll and welfare		107		119
Accrued liabilities		345		357
Advertising fee		5		6
Employee education fee		13		13
Net operating loss carry forwards		10,738		12,811
Total Deferred tax assets	$	23,636	$	25,054
Less: valuation allowance		(23,636)		(25,054)
Deferred income tax assets, net	$	—	$	—
Deferred income liabilities	$	—	$	—
Net Deferred income tax assets	$	—	$	—

The Company operates through multiple subsidiaries and VIEs and VIEs’ subsidiaries. The valuation allowance is considered on each individual entity basis. The subsidiaries and VIEs and VIEs’ subsidiaries registered in the PRC have total deferred tax assets related to net operating loss carry forwards at $10,738 and $12,811 as of December 31, 2019 and 2020, respectively. The Company assessed the available evidence to estimate if sufficient future taxable income would be generated to use the existing deferred tax assets. As of December 31, 2019 and 2020, full valuation allowances were established because the Company believes that it is more likely than not that its deferred tax assets will not be utilized as it does not expect to generate sufficient taxable income in the near future. As of December 31, 2020, the Company had net operating losses from several of its PRC entities of $54,120,which can be carried forward to offset future taxable profit. The net operating loss of $986, $25,093, $10,078, $12,660 and $5,303 will expire by 2021, 2022, 2023, 2024 and 2025, respectively, if not utilized.

11. INCOME TAXES (cont.)

Reconciliation between the income taxes expense computed by applying the PRC tax rate to loss before the provision of income taxes and the actual provision for income taxes is as follows:


	Years Ended December 31,
	2018			2019			2020
Loss before provision of income tax	$	(88,076)		$	(70,988)		$	(6,848)
PRC statutory income tax rate		25	%		25	%		25	%
Income tax at statutory tax rate		(22,019)			(17,747)			(1,712)
Accrual (reversal) of taxable deemed interest income from inter-company interest-free loans		2,108			(2,259)			(1,593)
Impairment of goodwill		—			18,523			—
Fair value change on contingent consideration		—			(16,399)			—
Non-taxable income		—			(234)			—
Non-deductible loss and other expenses not deductible for tax purposes		15,644			298			109
Effect of income tax rate differences in jurisdictions other than the PRC		3,234			2,313			1,128
Effect of tax holiday		(53)			305			147
Tax effect of tax rate change		—			—			(1,025)
Changes in valuation allowance		1,948			13,280			1,418
Income tax expenses	$	862		$	(1,920)		$	(1,528)

The rollforward of valuation allowances of deferred tax assets for the year ended December 31, 2020 were as follows:


	Year Ended December 31, 2020
Balance as of beginning of year	$	23,636
Additions of valuation allowance		546
Utilization of deferred tax assets		(153)
Change in tax rate		1,025
Balance as of the end of the year	$	25,054

Since January 1, 2008, the relevant tax authorities have not conducted a tax examination on the Company’s PRC entities. In accordance with relevant PRC tax administration laws, tax years from 2016 to present of the Company’s PRC subsidiaries and VIEs and VIEs’ subsidiaries remain subject to tax audits as of December 31, 2020 at the tax authority’s discretion.

PREFERRED SHARES AND WARRANT LIABILITIES

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

CONVERTIBLE LOANS

12 Months Ended

Dec. 31, 2020

CONVERTIBLE LOANS

CONVERTIBLE LOANS

12. CONVERTIBLE LOANS

On January 28, 2019, KAG, KAH and Kunlun Tech Limited (“Kunlun”), entered into a convertible loan agreement to invest $23 million to KAH,which is subject to an annual interest rate stipulated by the Peoples Bank of China for the corresponding period, which is at 4.35% as of January 28, 2019. The first principal amount of $20 million was advanced to KAH on January 28, 2019, and the remaining $3 million was advanced to KAH on January 31, 2020. If there was a closing of the SPAC Transaction before May 31, 2019, the interest would be waived and the $20 million loan would be automatically converted into KAH’s units (“Unit”) at the closing date at a price of $10.00 per Unit. Each Unit represents one ordinary share of KAH, one half of a redeemable warrant of KAH with a striking price of $11.50 (“Warrant”), and a right to 1/10 of an ordinary share of KAH (“Right”). The $20 million would become due if the SPAC Transaction could not be closed by May 31, 2019.

The Company assessed the contingent conversion feature and determined that this feature did not meet the definition of a derivative instrument because the settlement terms involved the gross delivery of the underlying securities, which were not readily convertible to cash. The Company then assessed whether the beneficial conversion feature guidance was applicable and concluded the convertible loan contains a contingent beneficial conversion feature. Upon the closing of the SPAC transaction, the contingency was resolved and the convertible loan, which consists of $20,000 principal and $219 accrued interest, was automatically converted into 2,000,000 Units. Accordingly, a contingent beneficial conversion feature of $2,128 was recognized as additional interest expense, which represents the difference between the conversion price and the fair value of the KAH’s ordinary share, one half of a warrant and a right on the commitment date. Furthermore, pursuant to the terms of the convertible loan agreement with Kunlun, the $3,000 principal amount funded on January 30, 2020 was automatically converted into 300,000 Units.

On April 25, 2019, KAG, KAH and 58.com Holdings Inc. (58.com) entered into a convertible loan, pursuant to which 58.com agreed to advance $1 million to KAG, which is subject to an annual interest rate stipulated by the Peoples Bank of China for the corresponding period, which is at 4.35% as of April 25, 2019. If there was a closing of the SPAC Transaction before May 31, 2019, the interest would be waived and the $1 million loan would be automatically converted into KAH’s ordinary shares at a price of $ 10.00 per share. Upon the closing of the SPAC transaction, 58.com remitted the $1 million to KAG, was automatically converted into 100,000 ordinary shares of KAH. The conversion feature is not bifurcated due to its indexed to KAH’s own stock and there was no beneficial conversion feature.

PREFERRED SHARES AND WARRANT LIABILITIES

12 Months Ended

Dec. 31, 2020

PREFERRED SHARES AND WARRANT LIABILITIES

13. PREFERRED SHARES AND WARRANT LIABILITIES

On December 28, 2020, KAH entered into a definitive securities purchase agreement (the “Purchase Agreement”) with U.S. based KX Venturas 4 LLC (the “Investor”) and completed the initial closing on December 29, 2020.

Pursuant to the Purchase Agreement, the Investor will invest $6,000 in newly designated Series A convertible preferred shares (“preferred shares”) of the Company. The first $3,000 of the investment closed on December 29, 2020 (the “First Closing”), and the remaining investment is expected to close in mid-2021 (the “Second Closing”). The preferred shares are convertible into 1,000,000 ordinary shares of the Company’s at a conversion price of $3.00, subject to customary adjustments. Pursuant to the Purchase Agreement, the Investor will also receive warrants to subscribe for the Company’s ordinary shares at an exercise price of $3.00 per share. The Preferred Shares and Warrants are bundled transactions, which were considered as equity-linked instruments. The Group has determined that there was no beneficial conversion feature attributable to the preferred shares because the initial effective conversion prices of these preferred shares were higher than the fair value of the Company’s ordinary shares at the relevant commitment dates. The Company has issued 3,000 convertible preferred shares as of December 31, 2020, and the fair value allocated to preferred shares was $1,311.

In connection with the issuance of the convertible preferred shares on December 29, 2020, 1,500,000 Series A Warrants, 1,333,333, Series B Warrants and 2,000,000 Series C Warrants were issued to the Investor, with each warrant provided the holder the right to subscribe for the Group’s ordinary shares at an exercise price of $3.00 per share. Series A and Series B Warrants are immediately exercisable, and Series C Warrants are exercisable upon exercise and in proportion to the number of Series B Warrants exercised. Series A, B and C warrants expire on December 29, 2027, August 29, 2022 and June 29, 2028, respectively.

The warrants are classified as a liability and the fair value allocated to warrants was $1,690 as of December 31, 2020. The warrants liability will be re-measured at each reporting period until the warrants are exercised or expire and any changes will be recognized in the statement of operations. No warrants were exercised as of December 31, 2020.

The fair value of the warrants as of December 31, 2020 were calculated using the Black-Scholes pricing model with the following assumptions:


	As of December 31, 2020
	Series A Warrant			Series B Warrant			Series C Warrant
Risk-free rate of return		0.66	%		0.12	%		0.71	%
Estimated volatility rate		46.07	%		51.29	%		45.63	%
Dividend yield		0.00	%		0.00	%		0.00	%
Exercise price	$	3.00		$	3.00		$	3.00
Fair value of warrant	$	1.39		$	0.76		$	1.43

STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2020

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

14. STOCKHOLDERS’ EQUITY

Ordinary shares

KAH was authorized to issue a total of 200,000,000 ordinary shares of a par value of $0.0001 each prior to the SPAC Transaction. On May 1, 2019, the Company passed a special resolution and changed the authorized ordinary shares of the Company to 500,000,000 ordinary shares. Holders of the Company’s ordinary shares are entitled to one vote for each share.

14. STOCKHOLDERS’ EQUITY (cont.)

In connection with the SPAC Transaction, KAH issued 3,300,000 Indemnity shares and 19,500,000 Earnout Shares to Renren, which are held in escrow, see Note 1(a) for details.

At the closing of the SPAC Transaction, (1) KAH issued 750,000 units to E&A Callet Investment Limited (“E&A Callet”) for US$ 7,500, which consists of 750,000 ordinary shares, 375,000 Warrants, and a right to 1/10 of an ordinary share of KAH (“Rights”) that converted into 75,000 ordinary shares at the same time; (2) the convertible loan issued to Kunlun was automatically converted into 2,000,000 Units, which consists of 2,000,000 ordinary shares, 1,000,000 Warrants, and Rights that converted into 200,000 ordinary shares at the same time ; (3) the convertible loan issued to 58.com was automatically converted into 100,000 ordinary shares ; (4) the outstanding Rights prior to the SPAC transaction were converted into 2,116,401 ordinary shares at the same time.

Warrants

As of December 31, 2020, there were 11,957,008 Warrants outstanding, which consist of 10,582,008 Warrants outstanding before the SPAC Transaction, 1,000,000 Warrants issued with units upon the conversion of convertible loan of Kunlun, and 375,000 Warrants issued with units for share subscription of E&A Callet.

Each whole Warrant that was issued with units in the initial public offering (“IPO”) of KAH in 2017 and issued with units to Kunlun upon the conversion of its convertible loan (“Public Warrant”) is exercisable for one ordinary share at a price of $11.50 per full share. Public Warrants may only be exercised for whole numbers of shares. The Public Warrants became exercisable on the date of the SPAC Transaction. If a registration statement covering the ordinary shares issuable upon exercise of the Public Warrants is not effective within 90 days following the SPAC Transaction, holders of Public Warrants may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. In such event, each holder would pay the exercise price by surrendering the Public Warrants for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary shares underlying the Public Warrants, multiplied by the difference between the exercise price of the Public Warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the ordinary shares for the 10 trading days ending on the day prior to the date of exercise. The warrants have a term of five years of the completion of the completion of the SPAC Transaction.

14. STOCKHOLDERS’ EQUITY (cont.)

The Company may redeem the outstanding Public Warrants, in whole and not in part, at a price of $0.01 per warrant:

●

at any time while the Warrants are exercisable,

●

upon a minimum of 30 days’ prior written notice of redemption,

●

if, and only if, the last sales price of the ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending three business days before the Company sends the notice of redemption, and

●

if, and only if, there is a current registration statement in effect with respect to the ordinary shares underlying such Warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the Company calls the Warrants for redemption as described above, the management will have the option to require all holders that wish to exercise Warrants to do so on a “cashless basis.”

The Warrants were recognized as an equity instrument, which is classified within equity (deficit) as additional paid-in capital.

Warrants outstanding as of December 31, 2019 and 2020 classifed as equity are as follows:


	December 31,
	2019	2020

Warrants issued with units in the IPO	10,582,008	10,582,008
Warrants issued to E&A Callet	375,000	375,000
Warrants issued with units to Kunlun	1,000,000	1,000,000
Total	11,957,008	11,957,008

Options

There was a call option purchased by the IPO underwriter of KAH in 2017, which is exercisable at $10.00 per Unit to purchase up to 900,000 Units (or an aggregate exercise price of $9,000,000) commencing on the consummation of the SPAC Transaction. The option may be exercised for cash or on a cashless basis, at the holder's option, and expires five years from the effective date of the registration statement related to the initial public offering of KAH (i.e., expires by October 2022).

FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2020

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

15. FAIR VALUE MEASUREMENTS

Assets and liabilities measured or disclosed at fair value

The Company measures its financial assets and liabilities, including contingent consideration and warrant liability at fair value on a recurring basis as of December 31, 2019 and 2020. The Company measured its accounts receivable, accounts payable, short-term debt, amounts due to related parties at amortized cost. Cash is classified within Level 1 of the fair value hierarchy because they are valued based on the quoted market price in an active market. The carrying value of the short-term debt obligations approximate fair value, considering the borrowing rates are at the same level of the current market yield for the comparable debts. The carrying value of accounts receivable, accounts payable, and amounts due to related parties approximate fair value due to the relatively short maturity.

15. FAIR VALUE MEASUREMENTS (cont.)

The following table presents the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis:

As of December 31, 2019

As of December 31, 2020

Fair Value Measurement at the Reporting Date using

Quoted

price in

active

markets

for

Significant

for

Significant

identical

other

unobservable

identical

other

unobservable

assets

observable

inputs

assets

observable

inputs

Level 1

inputs

Level 3

Total

Level 1

inputs

Level 3

Total

Warrant liability

—

(1,690)

The Company did not transfer any assets or liabilities in or out of Level 3 during the years ended December 31, 2018, 2019 and 2020.

In January 2019, the Company modified acquisition agreement with all of the dealerships and after sales service centers, under the modified terms, the fair value of contingent consideration is also affected by the operating results and the share price of KAH and the obligation to pay the contingent consideration would be transferred to Renren upon the closing of the SPAC Transaction.

