In October 2020, the Company entered into a definitive agreement with TTP, an auction platform for used cars in China. Pursuant to the agreement, the Company committed to make an investment in TTP through subscription of preferred shares of TTP for an aggregate purchase price of US$168,000, including (i) the first closing transaction of US$143,000 in exchange for

31.48

% preferre

d shares of TTP on an

as-converted

basis; and (ii) the second closing transaction of US$

25,000

in exchange for an additional

4.17

% preferred shares of TTP. In addition, the Company also obtained the right to purchase up to US$

200,000

in total principal amount of convertible bonds (“New Warrant”) to be issued by TTP upon the Company’s request.

The first closing transaction was completed on December 31, 2020, which would give the Company 51%

voting rights at the shareholders’ level and right to appoint majority members on TTP’s Board of Directors.

Therefore, the Company has obtained control over TTP. After the first closing, the Company holds investments in TTP both in forms of convertible bonds (“CB”) and preferred shares, representing in aggregate 48.87% of TTP’s equity interest on

as-converted

basis. In April 2021, the Company completed the second closing of its investment in TTP with a cash consideration of US$25,000. In June 2021, the CB and the related accrued interest held the Company was converted into preferred shares of TTP. After the second closing and the conversion of CB, the Company held 51.00% of TTP’s equity interest.

The acquisition was accounted for as a business combination. The financial position and results of operation of TTP and its subsidiaries have been included in the Company’s consolidated financial statements on December 31, 2020. Since the acquisition was effective on the last day of the fiscal year, the impact was immaterial to the results of operations for the year ended December 31, 2020. Total purchase price for the acquisition comprised of:


	Amount
	RMB
Total Cash consideration		935,932
Less: consideration for New Warrant		(74,383	)

Purchase consideration		861,549

The Company made estimates and judgments in determining the fair value of the assets acquired and liabilities assumed with the assistance from an independent valuation firm. The purchase price allocation as the date of the acquisition is as follows:


	Amount			Amortization Period
	RMB
Intangible assets
- Technologies		202,100			5 years
- Trademarks		106,900			10 years
- Customer relationship		41,300			5 years
- Database		73,500			5 years
Goodwill		2,567,113
Net liabilities acquired, excluding intangible assets and the related deferred tax liabilities		(861,918	)
Deferred tax liabilities		(63,570	)
Noncontrolling interests		(147,639	)
Convertible redeemable noncontrolling interests (Note)		(1,056,237	)

		861,549

Note: TTP had previously issued preferred shares in several series to certain shareholders, which could be redeemed by such shareholders upon the occurrence of certain events. The outcome of these events is not solely within the control of TTP and, therefore, these preferred shares have been accounted for as convertible redeemable noncontrolling interests.

The excess of purchase price over net tangible assets and identifiable intangible assets acquired was recorded as goodwill. Goodwill primarily represents the expected synergies from combining the TTP’s resources and experiences in the used car auction industry with the Company’s current business. The goodwill is not expected to be deductible for tax purposes.

Pro forma results of operations for the TTP acquisition has not been presented because it was not material to the consolidated financial statements.