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ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2019

ORGANIZATION AND PRINCIPAL ACTIVITIES

Schedule of consolidated financial information of the Group's VIE included in consolidated financial statements after elimination of intercompany balances and transactions within the Group


	December 31,
	2018		2019

Total assets	$	6,492	$	9,734
Total liabilities	$	4,678	$	1,147


	Year ended December 31,
	2017		2018		2019

Revenues	$	—	$	3	$	1,054
Net loss	$	(7,507)	$	(7,490)	$	(8,496)


	Year ended December 31,
	2017		2018		2019

Net cash provided by / (used in) operating activities	$	3,073	$	(7,519)	$	1,193
Net cash (used in) / provided by investing activities	$	(3,069)	$	473	$	(188)
Net cash provided by financing activities	$	—	$	—	$	—

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 37,736	$ 38,808
Restricted cash	2,709	994
Accounts receivable, net of allowance for doubtful accounts	1,356	1,463
Amounts due from related parties	4,600
Inventories	7,357	8,481
Prepaid expenses and other current assets	3,619	5,811
Total current assets	57,377	55,557
Property and equipment, net	3,502	3,652
Intangible assets, net	8,516	9,890
Goodwill	27,922	28,169
Operating lease right-of-use assets	12,233
Long-term rental deposits	778	1,131
Long-term investments	2,873	5,188
TOTAL ASSETS	113,201	103,587
Current Liabilities
Accounts payable (including accounts payable of the consolidated VIEs without recourse to LightInTheBox Holding Co., Ltd. of $5 and $135 as of December 31, 2018 and 2019, respectively)	17,643	12,941
Amounts due to related parties	186	4,953
Convertible promissory notes		51,922
Advance from customers	21,731	17,732
Operating lease liabilities	3,470
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIEs without recourse to LightInTheBox Holding Co., Ltd. of $4,673 and $13,887 as of December 31, 2018 and 2019, respectively)	28,642	22,688
Total current liabilities	71,672	110,236
Operating lease liabilities	8,801
Long-term payable	847	1,156
TOTAL LIABILITIES	81,320	111,392
(DEFICIT) / EQUITY
Ordinary shares ($0.000067 par value; 750,000,000 shares authorized; 150,011,929 and 240,895,045 shares issued as of December 31, 2018 and 2019, respectively; 134,456,369 and 224,759,809 shares outstanding as of December 31, 2018 and 2019, respectively)	14	11
Additional paid-in capital	262,888	239,269
Forward contracts	15,769
Treasury shares, at cost (13,525,810 and 14,011,790 shares as of December 31, 2018 and 2019, respectively)	(27,512)	(27,261)
Accumulated other comprehensive loss	(1,444)	(932)
Accumulated deficit	(217,888)	(218,887)
Non-controlling interests	54	(5)
TOTAL (DEFICIT) / EQUITY	31,881	(7,805)
TOTAL LIABILITIES AND (DEFICIT) / EQUITY	$ 113,201	$ 103,587

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME
Net (loss) / income	$ 1,058	$ (59,602)	$ (9,548)
Other comprehensive income / (loss):
Foreign currency translation adjustment, net of nil income taxes	(512)	(733)	380
Total comprehensive (loss) / income	546	(60,335)	(9,168)
Less: comprehensive (loss) / income attributable to non-controlling interests	59	(1)
Comprehensive (loss) / income attributable to LightInTheBox Holding Co., Ltd.	$ 487	$ (60,334)	$ (9,168)

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=118930883&loc=SL7669619-108580

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (a)(1)
-URI http://asc.fasb.org/extlink&oid=109239629&loc=SL4573702-111684

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=118930883&loc=SL7669625-108580

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (c)(1)
-URI http://asc.fasb.org/extlink&oid=109239629&loc=SL4573702-111684

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8736-108599

Reference 6: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 55
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-URI http://asc.fasb.org/extlink&oid=116874947&loc=SL4591551-111686

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=118932676&loc=d3e3000-108585

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=108774443&loc=SL4569616-111683

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
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-URI http://asc.fasb.org/extlink&oid=116874947&loc=SL4591552-111686

+ Details

ORGANIZATION AND PRINCIPAL ACTIVITIES - Details of History of the Group (Details) - shareholder	1 Months Ended
	Nov. 30, 2014	Mar. 31, 2008	Jun. 30, 2007
Details of History of the Group
Number of founding shareholders		5
Ezbuy
Details of History of the Group
Number of founding shareholders	5
Light In The Box
Details of History of the Group
Number of founding shareholders			5

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued payroll and staff welfare			$ 10,986		$ 12,716
Individual income tax withheld			473		487
VAT and other taxes payable			2,484		880
Accrued professional fees			1,209		1,971
Accrued advertising fees			9,525		2,950
Credit card processing charges			323		441
Accrued sales return	$ 1,336	$ 1,236	381		1,336
Current portion of finance lease liabilities			308		299
Others			2,953		1,608
Total			$ 28,642	$ 22,582	$ 22,688
Movements in accrued sales return
Balance at the beginning of the period	1,336	1,236
Allowance for sales return made in the year	3,546	9,257
Utilization of accrued sales return	(4,501)	(9,157)
Balance at the end of the period	$ 381	$ 1,336

CONSOLIDATED STATEMENTS OF CHANGES IN (DEFICIT) / EQUITY (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED STATEMENTS OF CHANGES IN (DEFICIT) / EQUITY
Foreign currency translation adjustment, net of income taxes	$ 0	$ 0	$ 0

GOODWILL - Changes in the carrying amount of goodwill (Details) - USD ($) $ in Thousands		12 Months Ended
	Dec. 10, 2018	Dec. 31, 2019	Dec. 31, 2018
Goodwill [Roll Forward]
Goodwill, beginning balance		$ 28,169	$ 690
Goodwill, Beginning Balance		28,169	690
Goodwill acquired during the year			27,479
Effect of exchange rate changes on goodwill		(247)
Goodwill, ending balance		27,922	28,169
Goodwill, Ending Balance		27,922	28,169
Ador Inc.
Goodwill [Roll Forward]
Goodwill, beginning balance		690	690
Goodwill, Beginning Balance		690	690
Goodwill, ending balance		690	690
Goodwill, Ending Balance		690	690
Ezbuy
Goodwill [Roll Forward]
Goodwill, beginning balance		27,479
Goodwill, Beginning Balance		27,479
Goodwill acquired during the year	$ 27,479		27,479
Effect of exchange rate changes on goodwill		(247)
Goodwill, ending balance		27,232	27,479
Goodwill, Ending Balance	$ 27,479	$ 27,232	$ 27,479

SHARE OPTIONS - Details of Share Options Granted (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Additional disclosures
Share-based compensation expense	$ 2,060	$ 405	$ 1,865
2008 Plan \| Share options
Options Number
Outstanding (in shares)	204,700	619,650
Exercisable (in shares)	200,700
Expected to vest (in shares)	4,000
Weighted-average exercise price per option
Outstanding (in dollars per share)	$ 2.39	$ 1.61
Exercisable (in dollars per share)	2.42
Expected to vest (in dollars per share)	$ 0.89
Weighted-average remaining contractual life (years)
Outstanding	4 years 9 months 29 days
Exercisable	4 years 9 months 7 days
Expected to vest	7 years 9 months 29 days
Additional disclosures
Total intrinsic value of options exercised	$ 539	$ 270	$ 324
Weighted average grant date fair value of options (in dollars per share)	$ 0.00	$ 0.50	$ 0.70
Share-based compensation expense	$ 66	$ 21	$ 97
Unrecognized compensation cost	$ 9
Weighted-average period of recognition of unrecognized compensation cost	1 year 9 months 29 days

(LOSS) / INCOME PER SHARE (Tables)

12 Months Ended

Dec. 31, 2019

(LOSS) / INCOME PER SHARE

Schedule of computation of basic and diluted net (loss)/income per ordinary share


	Year ended December 31,
	2017		2018		2019

Numerator:
Net (loss) / income attributable to ordinary shareholders of LightInTheBox Holding Co., Ltd.	$	(9,548)	$	(59,602)	$	999
Net : Change in fair value of convertible promissory notes		—		—		14,591
Denominator:
Weighted average number of shares used in calculating net (loss) / income per ordinary share —basic	$	137,641,562	$	134,495,549	$	137,588,401
Weighted average number of shares used in calculating net loss per ordinary share —diluted	$	137,641,562	$	134,495,549	$	223,517,833
Net (loss) / income per ordinary share- basic	$	(0.07)	$	(0.44)	$	0.01
Net loss per ordinary share- diluted	$	(0.07)	$	(0.44)	$	(0.06)

PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2019

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

5. PROPERTY AND EQUIPMENT, NET

The components of property and equipment are as follows:


	As of December 31,
	2018		2019

Leasehold improvements	$	3,688		3,684
Furniture, fixtures and office equipment		2,852		2,739
Software and IT equipment		2,736		2,438
Vehicles		1,760		1,698
Property and equipment, gross		11,036		10,559
Less: Accumulated depreciation		(7,384)		(7,057)
Property and equipment, net	$	3,652		3,502

Depreciation expenses incurred for the years ended December 31, 2017, 2018 and 2019 are $764, $572 and $1,254, respectively.

PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Property and equipment, net
Property and equipment, gross	$ 10,559	$ 11,036
Less: Accumulated depreciation	(7,057)	(7,384)
Property and equipment, net	3,502	3,652
Depreciation expense	1,254	572	$ 764
Leasehold improvements
Property and equipment, net
Property and equipment, gross	3,684	3,688
Furniture, fixtures and office equipment
Property and equipment, net
Property and equipment, gross	2,739	2,852
Software and IT equipment
Property and equipment, net
Property and equipment, gross	2,438	2,736
Vehicles
Property and equipment, net
Property and equipment, gross	$ 1,698	$ 1,760

(LOSS) / INCOME PER SHARE - Shares Excluded From the Calculation of Diluted Loss Per Share (Details) - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share options
Shares excluded from the calculation of diluted loss per share
Shares excluded from the calculation of diluted loss per share	204,700	619,650	890,500
Nonvested shares
Shares excluded from the calculation of diluted loss per share
Shares excluded from the calculation of diluted loss per share	460,000	548,780	1,084,284
Convertible promissory notes
Shares excluded from the calculation of diluted loss per share
Shares excluded from the calculation of diluted loss per share		88,883,116	0

SEGMENT REPORTING - Summary of revenues and percentage of revenues by geographical locations (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Segment reporting
Total product sales revenues	$ 243,626	$ 227,539	$ 319,881
Total revenues
Segment reporting
Revenues (as a percent)	100.00%	100.00%	100.00%
Europe
Segment reporting
Total product sales revenues	$ 87,586	$ 109,781	$ 153,697
Europe \| Total revenues
Segment reporting
Revenues (as a percent)	36.00%	48.20%	48.10%
France
Segment reporting
Total product sales revenues	$ 18,012	$ 22,900	$ 34,693
North America
Segment reporting
Total product sales revenues	$ 37,932	$ 51,206	$ 73,339
North America \| Total revenues
Segment reporting
Revenues (as a percent)	15.60%	22.50%	22.90%
United States
Segment reporting
Total product sales revenues	$ 29,794	$ 40,148	$ 60,810
Other countries
Segment reporting
Total product sales revenues	$ 118,108	$ 66,552	$ 92,845
Other countries \| Total revenues
Segment reporting
Revenues (as a percent)	48.40%	29.30%	29.00%

NONVESTED SHARES - Share-based Compensation Expenses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based compensation expenses
Incremental compensation expenses	$ 2,060	$ 405	$ 1,865
Fulfillment
Share-based compensation expenses
Incremental compensation expenses	238	47	214
Selling and marketing
Share-based compensation expenses
Incremental compensation expenses	408	99	456
General and administrative
Share-based compensation expenses
Incremental compensation expenses	$ 1,414	$ 259	$ 1,195

ORGANIZATION AND PRINCIPAL ACTIVITIES - VIE Arrangements and Loan Agreement (Details) $ in Thousands	1 Months Ended			12 Months Ended
	Jul. 31, 2019 USD ($)	Dec. 31, 2011 CNY (¥)	Dec. 31, 2011 USD ($)	Dec. 31, 2019
Details of History of the Group
Term of debt instrument				2 years
Qianghai Xuyi
Details of History of the Group
Term of debt instrument				10 years
Lanting Huitong \| Mr. Quji (Alan) Guo
Details of History of the Group
Ownership interest in VIE (as a percent)		51.00%	51.00%
Related party loan		¥ 255,000,000	$ 41
Lanting Huitong \| Mr. Jian He [Member]
Details of History of the Group
Ownership interest in VIE (as a percent)	51.00%
Related party loan	$ 40,492	¥ 255,000
Lanting Gaochuang \| Mr. Quji (Alan) Guo
Details of History of the Group
Ownership interest in VIE (as a percent)		51.00%	51.00%
Lanting Gaochuang \| Mr. Jian He [Member]
Details of History of the Group
Ownership interest in VIE (as a percent)	51.00%
Lanting Gaochuang \| Lanting Huitong
Details of History of the Group
Ownership interest in VIE (as a percent)	49.00%	49.00%	49.00%
Shenzhen Xuyi \| Qianneng Fu
Details of History of the Group
Ownership interest in VIE (as a percent)				67.00%
Shenzhen Xuyi \| Zicong ke
Details of History of the Group
Ownership interest in VIE (as a percent)				33.00%

LEASES - Components of lease cost (Details) $ in Thousands	12 Months Ended
LEASES - Components of lease cost (Details) $ in Thousands	Dec. 31, 2019 USD ($)
LEASES
Operating lease cost	$ 4,956
Short-term lease costs	2,189
Amortization of ROU assets	247
Interests	66
Total lease costs	7,458
Operating cash flows from operating leases	4,526
Operating cash flows from financing leases	290
Financing cash flows from financing leases	66
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities	$ 10,060
Weighted-average remaining operating lease term (in years)	6 years 5 months 12 days
Weighted-average remaining financing lease term (in years)	3 years 7 months 24 days
Weighted-average discount rate, operating leases	5.03%
Weighted-average discount rate, financing leases	5.44%
Options to extend the lease	true
Remaining lease term of leases	10 years
Total operating and short-term lease costs	$ 7,145

NONVESTED SHARES

12 Months Ended

Dec. 31, 2019

NONVESTED SHARES

NONVESTED SHARES

14. NONVESTED SHARES

In 2013, the Company granted 711,571 nonvested shares to certain officers and employees. These nonvested shares vest over a period ranged from two to four years.

In 2014, the Company granted 2,800,300 nonvested shares to certain officers and employees. These nonvested shares vest over a period ranged from three to four years.

In 2015, the Company granted 3,154,800 nonvested to certain officers and employees. These nonvested shares vest over a period from three months to four years.

In 2016, the Company granted 296,000 nonvested to certain officers and employees. These nonvested shares vest over a period from three months to four years.

In 2017, the Company granted 272,000 nonvested to certain officers and employees. These nonvested shares vest over a period of four years.

In 2018, the Company granted 244,000 nonvested to certain officers and employees. These nonvested shares vest over a period of four years.

In 2019, the Company granted 1,829,000 nonvested to certain officers and employees. The nonvested shares of 280,000 vest over a period of two years and nonvested shares of 1,549,000 vest immediately.

The holders of the nonvested shares are entitled to voting rights, but shall not be entitled to dividends before vesting.

The following table summarizes information regarding the nonvested shares granted and vested:


		Weighted average
		grant date
	Number of Shares	fair value

Outstanding at January 1, 2019	548,780	$	5.07
Granted	1,829,000	$	0.54
Forfeited	(104,476)	$	1.52
Vested	(1,813,304)	$	0.54
Outstanding at December 31, 2019	460,000	$	5.74

The total fair value of shares vested during the years ended December 31, 2017, 2018 and 2019 was $808, $379 and $972, respectively.

For the years ended December 31, 2017, 2018 and 2019, the Group recorded share-based compensation expenses of $1,768, $384 and $1,995 related to the nonvested shares, respectively. As of December 31, 2019, there was $327 of unrecognized compensation costs related to nonvested shares, which are expected to be recognized over a weighted-average period of 1.82 years.

Total share-based compensation expenses for share options and nonvested shares for the years ended December 31, 2017, 2018 and 2019 were as follows:


	Year ended December 31,
	2017		2018		2019

Fulfillment	$	214	$	47	$	238
Selling and marketing		456		99		408
General and administrative		1,195		259		1,414
Total	$	1,865	$	405	$	2,060

Convertible promissory notes (Tables)

12 Months Ended

Dec. 31, 2019

Convertible promissory notes

Schedule of components effecting the change in fair value


	Year ended December 31, 2018		Year ended December 31, 2019
Balance at January 1	$	—	$	51,922
Issuance		29,131		—
Change in fair value		22,791		(14,591)
Conversion to ordinary shares		—		(21,562)
Forward contracts		—		(15,769)
Balance at December 31	$	51,922	$	—

GOODWILL (Details) - USD ($) $ in Thousands		12 Months Ended
GOODWILL (Details) - USD ($) $ in Thousands	Dec. 10, 2018	Dec. 31, 2018
GOODWILL
Goodwill acquired during the year		$ 27,479
Ezbuy
GOODWILL
Goodwill acquired during the year	$ 27,479	$ 27,479

SHARE OPTIONS

12 Months Ended

Dec. 31, 2019

SHARE OPTIONS

SHARE OPTIONS

13. SHARE OPTIONS

On October 27, 2008, the Company adopted the 2008 Share Incentive Option Plan (“2008 Plan”) for the granting of share options to employees to reward them for services provided to the Company and to provide incentives for future services. Pursuant to the 2008 Plan, total shares that the 2008 Plan was authorized to grant were 4,444,444 shares. In May 2014, the Company authorized the issuance of an additional 6,900,000 ordinary shares to support the Company’s business expansion and recruiting plans. The majority of the options will vest over four years where 25% of the options will vest at the end of the first year after the grant date through the fourth year. The share options expire 10 years from the date of grant.