15. FAIR VALUE MEASUREMENTS (cont.)

On April 30, 2019, upon the closing of the SPAC Transaction, the contingency of a successful reverse recapitalization transaction was resolved. The Company determined the fair value of the contingent consideration on April 30, 2019 and recorded the changes in fair value from January 1, 2019 to April 30, 2019 in earnings, then the contingent consideration was assumed by Renren. As KAH’s share price becomes a significant input in the valuation, the Company adopted Monte Carlo simulation method. A Monte Carlo simulation uses random scenarios, together with the assumption of volatility, risk-free rate, expected dividend rate, to generate individual stock price paths. This approach for valuing a contingent consideration with a market condition is appropriate because each individual stock price path that is generated can be monitored to identify paths where the market condition is met. The simulation process is repeated numerous times to generate numerous different stock price paths. The major assumptions used in the Monte Carlo simulation are as follows:


	As of April 30, 2019

Volatility	40	%
Risk-free rate	3.2	%
Expected dividend rate	—	%
Simulation steps	10,000

The following is a reconciliation of the beginning and ending balances for contingent consideration measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2019:


	Amount
Balance at January 1, 2019	$	105,670
Fair value change for the four months ended April 30, 2019		(65,594)
Exchange difference		2,466
Contingent liability assumed by Renren on April 30, 2019		(42,542)
Balance at December 31, 2019	$	—

RELATED PARTY BALANCES AND TRANSACTIONS

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2020

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

16. SHARE-BASED COMPENSATION

(a) Kaixin incentive plans

The numbers of shares awards and per share data as follows are restated to give effect for the reverse recapitalization discussed in Note 1(a).

Kaixin Auto Group Incentive Plan (the “Kaixin 2018 Plan”)

On January 31, 2018, KAG adopted Kaixin 2018 Plan, whereby 6,248,000 ordinary shares of KAG are made available for future grant for employees or consultants of KAG either in the form of incentive share options or restricted shares. The plan was amended and restated in May 2018 that up to 21,868,000 ordinary shares will be made available for granting as awards. The term of the options may not exceed ten years from the date of the grant, except for the situation of an amendment, modification and termination. The awards under the plan are subject to vesting schedules ranging from immediately upon grant to four years subsequent to grant date.

On March 15, 2018 and July 1, 2018, KAG issued an aggregate of 5,695,286 options to purchase KAG’s ordinary shares to certain of its directors, officers and employees to compensate for their services.

Kaixin Auto Holdings Incentive Plan (the “Kaixin 2019 Plan”)

On April 30, 2019, KAH adopted Kaixin 2019 Plan, whereby 4,715,700 ordinary shares of KAH are made available for future grant for employees of KAH share options or restricted shares.

On May 3, 2019 (the “Replacement Date”), the Company’s board of directors approved a directive to replace all the outstanding share options granted during the year ended December 31, 2018 under the 2018 Plan to 144 employees with 2,186,364 options and 2,183,828 restricted shares. The exercise price of the options was reduced from $1.70 per share to $0.01 per share. The replacement options were subject to graded vesting over three years from the Replacement Date, in which 25% ~ 62.5% of the options granted to each individual vest on the grant date immediately and 1/36 of their remaining options vests monthly subsequent to the Replacement Date. For the restricted shares, there were 205,215 replacement restricted shares granted to certain employees vested immediately and 917,738 replacement restricted shares were subject to graded vesting, which were vested 1/4 annually starting from January 1, 2020. The remaining replacement restricted shares were subject to graded vesting over three years from the Replacement Date, in which 62.5% of the total restricted shares vest on the grant date immediately and 1/36 of the remaining restricted shares vests monthly subsequent to the Replacement Date. The total incremental cost as a result of the modification was $4,138. The incremental cost related to vested awards amounted to $1,205 and was recorded in the consolidated statements of operations during the year ended December 31, 2019. The incremental cost related to unvested awards amounted to $2,933 and is recorded over the remaining service periods.

Kaixin Auto Holdings Incentive Plan (the “Kaixin 2020 Plan”)

On November 17, 2020, the board of directors of KAH approved the Kaixin 2020 Plan, under which, up to 5,000,000 ordinary shares may be granted as awards in form of share options, restricted shares or restricted shares units. In the event of a change in control or another transaction having a similar effect, then any incentives granted under the 2020 Incentive Plan shall be deemed vested immediately. No such award has been granted during the year ended December 31, 2020. Subsequent to December 31, 2020, the Company has granted 4,646,778 restricted shares under the Kaixin 2020 Plan.

16. SHARE-BASED COMPENSATION (cont.)

(a) Kaixin incentive plans (cont.)

In determining the fair value of share options, a binomial option pricing model is applied. Assumptions used to estimate the fair values of the share options granted or modified were as follows:


	Years ended December 31,
	2019			2020
Risk-free interest rate(1)		2.50-3.00	%		N/A
Volatility(2)		45%-46	%		N/A
Expected term (in years) (3)		10			N/A
Exercise price(4)	$	0.01			N/A
Dividend yield(5)		—			N/A
Fair value of underlying ordinary share(6)	$	2.12-$3.36			N/A

(1)

Risk-free interest rate

Risk-free interest rate was estimated based on the yield to maturity of treasury bonds of the United States with a maturity period close to the expected life of the options, and the country risk spread between China and United States was considered.

(2)

Volatility

The volatility of the underlying ordinary shares during the life of the options was estimated based on the historical stock price volatility of listed comparable companies over a period comparable to the expected term of the options.

(3)

Expected term

For the options granted to employees, the Company estimated the expected term based on the vesting and contractual terms and employee demographics. For the options granted to non-employees, the Company estimated the expected term as the original contractual term.

(4)

Exercise price

The exercise price of the options was determined by the Company’s board of directors.

(5)

Dividend yield

The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the options.

16. SHARE-BASED COMPENSATION (cont.)

(a) Kaixin incentive plans (cont.)

(6)

Fair value of underlying ordinary shares

Prior to the consummation of the SPAC Transaction, the estimated fair value of the ordinary shares underlying the options as of the valuation date was determined based on a contemporaneous valuation. When estimating the fair value of the ordinary shares on the valuation dates, management has considered a number of factors, including the result of a third party appraisal of the Company, while taking into account standard valuation methods and the achievement of certain events. The fair value of the ordinary shares in connection with the option grants on the valuation date was determined with the assistance of an independent third-party appraiser. The fair values of the underlying ordinary shares on each date of the grant after April 30, 2019, were the closing prices of the Company's ordinary shares traded in the Stock Exchange.

A summary of the Company’s share options activities held by the Company’s employees for the year ended December 31, 2020 was as follows:


				Weighted
				average		Weighted
		Weighted		grant day		Average
		Average		fair		Remaining	Aggregate
Options Granted to Employees	Number of	Exercise		Value per		Contractual	Intrinsic
and Directors	Shares	Price		shares		Years	value
Outstanding as of December 31, 2019	2,154,514	$	0.01	$	3.20	9.39	$	4,007
Forfeited	(165,264)	$	0.01	$	3.35
Granted	—				—
Exercised	(499,456)				3.23
Outstanding as of December 31, 2020	1,489,794	$	0.02	$	3.17	9.08	$	7,524
Vested and expected to vest as of December 31, 2020	1,489,794	$	0.01	$	3.17	9.08		7,524
Exercisable as of December 31, 2020	425,460	$	0.01	$	1.87	8.32	$	1,583

The aggregate intrinsic value was calculated as the difference between the exercise price of the underlying awards and the closing stock price of $3.73 of the Company's ordinary share on December 31,2020.

(a) Kaixin incentive plans (cont.)

The fair values of the options granted for the years ended December 31, 2019, and 2020 are as follows:


	Years ended December 31,
	2019	2020
	US$	US$
Weighted average grant date fair value of option per share	3.21	—
Aggregate grant date fair value of options	7,794,799	—

As of December 31, 2020, there was approximately $1,961of total unrecognized compensation cost related to unvested share options. The unrecognized compensation costs are expected to be recognized over a weighted average period of 1.24 years.

16. SHARE-BASED COMPENSATION (cont.)

(a) Kaixin incentive plans (cont.)

Nonvested restricted shares

A summary of the nonvested restricted shares activity as of December 31, 2020 is as follows:


		Weighted average fair value
	Number of nonvested	per ordinary share
	restricted shares	at the grant dates
Outstanding as of December 31, 2019	1,446,111	3.36
Forfeited	(13,232)	3.94
Granted	200,000	4.73
Vested	(474,889)	—
Unvested as of December 31, 2020	1,157,990	3.36

As of December 31, 2020, there was approximately $199 of total unrecognized compensation cost related to unvested restricted shares. The unrecognized compensation costs are expected to be recognized over a weighted average period of 0.65 years.

The total fair value of shares vested during the year ended December 31, 2019 and 2020 was $3,231 and $1,870.

16. SHARE-BASED COMPENSATION (cont.)

(b) Renren incentive plan

Renren Inc. Incentive Plan (the “Renren Plan”)

Renren Inc. (“Renren”) adopted the 2006 Equity Incentive Plan (the “2006 Plan”), the 2008 Equity Incentive Plan (the “2008 Plan”), the 2009 Equity Incentive Plan (the “2009 Plan”), the 2011 Share Incentive Plan (the “2011 Plan”), the 2016 Share Incentive Plan (the “2016 Plan”), and the 2018 Share Incentive Plan (the “2018 Plan”) for purpose of granting of stock options and incentive stock options to employees and executives to reward them for service to the parent and to provide incentives for future service. The term of the options may not exceed ten years from the date of the grant, except for the situation of amendment, modification and termination. The awards under the above plans are subject to vesting schedules ranging from immediately upon grant to six years subsequent to grant date.

Renren Inc. calculated the estimated fair value of the options on the respective grant dates using the binomial option pricing model with the assistance from independent valuation firms, with the assumptions used in 2016.

16. SHARE-BASED COMPENSATION (cont.)

(b) Renren incentive plan (cont.)

The following table summarizes information with respect to share options outstanding as of December 31, 2018:

Options outstanding

Options exercisable

Weighted

average

Weighted

average

Weighted

remaining

average

remaining

average

Number

contractual

exercise

intrinsic

Number of

contractual

exercise

intrinsic

Range of exercise prices

outstanding

life

price

value

exercisable

life

price

value

0.01 ~ $0.18

139,094,101

5.40

0.06

5,754

117,561,450

5.11

0.06

4,863

139,094,101

5,754

117,561,450

4,863


		Weighted		Weighted
		average		average
	Number of	exercise		grant date
	Shares	price		fair value
Balance, January 1, 2018	141,481,616	$	0.48	$	0.64
Granted	—		—		—
Exercised	(2,268,420)	$	0.06	$	0.66
Forfeited	(119,095)	$	0.16	$	0.15
Balance, December 31, 2018	139,094,101	$	0.06	$	0.64
Exercisable, December 31, 2018	117,561,450	$	0.06
Expected to vest, December 31, 2018	21,532,651	$	0.06

For employee stock options, Renren Inc. recorded share-based compensation from continuing operations of $18,640 for the years ended December 31, 2018, based on the fair value on the grant dates over the requisite service period of award using the straight-line method.

As of December 31, 2018, there was $14,285 unrecognized share-based compensation expense relating to share options. This amount is expected to be recognized over a weighted-average vesting period of 3.04 years. As disclosed in Note 1(c), prior to January 1, 2019, there was an allocation of certain share-based expenses paid by Renren. Since January 1, 2019, the Company has established its own operational functions and separated its operating expenses from its parent, Renren, except for three senior management of Renren continued to take management role of Kaixin before the consummation of the SPAC Transaction. After the SPAC Transaction, there is no more expense allocation from Renren due to the Company has separated from its parent. The share-based compensation information related to Renren were only updated to the consummation date of the SPAC transaction, since there is no more expense allocation from Renren from that date.

Furthermore, Renren Inc. did not grant any options in fiscal year 2020.

16. SHARE-BASED COMPENSATION (cont.)

(b) Renren incentive plan (cont.)

Nonvested restricted shares

A summary of the nonvested restricted shares activity is as follows:


		Weighted
	Weighted	average fair
	number of	value
	nonvested	per ordinary
	restricted	share at the
	shares	grant dates
Outstanding as of December 31, 2017	10,802,683	$	0.95
Granted	88,935,342	$	0.14
Vested	(8,404,575)	$	0.47
Forfeited	(17,561,071)	$	0.18
Outstanding as of December 31, 2018	73,772,379	$	0.21

Renren Inc. recorded compensation expenses based on the fair value of nonvested restricted shares on the grant dates over the requisite service period of award using the straight line vesting attribution method. The fair value of the nonvested restricted shares on the grant date was the closing market price of the ordinary shares as of the date. Renren Inc. recorded compensation expenses related to nonvested restricted shares in an amount of $3,917 during the year ended December 31, 2018.

Total unrecognized compensation expense amounted to $15,345 related to nonvested restricted shares granted as of December 31, 2018. The expense is expected to be recognized over a weighted-average period of 5.22 years.

Share-based compensation expense under the Renren Plan allocated to the Company

The share-based compensation expense under Renren Plan allocated to the Company amounted to $2,390, $109 and $nil for the years ended December 31, 2018, 2019 and 2020, respectively. These expenses are part of selling and marketing expenses, research and development expenses, and general and administrative expenses allocated from Renren, which were waived and have been reflected as capital contributions as of the date such expenses were originally allocated.

16. SHARE-BASED COMPENSATION (cont.)

Total share-based compensation expense of share-based awards granted to employees and directors for the years ended December 31, 2018, 2019 and 2020 were as follows:


	Years ended December 31,
	2018	2019	2020
Selling and marketing	—	658	648
Research and development	—	206	162
General and administrative	11,436	2,949	2,552
Total share-based compensation expense	11,436	3,813	3,362

RELATED PARTY BALANCES AND TRANSACTIONS

12 Months Ended

Dec. 31, 2020

17. RELATED PARTY BALANCES AND TRANSACTIONS

The table below summarizes the major related parties and their relationships with the Company:


Company Name		Relationship with the Company
Renren Inc.		The controlling shareholder of the Company
Shareholder Value Fund (SVF)		A shareholder of the Company after the SPAC Transaction
Ningbo Jiusheng Automobile Sales Co., Ltd. (“Jiusheng”)		A entity untimately controlled by Mr. Lin Mingjun, who is appointed as Chief Executive Officer of the Company in November 2020

Amouns due to related parties consisted of the following:


	As of December 31,
	2019		2020
Renren and its subsidiaries ⁽¹⁾	$	—	$	2,255
Ningbo Jiusheng Automobile Sales Co., Ltd.		—		705
SVF ⁽²⁾		4,214		—
Total	$	4,214	$	2,960

Related party transactions:


	For the year ended December 31,
	2019		2020
Funds from Renren Inc. and its subsidiaries⁽¹⁾	$	113,400	$	2,140
Funds from SVF⁽²⁾		1,600		—
Operating advance from Ningbo Jiusheng Automobile Sales Co., Ltd.		—		666
Promissory notes issued to SVF⁽²⁾		2,614		—
Amounts due to SVF converted into ordinary shares of KAH ⁽²⁾		—		4,213
Repayment of funds to Renren Inc. ⁽¹⁾		115,501		—
Loan waived by Renren Inc. ⁽³⁾		76,007		—

(1)	The amount mainly represents advanced funds provided by Renren and its subsidiaries to finance the Company’s daily operations.

