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FILED: NEW YORK COUNTY CLERK 01/19/2022 10:36 PM INDEX NO. 652617/2021
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 01/19/2022
EXHIBIT B
Firefox https://sec.report/Document/0001104659-21-063826/raas-20201231x20f.htm
INDEX NO. 652617/2021
FILED: NEW YORK COUNTY CLERK 01/19/2022 10:36 PM
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 01/19/2022
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
(Mark One)
☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report:
For the transition period from to
Commission file number: 001-40004
Cloopen Group Holding Limited
(Exact Name of Registrant as Specified in Its Charter)
N/A
(Translation of Registrant’s Name into English)
Cayman Islands
(Jurisdiction of Incorporation or Organization)
16/F, Tower A, Fairmont Tower
33 Guangshun North Main Street
Chaoyang District, Beijing
People’s Republic of China
(Address of Principal Executive Offices)
Yipeng Li, Chief Financial Officer
Telephone: (86) 10-6477-5672
E-mail: liyipeng@yuntongxun.com
16/F, Tower A, Fairmont Tower
33 Guangshun North Main Street
Chaoyang District, Beijing
People’s Republic of China
(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Name of each exchange
Title of Each Class Trading Symbol on which registered
American depositary shares, each representing two Class A RAAS New York Stock Exchange
ordinary shares, par value US$0.0001 per share
Class A ordinary shares, par value US$0.0001 per share* New York Stock Exchange
* Not for trading, but only in connection with the listing on the New York Stock Exchange of American depositary shares
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
(Title of Class)
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
As of the date of this annual report, there were 303,090,509 Class A ordinary shares and 25,649,839 Class B ordinary shares outstanding.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐ No ☒
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Yes ☐ No ☒
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INDEX NO. 652617/2021
FILED: NEW YORK COUNTY CLERK 01/19/2022 10:36 PM
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 01/19/2022
Table of Contents
Long-term borrowings
On September 25, 2019, the Company borrowed two unsecured loans in total of US$15 million (equivalent to
RMB106.1 million) with detachable warrants from two PRC onshore investment funds. The warrants entitled the PRC
onshore investment funds to purchase 6,112,570 Series E Redeemable Convertible Preferred Shares (see Note 12).
At initial recognition, the Company recorded the warrants as liabilities at their estimated fair value in the
amount of US$2.1 million (equivalent to RMB14.8 million) and the remaining proceeds of US$12.9 million
(equivalent to RMB91.2 million) were allocated to the non-current interest free loan. The difference between
US$12.9 million (equivalent to RMB91.2 million) allocated to the non-current interest free loan and the US$15 million
(equivalent to RMB106.1 million), the repayment amount, is accreted as interest expense over the 16.5 months term of
the loans using an effective interest rate of 11.59%. The Company repaid such unsecured loans on December 30, 2020.
11. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
December 31,
2019 2020
RMB RMB
Accrued payroll and social insurance 45,688,185 51,919,137
Taxes payable 17,011,290 29,028,359
Accrued issuance costs for Series F financing — 5,548,788
Deposits 2,235,945 1,144,769
Staff reimbursements 1,841,772 2,437,562
Other payables 1,991,306 3,888,841
Accrued expenses and other current liabilities 68,768,498 93,967,456
12. WARRANT LIABILITIES
The Company classified the warrants to purchase redeemable convertible preferred shares as warrant
liabilities and adjusted the carrying value of the warrant liabilities to fair value at the end of each reporting period
utilizing the binomial option pricing model, which involves significant assumptions including the risk-free interest
rate, the expected volatility, expected dividend yield and expected term. The risk-free interest rate was based on the
U.S. Treasury rate for the expected remaining life of preferred shares warrants. The expected volatility was estimated
based on the historical volatility of comparable peer public companies with a time horizon close to the expected term
of the Company’s warrant liabilities. Expected dividend yield is zero as the Company does not anticipate any dividend
payments in the foreseeable future. Expected term is the remaining life of the warrant liabilities.