In 2013, the Company granted 307,250 share options under the 2008 Plan to employees at exercise price of $4.75 per share. These share options vest over a period ranged from three to four years.

In 2014, the Company granted 1,797,300 share options under the 2008 Plan to employees at exercise prices ranged from $1.84 to $3.26 per share. These share options vest over a period ranged from three to four years.

In 2015, the Company granted 546,400 share options under the 2008 Plan to employees at exercise prices at $2.25 per share. These share options vest over a period from three months to four years.

In 2016, the Company granted 4,000 share options under the 2008 Plan to employees at exercise prices at $1.40 per share. These share options vest over a period of four years.

In 2017, the Company granted 120,000 share options under the 2008 Plan to employees at exercise prices ranged from $0.89 to $1.49 per share. These share options vest over a period of four years.

In 2018, the Company granted 44,000 share options under the 2008 Plan to employees at exercise prices ranged from $0.33 to $1.92 per share. These share options vest over a period of four years.

In 2019, the Company didn’t grant share options.

The fair value of each option granted was estimated on the date of grant using binomial option pricing model with the following assumptions during the applicable periods:


	Year ended December 31,
	2017			2018
Risk-free interest rate per annum		2.45	%		2.90-3.20	%
Exercise multiple		2.2			2.2
Expected volatility		71.7	%		66.4-69.5	%
Expected dividend yield		0	%		0	%
Fair value of ordinary shares	$	0.70			0.44-1.04
Expected terms (in years)		10			10

(1)

Risk-free interest rate

Risk-free interest rate was estimated based on the yield to maturity of China international government bonds with a maturity period close to the contractual term of the options.

(2)

Exercise multiple

Exercise multiple represents the value of the underlying share as a multiple of exercise price of the option which, if achieved, results in exercise of the option.

(3)

Volatility

The volatility of the underlying ordinary shares during the life of the options was estimated based on the historical stock price volatility of the Company’s publicly traded stock.

(4)

Dividend yield

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

(5)

Fair value of underlying ordinary shares

The fair value of the underlying ordinary shares is determined based on the closing market price of the ADS of the Company as of the grant date.

A summary of the share option activities under the 2008 Plan as of December 31, 2019, and changes during the year then ended is presented below:


		Weighted average
		exercise price
	Options granted	per option

Outstanding at January 1, 2019	619,650	$	1.61
Granted	—	$	—
Exercised	(93,000)	$	0.01
Forfeited	(321,950)	$	1.58
Outstanding at December 31, 2019	204,700	$	2.39

The following table summarizes information regarding the share options granted as of December 31, 2019:


	As of December 31, 2019
				Weighted-
		Weighted-		average remaining
		average exercise		contractual	Aggregate
	Options Number	price per option		life (years)	intrinsic value

Options
Outstanding	204,700	$	2.39	4.83	$	—
Exercisable	200,700	$	2.42	4.77	$	—
Expected to vest	4,000	$	0.89	7.83	$	—

The total intrinsic value of options exercised during the years ended December 31, 2017, 2018 and 2019 were $324, $270, and $539, respectively.

The weighted average grant date fair value of options granted during the years ended December 31, 2017, 2018 and 2019 was $0.70, $0.50 and nil, respectively.

For the years ended December 31, 2017, 2018 and 2019, the Group recorded share-based compensation expense of $97, $21 and $66 related to the options under the 2008 Plan, respectively. As of December 31, 2019, there was $9 of unrecognized compensation cost related to the options, which is expected to be recognized over a weighted-average period of 1.83 years.

SEGMENT REPORTING (Tables)

12 Months Ended

Dec. 31, 2019

SEGMENT REPORTING

Schedule of components of net revenues


	Year ended December 31, 2019
	Product sales		Services		Consolidated

Revenues	$	236,705	$	6,921	$	243,626
Cost of revenues		144,061		1,968		146,029
Gross profit		92,644		4,953		97,597
Unallocated operating expenses						113,649
Loss from operations						(16,052)
Interest income						297
Interest expense						(66)
Change in fair value of convertible promissory notes						14,591
Other income, net						283
Loss before income tax expense and gain from equity method investment					$	(947)


	Year ended December 31, 2018
	Product sales		Services		Consolidated

Revenues	$	216,407	$	11,132	$	227,539
Cost of revenues		156,326		10,017		166,343
Gross profit		60,081		1,115		61,196
Unallocated operating expenses						98,677
Loss from operations						(37,481)
Interest income						487
Interest expense						(5)
Change in fair value of convertible promissory notes						(22,791)
Loss before income tax expense					$	(59,790)


	Year ended December 31, 2017
	Product sales		Services		Consolidated

Revenues	$	293,951	$	25,930	$	319,881
Cost of revenues		189,816		24,445		214,261
Gross profit		104,135		1,485		105,620
Unallocated operating expenses						115,787
Loss from operations						(10,167)
Exchange loss on offshore bank accounts						(89)
Interest income						581
Loss before income tax expense					$	(9,675)

Schedule of components of the Group's cost


	Year ended December 31,
	2017		2018		2019

Apparel	$	99,160	$	72,871	$	78,954
Other general merchandise (1)		194,791		143,536		157,751
Total product sales revenues	$	293,951	$	216,407	$	236,705

(1)Others mainly include products such as small accessories and gadgets, home garden, electronics and communication devices and others.

Summary of total net revenues generated in different geographic locations and as a percentage of total net revenues


	Year ended December 31,
	2017			2018			2019
	Revenues		%	Revenues		%	Revenues		%

Europe	$	153,697	48.1	$	109,781	48.2	$	87,586	36.0
North America		73,339	22.9		51,206	22.5		37,932	15.6
Other countries		92,845	29.0		66,552	29.3		118,108	48.4
Total revenues	$	319,881	100.0	$	227,539	100.0	$	243,626	100.0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Basis of presentation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Net (loss) / income	$ 1,058	$ (59,602)	$ (9,548)
Net cash provided by / (used in) operating activities	$ 1,882	$ (29,868)	$ (14,831)

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

+ Details

PARENT ONLY INFORMATION - STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Net (loss) / income	$ 1,058	$ (59,602)	$ (9,548)
Change in fair value of convertible promissory notes	(14,591)	22,791
Prepaid expenses and other current assets	3,416	10,298	(5,985)
Accrued expenses and other current liabilities	5,292	(1,584)	(837)
Net cash (used in)/provided by operating activities	1,882	(29,868)	(14,831)
Net cash (used in) / provided by investing activities	(681)	3,296	(3,506)
Repurchase of ordinary shares	(251)	(3,354)	(3,101)
Net cash used in financing activities	(551)	(3,365)	(3,064)
Net (decrease) / increase in cash, cash equivalents and restricted cash	650	(29,937)	(21,401)
Cash, cash equivalents and restricted cash at beginning of year	39,802	70,014	91,075
Cash, cash equivalents and restricted cash at end of year	40,445	39,802	70,014
LightInTheBox Holding Co., Ltd.
Net (loss) / income	999	(59,601)	(9,548)
Share of loss from subsidiaries and VIEs	12,479	35,665	7,407
Change in fair value of convertible promissory notes	(14,591)	22,791
Prepaid expenses and other current assets	(41)	283	112
Accrued expenses and other current liabilities	(1,262)	(1,469)	(126)
Net cash (used in)/provided by operating activities	(2,416)	(2,331)	(2,155)
Changes in amounts due from subsidiaries and VIEs	2,490	4,512	(23,883)
Net cash (used in) / provided by investing activities	2,490	4,512	(23,883)
Proceeds from private placement and options exercised		13	37
Repurchase of ordinary shares	(251)	(3,354)	(3,101)
Net cash used in financing activities	(251)	(3,341)	(3,064)
Net (decrease) / increase in cash, cash equivalents and restricted cash	(177)	(1,160)	(29,102)
Cash, cash equivalents and restricted cash at beginning of year	311	1,471	30,573
Cash, cash equivalents and restricted cash at end of year	$ 134	$ 311	$ 1,471

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventories and Property and Equipment, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Inventories
Inventory write-down / (reversal when sold)	$ (458)	$ 2,456	$ 2,065
Furniture, fixtures and office equipment \| Minimum
Property and equipment, net
Useful lives	2 months 12 days
Furniture, fixtures and office equipment \| Maximum
Property and equipment, net
Useful lives	5 years
Software and IT equipment \| Minimum
Property and equipment, net
Useful lives	1 month 6 days
Software and IT equipment \| Maximum
Property and equipment, net
Useful lives	3 years
Vehicles \| Minimum
Property and equipment, net
Useful lives	7 months 6 days
Vehicles \| Maximum
Property and equipment, net
Useful lives	9 years

NONVESTED SHARES (Tables)

12 Months Ended

Dec. 31, 2019

NONVESTED SHARES

Summary of information regarding the nonvested shares granted and vested


		Weighted average
		grant date
	Number of Shares	fair value

Outstanding at January 1, 2019	548,780	$	5.07
Granted	1,829,000	$	0.54
Forfeited	(104,476)	$	1.52
Vested	(1,813,304)	$	0.54
Outstanding at December 31, 2019	460,000	$	5.74

Schedule of share-based compensation expenses


	Year ended December 31,
	2017		2018		2019

Fulfillment	$	214	$	47	$	238
Selling and marketing		456		99		408
General and administrative		1,195		259		1,414
Total	$	1,865	$	405	$	2,060

ACQUISITION - Fair values of the identifiable assets acquired and liabilities (Details) - USD ($) $ in Thousands			12 Months Ended
	Dec. 10, 2018	Nov. 08, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jan. 01, 2019
ACQUISITION
Revenues			$ 243,626	$ 227,539	$ 319,881
Net income			999	(59,601)	(9,548)
Fair values of the identifiable assets acquired and liabilities
Prepaid expenses and other current assets			3,619	5,811		$ 5,554
Goodwill			27,922	28,169	690
Amortization expenses			$ 1,264	298	$ 5
Technology Platform
Fair values of the identifiable assets acquired and liabilities
Fair values of intangibles	$ 2,891
Amortization period	5 years
Branding
Fair values of the identifiable assets acquired and liabilities
Fair values of intangibles	$ 6,813
Amortization period	10 years		10 years
In-progress Orders
Fair values of the identifiable assets acquired and liabilities
Fair values of intangibles	$ 191
Amortization period	1 month 6 days		1 month 6 days
Ezbuy
ACQUISITION
Revenues				6,785
Net income				365
Ezbuy
ACQUISITION
Percentage equity interest acquired		100.00%
Purchase consideration	$ 29,131
Fair values of the identifiable assets acquired and liabilities
Cash and cash equivalents	3,683
Accounts receivable	35
Inventories	4,694
Prepaid expenses and other current assets	1,418
Property and equipment, net	2,982
Intangible assets, net	9,895
Long-term rental deposits	400
Accounts payable	(6,601)
Advance from customers	(9,734)
Accrued expenses and other current liabilities	(3,954)
Long-term payable	(1,170)
Fair value of non-controlling interest	4
Goodwill	27,479		$ 27,232	$ 27,479
Total purchase consideration	$ 29,131
Ezbuy \| Original Shareholders
ACQUISITION
Ownership percentage prior to acquisition		80.00%
Ezbuy \| third party
ACQUISITION
Ownership percentage prior to acquisition		20.00%

LONG-TERM INVESTMENT (Details) - USD ($) $ in Thousands				12 Months Ended
LONG-TERM INVESTMENT (Details) - USD ($) $ in Thousands	Jun. 21, 2019	Mar. 31, 2017	Feb. 06, 2015	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
LONG-TERM INVESTMENT
Share of income (loss) from equity method investment				$ 2,118	$ 221	$ 208
Percentage Of Equity Interest Transferred	30.00%
Demon
LONG-TERM INVESTMENT
Percentage of equity interest			30.00%
Total consideration			$ 2,100
Share of income (loss) from equity method investment				$ 2,118	$ 221	$ 208
Maikailai
LONG-TERM INVESTMENT
Percentage of equity interest		10.53%
Total consideration		$ 2,950

LEASES

12 Months Ended

Dec. 31, 2019

LEASES

LEASES

8. LEASES

The Group has operating leases for office space, warehouses and server rental and finance leases for vehicles as a lessee.

The Group’s lease agreements include lease payments that are fixed, do not contain material residual value guarantees or variable lease payments. The leases have remaining lease terms of up to ten years. Certain lease agreements include terms with options to extend the lease, however none of these have been recognized in the Company’s operating lease ROU assets or operating lease liabilities since those options were not reasonably certain to be exercised. The Group’s leases do not contain restrictions or covenants that restrict the Group from incurring other financial obligations. The Group’s lease agreements may contain lease and non-lease components. Non-lease components primarily include payments for maintenance.

The components of lease costs were as follows:


		For the year ended December 31, 2019
Operating lease costs		4,956
Short-term lease costs		2,189
Financing lease costs:
Amortization of ROU assets		247
Interests		66
Total lease costs		7,458


Other information	For the year ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	4,526
Operating cash flows from financing leases	290
Financing cash flows from financing leases	66
ROU assets obtained in exchange for new operating lease liabilities	10,060
ROU obtained in exchange for new finance lease liabilities	—
Weighted-average remaining lease term (in years):
Operating leases	6.45
Financing leases	3.65
Weighted-average discount rate:
Operating leases	5.03	%
Financing leases	5.44	%

For the year ended December 31, 2019, total operating and short-term lease costs were $7,145.

Future minimum lease payments for operating and financing leases as of December 31, 2019 are as follows:


	Operating Leases	Finance Leases
2020	3,516	361
2021	2,303	361
2022	1,632	325
2023	1,398	187
2024	1,193	34
2025 and thereafter	4,325	—
Total minimum lease payments	14,367	1,268
Less: Imputed interest	(2,096)	(113)
Total lease liability balance	12,271	1,155

Minimum payments related to leases not yet commenced as of December 31,2019	827	—

As previously disclosed in the consolidated financial statements for the year ended December 31, 2018 and under the previous lease standard (Topic 840), future minimum annual lease payments under operating leases as of December 31, 2018 were as follows:


For the year ending December 31,
2019	$	4,646
2020		2,153
2021		740
	$	7,539

Total expenses under operating leases were $4,282 and $5,258 for the years ended December 31, 2017 and 2018, respectively.

As of December 31, 2018, future minimum annual lease payments under the capital leases are as follows:


For the year ending December 31,
2019	$	369
2020		367
2021		362
2022		321
2023		185
2024		34
Total minimum lease payments		1,638
Less amount representing interest		(183)
Present value of minimum lease payments		1,455
Less current portion of minimum lease		(299)
Long-term present value of minimum lease payment	$	1,156

The assets, with costs and accumulated depreciation of approximately $1,760 and $14 as of December 31, 2018, respectively, are amortized over the estimated lives of the assets. Amortization of assets under capital leases is included in depreciation expense.

The effective interest rates on the capital leases vary from 4.30% to 7.40% per annum and are imputed based on the lessor’s implicit rate of return.