17. RELATED PARTY BALANCES AND TRANSACTIONS (cont.)

(2)

On April 30, 2019, KAH, KAG, Renren and SVF executed an agreement (the “Waiver Agreement”) pursuant to which KAG and Renren waived certain rights under the Share Exchange Agreement in exchange for SVF’s commitment to (i) contribute $1.6 million to KAH within two weeks after the closing of the SPAC Transaction, (ii) set a limit on the liabilities to be paid by cash (up to $4.0 million) and noncash (up to $2.6 million) consideration by KAH and (iii) use its best efforts to restructure $2.6 million KAH due to SVF prior to the SPAC Transaction, which would have become past due upon the closing of the SPAC Transaction.

On June 4, 2019, SVF paid $1,600 to the Company according to the Waiver Agreement.

On June 10, 2020, the Company and SVF entered into a subscription agreement to issue 4,213,629 ordinary shares to SVF, and cancel all the prior existing notes or agreements related to the $4.2 million balance as of December 31, 2019. The Company has issued the shares to SVF in July 2020.

(3)	On April 30, 2019, Renren also waived all the outstanding loans and receivables in the amount of $76,007 due from KAG and KAG’s subsidiaries without recourse by Renren or any of Renren’s subsidiaries upon consummation of the SPAC Transaction.

LOSS PER SHARE

12 Months Ended

Dec. 31, 2020

LOSS PER SHARE

LOSS PER SHARE

18. LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per ordinary share for the years ended:


	Years ended December 31,
	2018		2019		2020

Net loss:
Loss from continuing operations	$	(88,938)	$	(69,068)	$	(5,320)
Loss from discontinued operations, net of taxes		(594)		—		—

Net loss		(89,532)		(69,068)		(5,320)
Net loss attributable to the noncontrolling interest		(317)		(22,952)		(17)

Net loss attributable to Kaixin Auto Holdings' shareholders	$	(89,215)	$	(46,116)	$	(5,303)

Weighted average number of ordinary shares outstanding used in computing net loss per ordinary share - basic and diluted (2018 shares retroactively adjusted for the reverse recapitalization on April 30, 2019)		24,984,300		33,146,593		41,715,834

Net loss per share attributable to Kaixin Auto Holdings' shareholders - basic and diluted:
Loss per share from continuing operations	$	(3.56)	$	(1.39)		(0.13)
Loss per share from discontinued operations	$	(0.02)	$	—		—

Net loss per share attributable to Kaixin Auto Holdings' shareholders - basic and diluted	$	(3.58)	$	(1.39)	$	(0.13)

18. LOSS PER SHARE (cont.)

Securities that could potentially dilute basic net loss per share in the future that were not included in the computation of diluted net loss per share because to do so would have been antidilutive for the years ended December 31, 2018, 2019 and 2020 are as follows:


	Years ended December 31,
	2018	2019	2020
Share options	5,510,970	2,154,514	205,294
Restricted shares	—	1,446,111	1,157,990
Warrants	—	11,957,008	16,790,341
Preferred shares	—	—	3,000
Unit options	—	1,440,000	—
Indemnity shares	—	3,300,000	3,300,000

The 19.5 million Earnout Shares are considered contingently issuable shares and are also excluded from the computation of basic and diluted loss per share for the year ended December 31, 2019, because the related performance and market conditions were not achieved as of December 31, 2019 and they have been included in the computation of basic and diluted loss per share for the year ended December 31, 2020, because the related performance and market conditions have been waived in 2020.

OPERATING LEASES

12 Months Ended

Dec. 31, 2020

OPERATING LEASES

OPERATING LEASES

19. OPERATING LEASES

The Company leases its facilities and offices under non-cancelable operating lease agreements. These leases expire through 2022 and are renewable upon negotiation.

The following table provides a summary of leases where we are the leasee are presented as follows within our consolidated financial statements:


Assets/Liabilities	December 31, 2019		December 31, 2020
Right-of-use assets	$	2,252	$	74
Lease liabilities - current		1,785		39
Lease liabilities – non-current		810		26
Total lease liabilities	$	2,595	$	65

19. OPERATING LEASES (cont.)

The operating lease cost and short-term lease cost for the years ended December 31, 2019 and 2020 were as follows:


	Year ended December 31, 2019	Year ended December 31, 2020
Operating lease expense excluding short-term rental expense	1,811	$	182
Short-term lease cost	1,597		434
Total lease cost	3,408	$	616

Lease term and discount rate information related to leases where we are lessee is as follows:


	December 31, 2019		December 31, 2020
Weighted-average remaining lease terms	1.9 years			1.7 years
Weighted-average discount rate	10.92	%		10.30	%

19. OPERATING LEASES (cont.)

Supplemental cash flow information related to leases where we are lessee is as follows:


	December 31, 2019		December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities		—		—
Operating cash outflows from operating leases	$	1,211	$	27

Maturities of lease liabilities as of December 31, 2020 were as follows:


	Operating Leases


2021	$	44
2022		27
Total undiscounted lease payment	$	71
Less: Imputed interest		6
Present value of lease liabilities	$	65

STATUTORY RESERVE AND RESTRICTED NET ASSETS

12 Months Ended

Dec. 31, 2020

STATUTORY RESERVE AND RESTRICTED NET ASSETS

STATUTORY RESERVE AND RESTRICTED NET ASSETS

20. STATUTORY RESERVE AND RESTRICTED NET ASSETS

In accordance with the Regulations on Enterprises with Foreign Investment of China and their articles of association, the Company’s subsidiaries and VIE entities located in the PRC, being foreign invested enterprises established in the PRC, are required to provide for certain statutory reserves. These statutory reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion fund or discretionary reserve fund, and (iii) a staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires a minimum annual appropriation of 10% of after-tax profit (as determined under accounting principles generally accepted in China at each year-end); the other fund appropriations are at the subsidiaries’ or the affiliated PRC entities’ discretion. These statutory reserve funds can only be used for specific purposes of enterprise expansion, staff bonus and welfare, and are not distributable as cash dividends except in the event of liquidation of the Company’s subsidiaries, the Company’s affiliated PRC entities and their respective subsidiaries. The Company’s subsidiaries and VIE entities are required to allocate at least 10% of their after-tax profits to the general reserve until such reserve has reached 50% of their respective registered capital.

As of December 31, 2020, none of the Company’s PRC subsidiaries and VIE entities had a general reserve that reached the 50% of their registered capital threshold, therefore they will continue to allocate at least 10% of their after-tax profits to the general reserve fund.

Appropriations to the enterprise expansion reserve and the staff welfare and bonus reserve are to be made at the discretion of the board of directors of each of the Company’s subsidiaries. The appropriation to these reserves by the Company’s PRC subsidiaries was $nil for the years ended December 31, 2018, 2019 and 2020, respectively.

As a result of these PRC laws and regulations and the requirement that distributions by PRC entities can only be paid out of distributable profits computed in accordance with PRC GAAP, the PRC entities are restricted from transferring a portion of their net assets to the Company. Amounts restricted include paid-in capital and the statutory reserves of the Company’s PRC subsidiaries and VIE entities. The aggregate amounts of paid-in capital and statutory reserves restricted which represented the restricted net assets of the relevant subsidiaries and VIE entities in the Company not available for distribution were $95,228 and $107,268 as of December 31, 2019 and 2020, respectively.

SUBSEQUENT EVENT1

12 Months Ended

Dec. 31, 2020

SUBSEQUENT EVENT

SUBSEQUENT EVENT

21. SUBSEQUENT EVENT

On December 31, 2020, Kaixin Auto Holdings (Kaixin) announced that it entered into share purchase agreement (the “SPA”) with the shareholders of Haitaoche Limited (“Haitaoche”). Pursuant to the SPA, Kaixin will acquire 100% of the share capital of Haitaoche from the shareholders (the “Acquisition”). As consideration for the Acquisition, Kaixin will issue 74,035,502 ordinary shares of Kaixin to the shareholders of Haitaoche. Upon the completion of the Acquisition, the Haitaoche shareholders will collectively hold 51% of Kaixin's issued and outstanding shares. On April 15, 2021, NASDAQ approved the acquisition of 100% of the share capital of Haitaoche pursuant to the SPA.

On March 31, 2021, the Company announced that it has entered into a definitive securities purchase agreement (the“Purchase Agreement”) with Renren Inc., a 72% shareholder of the Company (the “Purchaser”) and completed the closing on the same date. Pursuant to the Purchase Agreement, the Purchaser invested $6,000 in newly designated convertible preferred shares of the Company. The preferred shares are convertible into the Company's ordinary shares at a conversion price of $3.00, subject to customary adjustments pursuant to the Purchase Agreement.

On May 7, 2021, the Company announced that each authorised issued and unissued Ordinary share of a par value of $0.0001 each be subdivided into 2 shares of a par value of $0.00005 each, such that immediately following the Share Subdivision, the authorised share capital of the Company will be $50 divided into 1,000,000,000 Ordinary shares of a par value of US$0.00005 each.

The Company has performed an evaluation of subsequent events through the date of the consolidated financial statements were issued, and determined that no events that would have required adjustment or disclosure in the consolidated financial statements other than those discussed in above.

Additional Information-Financial Statement Schedule I Condensed Financial Information of Parent Company

12 Months Ended

Dec. 31, 2020

Additional Information-Financial Statement Schedule I Condensed Financial Information of Parent Company

Additional Information-Financial Statement Schedule I Condensed Financial Information of Parent Company

BALANCE SHEETS

(U.S. dollars in thousands)


	As of December 31,
	2019		2020
ASSETS
Current assets:

Cash	$	40	$	3,005
Total current assets		40		3,005
Investment in subsidiaries		899		—
TOTAL ASSETS	$	939	$	3,005
LIABILITIES AND EQUITY
Current liabilities:
Accrued expenses		1,211		711
Amounts due to subsidiaries		1,684		—
Amounts due to related parties		2,614		—
Warrant liabilites		—		1,690
Total current liabilities		5,509		2,401
Non-current liabilities:
Deficit of investment in subsidiaries		—		659
Total non-current liabilities		—		—
TOTAL LIABILITIES	$	5,509	$	3,060

Deficit:
Ordinary shares	$	5	$	6
Additional paid-in capital		186,450		196,335
Accumulated deficit		(188,185)		(193,488)
Accumulated other comprehensive income (loss)		(2,840)		(2,908)
Total deficit		(4,570)		(55)
TOTAL LIABILITIES AND DEFICIT	$	939	$	3,005

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(U.S. dollars in thousands)


	Years ended December 31,
	2018		2019		2020
Selling and marketing	$	(1,504)	$	—	$	—
Research and development		(107)		—		—
General and administrative		(11,505)		(371)		(3,745)
Total operating expenses		(13,116)		(371)		(3,745)
Equity in loss of subsidiaries and variable interest entities		(76,099)		(45,745)		(899)
Net loss	$	(89,215)	$	(46,116)	$	(4,644)
Other comprehensive income (loss), net of tax:
Foreign currency translation		404		(4,222)		(68)
Other comprehensive income (loss)	$	404	$	(4,222)	$	(68)
Comprehensive loss	$	(88,811)	$	(50,338)	$	(4,712)

STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands, except share data and per share data, or otherwise noted)


	Years ended December 31,
	2018		2019		2020
Cash flows from operating activities:
Net loss	$	(89,215)	$	(46,116)	$	(5,302)
Equity in loss of subsidiaries and variable interest entities		76,099		45,745		899
Share-based compensation		11,436		—		3,362
Changes in operating assets and liabilities:
Amounts due from/to related parties		173		(20,980)		—
Accrued expenses and other payables		581		(292)		2,347
Prepaid expenses and other current assets		—		123		—
Net cash used in operating activities		(926)		(21,520)		1,306
Cash flows from investing activities:
Repayment of investment in subsidiaries		—		1,586		(2,340)
Net cash provided by investing activities		—		1,586		(2,340)
Cash flows from financing activities:
Proceeds from borrowings		500		—		—
Repayment of borrowings		(500)		—		—
Proceeds of advances from related parties		950		—		—
Repayment of advances from related parties		—		(1,050)		—
Proceeds from convertible loans		—		21,000		—
Proceeds from preferred shares		—		—		3,000
Proceeds from investors		—		—		1,000
Net cash provided by financing activities		950		19,950		4,000
Net increase in cash		24		16		2,965
Cash at beginning of year		—		24		40
Effect of exchange rate changes		—		—		—
Cash at end of year	$	24	$	40	$	3,005

1. BASIS FOR PREPARATION

The condensed financial information of the Parent Company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the Parent Company used the equity method to account for investments in its subsidiaries and VIE.

On April 30, 2019, KAH consummated the SPAC Transaction pursuant to the Share Exchange Agreement, where KAH acquired 100% of the issued and outstanding ordinary shares of KAG. The transaction is accounted for as a reverse recapitalization, which is equivalent to the issuance of shares by KAG for the net monetary assets of KAH, accompanied by a recapitalization. KAG is determined as the predecessor and the historical financial statements of KAG became KAH’s historical financial statements, with retrospective adjustments to give effect of the reverse recapitalization. As such, the historical consolidated comparative information as of and for the year ended December 31, 2018 in this Schedule I relates to KAG. The par value of ordinary shares was adjusted retrospectively from $16 to $2, the subscription receivable was adjusted retrospectively from negative $16 to $nil, and the difference of $2 was adjusted retrospectively as in addition paid-in capital as of December 31, 2018. Subsequent to April 30, 2019, the information relates to the KAH, with KAH as the accounting acquire in the reverse recapitalization.

2. INVESTMENTS IN SUBSIDIARIES, VIEs AND VIEs’ SUBSIDIARIES

The Parent Company and its subsidiaries, VIEs and VIEs’ subsidiaries were included in the consolidated financial statements where inter-company balances and transactions were eliminated upon consolidation. For the purpose of the Parent Company’s stand-alone financial statements, its investments in subsidiaries, VIEs and VIEs’ subsidiaries were reported using the equity method of accounting. The Parent Company’s share of loss from its subsidiaries, VIEs and VIEs’ subsidiaries were reported as share of loss of subsidiaries, VIEs and VIEs’ subsidiaries in the accompanying Parent Company financial statements. Ordinarily, under the equity method, an investor in an equity method investee would cease to recognize its share of the losses of an investee once the carrying value of the investment has been reduced to nil absent an undertaking by the investor to provide continuing support and fund losses. For the purpose of this Schedule I, the Parent Company has continued to reflect its share, based on its proportionate interest, of the losses of subsidiaries, VIEs and VIEs’ subsidiaries regardless of the carrying value of the investment even though the Parent Company is not obligated to provide continuing support or fund losses.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

(a)	Basis of presentation

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

Liquidity

(b)

Liquidity

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(b) Liquidity (cont.)