Series C Warrant
In February 2016, Ronglian Yitong entered into a two-year credit facility with SPD to borrow up to RMB40
million. On September 23, 2016, in connection with the credit facility arrangement, the Company issued a warrant to
China Equities HK Limited (“China Equities”), a related party of SPD, to purchase an aggregate of 661,376 shares of
the Company’s Series C Redeemable Convertible Preferred Shares at an exercise price of US$0.945 per share. The
warrant is exercisable upon issuance and expires on September 23, 2023. The warrant has not been exercised as of
December 31, 2020. At initial recognition, the Group recorded the warrant liabilities on the consolidated balance sheet
at its estimated fair value and subsequently, at each reporting date, recorded changes in estimated fair value included in
the change in fair value of warrant liabilities on the consolidated statement of comprehensive loss. The fair value of the
warrant to purchase 661,376 Series C Redeemable Convertible Preferred Shares is US$547,000 (equivalent to
RMB3,638,995) at the issuance date, US$814,000 (equivalent to RMB5,678,627) as of December 31, 2019 and
US$2,984,000 (equivalent to RMB19,470,302) as of December 31, 2020. On March 22, 2021, China Equities
exercised the Series C warrants. For details, please refer to Note 21(g).
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INDEX NO. 652617/2021
FILED: NEW YORK COUNTY CLERK 01/19/2022 10:36 PM
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 01/19/2022
Table of Contents
The fair value of the warrant liability to China Equities HK Limited for purchasing Series C Redeemable
Convertible Preferred Shares as of December 31, 2019 and 2020 are estimated with the following assumptions used:
December 31,
2019 2020
Risk‑free rate of return 2.60% 1.15%
Volatility 45% 45%
Expected dividend yield 0% 0%
Fair value of underlying Series C Redeemable Convertible Preferred Shares US$1.97 US$5.42
Expected term 3.7 years 2.7 years
Series E Warrant
During the Company’s Series E financing in September 2019, two PRC onshore investment funds would also
like to invest in the Series E Redeemable Convertible Preferred Shares. However, these two PRC onshore investment
funds were required to obtain ODI approvals from relevant PRC government authorities and complete foreign
currency exchange procedures before conducting an outbound direct investment pursuant to the PRC laws. To
facilitate these two PRC onshore investment funds to invest in the Series E Redeemable Convertible Preferred Shares
with the same preference and rights as other three offshore investment funds, a series of agreements were entered into
by the Company and Ronglian Yitong. On September 25, 2019, Ronglian Yitong entered into loan agreements with the
two PRC onshore investment funds to borrow two loans in the amount of US$9.0 million and US$6.0 million,
respectively (equivalent to RMB106,092,000 in total). The Company also entered into warrant purchase agreements
with the two PRC onshore investment funds, which entitle the PRC onshore investment funds to purchase 6,112,570
Series E Redeemable Convertible Preferred Shares at Series E’s issuance price of US$2.45 per share. Such preferred
shares shall be issuable upon the exercise of the warrants once the two investors obtain the government approval and
complete the exchange procedures for ODI. The warrants are exercisable through February 28, 2021. If the
government approval is not obtained before the due date of the loans, the warrants are lapsed. At initial recognition,
the Group allocated the proceeds from the issuance of the debt instrument to the warrants based on the warrant
liabilities’ fair value. The warrant liabilities are subject to remeasurement at each reporting period.
On March 25, 2020 and July 15, 2020, the Company issued 3,706,745 and 3,501,087 ordinary shares, in
connection with the purchase of non-controlling interests of the Group’s subsidiaries. Pursuant to the anti-dilution
provision in the Series E financing arrangement, the two PRC onshore investment funds were entitled to additional
123,677 and 190,597 warrants to purchase Series E Redeemable Convertible Preferred Shares, respectively.