INCOME TAXES (Details) $ in Thousands, $ in Thousands		12 Months Ended								24 Months Ended
INCOME TAXES (Details) $ in Thousands, $ in Thousands	Dec. 31, 2019 USD ($)	Dec. 31, 2019 HKD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 HKD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 HKD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2021 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Income taxes
Assessable profits				$ 2,000
Half of the current tax rate (as a Percent)				8.25	8.25
Current tax expense (benefit)			$ 113		$ 33		$ 81
Deferred tax expense			0		0		0
Schedule of Loss before income taxes
Loss before provision of income tax			1,171		(59,790)		(9,675)
Deferred tax assets:
Bad debt allowance												$ 88
Accrued inventory provision												348
Net operating loss carry forwards											$ 33,267	27,852
Less: Valuation allowance	$ (31,879)		(26,691)		(20,986)		(20,986)			$ (31,879)	(31,879)	(26,691)
Total deferred tax assets											1,388	1,597
Deferred tax liabilities:
Property and equipment											(18)
Acquired intangible assets											(1,370)	(1,597)
Total deferred tax liabilities											(1,388)	$ (1,597)
Net operating loss carry forwards											$ 196,310
Movement of valuation allowance
Balance at beginning of the period			26,691		20,986					$ 31,879
Additions			5,188		5,705
Balance at end of the period	$ 31,879		31,879		26,691		20,986
Reconciliation between the expense of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes
Loss before provision of income tax			$ 1,171		$ (59,790)		$ (9,675)
Statutory tax rate in the PRC (as a percent)		25.00%	25.00%	25.00%	25.00%	25.00%	25.00%
Income tax at statutory tax rate			$ 293		$ (14,948)		$ (2,419)
Non-deductible expenses			10		115		42
Effect of preferential tax rates			(135)		(7)		(67)
Utilization of tax loss previously not recognized							(99)
Effect of income tax rate differences in jurisdictions other than the PRC			(2,277)		9,154		1,456
Statutory income/expense			(653)
Deferred tax expense			(2,313)
Changes in valuation allowances			5,188		5,705		1,168
Income tax expense			$ 113		$ 33		$ 81
Hong Kong
Reconciliation between the expense of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes
Statutory tax rate in the PRC (as a percent)		16.50%	16.50%
Statute of limitations		6 years	6 years
PRC
Reconciliation between the expense of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes
Statutory tax rate in the PRC (as a percent)		25.00%	25.00%
Statute of limitations		5 years	5 years
PRC \| Lanting Gaochuang
Income taxes
Reduced tax rate for the years subsequent the exemption period (as a percent)						12.50%	12.50%	12.50%	12.50%
Preferential income tax rate	15.00%									15.00%
PRC \| Lanting Huitong
Income taxes
Reduction of taxable income for small and micro-sized enterprise (as a percent)		50	50
Reduced tax rate for small and micro-sized enterprise		20	20
Preferential income tax rate						15.00%	15.00%	15.00%
Reconciliation between the expense of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes
Statutory tax rate in the PRC (as a percent)				25.00%	25.00%
PRC \| Keji Chengdu
Income taxes
Income tax exemption (as a percent)		100	100	100	100
PRC \| Shenzhen Xuyi
Income taxes
Reduction of taxable income for small and micro-sized enterprise (as a percent)		50	50	50	50
Reduced tax rate for small and micro-sized enterprise		20	20	20	20
PRC \| Chongqing Xuyi
Income taxes
Reduction of taxable income for small and micro-sized enterprise (as a percent)		50	50
Reduced tax rate for small and micro-sized enterprise		20	20
PRC \| Suzhou Trading
Income taxes
Reduction of taxable income for small and micro-sized enterprise (as a percent)		50	50
Reduced tax rate for small and micro-sized enterprise		20	20
PRC \| Qianhai Xuyi Hunan
Income taxes
Reduction of taxable income for small and micro-sized enterprise (as a percent)		50	50	50	50
Reduced tax rate for small and micro-sized enterprise		20	20	20	20
Singapore
Reconciliation between the expense of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes
Statute of limitations		5 years	5 years
Singapore \| Ching International service PTE.LTD
Reconciliation between the expense of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes
Statutory tax rate in the PRC (as a percent)		17.00%	17.00%
Singapore \| D2D Express PTE.LTD
Reconciliation between the expense of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes
Statutory tax rate in the PRC (as a percent)		17.00%	17.00%
Singapore \| Avant E-Commerce Service PTE.LTD
Reconciliation between the expense of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes
Statutory tax rate in the PRC (as a percent)		17.00%	17.00%
Singapore \| Avant Logistic Service PTE.LTD
Reconciliation between the expense of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes
Statutory tax rate in the PRC (as a percent)		17.00%	17.00%
Cayman Islands
Schedule of Loss before income taxes
Loss before provision of income tax			$ 11,403		$ (24,750)		$ (3,705)
Reconciliation between the expense of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes
Loss before provision of income tax			11,403		(24,750)		(3,705)
Hong Kong
Income taxes
Withholding taxe amount on remittance of dividends		$ 0
Assessable profits		$ 0		$ 0		$ 0
Schedule of Loss before income taxes
Loss before provision of income tax			(7,728)		(36,476)		(7,205)
Reconciliation between the expense of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes
Loss before provision of income tax			(7,728)		(36,476)		(7,205)
PRC excluding Hong Kong SAR, and other countries
Schedule of Loss before income taxes
Loss before provision of income tax			(2,504)		1,436		1,235
Reconciliation between the expense of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes
Loss before provision of income tax			$ (2,504)		$ 1,436		$ 1,235

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

INCOME TAXES

Schedule of loss before income taxes expense and gain from equity method investment


	Year ended December 31,
	2017		2018		2019

Cayman Islands	$	(3,705)	$	(24,750)		11,403
Hong Kong SAR		(7,205)		(36,476)		(7,728)
PRC, excluding Hong Kong SAR, and other countries		1,235		1,436		(2,504)
Total	$	(9,675)	$	(59,790)	$	1,171

Schedule of principal components of the deferred tax assets and liabilities


	As of December 31,
	2018		2019

Deferred tax assets:
Bad debt allowance		88		—
Accrued inventory provision		348		—
Net operating loss carry forwards		27,852		33,267
Less: Valuation allowance		(26,691)		(31,879)
Total deferred tax asset	$	1,597	$	1,388

Deferred tax liabilities:
Property and equipment	$	—	$	(18)
Acquired intangible assets	$	(1,597)	$	(1,370)
Total deferred tax liabilities	$	(1,597)	$	(1,388)
Net deferred tax assets	$	—	$	—
Net deferred tax liabilities	$	—	$	—

Schedule of movement of valuation allowance


	Year ended December 31,
	2018		2019
Balance at beginning of the period	$	20,986	$	26,691
Additions		5,705		5,188
Balance at end of the period	$	26,691	$	31,879

Schedule of reconciliation between the expense of income taxes computed by applying the PRC tax rate to loss before income taxes and the actual provision for income taxes


	Year ended December 31,
	2017			2018			2019

Loss before provision of income tax	$	(9,675)		$	(59,790)		$	1,171
Statutory tax rate in the PRC		25	%		25	%		25	%
Income tax at statutory tax rate		(2,419)			(14,948)			293
Non-deductible expenses		42			115			10
Effect of preferential tax rates		(67)			7			(135)
Utilization of tax loss previously not recognized		(99)			—			—
Effect of income tax rate differences in jurisdictions other than the PRC		1,456			9,154			(2,277)
Statutory income/expense		—			—			(653)
Deferred tax expense		—			—			(2,313)
Changes in valuation allowances		1,168			5,705			5,188
Income tax expense	$	81		$	33		$	113

STATUTORY RESERVES AND RESTRICTED NET ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
STATUTORY RESERVES AND RESTRICTED NET ASSETS
Minimum percentage of after-tax profit required to be transferred to general reserve till such reserve reaches specified percentage of registered capital	10.00%
General reserve as a percentage of registered capital up to which after-tax profit of PRC subsidiaries and VIEs shall be transferred	50.00%
Discretionary appropriations to enterprise expansion reserve, staff welfare and bonus reserve	$ 0	$ 0	$ 0
Amount of restricted net assets of subsidiaries and VIE not available for distribution	$ 6,266

PARENT ONLY INFORMATION - Condensed Statements of Operatins and Comprehensive Loss (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
General and administrative	$ 37,811	$ 33,042	$ 29,605
Loss from operations	(16,052)	(37,481)	(10,167)
Interest income	297	487	581
Change in fair value of convertible promissory notes	14,591	(22,791)
Loss before income taxes and gain from equity method investment	(947)	(59,790)	(9,675)
Income tax expense	113	33	81
Net (loss) / income	1,058	(59,602)	(9,548)
Other comprehensive (loss) / income:
Foreign currency translation adjustment, net of nil income taxes	(512)	(733)	380
Total comprehensive (loss) / income	546	(60,335)	(9,168)
Foreign currency translation adjustment, net of income taxes	0	0	0
LightInTheBox Holding Co., Ltd.
General and administrative	1,113	1,145	2,246
Loss from operations	(1,113)	(1,145)	(2,246)
Share of loss from subsidiaries and VIEs	(12,479)	(35,665)	(7,407)
Interest income			105
Change in fair value of convertible promissory notes	14,591	(22,791)
Loss before income taxes and gain from equity method investment	999	(59,601)	(9,548)
Net (loss) / income	999	(59,601)	(9,548)
Other comprehensive (loss) / income:
Foreign currency translation adjustment, net of nil income taxes	(512)	(733)	380
Total comprehensive (loss) / income	487	(60,334)	(9,168)
Foreign currency translation adjustment, net of income taxes	$ 0	$ 0	$ 0

ACQUISITION

12 Months Ended

Dec. 31, 2019

ACQUISITION

ACQUISITION

3. ACQUISITION

On November 8, 2018, the Company entered into a Share Purchase Agreement (“SPA”) with Ezbuy and the original shareholders of Ezbuy to acquire 100% of the issued share capital (voting equity interest) of Ezbuy by issuing convertible promissory notes. Before the acquisition, 80% equity interest of three subsidiaries of Ezbuy was owned by the original shareholders and 20% by a third party.

The Company completed the acquisition on December 10, 2018 (the “acquisition date”). The purchase consideration was $29,131, which was deemed to be the fair value of the convertible promissory notes as of the acquisition date.

The transaction was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. The results of Ezbuy’s operations have been included in the Group’s consolidated financial statements since December 11, 2018. For the year ended December 31, 2018, revenues and net income from Ezbuy included in the Group’s consolidated financial statements were $6,785 and $365, respectively.

The following table presents the amounts recognized for assets acquired and liabilities assumed for Ezbuy as of the acquisition date. The non-controlling interests represents the fair value of the 20% equity interest of the three subsidiaries of Ezbuy , which is not held by Ezbuy:


	As of December 10, 2018
Cash and cash equivalents	$	3,683
Accounts receivable		35
Inventories		4,694
Prepaid expenses and other current assets		1,418
Property and equipment, net		2,982
Intangible assets, net		9,895
Long-term rental deposits		400
Accounts payable		(6,601)
Advance from customers		(9,734)
Accrued expenses and other current liabilities		(3,954)
Long-term payable		(1,170)
Fair value of non-controlling interest		4
Goodwill		27,479
Total purchase consideration	$	29,131

The intangible assets consist of technology, branding and in-progress orders. The fair values of technology of $2,891, branding of $6,813 and in-progress orders of $191 are amortized over 5 years, 10 years and 0.1 year, respectively on a straight line basis. Total amortization expense of these intangible assets were $298 and $1,264 for the years ended December 31, 2018 and 2019, respectively.

The Group engaged a third-party valuation firm to assist with the valuation of assets acquired, liabilities assumed and convertible promissory notes issued in this business combination. The goodwill resulting from the acquisition primarily attributed to the synergies and economic scale anticipated to be achieved from combining the operations of the Company and Ezbuy, and the assigned assembled workforce. None of the goodwill is expected to be deductible for income tax purpose.

For the purpose of impairment testing, goodwill is allocated to the product sales reporting unit that is expected to benefit from the combination. The Company performed the qualitative assessment as of December 31, 2019 having evaluated all relevant factors including, but not limited to, macroeconomic conditions, industry and market conditions, financial performance, and the share price of the Company. The Company weighed all factors in their entirety and concluded that it was not more-likely-than-not the fair value of the reporting unit was less than its carrying amount, thus further impairment testing on goodwill was unnecessary.

The following unaudited pro forma consolidated financial information for the year ended December 31, 2018 are presented as if the acquisition had been consummated on January 1, 2017 after giving effect to purchase accounting adjustments.

Unaudited pro forma consolidated statements of comprehensive loss for the year ended December 31, 2018:


	Pro Forma - Unaudited
	Year Ended December 31,
	2017		2018
Revenues	$	477,326	$	337,695
Net loss	$	21,593	$	70,884

The unaudited pro forma consolidated financial information was prepared in accordance with existing standards and is not necessarily indicative of the results of operations that would have occurred if the acquisition had been completed on the date indicated, nor is it indicative of the future operating results of the Group.

The unaudited pro forma results do not reflect events that either have occurred or may occur after the acquisition, including, but not limited to, the anticipated realization of ongoing savings from operating synergies in subsequent periods. They also do not give effect to certain charges that the Company incurred in connection with the acquisition, including, but not limited to, additional professional fees, employee integration, retention and severance costs, potential asset impairments, or product rationalization charges.

SEGMENT REPORTING (Details) $ in Thousands	12 Months Ended
SEGMENT REPORTING (Details) $ in Thousands	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 segment	Dec. 31, 2015 segment
Segment reporting
Number of operating segments \| segment				2	1
Product sales	$ 243,626	$ 227,539	$ 319,881
Cost of revenues	146,029	166,343	214,261
Total	243,626	227,539	319,881
Cost of Product Sales	146,029	166,343	214,261
Gross profit	97,597	61,196	105,620
Unallocated operating expenses	113,649	98,677	115,787
Loss from operations	(16,052)	(37,481)	(10,167)
Foreign Currency Transaction Gain (Loss), Unrealized	129	(339)	(89)
Interest income	297	487	581
Interest expense	(66)	(5)
Change in fair value of convertible promissory notes	14,591	(22,791)
Other income, net	283
Loss before income taxes and gain from equity method investment	(947)	(59,790)	(9,675)
Product sales
Segment reporting
Product sales	236,705	216,407	293,951
Cost of revenues	144,061	156,326	189,816
Total	236,705	216,407	293,951
Cost of Product Sales	144,061	156,326	189,816
Gross profit	92,644	60,081	104,135
Service and others
Segment reporting
Product sales	6,921	11,132	25,930
Cost of revenues	1,968	10,017	24,445
Total	6,921	11,132	25,930
Cost of Product Sales	1,968	10,017	24,445
Gross profit	$ 4,953	$ 1,115	$ 1,485

NONVESTED SHARES - Summary of Nonvested Shares Granted and Vested (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Weighted average grant date fair value
Incremental compensation expenses	$ 2,060	$ 405	$ 1,865
2008 Plan \| Nonvested shares
Number of Shares
Outstanding at the beginning of the period (in shares)	548,780
Granted (in shares)	1,829,000	244,000	272,000	296,000	3,154,800	2,800,300	711,571
Forfeited (in shares)	(104,476)
Vested (in shares)	(1,813,304)
Outstanding at the end of the period (in shares)	460,000	548,780
Weighted average grant date fair value
Outstanding at the beginning of the period (in dollars per share)	$ 5.07
Granted (in dollars per share)	0.54
Forfeited (in dollars per share)	1.52
Vested (in dollars per share)	0.54
Outstanding at the end of the period (in dollars per share)	$ 5.74	$ 5.07
Fair value of shares vested	$ 972	$ 379	$ 808
Incremental compensation expenses	1,995	$ 384	$ 1,768
Unrecognized compensation cost	$ 327
Weighted-average period of recognition of unrecognized compensation cost	1 year 9 months 26 days

Convertible promissory notes

12 Months Ended

Dec. 31, 2019

Convertible promissory notes

Convertible promissory notes

11. Convertible promissory notes

On December 10, 2018, the Company issued convertible promissory notes (the “Note”) to the original shareholders of Ezbuy (“Seller”) for business acquisition. The aggregate par value of the convertible promissory notes is $85.55 million with zero interest rate and due in 365 days after the acquisition date (Conversion Period). See Note 3 in details of the acquisition of Ezbuy.

Convertible promissory notes are to be converted as follows:

If prior to the end of the Conversion Period the trading average price per the Company’s American Depository Shares (“ADSs”) has been at or above US$3.85 during three consecutive days of trading, the Note shall be automatically converted into an aggregate of 22,220,779 ADSs of the Company; or

ii.

If the automatic issuance under (i) has not been triggered within the Conversion Period, the purchase price shall be payable in the amount equal to: (a) an aggregate of 22,220,779 ADSs by the way of the automatic issuance to each seller, and (ii) the difference between (x) US$85.55 million and (y) the product of 22,220,779 and the average of the ten highest closing prices of the trading days during the Conversion Period (the “Average High Closing Price”). However, the Average High Closing Price shall not be higher than US$3.85. By way of cash or new ADSs, or a combination, is determined by the board of the Company. If by way of new ADSs calculated on the basis of the Average High Closing Price, the number of new ADSs compensated shall not exceed 22,220,779.

In particular, if the Average High Closing Price is not lower than US$3.85, the above mentioned (ii) will be applied. However, if the Average High Closing Price is lower than US$3.85, the number of new ADSs compensated shall be 44,441,558 ADSs.

As a result of the foregoing, the ADSs that may be issuable is no less than 22,220,779 ADSs and up to 44,441,558 ADSs.

Based on the features above, the Group designated the above convertible promissory notes as financial liabilities at fair value through profit or loss.

The Company adopted Monte-Carlo Simulation based on a scenario-weighted average method to estimate the fair value of the convertible promissory notes as of the acquisition date and December 31, 2018. The estimate is based on the probability of each scenario and pay-off of the convertible promissory notes under each scenario. The scenarios include different timing and corresponding conversion price of the convertible promissory notes. The key assumptions adopted in the convertible promissory notes valuation include risk-free rate of interest and expected stock price volatility in the conversion period.

The table below reflects the components effecting the change in fair value for the year ended December 31, 2018 and2019:


	Year ended December 31, 2018		Year ended December 31, 2019
Balance at January 1	$	—	$	51,922
Issuance		29,131		—
Change in fair value		22,791		(14,591)
Conversion to ordinary shares		—		(21,562)
Forward contracts		—		(15,769)
Balance at December 31	$	51,922	$	—

Upon the maturity of the Conversion Period, the convertible promissory notes were fully allocated to Ezbuy’s shareholders, including 13,154,284 ordinary shares and 19,091,837 ADSs (representing 38,183,674 ordinary shares) that were issued on December 11, 2019 and 37,545,158 of ordinary shares were subsequently issued in January and March 2020, which were accounted for as Forward Contracts as of December 31, 2019 since the Company has committed to issue these shares before year ended December 31, 2019.

RELATED PARTY TRANSACTIONS (Details) - USD ($)	12 Months Ended
RELATED PARTY TRANSACTIONS (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Logistics services
Related Party Transactions
Amount of related party transaction	$ 1,952,000
Zhejiang Aokang Shoes Co. Ltd. Shareholder [Member]
Related Party Transactions
Percentage of outstanding shares held			18.10%
Goods purchased			$ 400
Zall E-commerce and its subsidiary Zall Development (HK) Holding Company Limited [Member]
Related Party Transactions
Percentage of outstanding shares held	29.50%
Hankou North Import And Export Service Co. Ltd. [Member]
Related Party Transactions
Amount of related party transaction		$ 325,000
Hankou North Import And Export Service Co. Ltd. [Member] \| Logistics services
Related Party Transactions
Amount of related party transaction		4,302,000
Amounts due to related party		1,550,000
Amount due from related parties	$ 62,000
Hankou North Import And Export Service Co. Ltd. [Member] \| Technical Services
Related Party Transactions
Amount of related party transaction	123,000
Zall Foreign Trade Service (Hong Kong) Company Limited [Member] \| Logistics services
Related Party Transactions
Amount of related party transaction	770,000	4,186,000,000
Amounts due to related party		1,007,000
Amount due from related parties	53,000
Network Marketing Technical Services [Member] \| Advertising services
Related Party Transactions
Amount of related party transaction	8,334,000	7,441,000
Amounts due to related party	220,000	2,396,000
Jiashi Financial Information Service (Hangzhou) Co. Ltd. [Member] \| Rental services
Related Party Transactions
Amount of related party transaction		$ 26,000
Wuhan Zall Internet Technology Co. Ltd. [Member]
Related Party Transactions
Amount of related party transaction	4,223,000
Amounts due to related party	4,223,000
Demon Network Technology (Hong Kong) Co. Ltd. [Member] \| Technical Services
Related Party Transactions
Amount of related party transaction	749,000
Amounts due to related party	315,000
Shaghai Zhijie E-Commerce Co., Ltd [Member] \| Maintenance Services
Related Party Transactions
Amount of related party transaction	189,000
Amounts due to related party	$ 19,000

PREPAID EXPENSES AND OTHER CURRENT ASSETS

12 Months Ended

Dec. 31, 2019

PREPAID EXPENSES AND OTHER CURRENT ASSETS

PREPAID EXPENSES AND OTHER CURRENT ASSETS

4. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Components of other current assets which are included in the prepaid expenses and other current assets are as follows:


	As of December 31,
	2018		2019

Receivable from payment processing agencies (1)	$	1,386	$	217
Prepayment to suppliers		838		967
Rental deposits and prepaid rents		268		680
Deferred expense		686		350
Others		2,633		1,405
Total	$	5,811	$	3,619

(1)

Receivables from payment processing agencies represented cash that had been received from customers but held by the payment processing agencies in the process of reconciliation as of December 31, 2018 and 2019. The receivables were collected by the Group subsequent to the respective year end.