Principles of consolidation

(c)Principles of consolidation

Business combinations

(d)	Business combinations

Use of estimates

(e)	Use of estimates

Cash and restricted cash

(f)	Cash and cash equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

Fair value

(g)	Fair value

●

Level 1 — inputs are based upon unadjusted quoted prices for identical assets or liabilities traded in active markets.

●

Inventory

(h)

Inventory

Property and equipment, net

(i)Property and equipment, net

Property and equipment, net is carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives:


Computer equipment and application software	2 – 3 years
Furniture and vehicles	5 years

Goodwill

(j)

Goodwill

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(j) Goodwill (cont.)

Revenue recognition

(k)	Revenue recognition

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(k) Revenue recognition (cont.)

Disaggregation of Revenue


	Years ended December 31,
	2018		2019		2020
Automobile sales	$	420,005	$	332,634	$	32,996
Used car financing income		2,317		—		—
Others		9,082		2,063		164
Total	$	431,404	$	334,697	$	33,160

Automobile sales

Used car financing

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(k) Revenue recognition (cont.)

Other revenue

Value added taxes

Income taxes

(l)	Income taxes

Current income taxes are provided for in accordance with the laws of the relevant tax authorities.

Research and development expenses

(m)	Research and development expenses

Financial instruments

(n)	Financial instruments

Recent accounting pronouncements not yet adopted

(o)	Foreign currency translation adjustments

Comprehensive loss

(p)	Comprehensive loss

Comprehensive loss includes net loss and foreign currency translation adjustments and is reported in the consolidated statements of comprehensive loss.

Share-based Compensation

(q)	Share-based Compensation

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(q) Share-based Compensation (cont.)

Leases

(r)

Leases

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(r) Leases (cont.)


	As of December 31,		Effect of		As of January 1,
	2018		Adoption		2019
Right-of-use assets	$	—	$	5,141	$	5,141
Lease liabilities - current		—		(1,760)		(1,760)
Lease liabilities - non-current		—		(1,975)		(1,975)
Prepaid expenses and other current assets		38,714		(1,422)		37,292
Accrued expenses and other current liabilities		(10,644)		16		(10,628)

Contingencies

(s)	Contingencies

Loss per share

(t)Loss per share

Segment Reporting

(u)Segment Reporting

(v)Recent accounting pronouncements not yet adopted

Recently issued ASUs by the FASB, except for the ones mentioned above, have no material impact on the Company's consolidated results of operations or financial position.

ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2020

ORGANIZATION AND PRINCIPAL ACTIVITIES

Schedule of loss per share before and after the retrospective adjustments


	Year ended December 31
	2018
	Before	After
	adjustment	adjustment
Net loss per share attributable to KAH's shareholders – basic and diluted:
Loss per share from continuing operations	(0.56)	(3.56)
Loss per share from discontinued operations	(0.00)	(0.02)
Net loss per share attributable to Kaixin Auto Holdings’ shareholders – basic and diluted	(0.56)	(3.58)

Schedule of Assets and liabilities of KAH upon the consummation of the SPAC Transaction


Cash	$	6
Prepaid expenses and other current assets		123
Amounts due to Renren Inc.		(1,050)
Amounts due to SVF		(2,614)
Other liabilities		(1,512)
Net liabilities assumed by KAG as of April 30, 2019	$	(5,047)

Summary of subsidiaries, VIEs and VIEs' major subsidiaries

As of December 31, 2020, Kaixin Auto Holdings’ major subsidiaries, VIEs and VIEs’ major subsidiaries are as follows:


			Percentage of
	Later of date		legal ownership
	of incorporation	Place of	by Kaixin Auto
Name of Subsidiaries	or acquisition	incorporation	Holdings	Principal activities
Major subsidiaries:
Kaixin Auto Group	January 25, 2018	Cayman Islands	100%	Investment holding
Renren Finance, Inc.	December 15, 2014	Cayman Islands	100%	Internet business
Jet Sound Hong Kong Company Limited	May 7, 2011	Hong Kong	100%	Investment holding
Shanghai Renren Financial Leasing Co., Ltd. (“Shanghai Financial”)	May 25, 2015	PRC	100%	Financing business
Shanghai Renren Automotive Technology Group Co., Ltd. (“Shanghai Auto”)	August 18, 2017	PRC	100%	Investment holding
Shanghai Lingding Automobile Technology Co., Ltd.	March 3, 2018	PRC	100%	Used car trading business
Variable Interest Entities:
Shanghai Qianxiang Changda Internet Information Technology Development Co., Ltd. (“Shanghai Changda”)	October 25, 2010	PRC	N/A	Internet business
Shanghai Jieying Automobile Sales Co., Ltd. (“Shanghai Jieying”)	February 27, 2017	PRC	N/A	Used car trading business
Major subsidiaries of Variable Interest Entities:
Beijing Kirin Wings Technology Development Co., Ltd.	January 16, 2013	PRC	N/A	Financing business
Shanghai Wangjing Investment Management Co., Ltd	April 20, 2015	PRC	N/A	Financing business
Jieying Baolufeng Automobile Sales (Shenyang) Co., Ltd.	June 14, 2017	PRC	N/A	Used car trading business
Chongqing Jieying Shangyue Automobile Sales Co., Ltd.	July 3, 2017	PRC	N/A	Used car trading business
Dalian Yiche Jieying Automobile Sales Co., Ltd.	June 27, 2017	PRC	N/A	Used car trading business
Neimenggu Jieying Kaihang Automobile Sales Co., Ltd.	July 14, 2017	PRC	N/A	Used car trading business
Hangzhou Jieying Yifeng Automobile Sales Co., Ltd.	August 1, 2017	PRC	N/A	Used car trading business
Jilin Jieying Taocheguan Automobile Sales Co., Ltd.	October 31, 2017	PRC	N/A	Used car trading business
Cangzhou Jieying Bole Automobile Sales Co., Ltd.	August 10, 2017	PRC	N/A	Used car trading business
Wuhan Jieying Chimei Automobile Sales Co., Ltd.	November 20, 2017	PRC	N/A	Used car trading business
Shanxi Jieying Weilan Automobile Sales and Service Co., Ltd.	March 13, 2018	PRC	N/A	Used car trading business

Summary of financial statement balances and amounts of the Company's VIEs were included in the accompanying consolidated financial statements


	As of December 31,
	2019		2020
Cash	$	1,080	$	108
Accounts receivable		203		—
Prepaid expenses and other current assets		27,083		43,536
Inventory		20,598		—
Total current assets		48,964		43,644
Property and equipment, net		146		41
Right-of-use assets		1,691		73
Total non-current assets		1,837		114
Total assets	$	50,801	$	43,758
Accounts payable	$	4,035	$	306
Short-term debt (including short-term debt of the consolidated VIEs with recourse to Kaixin Auto Holdings of $7,900 and $nil as of December 31, 2019 and 2020, respectively)		14,630		13,116
Accrued expenses and other current liabilities		13,770		12,394
Amounts due to related parties		—		2,725
Advance from customers		1,622		—
Income tax payable		4,469		3,391
Deferred revenue		—		1,862
Lease liabilities - current		1,224		39
Total current liabilities		39,750		33,833
Lease liabilities - non-current		810		26
Total non-current liabilities		810		26
Total liabilities	$	40,560	$	33,859


	Years ended December 31,
	2018		2019		2020
Revenues	$	428,492	$	332,629	$	32,823
Net loss	$	(38,561)	$	(2,151)	$	(653)
Loss from discontinued operations	$	(594)	$	—	$	—

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (cont.)

(d) The VIE arrangements (cont.)


	Years ended December 31,
	2018		2019		2020
Net cash used in operating activities	$	(8,433)	$	(3,948)	$	(395)
Net cash used in investing activities	$	(9,980)	$	(68)	$	—
Net cash provided by (used in) financing activities	$	22,193	$	(1,205)	$	(634)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summary of estimated useful lives of property and equipment


Computer equipment and application software	2 – 3 years
Furniture and vehicles	5 years

Summary of disaggregation of revenue


	Years ended December 31,
	2018		2019		2020
Automobile sales	$	420,005	$	332,634	$	32,996
Used car financing income		2,317		—		—
Others		9,082		2,063		164
Total	$	431,404	$	334,697	$	33,160

Summary of effect on consolidated balance sheet as a result of adopting ASC 842


	As of December 31,		Effect of		As of January 1,
	2018		Adoption		2019
Right-of-use assets	$	—	$	5,141	$	5,141
Lease liabilities - current		—		(1,760)		(1,760)
Lease liabilities - non-current		—		(1,975)		(1,975)
Prepaid expenses and other current assets		38,714		(1,422)		37,292
Accrued expenses and other current liabilities		(10,644)		16		(10,628)

DISCONTINUED OPERATIONS (Tables)

12 Months Ended

Dec. 31, 2020

Ji'nan Dealership

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Summarizes the carrying amounts of the major classes of assets and liabilities, operating results and condensed cash flow related to the discontinued operations recorded

The operating results from discontinued operations included in the Company’s consolidated statement of operations were as follows for the year ended December 31, 2018.


	Year ended December 31,
	2018
Major classes of line items constituting pretax profit of discontinued operations:
Revenues	$	47,672
Cost of revenues		50,531
Selling, research and development, and general and administrative expenses		16,777
Fair value change of contingent consideration		19,042
Loss from the operations of the discontinued operations, before income tax		(594)
Loss from the operations of the discontinued operations, net of tax	$	(594)

The condensed cash flow related to the discontinued operations were as follows for the year ended December 31, 2018:


	Year ended December 31,
	2018
Net cash provided by operating activities	$	516
Net cash used in investing activities	$	(1)
Net cash provided by financing activities	$	—

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721677-107760

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

BUSINESS ACQUISITION (Tables)

12 Months Ended

Dec. 31, 2020

Shanxi

Summary of results of operations attributable to the acquisitions included in the Company's consolidated statement of operations since the acquisition date


	Year ended December 31, 2018
Revenues	$	20,135
Net gain	$	752

Acquisitions of after-sales service centers

Summary of results of operations attributable to the acquisitions included in the Company's consolidated statement of operations since the acquisition date


	Year ended December 31, 2018
	Chongqing/
	Suzhou/ Jinan
	Zhoushuo
Revenues	$	341
Net loss	$	582

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)

12 Months Ended

Dec. 31, 2020

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Schedule of prepaid expenses and other current assets


		As of December 31,
	Note	2019		2020
Advances for purchasing cars	(i)	$	25,017	$	41,700
Others			2,569		1,924
Total		$	27,586	$	43,624

(i)	The balance represents cash advances paid to noncontrolling shareholders for purchasing cars.

PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2020

PROPERTY AND EQUIPMENT, NET

Schedule of property and equipment, net


	As of December 31,
	2019		2020
Computer equipment and application software	$	293	$	336
Furniture and vehicles		309		223
Leasehold improvements		321		321
Total		923		880
Less: Provision for impairment		(503)		(503)
Less: Accumulated depreciation		(267)		(332)
Property and equipment, net	$	153	$	45

SHORT-TERM DEBT (Tables)

12 Months Ended

Dec. 31, 2020

SHORT-TERM DEBT

Schedule of short-term debt


		As of December 31,
	Note	2019		2020
Bank of Beijing	(i)	$	718	$	307
East West Bank	(ii)		9,182		8,130
Others	(iii)		6,730		6,820
Total		$	16,630	$	15,257

(i)

(ii)

The loan with amount of $2,000 was under an irrevocable standby letter of credit issued by East West Bank to Renren in April 2019 with Renren’s restricted cash pledged as security.

(iii)

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2020

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Schedule of accrued expenses and other current liabilities


	As of December 31,
	2019		2020
Other taxes payable	$	4,604	$	4,423
Other payables of used car trading business		5,357		3,308
Accrued professional fee		3,043		2,804
Others		4,298		4,148
Total	$	17,302	$	14,683

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2020

INCOME TAXES

Schedule of current and deferred component of income tax expenses (benefit)


	Years ended December 31,
	2018		2019		2020
Current income tax expense (benefit)	$	862	$	(1,920)	$	(1,528)
Deferred income tax expense		—		—		—
Total income tax expense (benefit)	$	862	$	(1,920)	$	(1,528)

Schedule of principal components of the deferred tax assets and liabilities


	As of December 31,
	2019		2020
Deferred tax assets
Provision for doubtful accounts	$	2,165	$	2,249
Inventory		4,510		4,510
Prepaid expenses and other current assets		5,629		4,865
Property and equipment, net		124		124
Accrued payroll and welfare		107		119
Accrued liabilities		345		357
Advertising fee		5		6
Employee education fee		13		13
Net operating loss carry forwards		10,738		12,811
Total Deferred tax assets	$	23,636	$	25,054
Less: valuation allowance		(23,636)		(25,054)
Deferred income tax assets, net	$	—	$	—
Deferred income liabilities	$	—	$	—
Net Deferred income tax assets	$	—	$	—

Schedule of reconciliation between statutory income tax expense and actual income tax expense


	Years Ended December 31,
	2018			2019			2020
Loss before provision of income tax	$	(88,076)		$	(70,988)		$	(6,848)
PRC statutory income tax rate		25	%		25	%		25	%
Income tax at statutory tax rate		(22,019)			(17,747)			(1,712)
Accrual (reversal) of taxable deemed interest income from inter-company interest-free loans		2,108			(2,259)			(1,593)
Impairment of goodwill		—			18,523			—
Fair value change on contingent consideration		—			(16,399)			—
Non-taxable income		—			(234)			—
Non-deductible loss and other expenses not deductible for tax purposes		15,644			298			109
Effect of income tax rate differences in jurisdictions other than the PRC		3,234			2,313			1,128
Effect of tax holiday		(53)			305			147
Tax effect of tax rate change		—			—			(1,025)
Changes in valuation allowance		1,948			13,280			1,418
Income tax expenses	$	862		$	(1,920)		$	(1,528)

Summary of rollforward of valuation allowances of deferred tax assets


	Year Ended December 31, 2020
Balance as of beginning of year	$	23,636
Additions of valuation allowance		546
Utilization of deferred tax assets		(153)
Change in tax rate		1,025
Balance as of the end of the year	$	25,054

PREFERRED SHARES AND WARRANT LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2020

