Since December last year, Missfresh has received multiple warning letters from the NASDAQ Listing Qualifications Department due to its stock price falling below the minimum standards and failure to timely submit financial reports. On August 4th, Missfresh announced that it has submitted its annual performance report for the year 2022 to NASDAQ.
According to the annual performance report of 2022, after losing its main business, Missfresh’s total revenue in 2022 plummeted from $967 million in 2021 to $384 million, a year-on-year decrease of 60.3%. The highest proportion of product sales decreased from $944 million in 2021 to $384 million in 2022, a year-on-year decrease of 61.0%.
However, the survival of Missfresh did not reverse the situation of negative cash flow. The net cash flow used in operating activities in 2022 was $99 million USD, with a net loss of RMB 220.9 million USD and total current liabilities of $243.8 million USD.
As of December 31, 2022, Missfresh’s accounts payable amounted to $189.2 million. Missfresh stated in its financial report that it is currently planning a debt restructuring, but there is no guarantee on whether or when the potential debt restructuring can be completed.
After shutting down the Jisuda service, dismissing the delivery team, and terminating the pre-warehouse leasing in July last year, Missfresh’s fresh e-commerce business that it relied on to start has basically ceased. In March 2023, the intelligent fresh market business and retail cloud business was also shut down.
According to the financial report, it is mentioned that the self-owned brand product retail business launched in January 2023 and the provision of digital marketing solution services will be new growth points in the future. It also indicates that rehiring delivery personnel will be considered to promote new businesses – Missfresh has already disbanded all delivery teams after closing down its distributed mini-warehouse (DMW) operations.
Previously, Missfresh announced that it had signed a share purchase agreement with Mejoy Infinite Limited and its shareholders to acquire all ordinary shares of Mejoy Infinite Limited held by its shareholders for a total cash purchase price of 12 million US dollars, subject to certain delivery conditions being met.
According to publicly available information, Mejoy Infinite Limited is a digital marketing solution provider registered and established in Hong Kong. It was founded in 2018 and focuses on serving tools, games, and cross-border e-commerce advertisers. They provide promotion plans, media buying, material and creative production, data services, and other advertising marketing services for domestic advertisers targeting overseas markets.
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“We are pleased to announce this acquisition, with Mejoy becoming a part of our company,” Xu stated in the announcement. “We believe that this acquisition will fully leverage our extensive market expertise in online marketing and the e-commerce industry.”
After launching the new business, Missfresh will face a new round of challenges such as recruiting personnel and integrating the supply chain. The company also indicated in its financial report that there may be additional capital expenditures to support the development of proprietary brand products and sustain continuous losses. As for when to restart the distributed mini-warehouse (DMW) business, Missfresh has not yet reached a conclusion. According to the financial report, leases from the previous business have not been terminated and some spaces have been transformed into storage space required for the new business, with an area exceeding 300 square meters.
While actively exploring self-sustaining methods, Missfresh is also actively seeking investment opportunities. In July of last year, Missfresh announced its intention to reach an equity investment agreement with Shanxi Donghui Group and subsequently sold its convenience store vending machine business in August. However, according to financial reports, as of the reporting date, the transaction has not been completed and Missfresh has not received any funds from Shanxi Donghui. The $2.5 million from the sale of the convenience store business has also not been fully received.
In addition to the above measures, Missfresh recently announced on its investor relations page that it has signed two financing purchase agreements with two investors. According to the financing stock purchase agreement, the aforementioned investors have agreed to subscribe for a total of 5,400,000,000 shares of Missfresh Class B common stock for a total purchase price of $27 million, subject to certain delivery conditions. After the completion of the transaction, the newly acquired Missfresh Class B common stock by the new investors will account for 88.1% of its total issued and outstanding shares.
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The announcement stated that both investors have agreed to entrust all voting rights of the shares issued under the stock purchase agreement to Mr. Xu Zheng, Chairman and CEO of Missfresh. After this financing round, Mr. Xu Zheng still holds control over Missfresh. As of June 30, 2023, Mr. Xu Zheng still holds 72.8% of the total voting rights of Missfresh.
But it is worth mentioning that, according to the financial report released this time, as of the date of this annual report, the above-mentioned transactions have not been completed yet. Missfresh stated that it cannot guarantee that the company will receive any additional funds in a timely or complete manner from the counterparties of these transactions.
Besides equity financing, Missfresh has also obtained a total revolving credit line of 218.9 million US dollars from multiple Chinese commercial banks. As of December 31, 2022, Missfresh’s cash and cash equivalents and restricted cash amounted to 6.81 million US dollars.
Affected by new financing and adjustments in business, as of the time of writing, Missfresh’s stock price on the US market is reported at $2.07 per ADS, representing a 301.94% increase from the previous day’s closing price.
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