SHARE OPTIONS - Options Details and Assumptions Used to Estimate Fair Value of Options Granted (Details) $ / shares in Units, $ in Thousands		1 Months Ended	12 Months Ended
	Oct. 27, 2008 shares	May 31, 2014 shares	Dec. 31, 2019 USD ($) shares	Dec. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2017 USD ($) $ / shares shares	Dec. 31, 2016 $ / shares shares	Dec. 31, 2015 $ / shares shares	Dec. 31, 2014 $ / shares shares	Dec. 31, 2013 $ / shares shares
Share options
Incremental compensation expenses \| $			$ 2,060	$ 405	$ 1,865
2008 Plan
Share options
Shares authorized to grant \| shares	4,444,444
Additional shares authorized to issue \| shares		6,900,000
2008 Plan \| Share options
Share options
Vesting period	4 years			4 years	4 years	4 years
Vesting percentage at the end of the first year through the fourth year	25.00%
Expiration period	10 years
Shares options granted \| shares				44,000	120,000	4,000	546,400	1,797,300	307,250
Exercise price of shares options granted (in dollars per share)						$ 1.40	$ 2.25		$ 4.75
Incremental compensation expenses \| $			66	$ 21	$ 97
Unrecognized incremental compensation cost \| $			$ 9
Weighted-average period of recognition of unrecognized compensation cost			1 year 9 months 29 days
Assumptions used for estimating the fair value of options granted on the date of grant
Risk-free interest rate per annum (as a percent)					2.45%
Risk-free interest rate per annum, minimum (as a percent)				2.90%
Risk-free interest rate per annum, maximum (as a percent)				3.20%
Exercise multiple				2.2	2.2
Expected volatility (as a percent)					71.70%
Expected volatility, minimum (as a percent)				66.40%
Expected volatility, maximum (as a percent)				69.50%
Expected dividend yield (as a percent)				0.00%	0.00%
Fair value of ordinary shares (in dollars per share)					$ 0.70
Expected terms (in years)				10 years	10 years
2008 Plan \| Share options \| Minimum
Share options
Vesting period							3 months	3 years	3 years
Exercise price of shares options granted (in dollars per share)				$ 0.33	$ 0.89			$ 1.84
Assumptions used for estimating the fair value of options granted on the date of grant
Fair value of ordinary shares (in dollars per share)				0.44
2008 Plan \| Share options \| Maximum
Share options
Vesting period							4 years	4 years	4 years
Exercise price of shares options granted (in dollars per share)				1.92	$ 1.49			$ 3.26
Assumptions used for estimating the fair value of options granted on the date of grant
Fair value of ordinary shares (in dollars per share)				$ 1.04
2008 Plan \| Nonvested shares
Share options
Vesting period				4 years	4 years
Nonvested shares granted \| shares			1,829,000	244,000	272,000	296,000	3,154,800	2,800,300	711,571
Incremental compensation expenses \| $			$ 1,995	$ 384	$ 1,768
Weighted-average period of recognition of unrecognized compensation cost			1 year 9 months 26 days
2008 Plan \| Nonvested shares \| Minimum
Share options
Vesting period						3 months	3 months	3 years	2 years
2008 Plan \| Nonvested shares \| Maximum
Share options
Vesting period						4 years	4 years	4 years	4 years

ORGANIZATION AND PRINCIPAL ACTIVITIES - Consolidated Financial Information of the Group's VIEs and Subsidiaries (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Consolidated financial information of the Group's VIE and its subsidiaries included in consolidated financial statements
Total assets	$ 113,201	$ 103,587
Total liabilities	81,320	111,392
Revenues	243,626	227,539	$ 319,881
Net loss	999	(59,601)	(9,548)
Net cash provided by / (used in) operating activities	1,882	(29,868)	(14,831)
Net cash (used in) / provided by investing activities	(681)	3,296	(3,506)
Net cash provided by financing activities	(551)	(3,365)	(3,064)
Consolidated VIEs
Consolidated financial information of the Group's VIE and its subsidiaries included in consolidated financial statements
Total assets	9,734	6,492
Total liabilities	1,147	4,678
Revenues	1,054	3
Net loss	(8,496)	(7,490)	(7,507)
Net cash provided by / (used in) operating activities	1,193	(7,519)	3,073
Net cash (used in) / provided by investing activities	(188)	$ 473	$ (3,069)
Amount of consolidated VIEs' assets that are collateral for the VIEs' obligations	$ 0

PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2019

PROPERTY AND EQUIPMENT, NET

Schedule of components of property and equipment


	As of December 31,
	2018		2019

Leasehold improvements	$	3,688		3,684
Furniture, fixtures and office equipment		2,852		2,739
Software and IT equipment		2,736		2,438
Vehicles		1,760		1,698
Property and equipment, gross		11,036		10,559
Less: Accumulated depreciation		(7,384)		(7,057)
Property and equipment, net	$	3,652		3,502

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2019

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

(a) Basis of presentation

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

Basis of consolidation

(b) Basis of consolidation

The consolidated financial statements include the financial statements of the Group, its subsidiaries, VIEs and the VIE’s subsidiary, in which the Company has a controlling financial interest. Equity interests of the Company’s subsidiaries that are not owned by the Company are referred to as non-controlling interests. All inter-company transactions and balances between the Company, its subsidiaries, VIEs and subsidiary of the VIE are eliminated upon consolidation.

The financial position and the results of its operations of Ezbuy Holding Co., Ltd, its subsidiaries and its VIE and VIE’s subsidiary have been consolidated with the Company beginning on December 10, 2018, the date of acquisition by the Company.

Non-controling Interests

Non-controlling interests are classified as a separate component of equity / (deficit) in the consolidated balance sheets and consolidated statements of changes in equity / (deficit). Additionally, net loss attributable to non-controlling interests is reflected separately from consolidated net loss in the consolidated statements of operations and comprehensive (loss) / income and changes in equity / (deficit).

The Company records the non-controlling interests’ share of income or loss based on the percentage of ownership interest retained by the respective non-controlling interest holders. The net loss attributable to the Company is the total consolidated net loss less the net loss attributable to the non-controlling interests.

Use of estimates

(d) Use of estimates

The preparation of financial statements in conformity with U.S. 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. Actual results may differ from these estimates. The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Group’s financial statements include provision for accounts receivables, inventory valuation, the useful lives of property, plant and equipment and intangibles with definite lives, impairment of goodwill and long-lived assets, realization of deferred income tax assets, incremental borrowing rates for lease liabilities, impairment of equity investment, the fair value determination and estimated forfeit rates for share-based compensation awards and the fair value determination for convertible promissory notes, the fair value determinations of identifiable assets acquired and liabilities assumed, and sales return and allowance.

Cash and cash equivalents

(e) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, demand deposits, highly liquid investments and term deposits with an original maturity of three months or less and are readily convertible to known amount of cash.

Restricted cash

(f) Restricted cash

Restricted cash consists of cash which is held under the Group’s name in an escrow accounts as deposits withheld by third party payment processing agencies and the deposits fluctuate with the volume of payment processed.

Effective January 1, 2018, the Group adopted ASU 2016-18 – Statement of Cash Flows: Restricted Cash retrospectively. Changes in restricted cash is presented in total cash and cash equivalents and restricted cash in the Group's consolidated of cash flows for all the years presented.

Inventories

(g) Inventories

Inventories represent products available for sale and are accounted for using the first-in-first-out method and specific identification method, and are valued at the lower of cost or net realizable value. Adjustments are recorded to write down the cost of inventory to the net realizable value due to slow-moving merchandise and broken assortments, which are dependent upon factors such as historical trends with similar merchandise, inventory aging, and historical and forecasted consumer demand. Write downs of $2,065, $2,456 and reversal of $458 when sold were recorded in cost of revenues in the consolidated statements of operations for the years ended December 31, 2017, 2018 and 2019, respectively.

Property and equipment, net

(h) Property and equipment, net

Property and equipment, net, resulting from direct purchase, is stated at cost less accumulated depreciation.

Property and equipment, resulting from the acquisitions of entities accounted for using the acquisition method of accounting, are estimated by management based on the fair value of assets acquired at the acquisition date.

Depreciation are calculated on a straight-line basis over the following estimated useful lives:


	Useful lives

Leasehold improvements	Lesser of the lease term or estimated useful life of the assets
Furniture, fixtures and office equipment	0.2 - 5	years
Software and IT equipment	0.1 - 3	years
Vehicles	0.6 - 9	years

Acquired intangible assets, net

(i) Acquired intangible assets, net

Intangible assets, other than goodwill, resulting from the acquisitions of entities accounted for using the acquisition method of accounting are estimated by management based on the fair value of assets acquired at the acquisition date.

Identifiable intangible assets are carried at cost less accumulated amortization. Amortization of the intangible assets with definite life are computed using the straight-line method over the estimated useful lives.


	Useful lives

Domain name/Trade name	Indefinite life
Technology	3-5	years
Members	4	years
Branding	10	years
In-progress orders	0.1	year

Long-term investments

(j) Long-term investments

The Group’s long-term investments consist of equity investment without readily determinable fair value and equity method investment.

Equity investments without readily determinable fair value

Prior to adopting ASU 2016-01 Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, on January 1, 2018, investment in an entity where the Group does not have readily determinable fair value and the Group does not have significant influence, is accounted for using the cost method. The Group only adjusts for other-than-temporary declines in fair value and distributions of earnings that exceed the Group’s share of earnings since its investment.

Management regularly evaluated the impairment of the cost method investments based on performance and financial position of the investee as well as other evidence of market value. Such evaluation included, but was not limited to, reviewing the investee’s cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing needs. The Group did not record any impairment loss on its cost method investment during the year ended December 31, 2017.

Subsequent to the Group’s adoption of ASU 2016-01 on January 1, 2018, equity investments, except for those accounted for under the equity method, those that result in consolidation of the investee and certain other investments, are measured at fair value, and any changes in fair value are recognized in earnings. For equity securities without readily determinable fair value and do not qualify for the existing practical expedient in Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”) to estimate fair value using the net asset value per share (or its equivalent) of the investment, the Company elected to use the measurement alternative to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any.

Pursuant to ASU 2016-01, for equity investments measured at fair value with changes in fair value recorded in earnings, the Company does not assess whether those securities are impaired. For those equity investments that the Company elects to use the measurement alternative, the Company makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the entity has to estimate the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the entity has to recognize an impairment loss in net (loss) / income equal to the difference between the carrying value and fair value. The Group did not record any impairment loss on its equity investment without readily determinable fair value during the years ended December 31, 2018 and 2019.

Equity method investment

Investment in an entity where the Group can exercise significant influence, but not control, is accounted for using the equity method. Whether or not the Group can exercise significant influence with respect to an equity investee depends on an evaluation of several factors including, among others, the Group’s representation on the investee’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee. Under the equity method, the investment is initially recorded at cost and adjusted for the Group’s share of undistributed earnings or losses of the investee.

The management regularly evaluates the impairment of the equity investment based on performance and the financial position of the investee as well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investee’s cash position, recent financings, projected and historical financial performance, cash flow forecasts and financing needs. An impairment charge is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. The Group did not record any impairment loss on its equity method investment during the years ended December 31, 2017, 2018 and 2019.

Impairment of long-lived assets and intangible assets with definite life

(k) Impairment of long-lived assets and intangible assets with definite life

Long-lived assets, such as property and equipment and definite-lived intangible assets, are stated at cost less accumulated depreciation or amortization.

The Group evaluates the recoverability of long-lived assets, including identifiable intangible assets with determinable useful lives, whenever events or changes in circumstances indicate that a long-lived asset’s carrying amount may not be recoverable. The Group measures the carrying amount of long-lived asset against the estimated undiscounted future cash flows associated with it. Impairment exists when the sum of the expected future net cash flows is less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value. Fair value is estimated based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Group to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts.

Impairment of Goodwill and Indefinite-lived intangible assets

(l) Impairment of goodwill and indefinite-lived intangible assets

Goodwill and intangible assets deemed to have indefinite useful lives are not amortized, but tested for impairment annually as of December 31 or more frequently if event and circumstances indicate that they might be impaired.

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. ASC 350-20, Goodwill, permits the Group 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, using a two - step approach. If this is the case, the two-step 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 two-step goodwill impairment test is not required.

If the two-step goodwill impairment test is required, the first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not considered impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of the affected reporting unit’s goodwill to the carrying value of that goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. In estimating the fair value of each reporting unit the Group estimates the future cash flows of each reporting unit, the Group has taken into consideration the overall and industry economic conditions and trends, market risk of the Group and historical information.

An intangible asset that is not subject to amortization is tested for impairment at least annually or if events or changes in circumstances indicate that the asset might be impaired. Such impairment test compares the fair values of assets with their carrying value amounts and an impairment loss is recognized if and when the carrying amounts exceed the fair values. The estimates of fair values of intangible assets not subject to amortization are determined using various discounted cash flow valuation methodologies. Significant assumptions are inherent in this process, including estimates of discount rates.

Business combinations

(m) Business combinations

The Company accounts for its business combinations using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations. The purchase method of accounting requires that the consideration transferred to be allocated to the assets, including separately identifiable assets and liabilities the Company acquired, based on their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity and debt instruments issued as well as the contingent considerations as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of (i) the total of cost of acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in earnings.

Treasury shares, at cost

(n) Treasury shares, at cost

Treasury shares represent shares of the Company’s stock that have been issued, repurchased by the Company, and that have not been retired or canceled. These shares have no voting rights and are not entitled to receive dividends and are excluded from the weighted average outstanding shares in calculation of net income per share. Treasury shares are recorded at cost.

Revenue recognition

(o) Revenue recognition

The Group recognizes revenue (i) from product sales of apparel and other general merchandise through its websites and other online platforms, and (ii) from logistic services to small businesses in China and also globally to individual customers.

Periods prior to January 1, 2018

Product sales

The Group recognizes revenue from the sale of apparel and other general merchandise through its websites and other online platforms.

Prior to January 1, 2018, the Group recognizes revenue when the following four revenue recognition criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) the selling price is fixed or determinable, and (iv) collectability is reasonably assured.

Revenue is stated net of value added tax (“VAT”), discounts and return allowances.

The Group defers the recognition of revenue and the related product costs for shipments that are in-transit to the customer. Payments received in advance of delivery are classified as advances from customers. The Group recognizes the revenue at the time the customers receive the products even for international shipment. Amounts collected by delivery service providers but not remitted to the Group are classified as accounts receivable on the consolidated balance sheets.

Certain employees of the Group register in supplemental online outlets under their own name as these websites require registration using identity cards of individuals to sell the Group’s product on behalf of the Group. The Group has contractual arrangements with these employees which require them to transfer customers’ payments received to the Group for the sale of the products. The Group evaluates the sales transactions performed by these employees on behalf of the Group to determine whether to recognize the revenues on a gross or net basis. The determination is based upon an assessment as to whether the Group acts as a principal or agent when selling the products. All of the revenues involving employees performing sales transactions on the supplemental online outlets on behalf of the Group are currently accounted for on a gross basis since the Group is the primary obligor, has general and physical inventory risk, latitude in establishing prices, discretion in supplier selection and credit risks. Such sales transactions ceased in the year ended December 31, 2018.

In arrangements whereby certain suppliers place the products at the Group’s premises, the risk and rewards of ownership of the products passed to the Group upon confirmation of orders by the Group’s customers. All of the revenues involving these arrangement are accounted for on a gross basis since the Group is the primary obligor, has physical inventory risk, latitude in establishing prices, discretion in supplier selection and credit risks.

The Group periodically provides incentive offers to its customers to encourage purchases. Current discount offers, when accepted by its customers, are treated as a reduction to the purchase price of the related transaction and are included as a net amount in revenue. The Group also provides discount reward, which may only be used in the future, to customers who have made a current purchase. As the right of receiving future discount does not represent a significant and incremental discount to the customer, the discount is treated as a reduction of revenue when the future transaction takes place.

Promotional free products, which cannot be redeemed for cash are normally shipped together with current qualified sales. Cost of these promotional items or free products are recorded as cost of sales when the revenue of the current qualified sales is recognized.

The Group allows customers to return goods within a period of time subsequent to the delivery of the goods purchased. The Group changed its sales return policy to offer returns for items in 2017 from 30 days to 14 days of receipt of shipment. The Group estimates return allowance based on historical experience. The estimation of return allowances is adjusted to the extent that actual returns differ, or are expected to differ. Changes in the estimated return allowance are recognized through a cumulative catch-up adjustment in the period of change and will impact the amount of revenues in that period.