PREFERRED SHARES AND WARRANT LIABILITIES

Schedule of fair value of the warrants calculated using the Black-Scholes pricing model

The fair value of the warrants as of December 31, 2020 were calculated using the Black-Scholes pricing model with the following assumptions:


	As of December 31, 2020
	Series A Warrant			Series B Warrant			Series C Warrant
Risk-free rate of return		0.66	%		0.12	%		0.71	%
Estimated volatility rate		46.07	%		51.29	%		45.63	%
Dividend yield		0.00	%		0.00	%		0.00	%
Exercise price	$	3.00		$	3.00		$	3.00
Fair value of warrant	$	1.39		$	0.76		$	1.43

FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2020

FAIR VALUE MEASUREMENTS

Schedule of fair value hierarchy for assets and liabilities measured at fair value

As of December 31, 2019

As of December 31, 2020

Fair Value Measurement at the Reporting Date using

Quoted

price in

active

markets

for

Significant

for

Significant

identical

other

unobservable

identical

other

unobservable

assets

observable

inputs

assets

observable

inputs

Level 1

inputs

Level 3

Total

Level 1

inputs

Level 3

Total

Warrant liability

—

(1,690)

Summary of key assumptions used in the valuation of the contingent consideration


	As of April 30, 2019

Volatility	40	%
Risk-free rate	3.2	%
Expected dividend rate	—	%
Simulation steps	10,000

Schedule of reconciliation of the beginning and ending balances for contingent consideration measured at fair value on a recurring basis using significant unobservable inputs (Level 3)


	Amount
Balance at January 1, 2019	$	105,670
Fair value change for the four months ended April 30, 2019		(65,594)
Exchange difference		2,466
Contingent liability assumed by Renren on April 30, 2019		(42,542)
Balance at December 31, 2019	$	—

SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2020

Kaixin Auto 2019 Plan

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of assumptions used in determining the fair value of share options granted


	Years ended December 31,
	2019			2020
Risk-free interest rate(1)		2.50-3.00	%		N/A
Volatility(2)		45%-46	%		N/A
Expected term (in years) (3)		10			N/A
Exercise price(4)	$	0.01			N/A
Dividend yield(5)		—			N/A
Fair value of underlying ordinary share(6)	$	2.12-$3.36			N/A

(1)

Risk-free interest rate

(2)

Volatility

(3)

Expected term

(4)

Exercise price

The exercise price of the options was determined by the Company’s board of directors.

(5)

Dividend yield

The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the options.

16. SHARE-BASED COMPENSATION (cont.)

(a) Kaixin incentive plans (cont.)

(6)

Fair value of underlying ordinary shares

Summary of stock option activity


				Weighted
				average		Weighted
		Weighted		grant day		Average
		Average		fair		Remaining	Aggregate
Options Granted to Employees	Number of	Exercise		Value per		Contractual	Intrinsic
and Directors	Shares	Price		shares		Years	value
Outstanding as of December 31, 2019	2,154,514	$	0.01	$	3.20	9.39	$	4,007
Forfeited	(165,264)	$	0.01	$	3.35
Granted	—				—
Exercised	(499,456)				3.23
Outstanding as of December 31, 2020	1,489,794	$	0.02	$	3.17	9.08	$	7,524
Vested and expected to vest as of December 31, 2020	1,489,794	$	0.01	$	3.17	9.08		7,524
Exercisable as of December 31, 2020	425,460	$	0.01	$	1.87	8.32	$	1,583

Summary of fair values of the options granted


	Years ended December 31,
	2019	2020
	US$	US$
Weighted average grant date fair value of option per share	3.21	—
Aggregate grant date fair value of options	7,794,799	—

Schedule of total share-based compensation expense of share-based awards granted to employees and directors


	Years ended December 31,
	2018	2019	2020
Selling and marketing	—	658	648
Research and development	—	206	162
General and administrative	11,436	2,949	2,552
Total share-based compensation expense	11,436	3,813	3,362

Kaixin Auto 2019 Plan | Restricted Stock

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of stock option activity


		Weighted average fair value
	Number of nonvested	per ordinary share
	restricted shares	at the grant dates
Outstanding as of December 31, 2019	1,446,111	3.36
Forfeited	(13,232)	3.94
Granted	200,000	4.73
Vested	(474,889)	—
Unvested as of December 31, 2020	1,157,990	3.36

Renren Plan

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of stock option activity


		Weighted		Weighted
		average		average
	Number of	exercise		grant date
	Shares	price		fair value
Balance, January 1, 2018	141,481,616	$	0.48	$	0.64
Granted	—		—		—
Exercised	(2,268,420)	$	0.06	$	0.66
Forfeited	(119,095)	$	0.16	$	0.15
Balance, December 31, 2018	139,094,101	$	0.06	$	0.64
Exercisable, December 31, 2018	117,561,450	$	0.06
Expected to vest, December 31, 2018	21,532,651	$	0.06

Summary of the nonvested restricted shares activity


		Weighted
	Weighted	average fair
	number of	value
	nonvested	per ordinary
	restricted	share at the
	shares	grant dates
Outstanding as of December 31, 2017	10,802,683	$	0.95
Granted	88,935,342	$	0.14
Vested	(8,404,575)	$	0.47
Forfeited	(17,561,071)	$	0.18
Outstanding as of December 31, 2018	73,772,379	$	0.21

Summary of information with respect to share options outstanding by exercise price

Options outstanding

Options exercisable

Weighted

average

Weighted

average

Weighted

remaining

average

remaining

average

Number

contractual

exercise

intrinsic

Number of

contractual

exercise

intrinsic

Range of exercise prices

outstanding

life

price

value

exercisable

life

price

value

0.01 ~ $0.18

139,094,101

5.40

0.06

5,754

117,561,450

5.11

0.06

4,863

139,094,101

5,754

117,561,450

4,863

RELATED PARTY BALANCES AND TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of related party transactions


	As of December 31,
	2019		2020
Renren and its subsidiaries ⁽¹⁾	$	—	$	2,255
Ningbo Jiusheng Automobile Sales Co., Ltd.		—		705
SVF ⁽²⁾		4,214		—
Total	$	4,214	$	2,960

Related party transactions:


	For the year ended December 31,
	2019		2020
Funds from Renren Inc. and its subsidiaries⁽¹⁾	$	113,400	$	2,140
Funds from SVF⁽²⁾		1,600		—
Operating advance from Ningbo Jiusheng Automobile Sales Co., Ltd.		—		666
Promissory notes issued to SVF⁽²⁾		2,614		—
Amounts due to SVF converted into ordinary shares of KAH ⁽²⁾		—		4,213
Repayment of funds to Renren Inc. ⁽¹⁾		115,501		—
Loan waived by Renren Inc. ⁽³⁾		76,007		—

(1)	The amount mainly represents advanced funds provided by Renren and its subsidiaries to finance the Company’s daily operations.

17. RELATED PARTY BALANCES AND TRANSACTIONS (cont.)

(2)

On June 4, 2019, SVF paid $1,600 to the Company according to the Waiver Agreement.

LOSS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2020

LOSS PER SHARE

Schedule of computation of basic and diluted net loss per ordinary share


	Years ended December 31,
	2018		2019		2020

Net loss:
Loss from continuing operations	$	(88,938)	$	(69,068)	$	(5,320)
Loss from discontinued operations, net of taxes		(594)		—		—

Net loss		(89,532)		(69,068)		(5,320)
Net loss attributable to the noncontrolling interest		(317)		(22,952)		(17)

Net loss attributable to Kaixin Auto Holdings' shareholders	$	(89,215)	$	(46,116)	$	(5,303)

Weighted average number of ordinary shares outstanding used in computing net loss per ordinary share - basic and diluted (2018 shares retroactively adjusted for the reverse recapitalization on April 30, 2019)		24,984,300		33,146,593		41,715,834

Net loss per share attributable to Kaixin Auto Holdings' shareholders - basic and diluted:
Loss per share from continuing operations	$	(3.56)	$	(1.39)		(0.13)
Loss per share from discontinued operations	$	(0.02)	$	—		—

Net loss per share attributable to Kaixin Auto Holdings' shareholders - basic and diluted	$	(3.58)	$	(1.39)	$	(0.13)

Schedule of computation of diluted net loss per share


	Years ended December 31,
	2018	2019	2020
Share options	5,510,970	2,154,514	205,294
Restricted shares	—	1,446,111	1,157,990
Warrants	—	11,957,008	16,790,341
Preferred shares	—	—	3,000
Unit options	—	1,440,000	—
Indemnity shares	—	3,300,000	3,300,000

OPERATING LEASES (Tables)

12 Months Ended

Dec. 31, 2020

OPERATING LEASES

Summary of leases within our consolidated financial statements


Assets/Liabilities	December 31, 2019		December 31, 2020
Right-of-use assets	$	2,252	$	74
Lease liabilities - current		1,785		39
Lease liabilities – non-current		810		26
Total lease liabilities	$	2,595	$	65

Schedule of operating lease cost and short-term lease


	Year ended December 31, 2019	Year ended December 31, 2020
Operating lease expense excluding short-term rental expense	1,811	$	182
Short-term lease cost	1,597		434
Total lease cost	3,408	$	616

Summary of lease term and discount rate information related to leases


	December 31, 2019		December 31, 2020
Weighted-average remaining lease terms	1.9 years			1.7 years
Weighted-average discount rate	10.92	%		10.30	%

Summary of supplemental cash flow information related to leases


	December 31, 2019		December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities		—		—
Operating cash outflows from operating leases	$	1,211	$	27

Schedule of Maturities of lease liabilities


	Operating Leases


2021	$	44
2022		27
Total undiscounted lease payment	$	71
Less: Imputed interest		6
Present value of lease liabilities	$	65

Additional Information-Financial Statement Schedule I Condensed Financial Information of Parent Company (Tables)

12 Months Ended

Dec. 31, 2020

Additional Information-Financial Statement Schedule I Condensed Financial Information of Parent Company

BALANCE SHEETS


	As of December 31,
	2019		2020
ASSETS
Current assets:

Cash	$	40	$	3,005
Total current assets		40		3,005
Investment in subsidiaries		899		—
TOTAL ASSETS	$	939	$	3,005
LIABILITIES AND EQUITY
Current liabilities:
Accrued expenses		1,211		711
Amounts due to subsidiaries		1,684		—
Amounts due to related parties		2,614		—
Warrant liabilites		—		1,690
Total current liabilities		5,509		2,401
Non-current liabilities:
Deficit of investment in subsidiaries		—		659
Total non-current liabilities		—		—
TOTAL LIABILITIES	$	5,509	$	3,060

Deficit:
Ordinary shares	$	5	$	6
Additional paid-in capital		186,450		196,335
Accumulated deficit		(188,185)		(193,488)
Accumulated other comprehensive income (loss)		(2,840)		(2,908)
Total deficit		(4,570)		(55)
TOTAL LIABILITIES AND DEFICIT	$	939	$	3,005

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS


	Years ended December 31,
	2018		2019		2020
Selling and marketing	$	(1,504)	$	—	$	—
Research and development		(107)		—		—
General and administrative		(11,505)		(371)		(3,745)
Total operating expenses		(13,116)		(371)		(3,745)
Equity in loss of subsidiaries and variable interest entities		(76,099)		(45,745)		(899)
Net loss	$	(89,215)	$	(46,116)	$	(4,644)
Other comprehensive income (loss), net of tax:
Foreign currency translation		404		(4,222)		(68)
Other comprehensive income (loss)	$	404	$	(4,222)	$	(68)
Comprehensive loss	$	(88,811)	$	(50,338)	$	(4,712)

STATEMENTS OF CASH FLOWS


	Years ended December 31,
	2018		2019		2020
Cash flows from operating activities:
Net loss	$	(89,215)	$	(46,116)	$	(5,302)
Equity in loss of subsidiaries and variable interest entities		76,099		45,745		899
Share-based compensation		11,436		—		3,362
Changes in operating assets and liabilities:
Amounts due from/to related parties		173		(20,980)		—
Accrued expenses and other payables		581		(292)		2,347
Prepaid expenses and other current assets		—		123		—
Net cash used in operating activities		(926)		(21,520)		1,306
Cash flows from investing activities:
Repayment of investment in subsidiaries		—		1,586		(2,340)
Net cash provided by investing activities		—		1,586		(2,340)
Cash flows from financing activities:
Proceeds from borrowings		500		—		—
Repayment of borrowings		(500)		—		—
Proceeds of advances from related parties		950		—		—
Repayment of advances from related parties		—		(1,050)		—
Proceeds from convertible loans		—		21,000		—
Proceeds from preferred shares		—		—		3,000
Proceeds from investors		—		—		1,000
Net cash provided by financing activities		950		19,950		4,000
Net increase in cash		24		16		2,965
Cash at beginning of year		—		24		40
Effect of exchange rate changes		—		—		—
Cash at end of year	$	24	$	40	$	3,005

ORGANIZATION AND PRINCIPAL ACTIVITIES - Reverse Recapitalization (Details) - $ / shares

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

Net loss per share attributable to KAH's shareholders - basic and diluted:

Loss per share from discontinued operations

^[1]

$ (0.13)

$ (1.39)

$ (3.56)

^[1]

(0.02)

Net loss per share attributable to Kaixin Auto Holdings' shareholders - basic and diluted(i):

^[1]

$ (0.13)

$ (1.39)

(3.58)

Before adjustment

Net loss per share attributable to KAH's shareholders - basic and diluted:

Loss per share from discontinued operations

(0.56)

0.00

Net loss per share attributable to Kaixin Auto Holdings' shareholders - basic and diluted(i):

$ (0.56)

[1]	Share and per share data have been retroactively restated to give effect to the reverse recapitalization that is discussed in Note 1(a)

ORGANIZATION AND PRINCIPAL ACTIVITIES - Acquisition of KAG (Details)
$ in Thousands

1 Months Ended

12 Months Ended

Apr. 30, 2019

Dec. 31, 2020

Dec. 31, 2019

USD ($)

Dec. 31, 2018

Exchange ratio for restatement of equity

0.1562

Par value of ordinary shares | $

$ 2

Retrospective adjustment to addition paid-in capital for subscription receivable | $

$ 2

Weighted average shares outstanding, basic and diluted (in shares)

^[1]

41,715,834

33,146,593

24,984,300

Common Stock reserved

4,200,000

Before adjustment

Par value of ordinary shares | $

$ 16

Subscription receivable | $

$ 16

Weighted average shares outstanding, basic and diluted (in shares)