On November 3, 2020, the warrants in connection with Series E financing were exercised and the Company
issued 6,426,844 Series E Redeemable Convertible Preferred Shares to the offshore affiliates of the two PRC onshore
investment funds (the “Offshore Affiliates”) in exchange for two promissory notes in the aggregate amount of US$15
million. Therefore, the preferred shares issued in connection with the exercise of Series E warrants was recorded in
mezzanine equity in an amount of RMB122,642,269.
The fair value of the warrant to purchase 6,112,570 Series E Redeemable Convertible Preferred Shares is
US$2,100,000 (equivalent to RMB14,852,880) at the issuance date and US$2,000,000 (equivalent to RMB13,952,400)
as of December 31, 2019.The fair value of additional warrants issued to purchase the additional 123,677 and 190,597
Series E Redeemable Convertible Preferred Shares is US$73,268 (equivalent to RMB515,611) at issuance date and
total fair value of the warrant to purchase 6,426,844 Series E Redeemable Convertible Preferred Shares at the exercise
date of Series E warrants is US$2,471,709 (equivalent to RMB 16,549,825).
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INDEX NO. 652617/2021
FILED: NEW YORK COUNTY CLERK 01/19/2022 10:36 PM
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 01/19/2022
Table of Contents
The fair value of the warrant liability issued to two PRC onshore investment funds for purchasing Series E
Redeemable Convertible Preferred Shares as of December 31, 2019 are estimated with the following assumptions
used:
December 31,
2019
Risk‑free rate of return 2.58%
Volatility 55%
Expected dividend yield 0%
Fair value of underlying Series E Redeemable Convertible Preferred Shares US$2.49
Expected term 1.2 years
Series F Warrant
On November 13, 2020, the Company agreed to issue a warrant to Novo Investment HK Limited (“Novo
Investment”) with the exercise price of US$34,000,000. Novo Investment may, within six months commencing from
the issuance date, subscribe for an aggregate of 11,799,685 Series F Redeemable Convertible Preferred Shares of the
Company, par value of US$0.0001 per share, at the exercise price of US$2.8814 per share, subject to adjustment. On
January 7, 2021, the Series F warrant was fully exercised with the exercise price of US$34,000,000 and the Company
issued 11,799,685 Series F Redeemable Convertible Preferred Shares to Novo Investment (Note 21(c)). At initial
recognition, the Group recorded the warrant liabilities on the consolidated balance sheet at its estimated fair value and
subsequently, at each reporting date, recorded changes in estimated fair value included in the change in fair value of
warrant liabilities on the consolidated statement of comprehensive loss.
The fair value of the warrant to purchase 11,799,685 Series F Redeemable Convertible Preferred Shares is
US$4,800,000 (equivalent to RMB31,816,800) at the issuance date and US$31,000,000 (RMB202,271,900) as of
December 31, 2020.
The fair value of the warrant liability issued to Novo Investment for purchasing Series F Redeemable
Convertible Preferred Shares as of December 31, 2020 are estimated with the following assumptions used:
December 31,
2020
Risk‑free rate of return 1.07%
Volatility 30%
Expected dividend yield 0%
Fair value of underlying Series F Redeemable Convertible Preferred Shares US$5.50
Expected term 0.36 years
13. REDEEMABLE CONVERTIBLE PREFERRED SHARES
On July 30, 2014, the Company issued 18,642,038 Series A Redeemable Convertible Preferred Shares
(“Series A Preferred Shares”) at US$0.1475 per share with total consideration of US$2,750,000 (equivalent to
RMB16,902,050).
On February 6, 2015, the Company issued 19,617,225 Series B Redeemable Convertible Preferred Shares
(“Series B Preferred Shares”) at US$0.52 per share with total consideration of US$10,200,000 (equivalent to
RMB62,691,240).
On June 10, 2016, the Company issued 18,608,315 Series C Redeemable Convertible Preferred Shares
(“Series C Preferred Shares”) to investors at US$1.34 per share with total consideration of US$25,000,000 (equivalent
to RMB165,466,000).
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