Outbound shipping charges to customers are included as a part of the revenues. Outbound shipping-related costs are included in the cost of product sales.

Prior to January 1, 2018, VAT on sales is calculated at 17% on revenue from sale of products in the PRC and paid after deducting input-VAT on purchases. The net VAT balance between input-VAT and output-VAT is reflected in the consolidated financial statement as prepaid expenses and other current assets or accrued expenses and other current liabilities.

Service

The Group derive services revenue mainly from provision of logistic services to small businesses in China and also globally to individual customers. Prior to January 1, 2018, service revenue is recognized when persuasive evidence of an arrangement exists, service has been performed, the fee is fixed or determinable and collectability is reasonably assured. Revenue for logistic services are recognized when the packages are delivered to the recipients.

Period commencing January 1, 2018

The Group adopted Accounting Standards Update (or ASU) 2014-09 - Revenue from Contracts with Customers on January 1, 2018. The Company applied ASU 2014-09 using the modified retrospective method for contracts which were not completed at the date of initial adoption. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue recognition, while prior period amounts were not adjusted and continue to be reported in accordance with ASC 605, Revenue Recognition.

Since the adoption of Accounting Standards Update (or ASU) 2014-09 - Revenue from Contracts with Customers, starting from January 1, 2018, the Group recognizes revenues upon the satisfaction of its performance obligation (upon transfer of control of promised goods or services to customers) in amounts that reflects the consideration to which the Group expects to be entitled to in exchange for those goods or services, excluding amounts collected on behalf of third parties (for example, value added taxes). For each performance obligation satisfied over time, the Group recognizes revenue over time by measuring the progress toward complete satisfaction of that performance obligation. If the Group does not satisfy a performance obligation over time, the performance obligation is satisfied at a point in time.

The adoption of new revenue standard did not impact retained earnings as of January 1, 2018.

Product sales

The Group identified one performance obligation which is to sell products to customers through its websites and other online platforms. Revenues of product sales are recognized on a gross basis and presented as product sales on the consolidated statements of operations, because (i) the Group is primarily responsible for fulfilling the promise to provide the specified products; (ii)the Group bears the physical and general inventory risk once the products are delivered to its warehouses; (iii) the Group has discretion in establishing price.

The Group established a membership program whereby a registered member earns certain points for visiting one of the Group’s websites. Points could only be redeemed in connection with a future purchase. Such points, when redeemed, were treated as reduction of revenues at the time of future purchase. Since the points were earned not based on past sales transactions, no accruals were made at the time when earned by the registered members.

Included in our product sales, prime membership revenues are amortized over the membership period with straight-line method. Prime is a subscription based membership programme. Items purchased from Prime shop enjoy flat international shipping per checkout.

Product sales, net of discounts, return allowance and VAT, are recognized at the point in time when customers accept the products upon delivery. Revenues are measured as the amount of consideration the Group expects to receive in exchange for transferring products to consumers. Return allowance, which reduce revenues, are estimated utilizing the expected value method based on historical experience of return. In 2018 the Group allowed customers to return the goods with no quality-related issues within 14 days of receipt of shipment, and subsequently changed to 7 days in 2019. The Group allows customers to return most of goods with quality-related issues within 30 days of receipt of shipment, and to return lamps and faucets with quality-related issues within 12 months. Liabilities for return allowance are included in “Accrued expenses and other current liabilities” and were $1,336 and $381 as of December 31, 2018 and 2019.

The Group utilizes delivery service providers to deliver products to its consumers (“shipping activities”) but the delivery service is not considered as a separate obligation as the shipping activities are performed before the consumers obtain control of the products. Therefore, shipping activities are not considered a separate promised service to the consumers but rather are activities to fulfill the Group's promise to transfer the products. Outbound shipping charges to customers are included as a part of the revenues and outbound shipping-related costs are recorded as cost of product sales. Shipping costs incurred for sales of products and recognized as cost of product sales were $60,131, $51,731 and $36,691 for the years ended December 31, 2017, 2018 and 2019, respectively.

Services and others

The Group derives services revenues mainly from provision of logistic services to small businesses in China and also globally to individual customers and from provision of systems and technical services. Revenues from logistic services are recognized over the delivery period since the customers simultaneously receive and consume benefits provided by the Group’s performance as the Group performs during the delivery period. Revenues from provision of systems and technical services are recognized upon completion of services and provision of systems.

Contract Balances

(p) Contract Balances

Timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable represents amounts invoiced and revenue recognized prior to invoicing when the Group has satisfied its performance obligation and has the unconditional right to payment. For the years ended December 31, 2017 and 2018, accounts receivable consisted of accounts receivable for logistic services, accounts receivable for cash collected by the delivery service providers on behalf of the Group and accounts receivable for cash collected by supplemental online outlets. For the year ended December 31, 2019, accounts receivable included receivables due from B2B partners and cash collected by supplemental online outlets. The Group considers many factors in assessing the collectability of its accounts receivable, such as the age of the amounts due, the customer’s payment history, creditworthiness, financial conditions of the customers and industry trend. An allowance for doubtful accounts is recorded in the period in which a loss is determined to be probable. As of December 31, 2018 and 2019, the allowance of doubtful accounts was $533 and $1,418, respectively.

A contract liability is recognized when the Group has an obligation to transfer goods or services to a customer for which the Group has received consideration from the customer, or for which an amount of consideration is due, from the customer. It is included in advance from customers on the consolidated balance sheets.

Changes in the Group’s contract liability are presented in the following table for the years ended December 31, 2018 and 2019:


	For the year ended
	December 31, 2018		December 31, 2019
Contract liability as of January 1	$	5,248	10,246
Cash received in advance, net of VAT		199,899	240,460
Revenue recognized from opening balance of contract liability		(5,248)	(10,246)
Revenue recognized from contract liability arising during current year		(189,653)	(226,130)
Contract liability as of December 31	$	10,246	14,330

The Company has elected the practical expedient not to disclose the information about remaining performance obligations which are part of contracts that have an original expected duration of one year or less.

Cost of revenues

(q) Cost of revenues

Product sales

Cost of goods sold primarily consists of the purchase price of consumer products sold by the Group on its websites, inbound and outbound shipping charges, packaging supplies and inventory write-down. Shipping charges to receive products from its suppliers are included in inventory cost, and recognized as cost of sales upon sale of products to customers.

Services

Cost of services primarily consists of the shipping charges and cost of packaging supplies directly incurred relating to logistic services. Shipping charges are recognized as cost of revenues over the delivery period when the goods are delivered to destination.

Fulfillment

(r) Fulfillment

Fulfillment costs represent those costs incurred in operating and staffing the Group’s fulfillment and customer service centers, including (i) costs attributable to buying, receiving, inspecting, and warehousing inventories, (ii) picking, packaging, and preparing customer orders for shipment, and (iii) payment processing and related transaction costs.

Selling and marketing

(s) Selling and marketing

Selling and marketing expenses consist primarily of search engine marketing and advertising, affiliate market program expenditure, public relations expenditures; and payroll and related expenses for personnel engaged in selling, marketing and business development. The Group pays to use certain relevant key words relating to its business on major search engines and the fee is on a “cost-per-click” basis. The Group also pays commissions to participants in its affiliate program when customer referrals result in product sales, and the Group classifies such costs as selling and marketing expenses in the consolidated statements of operations. Advertising expense includes fees paid to on-line advertisers who assist the Group to advertise at targeted websites. Such fees are paid at fixed rate or calculated based on volume directed to the Group’s website. The advertising expenses for the years ended December 31, 2017, 2018 and 2019 were $62,767, $43,308 and $41,975, respectively.

General and administrative

(t) General and administrative

General and administrative expenses consist of payroll and related expenses for employees involved in general corporate functions such as accounting, finance, tax, legal, and human resources; costs associated with the use by these functions of facilities and equipment, such as depreciation expense and rent; professional fees and other general corporate costs. Also included in general and administrative expenses are payroll and related expenses for employees involved in product research and development, and systems support, as well as server charges and costs associated with telecommunications. The research and development expenses for the years ended December 31, 2017, 2018 and 2019 were $5,207, $5,694 and $17,871, respectively.

General and administrative expenses also include credit losses relating to fraudulent credit card activities which resulted in chargebacks from the payment processing agencies. The Group estimates chargebacks based on historical experience. The estimation of chargebacks is adjusted to the extent that actual chargebacks differ, or are expected to differ. The chargeback expenses for the years ended December 31, 2017, 2018 and 2019 were $2,929, $2,938 and $1,836, respectively.

Fair value

(u) 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 Group 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 instruments traded in active markets.

Level 2-inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments 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.

Financial instruments and fair value measurements

(v) Financial instruments and fair value measurements

Financial instruments of the Group primarily consist of cash and cash equivalents, restricted cash, accounts receivable, receivable from payment processing agencies, amounts due from related parties, long-term investments, long-term rental deposits, accounts payable, amounts due to related parties, convertible promissory notes, advance from customers, accrued expenses and other current liabilities and long-term payable.

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, receivable from payment processing agencies, accounts payable, amounts due to related parties, deposit liability consist of advance from customers and accrued expenses and other current liabilities as of December 31, 2018 and 2019 approximate their fair values due to short-term maturities.

The Group no longer uses the cost method of accounting for long-term investments as it was applied before, since the Group adopted the ASU 2016-01 Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, since January 1, 2018. After management's assessment of each of the equity investments except that accounted for under the equity method described in Note 9, management concluded that investment does not have readily determinable fair value, and elected the measurement alternative.

The Group measures convertible promissory notes at fair value on a recurring basis. Convertible promissory notes being recognized in its entirety at fair value were measured at fair value using unobservable inputs. It is categorized in Level 3 of the fair value hierarchy.

The carrying amount of long-term payable approximates fair value as the related interest rates approximate rates currently offered by financial institutions for similar debt instruments of comparable maturities, and the Group discloses the fair value of its long-term payable based on Level 2 inputs in Note 8.

Goodwill, long-term investments and other intangible assets are measured at fair value on a nonrecurring basis when impairment is recognized. The Group estimated the fair value of a reporting unit using the discounted cash flow method under the income approach. The discounted cash flows were based on five years financial forecasts developed by management for planning purposes and estimated discount rates. Cash flows beyond the forecasted period were estimated using a terminal value calculation. The fair values of intangible asset were determined based on various valuation methods, including the replacement cost method, the relief from royalty method and the excess earning method.

The following table present the fair value hierarchy for the liabilities measured at fair value on a recurring basis at December 31, 2018:


	December 31, 2018
	Level 1		Level 2		Level 3		Total Fair Value
Liabilities:
Convertible promissory notes	$	—	$	—	$	51,922	$	51,922

Foreign currency translation

(w) Foreign currency translation

The Company’s functional currency is the U.S. dollar (“US$”). The Company’s subsidiaries, VIEs and its VIEs’ subsidiary determine their functional currencies based on the criteria of ASC topic 830, Foreign Currency Matters.

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 functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the consolidated statements of operations.

The Group’s entities with functional currency of Renminbi (“RMB”), Euro (“EUR”), Singapore Dollar (“SGD”), Malaysian Ringgit (“RM”), Thailand Baht (“THB”) and Indonesian Rupiah (“IDR”), translate their operating results and financial position into the US$, the Group’s reporting currency. Assets and liabilities are translated using the exchange rates in effect on the balance sheet date. Revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive loss.

Income taxes

(x) Income taxes

Income taxes are provided using the asset and liability method. Under this method, deferred income taxes are recognized for tax credits and net operating losses available for carry forwards and significant temporary differences. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws and regulations applicable to the Group as enacted by the relevant tax authorities.

The impact of an uncertain income tax position on the income tax return must be 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 Group 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, 2017, 2018 or 2019, respectively.

The Company applies the provisions of ASC Topic 740, Income Taxes (“ASC 740”), in accounting for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the financial statements. The Company has elected to classify interest and penalties related to an uncertain tax position, if and when required as part of income tax expense in the consolidated statements of comprehensive income / (loss).

Comprehensive loss

(y) 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

(z) Share-based compensation

Share-based payment transactions with employees, such as share options are measured based on the grant date fair value of the equity instrument. The Group has elected to recognize compensation expense using the straight-line method for all employee equity awards granted with graded vesting provided that the amount of compensation cost recognized at any date is at least equal to the portion of the grant-date value of the options that are vested at that date, over the requisite service period of the award, which is generally the vesting period of the award. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of share-based compensation expense to be recognized in future periods.

Changes in the terms or conditions of share options are accounted as a modification under which the Group calculate whether there is any excess of the fair value of the modified option over the fair value of the original option immediately before its terms are modified, measured based on the share price and other pertinent factors at the modification date. For vested options, the Group recognizes incremental compensation cost in the period of the modification occurred and for unvested options, the Group recognizes, over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date.

Leases

(aa) Leases

On January 1, 2019, the Group adopted Accounting Standards Update (“ASU”) No. 2016-02 (“ASU 2016-02”), Leases (Topic 842), using the modified retrospective transition method and elected the transition option to use an effective date of January 1, 2019 as the date of initial application. As a result, the comparative periods were not restated.

The Group has elected the package of practical expedients permitted which allows the Group not to reassess the following at adoption date: (i) whether any expired or existing contracts are or contains a lease, (ii) the lease classification for any expired or existing leases, and (iii) initial direct costs for any expired or existing leases (i.e. whether those costs qualify for capitalization under ASU 2016-02). The Group also elected the short-term lease exemption for certain classes of underlying assets including office space, warehouses and server rental, with lease term of 12 months or less. For lease arrangement with lease and non-lease components, the Group made the policy election to combine the lease and non-lease components as one-single component under Topic 842.

The Group’s accounting policy effective on the adoption date of ASU 2016-02 is as follows:

Leases are classified at the inception date as either a finance lease or an operating lease.

The Group classifies a lease as a finance lease when the lease meets any one of the following criteria at lease commencement:

a. The lease transfers ownership of the underlying asset to the lessee by the end of the lease term.

b. The lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise.

c. The lease term is for a major part of the remaining economic life of the underlying asset.

d. The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset.

e. The underlying asset is of such a specialized nature that it is expected to have no alternative use to the Company at the end of the lease term.

For both operating and financing leases, the Group records a lease liability and corresponding right-of-use (ROU) asset at lease commencement. Lease terms are based on the non-cancellable term of the lease and may contain options to extend the lease when it is reasonably certain that the Group will exercise the option. Lease liabilities represent the present value of the lease payments not yet paid, discounted using the discount rate for the lease at lease commencement.

The Group estimates its incremental borrowing rate for its leases at the commencement date to determine the present value of future lease payments when the implicit rate is not readily determinable in the lease. In estimating its incremental borrowing rate, the Group considers its credit rating and publicly available data of borrowing rates for loans of similar amount, currency and term as the lease.

Operating leases are presented as “Operating lease ROU assets” and “Operating lease liabilities”. Lease liabilities that become due within one year of the balance sheet date are classified as current liabilities. At lease commencement, operating lease ROU assets represent the right to use underlying assets for their respective lease terms and are recognized at amounts equal to the lease liabilities adjusted for any lease payments made prior to the lease commencement date, less any lease incentives received and any initial direct costs incurred by the Group.

After lease commencement, operating lease liabilities are measured at the present value of the remaining lease payments using the discount rate determined at lease commencement. Operating lease ROU assets are measured at the amount of the lease liabilities and further adjusted for prepaid or accrued lease payments, the remaining balance of any lease incentives received, unamortized initial direct costs and impairment of the ROU assets, if any. Operating lease expense is recognized as a single cost on a straight-line basis over the lease term.

Financing lease ROU assets are included in “property and equipment” and “long-term payable” on the consolidated balance sheet. Lease liabilities that become due within one year of the balance sheet date are classified as current liabilities. Financing lease ROU assets are amortized on a straight-line basis from the lease commencement date. After initial measurement, the carrying value of the lease liability is increased to reflect interest at a constant rate and reduced to reflect any lease payments made during the period.

Leases that have a term of 12 months or less at the commencement date (“short-term leases”) are not included in operating lease ROU assets and operating lease liabilities. Lease expense for the short-term leases are recognized on a straight-line basis over the lease term.

The cumulative effects of the changes made to the Group’s consolidated balance sheet as of January 1, 2019 for the adoption of ASU 2016-02 are as follows:


		Adjustments due
	Balance as of	to the adoption of	Balance as of
	December 31, 2018	ASU 2016-02	January 1, 2019
Assets:
Prepaid expenses and other current assets	5,811	(257)	5,554
Operating lease right-of-use assets	—	6,263	6,263
Liabilities:
Operating lease liabilities (current)	—	3,752	3,752
Operating lease liabilities (non-current)	—	2,360	2,360
Accrued expenses and other current liabilities	22,688	(106)	22,582

The impact of adopting ASU 2016-02 on the Group’s consolidated balance sheet as of December 31, 2019 are as follows:


		Effect of the
		adoption of ASU
	Legacy	2016-02	Balance as of
	GAAP	Higher/(lower)	December 31, 2019
Assets:
Prepaid expenses and other current assets	4,141	(522)	3,619
Operating lease right-of-use assets	—	12,233	12,233
Liabilities:
Operating lease liabilities (current)	—	3,470	3,470
Operating lease liabilities (non-current)	—	8,801	8,801
Accrued expenses and other current liabilities	29,202	(560)	28,642

The adoption of the standard did not have significant impact the Group’s consolidated statements of comprehensive (loss) / income or cash flows.

Earnings / (loss) per share

(bb) Earnings / (loss) per share

Basic earnings / (loss) per ordinary share is computed by dividing net income / (loss) attributable to ordinary shareholders by weighted average number of ordinary shares outstanding during the period.