160,000,000

Reverse recapitalization | KAG

Percentage of issued and outstanding shares acquired

100.00%

Number of ordinary shares acquired

160,000,000

Number of shares issued in exchage of consideration

28,284,300

Number of shares held in escrow

3,300,000

[1]	Share and per share data have been retroactively restated to give effect to the reverse recapitalization that is discussed in Note 1(a)

ORGANIZATION AND PRINCIPAL ACTIVITIES - Assets and liabilities of KAH upon the consummation of the SPAC Transaction (Details) - KAG - Reverse recapitalization - Nonrecurring $ in Thousands	Dec. 31, 2020 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash	$ 6
Prepaid expenses and other current assets	123
Others liabilities	(1,512)
Net liabilities acquired by KAG as of April 30, 2019	(5,047)
Renren Inc.
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amounts due to related parties	(1,050)
SVF
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amounts due to related parties	$ (2,614)

ORGANIZATION AND PRINCIPAL ACTIVITIES - EBITDA (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Apr. 30, 2019	Dec. 31, 2020	Dec. 31, 2019
Liabilities waived by Renren Inc.	$ 76,007	$ (4,213)	$ 76,007
Contribution from Renren Inc for contingent consideration	$ 42,542		$ 42,542
Renren Inc.
Earn out shares issued held in escrow	19,500,000	19,500,000
Earnout Shares	19,500,000
Business combination, contingent consideration arrangements, description		$13.00 for any sixty days in any period of ninety consecutive trading days during a fifteen-month period following the closing, and will receive all the 19.5 million Earnout Shares if the stock price of KAH is higher than $13.50 for any sixty days in any period of ninety consecutive trading days during a thirty-month period following the closing
Renren Inc. \| Gross revenue more than or equal 5000 millions
Number of ordinary shares entitled from earn out shares	1,950,000,000,000
Renren Inc. \| Adjusted EBITDA is greater than or equal to RMB150 million
Number of ordinary shares entitled from earn out shares	3,900,000,000,000
Renren Inc. \| Adjusted EBITDA is greater than or equal to RMB200 million
Number of ordinary shares entitled from earn out shares	7,800,000,000,000
Renren Inc. \| Adjusted EBITDA is greater than or equal to RMB340 million
Number of ordinary shares entitled from earn out shares	4,875,000,000,000
Renren Inc. \| Adjusted EBITDA is greater than or equal to RMB480 million
Number of ordinary shares entitled from earn out shares	9,750,000,000,000

ORGANIZATION AND PRINCIPAL ACTIVITIES - Cost of revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Subsidiary or Equity Method Investee [Line Items]
Cost of revenues	$ 32,160	$ 340,174	$ 413,971
Selling and marketing expenses	2,588	14,364	24,077
Research and development expenses	757	3,357	4,419
General and administrative expenses	6,832	36,145	23,012
Parent
Subsidiary or Equity Method Investee [Line Items]
Cost of revenues			23
Selling and marketing expenses			54
Research and development expenses			204
General and administrative expenses	$ 0	109	5,394
Share-based compensation cost of the earnout shares		$ 109	$ 2,390

ORGANIZATION AND PRINCIPAL ACTIVITIES - Transfer of Ji'nan Dealership (Details) $ in Thousands, ¥ in Millions	1 Months Ended		3 Months Ended	12 Months Ended
	Nov. 30, 2018 USD ($)	Nov. 30, 2018 CNY (¥)	Sep. 30, 2018 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Schedule of Equity Method Investments [Line Items]
Write down of inventory					$ 17,826
Write-offs for advance to supplier related to Ji'nan Dealership						$ 16,840
Write-off of prepaid expenses and other current assets					$ 22,282
Net impact on cost of revenue				$ 2,921
Write off of amounts due from non-controlling shareholders				$ 7,479
Ji'nan Dealership
Schedule of Equity Method Investments [Line Items]
Write down of inventory			$ 5,700
Write-offs for advance to supplier related to Ji'nan Dealership			$ 16,100
Ji'nan Dealership
Schedule of Equity Method Investments [Line Items]
Amount due to related party as a consideration for transfer of equity interest	$ 19,500	¥ 133.8

ORGANIZATION AND PRINCIPAL ACTIVITIES - VIEs and VIEs' major subsidiaries (Details)	Dec. 31, 2020
KAG
Schedule of Equity Method Investments [Line Items]
Percentage of legal ownership by Kaixin Auto Group	100.00%
Renren Finance, Inc
Schedule of Equity Method Investments [Line Items]
Percentage of legal ownership by Kaixin Auto Group	100.00%
Jet Sound Hong Kong Company Limited
Schedule of Equity Method Investments [Line Items]
Percentage of legal ownership by Kaixin Auto Group	100.00%
Shanghai Renren Financial Leasing Co., Ltd.
Schedule of Equity Method Investments [Line Items]
Percentage of legal ownership by Kaixin Auto Group	100.00%
Shanghai Renren Automotive Technology Group Co., Ltd.
Schedule of Equity Method Investments [Line Items]
Percentage of legal ownership by Kaixin Auto Group	100.00%
Shanghai Lingding Automobile Technology Co., Ltd.
Schedule of Equity Method Investments [Line Items]
Percentage of legal ownership by Kaixin Auto Group	100.00%

ORGANIZATION AND PRINCIPAL ACTIVITIES - Contractual agreement (Details)		12 Months Ended
	Aug. 17, 2017	Dec. 31, 2020
Business Operations Agreement
Term of agreements		10 years
Extension term of agreements		10 years
Threshold period of advance written notice to the VIEs requesting not to extend the term, three months prior to the expiration dates		30 days
Period prior to expiration of the loan agreements for which advance written notice is given to VIEs		3 months
Exclusive Equity Option Agreement
Term of agreements		10 years
Threshold period of advance written notice to the VIEs requesting not to extend the term, three months prior to the expiration dates		30 days
Exclusive Technical and Consulting Services Agreement
Term of agreements		10 years
Extension term of agreements		10 years
Threshold period of advance written notice to the VIEs requesting not to extend the term, three months prior to the expiration dates	3 months
Loan Agreements
Term of agreements		10 years
Extension term of agreements		10 years
Period prior to expiration of the loan agreements for which advance written notice is given to VIEs		3 months

ORGANIZATION AND PRINCIPAL ACTIVITIES - Consolidated financial statements (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash	$ 3,162	$ 3,190	$ 7,950
Accounts receivable		219
Inventories		20,990
Prepaid expenses and other current assets	43,624	27,586	38,714
Total current assets	46,786	51,985
Goodwill	0
Property and equipment, net	45	153
Total non-current assets	1,681	2,405
TOTAL ASSETS	48,467	54,390
Accounts payable	402	4,122
Lease liabilities - current	39	1,785
Short-term debt	15,257	16,630
Accrued expenses and other current liabilities	14,683	17,302	10,644
Amounts due to related parties	2,960	4,214
Advance from customers	1,863	1,677
Income tax payable	4,042	5,319
Total current liabilities	40,936	51,049
Lease liabilities - non-current	26	810
Total non-current liabilities	26	810
TOTAL LIABILITIES	40,962	51,859
Revenues	33,160	334,697	431,404
Net loss	(5,320)	(69,068)	(89,532)
Loss from discontinued operations			(594)
Net cash used in operating activities	(3,878)	(4,745)	(9,749)
Net cash used in investing activities		1,223	98,982
Net cash provided by (used in) financing activities	3,917	(6,328)	(138,637)
WFOE
Service fees	0	0
Consolidated VIEs \| WFOE
Cash	108	1,080
Accounts receivable		203
Inventories		20,598
Prepaid expenses and other current assets	43,536	27,083
Total current assets	43,644	48,964
Property and equipment, net	41	146
Right-of-use assets	73	1,691
Total non-current assets	114	1,837
TOTAL ASSETS	43,758	50,801
Accounts payable	306	4,035
Lease liabilities - current	39	1,224
Short-term debt	13,116	14,630
Accrued expenses and other current liabilities	12,394	13,770
Amounts due to related parties	2,725
Advance from customers		1,622
Income tax payable	3,391	4,469
Deferred revenue	1,862
Total current liabilities	33,833	39,750
Lease liabilities - non-current	26	810
Total non-current liabilities	26	810
TOTAL LIABILITIES	33,859	40,560
Revenues	32,823	332,629	428,492
Net loss	(653)	(2,151)	(38,561)
Loss from discontinued operations			(594)
Net cash used in operating activities	(395)	(3,948)	(8,433)
Net cash used in investing activities		(68)	(9,980)
Net cash provided by (used in) financing activities	$ (634)	(1,205)	$ 22,193
Consolidated VIEs \| WFOE \| Recourse [Member]
Short-term debt		$ 7,900

ORGANIZATION AND PRINCIPAL ACTIVITIES - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Short-term debt	$ 15,257	$ 16,630
Consolidated VIEs
Percentage of net revenue contributed by VIE	99.00%	99.40%	99.30%
Percentage of consolidated total assets contributed by VIE	90.30%	93.40%
Percentage of consolidated total liabilities contributed by VIE	82.70%	78.20%
Consolidated VIEs \| WFOE
Short-term debt	$ 13,116	$ 14,630

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Liquidity (Details) - USD ($) $ in Thousands			1 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 29, 2020	Jun. 30, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Change in Accounting Estimate [Line Items]
Working capital				$ 5,850
Proceeds from convertible loan					$ 21,000
Accumulated deficit				197,492	192,189
Cash flows from operating activities				$ 3,878	$ 4,745	$ 9,749
Investment			$ 3,000
Renren Inc.
Change in Accounting Estimate [Line Items]
Proceeds from convertible loan	$ 6,000
Renren Inc. \| Subsequent Event [Member]
Change in Accounting Estimate [Line Items]
Proceeds from convertible loan	$ 6,000
ATW Partners LLC
Change in Accounting Estimate [Line Items]
Proceeds from convertible loan		$ 3,000

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory (Details)	12 Months Ended
	Dec. 31, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Period for considering vehicle as slow moving	90 days

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment net and Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Impairment expense		$ 74,091
Goodwill	$ 0
Computer equipment and application software \| Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives	2 years
Computer equipment and application software \| Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Furniture and vehicles
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disaggregation of Revenue [Line Items]
Total revenues	$ 33,160	$ 334,697	$ 431,404
Automobile sales
Disaggregation of Revenue [Line Items]
Total revenues	32,996	332,634	420,005
Financing income
Disaggregation of Revenue [Line Items]
Total revenues			2,317
Others
Disaggregation of Revenue [Line Items]
Total revenues	$ 164	$ 2,063	$ 9,082

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Value added taxes and Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right-of-use assets	$ 74	$ 2,252
Lease liabilities	$ 65	$ 2,595
Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right-of-use assets			$ 5,141
Lease liabilities			$ 3,735

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Effect on consolidation balance sheet as result of adopting ASC 842 (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right-of-use lease assets	$ 74	$ 2,252
Lease liabilities - current	39	1,785
Lease liabilities - non-current	26	810
Prepaid expenses and other current assets	43,624	27,586		$ 38,714
Accrued expenses and other current liabilities	$ (14,683)	$ (17,302)		$ (10,644)
Effect of adoption
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right-of-use lease assets			$ 5,141
Lease liabilities - current			(1,760)
Lease liabilities - non-current			(1,975)
Prepaid expenses and other current assets			(1,422)
Accrued expenses and other current liabilities			16
Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Right-of-use lease assets			5,141
Lease liabilities - current			(1,760)
Lease liabilities - non-current			(1,975)
Prepaid expenses and other current assets			37,292
Accrued expenses and other current liabilities			$ (10,628)

SIGNIFICANT RISKS AND UNCERTAINTIES (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
SIGNIFICANT RISKS AND UNCERTAINTIES
Cash and cash equivalents denominated in foreign currency	$ 132	$ 2,410

DISCONTINUED OPERATIONS - Ji'nan Dealership (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)
Major classes of line items constituting pretax profit of discontinued operations:
Loss from the operations of the discontinued operations, net of tax	$ (594)
Disposed of by sale \| Ji'nan Dealership
Major classes of line items constituting pretax profit of discontinued operations:
Revenues	47,672
Cost of revenues	50,531
Selling, research and development, and general and administrative expenses	16,777
Fair value change of contingent consideration	19,042
Loss from the operations of the discontinued operations, before income tax	(594)
Loss from the operations of the discontinued operations, net of tax	(594)
Condensed cash flow related to the discontinued operations
Net cash provided by operating activities	516
Net cash used in investing activities	$ (1)

BUSINESS ACQUISITION (Details) - USD ($) $ in Thousands	12 Months Ended
BUSINESS ACQUISITION (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
BUSINESS ACQUISITION
Fair value change of contingent consideration	$ (65,594)	$ 30,460

BUSINESS ACQUISITION - Fair value of contingent consideration (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($) item
Business Acquisition [Line Items]
Fair value change in contingent consideration	$ (65,594)	$ 30,460
Acquisition in 2018
Business Acquisition [Line Items]
Number of acquisition completed \| item		3
Fair value change in contingent consideration		$ 49,503

BUSINESS ACQUISITION - Net Revenue (Details) - Shanxi $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)
Business Acquisition [Line Items]
Revenues	$ 20,135
Net gain (loss)	$ 752

BUSINESS ACQUISITION - Acquisitions of after-sales service centers (Details) - Acquisitions of after-sales service centers	12 Months Ended
	Dec. 31, 2018 item
Business Acquisition [Line Items]
Equity interest subscribed	70.00%
Number of equal annual installments after the successful offering	4
Shanghai Zhoushuo [Member]
Business Acquisition [Line Items]
Number of acquisition completed	3

BUSINESS ACQUISITION - Results of operations attributable (Details) - Acquisitions of after-sales service centers $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($)
Business Acquisition [Line Items]
Revenues	$ 341
Net gain (loss)	$ 582

BUSINESS ACQUISITION - Acquisition of after sales service center - (Details) - Chongqing Zhoushuo $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Ownership interest disposed	70.00%
Consideration	$ 0.1

BUSINESS ACQUISITION - Pro forma information of acquisitions in 2017 and 2018 - (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Jan. 31, 2019
BUSINESS ACQUISITION
Initial public offering price		$ 10.00
Gain of fair value change of contingent consideration	$ 65,594

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Advances for purchasing cars	$ 41,700	$ 25,017
Others	1,924	2,569
Total	$ 43,624	$ 27,586	$ 38,714

PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 880	$ 923
Less: Accumulated depreciation	(332)	(267)
Less: Provision for impairment	(503)	(503)
Property and equipment, net	45	153
Depreciation	41	168	$ 161
Impairment Loss	0	503	$ 0
Computer equipment and application software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	336	293
Furniture and vehicles
Property, Plant and Equipment [Line Items]
Property and equipment, gross	223	309
LeaseholdImprovementsMember
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 321	$ 321

GOODWILL (Details) $ in Thousands	12 Months Ended
GOODWILL (Details) $ in Thousands	Dec. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($)
GOODWILL
Number of Reporting Units \| item	1
Goodwill [Roll Forward]
Impairment expense		$ (74,091)
Net goodwill, Closing balance	$ 0

SHORT-TERM DEBT (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
SHORT-TERM DEBT AND LONG-TERM DEBT
Short-term debt	$ 15,257	$ 16,630
Bank of Beijing
SHORT-TERM DEBT AND LONG-TERM DEBT
Short-term debt	307	718
East West Bank
SHORT-TERM DEBT AND LONG-TERM DEBT
Short-term debt	8,130	9,182
Others
SHORT-TERM DEBT AND LONG-TERM DEBT
Short-term debt	$ 6,820	$ 6,730

SHORT-TERM DEBT - Additional information (Details) - USD ($)				12 Months Ended
	Nov. 11, 2020	Apr. 21, 2020	Apr. 11, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Aug. 31, 2021	Jun. 30, 2021	Apr. 30, 2019
Debt Instrument [Line Items]
Repayment of loans	$ 383,000	$ 3,372,000	$ 3,065,000
Interest Expense				$ 1,183,000	$ 4,057,000	$ 4,261,000
East West Bank
Debt Instrument [Line Items]
Long-term Line of Credit									$ 2,000,000
East West Bank \| Subsequent Event [Member]
Debt Instrument [Line Items]
Outstanding loans							$ 2,000,000	$ 6,130,000
Loan 1 \| Bank of Beijing
Debt Instrument [Line Items]
Loan balances									411
Loan 2 \| Bank of Beijing
Debt Instrument [Line Items]
Aggregate principal amount									$ 718,000
Annual interest rate									5.665%
Minimum
Debt Instrument [Line Items]
Annual interest rate				10.80%
Minimum \| East West Bank
Debt Instrument [Line Items]
Annual interest rate				2.80%
Maximum
Debt Instrument [Line Items]
Annual interest rate				14.00%
Maximum \| East West Bank
Debt Instrument [Line Items]
Annual interest rate				6.00%

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Other taxes payable	$ 4,423	$ 4,604
Other payables of used car trading business	3,308	5,357
Accrued professional fee	2,804	3,043
Others	4,148	4,298
Total	$ 14,683	$ 17,302	$ 10,644

INCOME TAXES (Details) $ in Thousands, $ in Millions			12 Months Ended				36 Months Ended
INCOME TAXES (Details) $ in Thousands, $ in Millions	Apr. 01, 2018 HKD ($)	Jan. 01, 2008	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017	Dec. 31, 2020 USD ($)
Income Taxes [Line Items]
Profits tax rate			25.00%	25.00%	25.00%		25.00%
Provision for income tax			$ (1,528)	$ (1,920)	$ 862
Withholding tax rate		10.00%
Other Subsidiaries and VIE
Income Taxes [Line Items]
Profits tax rate			25.00%
Deferred tax liabilities			$ 0				$ 0
Beijing Qilin Wings Technology Development Co Ltd [Member}
Income Taxes [Line Items]
Preferential tax rate						15.00%
Period for preferential tax rate						3 years
Hong Kong
Income Taxes [Line Items]
Provision for income tax							$ 0
Hong Kong \| Corporate profits of first HKD 2 million
Income Taxes [Line Items]
Corporate Profits	$ 2
Profits tax rate	8.25%
Hong Kong \| Corporate profits exceeds HKD 2 million
Income Taxes [Line Items]
Corporate Profits	$ 2
Profits tax rate	16.50%

INCOME TAXES - Components of income tax expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
INCOME TAXES
Current income tax expenses (benefit)	$ (1,528)	$ (1,920)	$ 862
Income tax expenses (benefit)	$ (1,528)	$ (1,920)	$ 862

Loss from continuing operations

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

INCOME TAXES - Principal components of the deferred tax assets and liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Deferred tax assets
Provision for doubtful accounts	$ 2,249	$ 2,165
Inventory	4,510	4,510
Prepaid expenses and other current assets	4,865	5,629
Property and equipment, net	124	124
Accrued payroll and welfare	119	107
Accrued liabilities	357	345
Advertising fee	6	5
Employee education fee	13	13
Net operating loss carry forwards	12,811	10,738
Total Deferred tax assets	25,054	23,636
Less: valuation allowance	$ (25,054)	$ (23,636)

INCOME TAXES - Operating loss carry forwards (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Operating loss carryforwards
Operating Loss Carryforwards	$ 54,120
Expire in 2021
Operating loss carryforwards
Operating Loss Carryforwards	986
Expire in 2022
Operating loss carryforwards
Operating Loss Carryforwards	25,093
Expire in 2023
Operating loss carryforwards
Operating Loss Carryforwards	10,078
Expire in 2024
Operating loss carryforwards
Operating Loss Carryforwards	12,660
Expire in 2025
Operating loss carryforwards
Operating Loss Carryforwards	$ 5,303

INCOME TAXES - Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended			36 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2020
INCOME TAXES
Loss before provision of income tax	$ (6,848)	$ (70,988)	$ (88,076)
PRC statutory income tax rate	25.00%	25.00%	25.00%	25.00%
Income tax at statutory tax rate	$ (1,712)	$ (17,747)	$ (22,019)
Reversal of taxable deemed interest income from inter-company interest-free loans for prior years	(1,593)	(2,259)	2,108
Impairment of goodwill		18,523
Fair value changes on contingent consideration		(16,399)
Non-taxable income		(234)
Non-deductible loss and other expenses not deductible for tax purposes	109	298	15,644
Effect of income tax rate differences in jurisdictions other than the PRC	1,128	2,313	3,234
Effect of tax holiday	147	305	(53)
Tax effect of tax rate change	(1,025)
Changes in valuation allowance	1,418	13,280	1,948
Income tax expenses (benefit)	$ (1,528)	$ (1,920)	$ 862

INCOME TAXES - Rollforward of valuation allowances of deferred tax assets (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Rollforward of valuation allowances of deferred tax assets
Balance as of beginning of year	$ 23,636
Additions of valuation allowance	546
Utilization of deferred tax assets	(153)
Change in tax rate	1,025
Balance as of the end of the year	$ 25,054

CONVERTIBLE LOANS (Details) - USD ($)					1 Months Ended		12 Months Ended	36 Months Ended
CONVERTIBLE LOANS (Details) - USD ($)	Jan. 30, 2020	Apr. 25, 2019	Jan. 31, 2019	Jan. 28, 2019	May 31, 2019	Apr. 30, 2019	Dec. 31, 2019	Dec. 31, 2020	Dec. 29, 2020
Debt Instrument [Line Items]
Proceeds from convertible loan							$ 21,000,000
Striking price of redeemable warrants									$ 3.00
Principal amount converted	$ 3,000,000
Accrued interest converted								$ 219,000
KAG
Debt Instrument [Line Items]
Principal amount			$ 3,000,000	$ 20,000,000
Loan agreed to fund		$ 1,000,000
Kunlun
Debt Instrument [Line Items]
Number of KAH's units/ KAH's ordinary shares issued	300,000
Kunlun \| KAG
Debt Instrument [Line Items]
Proceeds from convertible loan				$ 23,000,000	$ 20,000,000
Interest rate (as a percent)				4.35%
Conversion price				$ 10.00
Number of ordinary shares per unit				1
Striking price of redeemable warrants				$ 11.50
Principal amount converted				$ 20,000,000
Accrued interest converted				$ 219,000
Number of KAH's units/ KAH's ordinary shares issued				2,000,000
Beneficial conversion feature recognized				$ 2,128
58.com Holdings
Debt Instrument [Line Items]
Number of KAH's units/ KAH's ordinary shares issued						100,000
58.com Holdings \| KAG
Debt Instrument [Line Items]
Proceeds from convertible loan		$ 1,000,000		$ 20,000,000
Interest rate (as a percent)		4.35%
Conversion price		$ 10.00
Number of KAH's units/ KAH's ordinary shares issued		100,000
Loan agreed to fund		$ 1,000,000

PREFERRED SHARES AND WARRANT LIABILITIES (Details)	Dec. 31, 2020 $ / shares
Risk-free rate of return \| Series A Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	0.66
Risk-free rate of return \| Series B Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	0.12
Risk-free rate of return \| Series C Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	0.71
Estimated volatility rate \| Series A Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	46.07
Estimated volatility rate \| Series B Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	51.29
Estimated volatility rate \| Series C Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	45.63
Dividend yield \| Series A Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	0.00
Dividend yield \| Series B Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	0.00
Dividend yield \| Series C Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	0.00
Exercise price \| Series A Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	3.00
Exercise price \| Series B Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	3.00
Exercise price \| Series C Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	3.00
Fair value of warrant \| Series A Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	1.39
Fair value of warrant \| Series B Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	0.76
Fair value of warrant \| Series C Warrants
Class of Warrant or Right [Line Items]
Warrants and Rights Outstanding	1.43

PREFERRED SHARES AND WARRANT LIABILITIES - Additional information (Details) - USD ($)			1 Months Ended	12 Months Ended
	Dec. 29, 2020	Dec. 28, 2020	Jun. 30, 2021	Dec. 31, 2020	Dec. 31, 2019	Apr. 30, 2019
Class of Warrant or Right [Line Items]
Total amount of investment agreed			$ 3,000,000
Proceeds from investment in convertible preferred shares				$ 3,000,000
Preferred shares, authorized				6,000
Preferred shares, issued				3,000	0
Exercise price of warrants	$ 3.00
Warrants outstanding				11,957,008	11,957,008	10,582,008
Purchase Agreement
Class of Warrant or Right [Line Items]
Total amount of investment agreed	$ 6,000,000
Proceeds from investment in convertible preferred shares	3,000,000
Preferred shares, issued				3,000
Fair value allocated to preferred shares	$ 1,690,000			$ 1,311,000
Exercise price of warrants	$ 3.00
Kaixin Auto Holdings [Member] \| Purchase Agreement
Class of Warrant or Right [Line Items]
Preferred shares, authorized		1,000,000
Conversion price		$ 3.00
Series A Warrants
Class of Warrant or Right [Line Items]
Warrants issued/granted	$ 1,500,000
Series B Warrants
Class of Warrant or Right [Line Items]
Warrants issued/granted	1,333,333
Series C Warrants
Class of Warrant or Right [Line Items]
Warrants issued/granted	$ 2,000,000

STOCKHOLDERS' EQUITY (Details) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 29, 2020 $ / shares	Dec. 31, 2019 $ / shares shares	May 01, 2019 Vote shares	Apr. 30, 2019 $ / shares shares
Class of Stock [Line Items]
Ordinary shares, authorized \| shares		500,000,000		200,000,000
Ordinary shares, par value (in dollars per share) \| $ / shares		$ 0.0001		$ 0.0001
Preferred shares, authorized \| shares		6,000
Preferred shares, par value (in dollars per share) \| $ / shares		$ 0.0001		$ 0.0001
Preferred shares, issued \| shares		3,000		0
Total amount of investment agreed \| $	$ 3,000
Proceeds from investment in convertible preferred shares \| $		$ 3,000
Exercise price of warrants \| $ / shares			$ 3.00
Kaixin Auto Holdings [Member]
Class of Stock [Line Items]
Ordinary shares, authorized \| shares					500,000,000	200,000,000
Ordinary shares, par value (in dollars per share) \| $ / shares						$ 0.0001
Number of votes \| Vote					1

STOCKHOLDERS' EQUITY - Reverse recapitalisation (Details) - USD ($)		1 Months Ended	12 Months Ended
	Jan. 30, 2020	Apr. 30, 2019	Dec. 31, 2020	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2019
Class of Stock [Line Items]
Ordinary shares, issued			64,112,855			59,150,341
Ordinary shares, outstanding			64,112,855			59,150,341
Ordinary shares converted from the rights attached to units			2,116,401
Number of ordinary shares consisted by units		2,000,000
Warrants outstanding		10,582,008	11,957,008			11,957,008
Kaixin Auto Holdings [Member]
Class of Stock [Line Items]
Number of shares held in escrow		3,300,000
Underwriters call option
Class of Stock [Line Items]
Price per unit					$ 10.00
Number of units exercisable					900,000
Aggregate exercise price					$ 9,000,000
Expiration period				5 years
Underwriters call option \| Kaixin Auto Holdings [Member]
Class of Stock [Line Items]
Price per unit			$ 11.50
E&A Callet
Class of Stock [Line Items]
Warrants outstanding			375,000
E&A Callet \| Kaixin Auto Holdings [Member]
Class of Stock [Line Items]
Number of units issued		750,000
Price of units issued		$ 7,500
Number of ordinary shares consisted by units		750,000
Number of warrants consisted by units		375,000
Number of rights that converted into ordinary shares at the same time		75,000
Kunlun
Class of Stock [Line Items]
Number of ordinary shares consisted by units		2,000,000
Number of warrants consisted by units		1,000,000
Number of rights that converted into ordinary shares at the same time		200,000
Number of KAH's units/ KAH's ordinary shares issued	300,000
Warrants outstanding			1,000,000
58.com Holdings
Class of Stock [Line Items]
Number of KAH's units/ KAH's ordinary shares issued		100,000
Renren Inc.
Class of Stock [Line Items]
Earn Out Shares Issued Held in Escrow		19,500,000	19,500,000
Earn out shares issued held in escrow		19,500,000	19,500,000
Public warrants
Class of Stock [Line Items]
Warrants outstanding			11,957,008

STOCKHOLDERS' EQUITY - Warrants (Details) - $ / shares	12 Months Ended
STOCKHOLDERS' EQUITY - Warrants (Details) - $ / shares	Dec. 31, 2020	Dec. 29, 2020	Dec. 31, 2019	Apr. 30, 2019
Class of Stock [Line Items]
Exercise price (in dollars per share)		$ 3.00
Stock price trigger for redemption of public warrants (in dollars per share)	$ 0.01
Class Of Warrant Or Right, Redemption Of Warrants Or Rights, Stock Price Trigger	$ 0.01
Minimum threshold written notice period for redemption of warrants	30 days
Closing price of share for threshold trading days	20 days
Closing price of share for threshold consecutive trading days	3 days
Class Of Warrant Or Right, Redemption Of Warrants Or Rights, Last Sales Price of the Ordinary Shares	$ 18.00
Warrants outstanding	11,957,008		11,957,008	10,582,008
Public warrants
Class of Stock [Line Items]
Warrants outstanding	11,957,008
Issued With Units In The IPO [Member]
Class of Stock [Line Items]
Warrants outstanding	10,582,008		10,582,008
Issued To E&A Callet [Member]
Class of Stock [Line Items]
Warrants outstanding	375,000		375,000
Issued With Units To Kunlun [Member]
Class of Stock [Line Items]
Warrants outstanding	1,000,000		1,000,000