Diluted earnings per ordinary share reflects the potential dilution that could occur if securities were exercised or converted into ordinary shares and is calculated by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the year. Ordinary equivalent shares consist of shares issuable upon convertible promissory notes using the if-converted method, and ordinary shares issuable upon the vest of nonvested shares or exercise of outstanding share options (using the treasury stock method). Ordinary equivalent shares are calculated based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. Ordinary equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such shares would be anti-dilutive.

Significant risks and uncertainties

(cc) Significant risks and uncertainties

The Group participates in an industry with rapid changes in regulations, customer demand and competition and believes that changes in any of the following areas could have a material adverse effect on the Group’s future financial position, results of operations, or cash flows: advances and trends in e-commerce industry; changes in certain supplier and vendor relationships; regulatory or other PRC related factors; and risks associated with the Group’s ability to keep and increase the market coverage.

Concentration of credit risk

(dd) Concentration of credit risk

Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash, accounts receivable, advances to suppliers, receivable from reputable payment processing agencies with high-credit ratings and long-term rental deposits. The Group places its cash and cash equivalents and restricted cash with financial institutions and third-party payment processing agencies located in the PRC, Hong Kong, United States, Netherland, Singapore, Malaysia, Thailand and Indonesia. In the event of bankruptcy of one of these financial institutions and third-party payment processing agencies, the Group may not be able to claim its cash and demand deposits back in full. The Group continues to monitor the financial strength of the financial institutions and third-party payment processing agencies. There has been no recent history of default in relation to these financial institutions and third-party payment processing agencies. For the years ended December 31, 2017 and 2018, accounts receivable primarily comprised amounts receivable from supplemental online outlets and amounts receivable from product delivery service providers. These amounts are collected from customers by the supplemental online outlets and the product delivery service providers. For the year ended December 31, 2019, accounts receivable also included receivables due from B2B partners. With respect to advances to product suppliers and long-term rental deposits, the Group performs on-going credit evaluations of the financial condition of its vendors. Receivable from payment processing agencies represented cash that had been received from customers but held by the payment processing agencies in the process of reconciliation and are collected by the Group subsequent to the year end.

Foreign currency risk

(ee) Foreign currency risk

The RMB is not a freely convertible currency. The PRC 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. The Group’s cash and cash equivalents and restricted cash denominated in RMB amounted to $4,368 and $3,952 at December 31, 2018 and 2019, respectively.

Recent accounting pronouncements not yet adopted

(ff) Recent accounting pronouncements not yet adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments and subsequently in November 2018, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. The ASUs amend the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In addition, these amendments require the measurement of all expected credit losses for financial assets, including trade accounts receivable, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This guidance and related amendments is effective for annual reporting periods beginning after December 15, 2019, including interim periods therein. Early application is permitted for all organizations for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Group is currently assessing the impact this guidance will have on its consolidated financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-04: Intangibles—Goodwill and Other (Topic 350) : Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the Board eliminated Step 2 from the goodwill impairment test. Under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity should apply the amendments in this Update on a prospective basis. An entity is required to disclose the nature of and reason for the change in accounting principle upon transition. A public business entity should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Group is evaluating the effect that adoption of this guidance will have on its consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement to ASC Topic 820, Fair Value Measurement ("ASC 820"). ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying, and/or adding certain disclosures. ASU 2018-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2019. An entity is permitted to early adopt by modifying existing disclosures and delay adoption of the additional disclosures until the effective date. The Group is evaluating the effect that adoption of this guidance will have on its consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This update simplifies the accounting for income taxes as part of the FASB’s overall initiative to reduce complexity in accounting standards. The amendments include removal of certain exceptions to the general principles of ASC 740, Income taxes, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The update is effective in fiscal years beginning after December 15, 2020, and interim periods therein, and early adoption is permitted. Certain amendments in this update should be applied retrospectively or modified retrospectively, all other amendments should be applied prospectively. The Group is evaluating the effect that adoption of this guidance will have on its consolidated financial statements and related disclosures.

(LOSS) / INCOME PER SHARE - Computation of Basic and Diluted Net (Loss)/Income Per Ordinary Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Numerator:
Net (loss) / income attributable to ordinary shareholders of LightInTheBox Holding Co., Ltd.	$ 999	$ (59,602)	$ (9,548)
Change in fair value of convertible promissory notes	$ 14,591	$ (22,791)
Denominator:
Weighted average number of shares used in calculating net (loss) / income per ordinary share -basic	137,588,401	134,495,549	137,641,562
Weighted average number of shares used in calculating net loss per ordinary share -diluted	223,517,833	134,495,549	137,641,562
Net (loss) / income per ordinary share - basic (in dollars per share)	$ 0.01	$ (0.44)	$ (0.07)
Net loss per ordinary share-diluted	$ (0.06)	$ (0.44)	$ (0.07)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

ACQUIRED INTANGIBLE ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2019

ACQUIRED INTANGIBLE ASSETS, NET

Schedule of intangible assets subject to amortization


	December 31, 2018								December 31, 2019
	Gross				Accumulated		Net		Gross				Accumulated		Net
	carrying		Accumulated		impairment		carrying		carrying		Accumulated		impairment		carrying
	amount		amortization		loss		amount		amount		amortization		loss		amount
Intangible assets not subject to amortization:
Trademark/Domain Name	$	1,220	$	—	$	(1,010)	$	210	$	1,220	$	—	$	(1,010)	$	210

Intangible assets subject to amortization:
- Technology Platform		90		(90)		—		—		90		(90)		—		—
- Non-compete Agreement		9		(7)		(2)		—		9		(7)		(2)		—
- Customer Base		32		(22)		(10)		—		32		(22)		(10)		—
- Technology		2,951		(85)		—		2,866		2,915		(660)		—		2,255
- Branding		6,871		(57)		—		6,814		6,786		(735)		—		6,051
- In-progress Orders		192		(192)		—		—		190		(190)		—		—
- Members		20		(20)		—		—		20		(20)		—		—
	$	11,385	$	(473)	$	(1,022)	$	9,890	$	11,262	$	(1,724)	$	(1,022)	$	8,516

Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2019 shares
Document and Entity Information
Entity Registrant Name	LightInTheBox Holding Co., Ltd.
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Entity Central Index Key	0001523836
Document Type	20-F
Document Period End Date	Dec. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Interactive Data Current	Yes
Entity Emerging Growth Company	false
Document Accounting Standard	U.S. GAAP
Entity Shell Company	false
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	187,214,651
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY

CONTINGENCIES	12 Months Ended
CONTINGENCIES	Dec. 31, 2019
CONTINGENCIES
CONTINGENCIES	21. CONTINGENCIES The Group’s PRC subsidiaries and VIEs, have not fully paid the contributions for employee benefit plans as required by applicable PRC regulations. While the Group believes it has made adequate provision of such outstanding amounts in the consolidated financial statements, prior failure to make payments may be in violation of applicable PRC labor-related laws and the Group may be subject to fines up to maximum of 3 times if it fails to rectify any such breaches within the period prescribed by the relevant authorities. As of December 31, 2019, there had been no actions initiated by the relevant authorities. The Group is unable to reasonably estimate the actual amount of fines and penalty that may rise if the authorities were to become aware of the non-compliance and were to take action. The Group’s PRC subsidiaries and VIEs did not withhold appropriate amount of individual income tax prior to its IPO as required by applicable PRC tax laws. While the Group believes it has made adequate provision of such outstanding amounts in the consolidated financial statements, and in March 2013, the accrued amounts were substantially paid by the Group on a voluntary basis to the relevant tax authority, the Group may still be subject to future fines or levies for such non-compliance. As of December 31, 2019, there had been no actions initiated by the relevant authorities. The Group is unable to reasonably estimate the actual amount of fines or levies that may rise if the authorities were to take action. The Group is subject to periodic legal or administrative proceedings in the ordinary course of business. The Group does not believe that any currently pending legal or administrative proceeding to which the Group is a party will have a material effect on its business or financial condition.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

12 Months Ended

Dec. 31, 2019

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES


	As of December 31,
	2018		2019

Accrued payroll and staff welfare	$	12,716	$	10,986
Individual income tax withheld		487		473
VAT and other taxes payable		880		2,484
Accrued professional fees		1,971		1,209
Accrued advertising fees		2,950		9,525
Credit card processing charges		441		323
Accrued sales return (2)		1,336		381
Current portion of finance lease liabilities		299		308
Others (1)		1,608		2,953
Total	$	22,688	$	28,642

(1)

Others mainly include deposits from vendors, current portion of minimum lease and accrued utilities.

(2)

Accrued sales return represents the estimated sales return at the end of each of the respective years. Movements during the respective years are as follows:


	Year ended December 31,
	2018		2019
Balance at January 1	$	1,236	$	1,336
Allowance for sales return accrued in the year		9,257		3,546
Utilization of accrued sales return allowance		(9,157)		(4,501)
Balance at December 31	$	1,336	$	381

SHARE OPTIONS - Summary of Stock Option Activity (Details) - 2008 Plan - Share options - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Options granted
Balance at the beginning of the period (in shares)	619,650
Granted (in shares)		44,000	120,000	4,000	546,400	1,797,300	307,250
Exercised (in shares)	(93,000)
Forfeited (in shares)	(321,950)
Balance at the end of the period (in shares)	204,700	619,650
Weighted average exercise price per option
Balance at the beginning of the period (in dollars per share)	$ 1.61
Granted (in dollars per share)				$ 1.40	$ 2.25		$ 4.75
Exercised (in dollars per share)	0.01
Forfeited (in dollars per share)	1.58
Balance at the end of the period (in dollars per share)	$ 2.39	$ 1.61

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Accounts payable	$ 17,643	$ 12,941
Advance from customers	21,731	17,732
Accrued expenses and other current liabilities	$ 28,642	$ 22,688
Ordinary shares, par value (in dollars per share)	$ 0.000067	$ 0.000067
Ordinary shares, shares authorized	750,000,000	750,000,000
Ordinary shares, shares issued	203,349,887	150,011,929
Ordinary shares, shares outstanding	187,214,651	134,456,369
Treasury stock, shares	14,011,790	13,525,810
Consolidated VIEs
Accounts payable	$ 135	$ 5
Accrued expenses and other current liabilities	$ 1,012	$ 4,673

CONSOLIDATED STATEMENTS OF CHANGES IN (DEFICIT) / EQUITY - USD ($) $ in Thousands	Ordinary Shares	Additional Paid-in Capital	Treasury Shares, at cost	Accumulated Other Comprehensive Loss	Accumulated Deficit	Non-controlling Interests	Forward Contracts	Total
Balance at Dec. 31, 2016	$ 10	$ 236,949	$ (20,806)	$ (579)	$ (149,738)			$ 65,836
Balance (in shares) at Dec. 31, 2016	137,820,605
Increase (Decrease) in Stockholders' Equity
Issuance of ordinary shares upon vesting of nonvested shares	$ 1							1
Issuance of ordinary shares upon vesting of nonvested shares (in shares)	437,830
Exercise of share options		37						37
Exercise of share options (in shares)	293,362
Share-based compensation		1,865						1,865
Repurchase of ordinary shares			(3,101)					(3,101)
Repurchase of ordinary shares (in shares)	(2,886,920)
Net (loss) / income					(9,548)			(9,548)
Foreign currency translation adjustment, net of nil income taxes				380				380
Balance at Dec. 31, 2017	$ 11	238,851	(23,907)	(199)	(159,286)			55,470
Balance (in shares) at Dec. 31, 2017	135,664,877
Increase (Decrease) in Stockholders' Equity
Issuance of ordinary shares upon vesting of nonvested shares (in shares)	453,652
Exercise of share options		13						13
Exercise of share options (in shares)	52,000
Share-based compensation		405						405
Repurchase of ordinary shares			(3,354)					(3,354)
Repurchase of ordinary shares (in shares)	(2,704,988)
Non-controlling interests resulting for acquisition of Ezbuy						$ (4)		(4)
Net (loss) / income					(59,601)	(1)		(59,602)
Foreign currency translation adjustment, net of nil income taxes				(733)				(733)
Balance at Dec. 31, 2018	$ 11	239,269	(27,261)	(932)	(218,887)	(5)		(7,805)
Balance (in shares) at Dec. 31, 2018	134,456,369
Increase (Decrease) in Stockholders' Equity
Issuance of ordinary shares upon vesting of nonvested shares (in shares)	1,813,304
Issuance of ordinary shares upon conversion of convertible promissory notes	$ 3	21,559						21,562
Issuance of ordinary shares upon conversion of convertible promissory notes (in shares)	51,337,958
Exercise of share options (in shares)	93,000
Share-based compensation		2,060						2,060
Repurchase of ordinary shares			(251)					(251)
Repurchase of ordinary shares (in shares)	(485,980)
Net (loss) / income					999	59		1,058
Foreign currency translation adjustment, net of nil income taxes				(512)				(512)
Balance at Dec. 31, 2019	$ 14	$ 262,888	$ (27,512)	$ (1,444)	$ (217,888)	$ 54	$ 15,769	31,881
Balance (in shares) at Dec. 31, 2019	187,214,651
Increase (Decrease) in Stockholders' Equity
Forward contracts							$ 15,769	$ 15,769

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)

12 Months Ended

Dec. 31, 2019

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Schedule of components of other current assets which are included in the prepaid expenses and other current assets

Components of other current assets which are included in the prepaid expenses and other current assets are as follows:


	As of December 31,
	2018		2019

Receivable from payment processing agencies (1)	$	1,386	$	217
Prepayment to suppliers		838		967
Rental deposits and prepaid rents		268		680
Deferred expense		686		350
Others		2,633		1,405
Total	$	5,811	$	3,619

(1)

INCOME TAXES

12 Months Ended

Dec. 31, 2019

INCOME TAXES

INCOME TAXES

15. INCOME TAXES

Cayman Islands

The Company and Ezbuy are two tax-exempted companies incorporated in the Cayman Islands and are not subject to tax on income or capital gains.

Hong Kong

Light In The Box, Lanting International Holding Limited (“Lanting International”), LightInTheBox International Logistic Co., Ltd. (“LightInTheBox Logistic”), Light Square Limited (“Light Square”), and Ezbuy HK are located in Hong Kong and subject to Hong Kong profits tax at 16.5% with respect to the profit generated from Hong Kong. It is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends. A two-tiered profits tax rates regime was introduced since year 2018 where the first HK$2,000 of assessable profits earned by a company will be taxed at half of the current tax rate (8.25%) whilst the remaining profits will continue to be taxed at 16.5%. There is an anti-fragmentation measure where each group will have to nominate only one company in the group to benefit from the progressive rates. The Group did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong for any of the years presented.

PRC

The Company’s subsidiaries and VIEs in the PRC are subject to the statutory rate of 25%, in accordance with the Enterprise Income Tax law (the ‘‘EIT Law’’), which was effective since January 1, 2008 except for the following entities eligible for preferential tax rates.

Lanting Gaochuang was qualified as a software enterprise in 2012 and therefore was entitled to a two-year income tax exemption starting from 2013, its first profit making year, following by a reduced tax rate of 12.5% for the subsequent three years ended December 31, 2017. Lanting Gaochuang reapplied and obtained the HNTE certificate on December 2, 2019, and was eligible to an enterprise income tax rate of 15% from December 31, 2019 through December 31, 2021, provided that it meets the requirements.

Lanting Huitong was qualified as a technology-advanced service enterprise for the years ended December 31, 2016 and 2017, and therefore was entitled to the preferential income tax rate of 15% for those years. For the year ended December 31, 2018, Lanting Huitong was subject to 25% statutory income tax rate in accordance with the Enterprise Income Tax Law (“EIT Law”). In 2019, Lanting Huitong was qualified as a small and micro-sized enterprise (“SME”), and therefore was eligible for both the 50% reduction of taxable income and the reduced EIT rate of 20% for the year ended December 31, 2019.

Keji Chengdu was qualified as a software enterprise which allows it to utilize a two-year 100% exemption for 2018 and 2019 followed by a three-year half-reduced EIT rate effective for years from 2020 to 2022.

Suzhou Trading was qualified as SME, and therefore was subject to both the 50% reduction of taxable income and the reduced EIT rate of 20% for the year ended December 31, 2019.

Shenzhen Xuyi and Qianhai Xuyi Hunan Branch was qualified as SME in 2018 and Shenzhen Xuyi and Chongqing Xuyi qualified as SME in 2019, and therefore were subject to both the 50% reduction of taxable income and the reduced EIT rate of 20% for the respective years.

Other entities of the Group domiciled in the PRC were subject to 25% statutory income tax rate in accordance with the EIT Law in the periods presented.

Singapore

Ching International service PTE.LTD, D2D Express PTE.LTD, Avant E-Commerce Service PTE.LTD and Avant Logistic Service PTE.LTD are located in Singapore and are subject to 17% statutory income tax rate with respect to the profit generated from Singapore.

The components of (loss)/income before income tax expense and gain from equity method investment are as follows:


	Year ended December 31,
	2017		2018		2019

Cayman Islands	$	(3,705)	$	(24,750)		11,403
Hong Kong SAR		(7,205)		(36,476)		(7,728)
PRC, excluding Hong Kong SAR, and other countries		1,235		1,436		(2,504)
Total	$	(9,675)	$	(59,790)	$	1,171

For the years ended December 31, 2017, 2018 and 2019, income tax expense included in the consolidated statements of operations were attributable to the Group’s PRC subsidiaries and VIEs and comprised current tax expense of $81, $33 and $113, and deferred tax expense of nil, nil and nil for the years ended December 31, 2017, 2018 and 2019.