FAIR VALUE MEASUREMENTS - Fair value hierarchy for assets and liabilities measured at fair value (Details) - Recurring $ in Thousands	Dec. 31, 2020 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ (1,690)
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Warrant liability	$ (1,690)

FAIR VALUE MEASUREMENTS - Assumptions used in Monte Carlo simulation (Details)	Apr. 30, 2019 item
Estimated volatility rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value of the contingent consideration	40
Risk-free rate of return
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value of the contingent consideration	3.2
Simulation steps
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value of the contingent consideration	10,000

FAIR VALUE MEASUREMENTS - Reconciliation of the beginning and ending balances for contingent consideration measured at fair value on a recurring basis using significant unobservable (Details) - Contingent consideration $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of the year	$ 105,670
Fair value change	(65,594)
Exchange difference	2,466
Contingent liability assumed by Renren	(42,542)
Balance at end of the year	$ 0

SHARE-BASED COMPENSATION - Kaixin Auto Group 2018 Plan (Details) - shares			12 Months Ended
	Jul. 01, 2018	Mar. 15, 2018	Dec. 31, 2017	Dec. 31, 2019	May 31, 2018	Jan. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ordinary shares available for future grant				4,200,000
Kaixin Auto Group 2018 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Ordinary shares available for future grant					21,868,000	6,248,000
Options granted	5,695,286	5,695,286
Kaixin Auto Group 2018 Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of the options			P10Y

SHARE-BASED COMPENSATION - Kaixin Auto 2019 Plan (Details) $ / shares in Units, $ in Thousands					12 Months Ended
	Nov. 17, 2020 shares	May 03, 2019 USD ($) employee $ / shares shares	Jul. 01, 2018 shares	Mar. 15, 2018 shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2017	Apr. 30, 2019 shares	May 31, 2018 shares	Jan. 31, 2018 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Capital shares reserved for future issuance						4,200,000
Weighted average exercise price \| $ / shares					$ 0.02	$ 0.01
Total incremental cost \| $		$ 4,138
Total incremental cost related to vested awards \| $						$ 1,205
Total incremental cost related to nonvested awards \| $					$ 2,933
Kaixin Auto 2019 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Capital shares reserved for future issuance								4,715,700
Options granted		2,186,364
Number of employees for option \| employee		144
Weighted-average grant-date fair value of the share options granted \| $ / shares						$ 3.21
Kaixin Auto 2019 Plan \| Vests immediately on grant date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average exercise price \| $ / shares		$ 1.70
Vesting percentage		25.00%
Kaixin Auto 2019 Plan \| Vests monthly subsequent to replacement date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average exercise price \| $ / shares		$ 0.01
Vesting percentage		62.50%
Kaixin Auto 2019 Plan \| Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted		2,183,828			200,000
Kaixin Auto 2019 Plan \| Replacement restricted shares \| Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted		205,215
Kaixin Auto 2019 Plan \| Replacement restricted shares with graded vesting, one
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted		917,738
Vesting percentage		0.25%
Kaixin Auto 2019 Plan \| Remaining replacement restricted shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Kaixin Auto 2019 Plan \| Remaining replacement restricted shares \| Vests immediately on grant date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage					62.50%
Kaixin Auto 2019 Plan \| Remaining replacement restricted shares \| Vests monthly subsequent to replacement date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage		0.0278%
Kaixin Auto 2020 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	5,000,000
Kaixin Auto 2020 Plan [Member] \| Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted	4,646,778
Kaixin Auto Group 2018 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Capital shares reserved for future issuance									21,868,000	6,248,000
Options granted			5,695,286	5,695,286
Kaixin Auto Group 2018 Plan \| Vests monthly subsequent to replacement date
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Kaixin Auto Group 2018 Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of the options							P10Y

SHARE-BASED COMPENSATION - Kaixin Auto 2019 Plan - Assumptions used in determining the fair value of share options granted (Details) - Kaixin Auto 2019 Plan - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate, minimum	2.50%
Risk-free interest rate, maximum	3.00%
Volatility, minimum	45.00%
Volatility, maximum	46.00%
Expected term (in years)	10 years
Exercise price	$ 0.01
Dividend yield	0.00%
Fair value of the shares		$ 3.73
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of the shares	$ 2.12
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of the shares	$ 3.36

SHARE-BASED COMPENSATION - Kaixin Auto Group 2019 Plan - Summary of share options outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	May 03, 2019	Dec. 31, 2020	Dec. 31, 2019
Number of shares
Balance at the beginning of period		2,154,514
Forfeited		(165,264)
Exercised		(499,456)
Balance at the end of period		1,489,794	2,154,514
Expected to vest, at the end of period		1,489,794
Exercisable, at the end of period		425,460
Weighted average exercise price
Balance at the beginning of period		$ 0.01
Forfeited		0.01
Balance at the end of period		0.02	$ 0.01
Expected to vest, at the end of period		0.01
Exercisable, at the end of period		0.01
Weighted Average grant date fair value per share
Balance at the beginning of period		3.20
Exercised		3.23
Forfeited		3.35
Balance at the end of period		3.17	$ 3.20
Expected to vest, at the end of period		3.17
Exercisable		$ 1.87
Weighted average remaining contractual years
Outstanding at the end of the period (in years)		9 years 29 days	9 years 4 months 20 days
Vested and expected to vest at the end of the period (in years)		9 years 29 days
Exercisable at the end of the period (in years)		8 years 3 months 25 days
Weighted average intrinsic value
Outstanding at the end of the period (in dollars)		$ 7,524	$ 4,007
Vested and expected to vest at the end of the period (in dollars)		7,524
Exercisable at the end of the period (in dollars)		$ 1,583
Kaixin Auto 2019 Plan
Number of shares
Granted	2,186,364
Weighted Average grant date fair value per share
Granted			$ 3.21

SHARE-BASED COMPENSATION - Kaixin Auto 2019 Plan - fair value of share options granted (Details) - Kaixin Auto 2019 Plan - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Closing stock price	$ 3.73
Weighted-average grant-date fair value of the share options granted		$ 3.21
Aggregate grant date fair value of options		$ 7,794,799
Unrecognized share-based compensation expense	$ 1,961
Unrecognized share-based compensation expense, expected recognition period	1 year 2 months 26 days

SHARE-BASED COMPENSATION - Nonvested Restricted Shares - (Details) - Kaixin Auto 2019 Plan - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	May 03, 2019	Dec. 31, 2020	Dec. 31, 2019
Weighted average fair value per ordinary shares at the granted dates
Weighted average period for unrecognized compensation cost		1 year 2 months 26 days
Restricted Stock
Number of nonvested restricted shares
Balance at the beginning of period		1,446,111
Granted	2,183,828	200,000
Vested		(474,889)
Forfeited		(13,232)
Balance at the end of period		1,157,990	1,446,111
Weighted average fair value per ordinary shares at the granted dates
Balance at the beginning of period		$ 3.36
Granted		4.73
Forfeited		3.94
Balance at the end of period		$ 3.36	$ 3.36
Total unrecognized compensation cost		$ 199
Weighted average period for unrecognized compensation cost		7 months 24 days
Total fair value of shares vested		$ 1,870	$ 3,231

SHARE-BASED COMPENSATION - Renren Plan - Summary of share options outstanding with range of exercise prices (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($) $ / shares shares
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Options outstanding, Number outstanding \| shares	139,094,101
Options outstanding, Weighted average intrinsic value \| $	$ 5,754
Options exercisable, Number of exercisable \| shares	117,561,450
Options exercisable, Weighted average intrinsic value \| $	$ 4,863
Renren Plan \| $0.01 ~ $0.18
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, lower limit \| $ / shares	$ 0.01
Range of exercise prices, upper limit \| $ / shares	$ 0.18
Options outstanding, Number outstanding \| shares	139,094,101
Options outstanding, Weighted average remaining contractual life	5 years 4 months 24 days
Options outstanding, Weighted average exercise price \| $ / shares	$ 0.06
Options outstanding, Weighted average intrinsic value \| $	$ 5,754
Options exercisable, Number of exercisable \| shares	117,561,450
Options exercisable, Weighted average remaining contractual life	5 years 1 month 9 days
Options exercisable, Weighted average exercise price \| $ / shares	$ 0.06
Options exercisable, Weighted average intrinsic value \| $	$ 4,863

SHARE-BASED COMPENSATION - Renren Plan - Summary of share options outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Number of shares
Balance at the beginning of period	2,154,514
Exercised	(499,456)
Forfeited	(165,264)
Balance at the end of period	1,489,794	2,154,514
Exercisable, at the end of period	425,460
Expected to vest, at the end of period	1,489,794
Weighted average exercise price
Balance at the beginning of period	$ 0.01
Forfeited	0.01
Balance at the end of period	0.02	$ 0.01
Exercisable, at the end of period	0.01
Expected to vest, at the end of period	0.01
Weighted Average grant date fair value per share
Balance at the beginning of period	3.20
Forfeited	3.35
Balance at the end of period	$ 3.17	$ 3.20
Renren Plan
Number of shares
Balance at the beginning of period		139,094,101	141,481,616
Exercised			(2,268,420)
Forfeited			(119,095)
Balance at the end of period			139,094,101
Exercisable, at the end of period			117,561,450
Expected to vest, at the end of period			21,532,651
Weighted average exercise price
Balance at the beginning of period		$ 0.06	$ 0.48
Exercised			0.06
Forfeited			0.16
Balance at the end of period			0.06
Exercisable, at the end of period			0.06
Expected to vest, at the end of period			0.06
Weighted Average grant date fair value per share
Balance at the beginning of period		$ 0.64	0.64
Exercised			0.66
Forfeited			0.15
Balance at the end of period			$ 0.64
Share-based compensation cost of the earnout shares		$ 109	$ 2,390
Total unrecognized compensation cost			$ 14,285
Weighted average period for unrecognized compensation cost			3 years 14 days
Renren Plan \| Continuing operations
Weighted Average grant date fair value per share
Share-based compensation cost of the earnout shares			$ 18,640

SHARE-BASED COMPENSATION - Nonvested Restricted Shares of Renren plan (Details) - Renren Plan - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Weighted average fair value per ordinary shares at the granted dates
Share-based compensation cost of the earnout shares	$ 109	$ 2,390
Weighted average period for unrecognized compensation cost		3 years 14 days
Restricted Stock
Number of nonvested restricted shares
Balance at the beginning of period	73,772,379	10,802,683
Granted		88,935,342
Vested		(8,404,575)
Forfeited		(17,561,071)
Balance at the end of period		73,772,379
Weighted average fair value per ordinary shares at the granted dates
Balance at the beginning of period	$ 0.21	$ 0.95
Granted		0.14
Vested		0.47
Forfeited		0.18
Balance at the end of period		$ 0.21
Share-based compensation cost of the earnout shares		$ 3,917
Total unrecognized compensation cost		$ 15,345
Weighted average period for unrecognized compensation cost		5 years 2 months 19 days

SHARE-BASED COMPENSATION - Share-based compensation expense - (Details) - Kaixin Auto 2019 Plan - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 3,362	$ 3,813	$ 11,436
Selling and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	648	658
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	162	206
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 2,552	$ 2,949	$ 11,436

RELATED PARTY BALANCES AND TRANSACTIONS (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Related Party Transaction [Line Items]
Amounts due to related parties	$ 2,960	$ 4,214
Renren And Its Subsidiaries [Member]
Related Party Transaction [Line Items]
Amounts due to related parties	2,255
Ningbo Jiusheng Automobile Sales Co., Ltd.
Related Party Transaction [Line Items]
Amounts due to related parties	$ 705
SVF
Related Party Transaction [Line Items]
Amounts due to related parties		$ 4,214

RELATED PARTY BALANCES AND TRANSACTIONS - Related party transactions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Related Party Transaction [Line Items]
Proceeds of advances from related parties	$ 2,140	$ 115,035	$ 159,938
Renren And Its Subsidiaries [Member]
Related Party Transaction [Line Items]
Proceeds of advances from related parties	2,140	113,400
Loan guarantee provided by related parties		76,007
SVF
Related Party Transaction [Line Items]
Proceeds of advances from related parties		1,600
Promissory note to related party		2,614
Proceeds from Ordinary shares issued	4,213
Ningbo Jiusheng Automobile Sales Co., Ltd.
Related Party Transaction [Line Items]
Proceeds of advances from related parties	$ 666
Renren Inc.
Related Party Transaction [Line Items]
Repayment Of Loans To Renren Inc		$ 115,501

RELATED PARTY BALANCES AND TRANSACTIONS - Additional information (Details) - USD ($) $ in Thousands	Jun. 04, 2019	Apr. 30, 2019	Aug. 31, 2021	Jun. 30, 2021	Jun. 10, 2020	Dec. 31, 2019
Related Party Transaction [Line Items]
Payments	$ 1,600
Number of ordinary shares to be issued					4,213,629
Capital shares reserved for future issuance						4,200,000
Outstanding loans and receivables		$ 76,007
Waiver agreement
Related Party Transaction [Line Items]
Contribution with in two weeks after the closing of business combination		1,600
Liabilities to be paid by cash		4,000
Liabilities to be paid by non-cash		2,600
Restructuring debt prior to reverse recapitalization		$ 2,600
East West Bank \| Subsequent Event [Member]
Related Party Transaction [Line Items]
Short term debt			$ 2,000	$ 6,130

LOSS PER SHARE (Details) - USD ($)
$ / shares in Units, $ in Thousands

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

Net loss:

$ (5,320)

$ (69,068)

$ (88,938)

Loss from discontinued operations

(594)

Net loss attributable to the noncontrolling interest

(5,320)

(69,068)

(89,532)

(17)

(22,952)

(317)

Net loss attributable to Kaixin Auto Holdings' shareholders

$ (5,303)

$ (46,116)

$ (89,215)

Weighted average number of ordinary shares outstanding used in computing net loss per ordinary share - basic and diluted (2018 shares retroactively adjusted for the reverse recapitalization on April 30, 2019)

41,715,834

33,146,593

24,984,300

Net (loss) income per ordinary share attributable to Kaixin Auto Holdings' shareholders - basic:

Net loss per share attributable to KAH's shareholders - basic and diluted:

^[1]

$ (0.13)

$ (1.39)

$ (3.56)