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


	As of December 31,
	2018		2019

Deferred tax assets:
Bad debt allowance		88		—
Accrued inventory provision		348		—
Net operating loss carry forwards		27,852		33,267
Less: Valuation allowance		(26,691)		(31,879)
Total deferred tax asset	$	1,597	$	1,388

Deferred tax liabilities:
Property and equipment	$	—	$	(18)
Acquired intangible assets	$	(1,597)	$	(1,370)
Total deferred tax liabilities	$	(1,597)	$	(1,388)
Net deferred tax assets	$	—	$	—
Net deferred tax liabilities	$	—	$	—

As of December 31, 2019, the Group had net operating losses from several of its PRC and overseas entities in the amount of $196,310, which can be carried forward to offset future taxable profit. As per filed tax returns, the net operating loss from PRC entities will expire between 2020 and 2024. For the net operating loss from overseas entities, there is no limitation of expiration according to applicable statute of Hong Kong and Singapore.

The Group operates through its subsidiaries and VIEs and the valuation allowance is considered on each individual subsidiary and VIE basis. The Group has recognized a full valuation allowance against deferred tax assets as the Group believes that it is more likely than not that its deferred tax assets will not be realized as it does not expect to generate sufficient taxable income in the near future.

Movement of valuation allowance


	Year ended December 31,
	2018		2019
Balance at beginning of the period	$	20,986	$	26,691
Additions		5,705		5,188
Balance at end of the period	$	26,691	$	31,879

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


	Year ended December 31,
	2017			2018			2019

Loss before provision of income tax	$	(9,675)		$	(59,790)		$	1,171
Statutory tax rate in the PRC		25	%		25	%		25	%
Income tax at statutory tax rate		(2,419)			(14,948)			293
Non-deductible expenses		42			115			10
Effect of preferential tax rates		(67)			7			(135)
Utilization of tax loss previously not recognized		(99)			—			—
Effect of income tax rate differences in jurisdictions other than the PRC		1,456			9,154			(2,277)
Statutory income/expense		—			—			(653)
Deferred tax expense		—			—			(2,313)
Changes in valuation allowances		1,168			5,705			5,188
Income tax expense	$	81		$	33		$	113

As of and for the years ended December 31, 2017, 2018 and 2019, there were no significant impact from tax uncertainties on the Company’s financial position and result of operations. The company does not expect the amount of unrecognized tax benefits to increase significantly in the next 12 months.

The Company and its subsidiaries’ major tax jurisdictions are Hong Kong, PRC, and Singapore. Income tax returns of the Company and its subsidiaries remain open and subject to examination by the local tax authorities of Hong Kong, PRC and Singapore until the statute of limitations expire in each corresponding jurisdiction. The statute of limitations in Hong Kong, PRC and Singapore are six years, five years and five years, respectively.

PARENT ONLY INFORMATION

12 Months Ended

Dec. 31, 2019

PARENT ONLY INFORMATION

PARENT ONLY INFORMATION

23. PARENT ONLY INFORMATION

Basis of presentation

Condensed financial information is used for the presentation of the Company, or the parent company. The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Group’s consolidated financial statements except that the parent company used the equity method to account for its investment in its subsidiaries and VIEs.

Investments in subsidiaries and VIEs

The Company and its subsidiaries and VIEs were included in the consolidated financial statements where the intercompany transactions and balances were eliminated upon consolidation. For purpose of the Company’s standalone financial statements, its investments in subsidiaries and VIEs were reported using the equity method of accounting. The Company’s deficit in subsidiaries and VIEs were reported as equity in losses of subsidiaries and VIEs 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 parent only information, the parent company has continued to reflect its share, based on its proportionate interest, of the losses of subsidiaries, VIEs and VIEs’ subsidiary regardless of the carrying value of the investment even though the parent company is not obligated to provide continuing support or fund losses.

The following represents condensed unconsolidated financial information of LightInTheBox Holding Co., Ltd.

Condensed Balance Sheets:


	December 31,
	2018		2019
ASSETS
Current assets
Cash and cash equivalents	$	311	$	134
Prepaid expenses and other current assets		168		209
Amounts due from subsidiaries and VIEs		166,636		164,146
TOTAL ASSETS	$	167,115	$	164,489

LIABILITIES AND (DEFICIT) / EQUITY

Current Liabilities
Convertible promissory notes		51,922		—
Accrued expenses and other current liabilities		1,880		618
Deficit of investment in subsidiaries and VIEs		121,113		132,044
TOTAL LIABILITIES	$	174,915	$	132,662

(DEFICIT) / EQUITY
Ordinary shares	$	11	$	14
Additional paid-in capital		239,269		262,888
Forward contracts		—		15,769
Treasury shares, at cost		(27,261)		(27,512)
Accumulated deficit		(218,887)		(217,888)
Accumulated other comprehensive loss		(932)		(1,444)
TOTAL (DEFICIT) / EQUITY		(7,800)		31,827
TOTAL LIABILITIES AND (DEFICIT) / EQUITY	$	167,115	$	164,489

Condensed Statements of Operations and Comprehensive (Loss)/Income:


	Year ended December 31
	2017		2018		2019
General and administrative		2,246		1,145		1,113
Operating loss		(2,246)		(1,145)		(1,113)
Share of loss from subsidiaries and VIEs		(7,407)		(35,665)		(12,479)
Interest income		105		—		—
Change in fair value of convertible promissory notes		—		(22,791)		14,591
(Loss) / Income before income taxes		(9,548)		(59,601)		999
Income tax expense		—		—		—
Net (loss) / income		(9,548)		(59,601)		999
Other comprehensive (loss) / income:
Foreign currency translation adjustment, net of nil income taxes		380		(733)		(512)
Total comprehensive (loss) / income	$	(9,168)	$	(60,334)	$	487

Condensed Statements of Cash Flows:


	Year ended December 31,
	2017		2018		2019

Net (loss) / income		(9,548)		(59,601)		999
Share of loss from subsidiaries and VIEs		7,407		35,665		12,479
Change in fair value of convertible promissory notes		—		22,791		(14,591)
Prepaid expenses and other current assets		112		283		(41)
Accrued expenses and other current liabilities		(126)		(1,469)		(1,262)
Net cash used in operating activities	$	(2,155)	$	(2,331)	$	(2,416)
Changes in amounts due from subsidiaries and VIEs		(23,883)		4,512		2,490
Net cash (used in) / provided by investing activities	$	(23,883)	$	4,512	$	2,490
Proceeds from private placement and options exercised		37		13		—
Repurchase of ordinary shares		(3,101)		(3,354)		(251)
Net cash used in financing activities	$	(3,064)	$	(3,341)	$	(251)
Net decrease in cash and cash equivalents		(29,102)		(1,160)		(177)
Cash and cash equivalents at beginning of the year		30,573		1,471		311
Cash and cash equivalents at end of the year		1,471		311		134

ACQUIRED INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2019

ACQUIRED INTANGIBLE ASSETS, NET

ACQUIRED INTANGIBLE ASSETS, NET

7. ACQUIRED INTANGIBLE ASSETS, NET

The Group’s intangible assets, presented in the following table, arose from the acquisition of Shanghai Ouku on May 24, 2010 , the acquisition of the fashion-focused site business from Ador Inc. on December 31, 2013 and the acquisition of Ezbuy on December 10, 2018.


	December 31, 2018								December 31, 2019
	Gross				Accumulated		Net		Gross				Accumulated		Net
	carrying		Accumulated		impairment		carrying		carrying		Accumulated		impairment		carrying
	amount		amortization		loss		amount		amount		amortization		loss		amount
Intangible assets not subject to amortization:
Trademark/Domain Name	$	1,220	$	—	$	(1,010)	$	210	$	1,220	$	—	$	(1,010)	$	210

Intangible assets subject to amortization:
- Technology Platform		90		(90)		—		—		90		(90)		—		—
- Non-compete Agreement		9		(7)		(2)		—		9		(7)		(2)		—
- Customer Base		32		(22)		(10)		—		32		(22)		(10)		—
- Technology		2,951		(85)		—		2,866		2,915		(660)		—		2,255
- Branding		6,871		(57)		—		6,814		6,786		(735)		—		6,051
- In-progress Orders		192		(192)		—		—		190		(190)		—		—
- Members		20		(20)		—		—		20		(20)		—		—
	$	11,385	$	(473)	$	(1,022)	$	9,890	$	11,262	$	(1,724)	$	(1,022)	$	8,516

The amortization expenses incurred for the years ended December 31, 2017, 2018 and 2019 were $5, $298 and $1,264, respectively. For the years ended December 31, 2017, 2018 and 2019, no impairment loss was recorded.

The estimated amortization expense for intangible assets in each of the next five years are $1,264, $1,264, $1,264, $1,216, and $684 respectively.

(LOSS) / INCOME PER SHARE

12 Months Ended

Dec. 31, 2019

(LOSS) / INCOME PER SHARE

(LOSS) / INCOME PER SHARE

16. (LOSS) / INCOME PER SHARE

The following table sets forth the computation of basic and diluted net (loss)/income per ordinary share for the following years:


	Year ended December 31,
	2017		2018		2019

Numerator:
Net (loss) / income attributable to ordinary shareholders of LightInTheBox Holding Co., Ltd.	$	(9,548)	$	(59,602)	$	999
Net : Change in fair value of convertible promissory notes		—		—		14,591
Denominator:
Weighted average number of shares used in calculating net (loss) / income per ordinary share —basic	$	137,641,562	$	134,495,549	$	137,588,401
Weighted average number of shares used in calculating net loss per ordinary share —diluted	$	137,641,562	$	134,495,549	$	223,517,833
Net (loss) / income per ordinary share- basic	$	(0.07)	$	(0.44)	$	0.01
Net loss per ordinary share- diluted	$	(0.07)	$	(0.44)	$	(0.06)

As a result of the Group’s net loss for the years ended December 31, 2017 and 2018, 890,500 and 619,650 options outstanding, 1,084,284 and 548,780 nonvested shares outstanding, nil and 88,883,116 shares upon conversion of convertible promissory notes, were excluded from the computation of diluted net loss per share as their inclusion would have been anti-dilutive. For the year ended December 31, 2019,204,700 options outstanding and 460,000 nonvested shares outstanding were excluded from the computation of diluted net loss per share as their inclusion would have been anti-dilutive.

GOODWILL

12 Months Ended

Dec. 31, 2019

GOODWILL

GOODWILL

6. GOODWILL

On December 10, 2018, the Group acquired Ezbuy and the acquired assets were recorded at fair value at the date of acquisition, including goodwill of $27,479. See Note 3 for details of acquisition of Ezbuy.

All goodwill are allocated to the product sales segment.

The changes in the carrying amount of goodwill for the years ended December 31, 2018 and 2019, are as follows:


	Ador Inc		Ezbuy		Total
Balance at January 1, 2018
Goodwill	$	690	$	—	$	690
Accumulated impairment loss		—		—		—
	$	690	$	—	$	690
Goodwill acquired during the year		—		27,479		27,479
Impairment loss		—		—		—
Balance at December 31, 2018
Goodwill	$	690	$	27,479	$	28,169
Accumulated impairment loss		—		—		—
	$	690	$	27,479	$	28,169
Effect of exchange rate changes on goodwill		—		(247)		(247)
Impairment loss		—		—		—
Balance at December 31, 2019
Goodwill	$	690	$	27,232	$	27,922
Accumulated impairment loss		—		—		—
	$	690	$	27,232	$	27,922

ORDINARY SHARES	12 Months Ended
ORDINARY SHARES	Dec. 31, 2019
ORDINARY SHARES
ORDINARY SHARES	12. ORDINARY SHARES On June 8, 2016, the Company announced that the implementation of a share repurchase program of up to $10 million worth of its outstanding ADS representing its ordinary shares from June 15, 2016 through June 14, 2017. Our board of directors subsequently extended the existing share repurchase program for an additional twelve month period, to June 14, 2018. Pursuant to the share repurchase plan, the Company repurchased 5,410,411 ADSs and 6,762,905 ADSs during the year ended December 31, 2017 and 2018, representing 10,820,822 ordinary shares and 13,525,810 ordinary shares with a total consideration of approximately $23,907 and $27,261. On December 23, 2019, the Company announced the implementation and the execution of a share repurchase program of up to US$3 million of our ordinary shares in the form of American Depositary Shares through June 28, 2020. Pursuant to the share repurchase plan, the Company repurchased 242,990 ADSs during the year ended December 31, 2019, representing 485,980 ordinary shares with a total consideration of approximately $251. The shares repurchased by the Company had not been retired or canceled and were accounted for at cost as treasury stock. In connection with the issuance of ordinary shares, the Group also granted a warrant to the investor to purchase up to 7,455,000 ordinary shares (equivalent to 3,727,500 ADS) at exercise price of $2.75 per ordinary share. The warrant is exercisable starting from September 30, 2016 and was terminated on March 30, 2018 without being exercised. The Group accounts for the warrant under the authoritative guidance in accounting for derivative financial statements indexed to and potentially settled in, a company’s own stock and has determined the warrant should be classified as equity in its consolidated financial statements at fair value at the date of grant. No subsequent charges in fair value were recognized. The Group used the Black-Scholes pricing model to value the warrant and determined the fair value of the warrant at the date of the grant is immaterial. On December 11, 2019, the Company issued 13,154,284 ordinary shares and 19,091,837 ADSs (representing 38,183,674 ordinary shares) upon the maturity of the convertible promissory notes issued to certain of Ezbuy’s shareholders. In January and March 2020, the Company issued 37,545,158 ordinary shares to the rest of Ezbuy’s sharehoders. See Note 11 for details.

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Revenues
Revenues	$ 243,626	$ 227,539	$ 319,881
Cost of revenues
Cost of revenues	146,029	166,343	214,261
Gross profit	97,597	61,196	105,620
Operating expenses:
Fulfillment	24,900	15,127	17,291
Selling and marketing	51,111	50,508	68,891
General and administrative	37,811	33,042	29,605
Other operating income	(173)
Total operating expenses	113,649	98,677	115,787
Loss from operations	(16,052)	(37,481)	(10,167)
Exchange loss on offshore bank accounts			(89)
Interest income	297	487	581
Interest expense	(66)	(5)
Change in fair value of convertible promissory notes	14,591	(22,791)
Other income, net	283
Total other income/ (loss)	15,105	(22,309)	492
Loss before income taxes and gain from equity method investment	(947)	(59,790)	(9,675)
Income tax expense	(113)	(33)	(81)
Gain from equity method investment	2,118	221	208
Net (loss) / income	1,058	(59,602)	(9,548)
Less: Net (loss) / income attributable to non-controlling interests	59	(1)
Net (loss) / income attributable to LightInTheBox Holding Co., Ltd.	$ 999	$ (59,601)	$ (9,548)
Net (loss) / income per ordinary share - basic (in dollars per share)	$ 0.01	$ (0.44)	$ (0.07)
Net loss per ordinary share - diluted	$ (0.06)	$ (0.44)	$ (0.07)
Product sales
Revenues
Revenues	$ 236,705	$ 216,407	$ 293,951
Cost of revenues
Cost of revenues	144,061	156,326	189,816
Service and others
Revenues
Revenues	6,921	11,132	25,930
Cost of revenues
Cost of revenues	$ 1,968	$ 10,017	$ 24,445

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition, General and Administrative Expense and Foreign Currency Risk (Details) $ in Thousands			12 Months Ended
	Jan. 01, 2018 USD ($) item	Dec. 31, 2017 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016	Dec. 31, 2019 USD ($)	Jan. 01, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Revenue recognition
Number of criteria to be met prior to recognition of revenue \| item	4
Return period (in days)					14 days	30 days
Accrued sales return							$ 381		$ 1,336	$ 1,236
Cost of goods sold			$ 146,029	$ 166,343	$ 214,261
Allowance of doubtful accounts			$ 1,418	533
VAT on sales as a percentage on revenue from the sale of products		17.00%
Return period, subsequent to the receipt of shipment with quality-related issues			12 months
Contract Balances
Advance from customers							21,731		17,732
Contract liability	$ 5,248	$ 5,248	$ 10,246	5,248	5,248		14,330		10,246	5,248
Accrued expenses and other current liabilities							28,642	$ 22,582	22,688
Revenue included in advance from customers
Contract liability as of January 1, 2018	$ 5,248		10,246	5,248
Cash received in advance, net of VAT			240,460	199,899
Revenue recognized from opening balance of contract liability			(10,246)	(5,248)
Revenue recognized from contract liability arising during current year			(226,130)	(189,653)
Contract liability as of December 31, 2018		$ 5,248	$ 14,330	10,246	5,248
Revenue, Remaining Performance Obligation, Optional Exemption, Performance Obligation [true false]			true
Selling and marketing
Advertising expense			$ 41,975	43,308	62,767
General and administrative
Research and development expense			17,871	5,694	5,207
Chargeback incurred			1,836	2,938	2,929
Income taxes
Income tax due to uncertain tax positions							0		0	$ 0
Accrued expenses and other current liabilities
Revenue recognition
Accrued sales return							381		1,336
Product sales
Revenue recognition
Cost of goods sold			144,061	156,326	189,816
Shipping and handling
Revenue recognition
Cost of goods sold			$ 36,691	$ 51,731	$ 60,131
Foreign currency risk \| Denominated in RMB
Foreign currency risk
Cash and cash equivalents, term deposit and restricted cash							$ 3,952		$ 4,368
Maximum
Revenue recognition
Return period, subsequent to the receipt of shipment with no quality-related issues			7 days	14 days
Return period, subsequent to the receipt of shipment with quality-related issues			30 days

ORDINARY SHARES (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 11, 2019	Jun. 08, 2016	Mar. 31, 2020	Sep. 30, 2016	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 23, 2019
Total consideration to share repurchase plan					$ 251	$ 3,354	$ 3,101
Private Placement \| Warrant
Maximum number of ordinary shares into which the warrant maybe converted				7,455,000
Exercise price of warrant per ordinary share				$ 2.75
ADS
Authorized stock repurchase		$ 10,000						$ 3,000
Period to repurchase shares		12 months
Repurchase of outstanding shares (in share)					242,990	6,762,905	5,410,411
Number of ordinary shares represented in ADS	19,091,837
ADS \| Private Placement \| Warrant
Issuance of shares (in shares)				3,727,500
Ordinary Shares
Repurchase of outstanding shares (in share)					485,980	13,525,810	10,820,822
Total consideration to share repurchase plan					$ 251	$ 27,261	$ 23,907
Issuance of shares (in shares)	13,154,284		37,545,158
Number of ordinary shares represented in ADS	38,183,674

LEASES - Future minimum lease payments for operating and financing leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Future minimum lease payments under non-cancellable operating lease agreements
2020	$ 3,516
2021	2,303
2022	1,632
2023	1,398
2024	1,193
2025 and thereafter	4,325
Total minimum operating lease payments	14,367
Less: Imputed interest	(2,096)
Total lease liability balance	12,271
Minimum payments related to leases not yet commenced	827
Assets, cost value		$ 1,760
Assets, accumulated depreciation		14
Minimum future lease payments under the capital leases
2020	361
2021	361
2022	325
2023	187
2024	34
Total minimum lease payments	1,268
Less: Imputed interest	(113)
Total lease liability balance	$ 1,155
Present value of minimum lease payments		1,455
Less current portion of minimum lease		(299)
Long-term present value of minimum lease payment		$ 1,156

LONG-TERM INVESTMENT	12 Months Ended
LONG-TERM INVESTMENT	Dec. 31, 2019
LONG-TERM INVESTMENT
LONG-TERM INVESTMENT	9. LONG-TERM INVESTMENTS On February 6, 2015, the Group acquired 30% equity interest of Shantou Demon Network Technology Co., Ltd. (“Demon”), with $2,100 cash consideration. Demon owns an online website specialized in cross-border packages tracking. The Group has significant influence but does not have control over Demon. Accordingly the Group recorded it as an equity method investment. For the years ended December 31, 2017 and 2018, the Group recorded its share of income of $208 and $221 in the consolidated statement of operations, respectively. On June 21, 2019, the Group transferred the 30% equity interest in Demon to Wuhan Zall Interconnected Technologies Co., Ltd. and recorded a gain of $2,118 for the year ended December 31, 2019. On March 31, 2017, the Group entered into an agreement with Maikailai Technologies Co., Ltd (“Maikailai”) to acquire 10.53% equity interest of Maikailai with a total cash consideration of $2,950. As the Group does not have readily determinable fair value of Maikailai and the Group does not have significant influence over Maikailai, the investment is recorded as a cost method investment prior to adopting ASU 2016-01. In accordance with ASU 2016-01, the Company elected to use the measurement alternative to measure such investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. The adoption did not result in any impact on the carrying amount of the Company’s equity investment in Maikailai measured at fair value using the measurement alternative.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Prepaid expenses and other current assets	$ 3,619	$ 5,554	$ 5,811
Operating lease right-of-use assets	12,233	6,263
Operating lease liabilities(current)	3,470	3,752
Operating lease liabilities(non-current)	8,801	2,360
Accrued expenses and other current liabilities	28,642	$ 22,582	22,688
ASU 2016-02 \| Adjustment
Prepaid expenses and other current assets	(522)		(257)
Operating lease right-of-use assets	12,233		6,263
Operating lease liabilities(current)	3,470		3,752
Operating lease liabilities(non-current)	8,801		2,360
Accrued expenses and other current liabilities	(560)		$ (106)
Previous Accounting Guidance
Prepaid expenses and other current assets	4,141
Accrued expenses and other current liabilities	$ 29,202

STATUTORY RESERVES AND RESTRICTED NET ASSETS	12 Months Ended
STATUTORY RESERVES AND RESTRICTED NET ASSETS	Dec. 31, 2019
STATUTORY RESERVES AND RESTRICTED NET ASSETS
STATUTORY RESERVES AND RESTRICTED NET ASSETS	18. STATUTORY RESERVES AND RESTRICTED NET ASSETS In accordance with the PRC laws and regulations, the group is required to provide for certain statutory reserves, namely general reserve, enterprise expansion reserve, and staff welfare and bonus reserve, all of which are appropriated from net profit as reported in their PRC statutory accounts. The Group’s subsidiaries 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. 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 Group’s subsidiaries. There are no appropriations to these reserves by the Group’s PRC (mainland) subsidiaries for the years ended December 31, 2017, 2018 and 2019. As a result of these PRC laws and regulations and the requirement that distributions by the PRC entities can only be paid out of distributable profits computed in accordance with the PRC GAAP, the PRC entities are restricted from transferring a portion of their net assets to the Group. Amounts restricted include paid-in capital and the statutory reserves of the Company’s PRC subsidiaries and VIEs. As of December 31, 2019, the amounts of capital represented the amount of net assets of the relevant subsidiaries and VIEs in the Group not available for distribution amounted to $6,266.

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities
Net (loss) / income	$ 1,058	$ (59,602)	$ (9,548)
Adjustments to reconcile net (loss)/income to net cash used in operating activities:
Depreciation and amortization	2,518	870	769
Loss /(Gain) on disposal of property, plant and equipment	(1)	36
Share-based compensation	2,060	405	1,865
Unrealized foreign exchange loss / (gain)	(129)	339	89
Gain from equity method investment	(1,988)	(221)	(208)
Change in fair value of convertible promissory notes	(14,591)	22,791
Bad debt expense / (reversal)	(199)	533
Inventory write-down / (reversal when sold)	(458)	2,456	2,065
Changes in operating assets and liabilities, net of effect of acquisition of Ezbuy:
Accounts receivable	(777)	1,860	(973)
Inventories	1,582	5,638	(3,293)
Prepaid expenses and other current assets	3,416	10,298	(5,985)
Due from related parties	(377)
Long-term rental deposits	353	(81)	(12)
Accounts payable	4,702	(16,185)	(108)
Amounts due to related parties	(4,767)	4,953
Advance from customers	3,999	(2,374)	1,345
Accrued expenses and other current liabilities	5,292	(1,584)	(837)
Operating lease right-of-use assets	(11,976)
Operating lease liabilities	12,165
Net cash (used in)/provided by operating activities	1,882	(29,868)	(14,831)
Cash flows from investing activities
Purchase of property and equipment	(917)	(387)	(556)
Proceeds from disposal of property and equipment	236
Cash acquired from acquisition of Ezbuy		3,683
Payment for long term investment			(2,950)
Net cash (used in) / provided by investing activities	(681)	3,296	(3,506)
Cash flows from financing activities
Proceeds from exercise of share options		13	37
Repayment of long-term payable under finance leases	(300)	(24)
Repurchase of ordinary shares	(251)	(3,354)	(3,101)
Net cash used in financing activities	(551)	(3,365)	(3,064)
Net (decrease) / increase in cash, cash equivalents and restricted cash	650	(29,937)	(21,401)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(7)	(275)	340
Cash, cash equivalents and restricted cash at beginning of year	39,802	70,014	91,075
Cash, cash equivalents and restricted cash at end of year	40,445	39,802	70,014
Reconciliation of cash and cash equivalents and restricted cash to the consolidated balance sheets
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	39,802	70,014	91,075
Supplemental cash flow information:
Income taxes paid	(133)	(55)	$ (81)
Interest expense paid	(66)	(4)
Noncash investing activities:
Issuance of convertible promissory notes as the consideration of acquisition of Ezbuy		(29,131)
Acquisition of property, plant and equipment included in long-term payable	(758)	(1,170)
Purchase of property and equipment included in accrued expenses and other current liabilities	758	$ 1,170
Disposal of property and equipment included in prepaid expenses and other current assets	(400)
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities	10,060
Disposal of long term investment included in amounts due from related parties	$ 4,223

ORGANIZATION AND PRINCIPAL ACTIVITIES

12 Months Ended

Dec. 31, 2019

ORGANIZATION AND PRINCIPAL ACTIVITIES

ORGANIZATION AND PRINCIPAL ACTIVITIES

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

LightInTheBox Holding Co., Ltd. (the “Company”), incorporated in the Cayman Islands in March 2008 by five founding shareholders, together with its consolidated subsidiaries, its variable interest entities (“VIEs”) and its VIE’s subsidiary (collectively referred to the “Group”), is primarily involved in online retailing to sell and deliver products and services to consumers around the world.

(a)

History of the Group and corporate reorganization

The Group commenced its operation in June 2007, with the establishment of Light In The Box Limited (“Light In The Box”) in June 2007 in Hong Kong by the same five founding shareholders of the Company. Light In The Box subsequently became the Company's subsidiary through a share for share exchange in April 2008 which was accounted for in a manner akin to a pooling of interest as if the Company had been in existence and owned Light In The Box since June 2007.

Lightinthebox Trading (Shenzhen) Co., Ltd. (“Lanting Jishi “) was established in October 2008 in the People's Republic of China (the "PRC") as a wholly owned subsidiary of Light In The Box.

On March 17, 2016, Zall Cross-border E-commerce Investment Company Limited (“Zall E-Commerce”), an indirect wholly-owned subsidiary of Zall Group Ltd. (“Zall Group”), a developer and operator of large-scale consumer-focused product wholesale shopping malls in China, acquired a strategic equity interest in the Group.

On December 10, 2018, the Company acquired total issued share capital of Ezbuy Holding Co., Ltd (“Ezbuy”).

Ezbuy, incorporated in the Cayman Islands in November 2014 by its five founding shareholders, together with its consolidated subsidiaries and its VIEs, is primarily involved in online retailing to sell and deliver products and services to consumers in South-East Asia.

Ezbuy commenced its operation in December 2014, with the establishment of Ezbuy Holdings limited (“Ezbuy HK”) in December 2014 in Hong Kong, a wholly owned subsidiary of Ezbuy.

Qianhai Xuyi Information Technology (Shenzhen) Co., Ltd (“Qianhai Xuyi”) was established in March 2015 in the PRC as a wholly owned subsidiary of Ezbuy HK.

(b)

The VIE arrangements

The PRC regulations currently limit direct foreign ownership of business entities providing value-added telecommunications services, advertising 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 Group currently conducts certain aspects of its business in the PRC through Shenzhen Lanting Huitong Technologies Co.Ltd. (“Lanting Huitong”) and Beijing Lanting Gaochuang Technologies Co.Ltd. (“Lanting Gaochuang”) , Shenzhen Xuyi International logistics Co., Ltd. (“Shenzhen Xuyi”), Chongqing Xuyi E-Commerce Co., Ltd. (“Chongqing Xuyi”), and Jiaxing Xuyang Logistics Co., Ltd. (“Jiaxing Xuyang”), all of which are VIEs.

Lanting Huitong was established by the shareholders of the Company in June 2008 in the PRC. Through the contractual arrangements (as described below) among Lanting Jishi, Lanting Huitong and the respective shareholders of Lanting Huitong, Lanting Huitong became the Group's VIE.

In order to obtain the benefit granted to domestic enterprises that are held by Chinese nationals who have previously studied overseas, Mr. Quji (Alan) Guo, the Company’s co-founder and director, and Lanting Huitong established Lanting Gaochuang in December 2011, each holding 51% and 49% of Lanting Gaochuang from the Incorporation of Lanting Gaochuang to July 2019, respectively, in the China Beijing Wangjing Overseas Students Pioneer Park. In July 2019, Mr. Quji (Alan) Guo entered into an equity transfer agreement to transfer his shares in Lanting Gaochuang to Mr. Jian He. Currently, Mr. Jian He and Lanting Huitong directly hold 51% and 49% of Lanting Gaochuang, respectively. On November 22, 2019, the registered address of Lanting Gaochuang changed to Room F3-325, Tower A, Win Center, Building 6, Yard 33, Baiziwan Road Chaoyang District, Beijing, China.

Through a series of contractual arrangements (as described below) among Lanting Jishi, Lanting Gaochuang and the respective shareholders of Lanting Gaochuang, Lanting Gaochuang became the Group’s VIE.

Shenzhen Xuyi was established by the founders of Ezbuy in November 2014 in the PRC. Through the contractual arrangements (as described below) among Qianhai Xuyi, Shenzhen Xuyi and the respective shareholders of Shenzhen Xuyi, Shenzhen Xuyi became Ezbuy’s VIE and then became the Group’s VIE since the Group’s acquisition of Ezbuy on December 10, 2018 (the “Acquisition”). In April 2020, Mr. Jian He entered into an equity transfer agreement to transfer his shares of Shenzhen Xuyi to Mr. Qianneng Fu. On April 9, 2020, the registration of this transfer with local branch of the SAIC was completed. The registered shareholders of Shenzhen Xuyi currently are Mr. Qianneng Fu and Mr. Zicong Ke holding 67% and 33% respectively.

Chongqing Xuyi was also established by the founders of Ezbuy in December 2014 in the PRC. Through the contractual arrangements (as described below) among Qianhai Xuyi, Chongqing Xuyi and the respective shareholders of Chongqing Xuyi, Chongqing Xuyi became Ezbuy’s VIE and then became the Group’s VIE since the Acquisition.

Jiaxing Xuyang was established by one of the founders of Ezbuy and one of employees in Qianhai Xuyi in May 2017 in the PRC. Through the contractual arrangements (as described below) among Qianhai Xuyi, Jiaxing Xuyang and the respective shareholders of Jiaxing Xuyang, Jiaxing Xuyang became Ezbuy’s VIE and then became the Group’s VIE since the Acquisition.

(c)

Agreements that provide Lanting Jishi effective control over Lanting Huitong and Lanting Gaochuang and Qianhai Xuyi effective control over Shenzhen Xuyi, Chongqing Xuyi and Jiaxing Xuyang (collectively, the “VIEs”)

(i) Lanting Jishi

Powers of attorney: Each registered shareholder of Lanting Huitong and Lanting Gaochuang (collectively, “Lanting VIEs”) has executed a power of attorney appointing Lanting Jishi or its designee to be his or her attorney, and irrevocably authorizing them to vote on his or her behalf on all of the matters concerning Lanting VIEs that may require shareholders’ approval, including nominating and electing directors, general managers and other executive officers. The powers of attorney will be irrevocably effective as long as the registered shareholders remain as shareholders of Lanting VIEs.

Equity disposal agreements: Under the Equity Disposal Agreements entered into among Lanting Jishi, Lanting VIEs, and the shareholders of Lanting VIEs, Lanting Jishi or its designated party has exclusive options to purchase, when and to the extent permitted under PRC law, all or part of the equity interest in Lanting VIEs. The exercise price for the options to purchase all or part of the equity interest will be the minimum amount of consideration permissible under the then applicable PRC law. The Equity Disposal Agreements are valid for two years and can be extended indefinitely at Lanting Jishi's option. Lanting Jishi has the right to terminate this agreement at any time by giving three days' written notice to other parties.

Spousal consent letters: Under the spousal consent letters, the spouses of certain shareholders of Lanting Huitong acknowledged that a certain percentage of the equity interest in Lanting Huitong held by and registered in the name of their respective spouse will be disposed of pursuant to the equity disposal agreement and share pledge agreement. These spouses understand that such equity interest is held by their respective spouse on behalf of Lanting Jishi, and they will not take any action to interfere with the disposition of such equity interests, including, without limitation, claiming that such equity interest constitute communal property of marriage. The spousal consent letters will be valid until the liquidation of Lanting Huitong, unless terminated earlier at Lanting Jishi’s sole discretion.

Loan agreement: Under the loan agreement entered into in December 2011 between Lanting Huitong and Mr. Quji (Alan) Guo, Lanting Huitong extended a loan in the amount of $41 (RMB255,000) to Mr. Quji (Alan) Guo to be contributed as 51% of the registered capital of Lanting Gaochuang. Under this agreement, Mr. Quji (Alan) Guo agreed that without prior written consent from Lanting Huitong, Lanting Gaochuang might not enter into any transaction that could materially affect its assets, liabilities, interests or operations, and there would be no earnings distribution in any form by Lanting Gaochuang before such loan has been repaid. This loan could only be repaid by transferring all of Mr. Quji (Alan) Guo’s equity interest in Lanting Gaochuang to Lanting Huitong or a third party designated by Lanting Huitong, and submitting all proceeds from such transaction to Lanting Huitong. The loan agreement had a term of ten years and will be extended automatically, unless indicated otherwise by Lanting Huitong in writing three months prior to the contract expiration date. In September 2019, Mr. Quji (Alan) Guo made the repayment under this loan agreement which was therefore terminated. Under the loan agreement entered into in July 2019 between Lanting Huitong and Mr. Jian He, Lanting Huitong extended a loan in the amount of RMB255,000 ($40,492) to Mr. Jian He for his contribution of 51% of the registered capital of Lanting Gaochuang. Under this agreement, Mr. Jian He agreed that without prior written consent from Lanting Huitong, Lanting Gaochuang may not enter into any transaction that could materially affect its assets, liabilities, interests or operations, and there will be no earnings distribution in any form by Lanting Gaochuang before such loan has been repaid. Mr. Jian He also agreed that at the request of Lanting Huitong, all or part of the equity interests held in Lanting Gaochuang shall be promptly and unconditionally transferred to Lanting Huitong or a designated third party in accordance with PRC law. This loan can only be repaid by transferring all of Mr. Jian He’s equity interest in Lanting Gaochuang to Lanting Huitong or a third party designated by Lanting Huitong and submitting all proceeds from such transaction to Lanting Huitong. The loan agreement has a term of ten years and will be extended automatically, unless indicated otherwise by Lanting Huitong in writing three months prior to the expiration date.

Agreements that transfer economic benefits to Lanting

Jishi Business operation agreements: Under the Business Operation Agreements entered into among Lanting Jishi, Lanting VIEs, and the shareholders of Lanting VIEs, the registered shareholders of Lanting VIEs and Lanting VIEs agreed that Lanting VIEs may not enter into any transaction that could materially affect their assets, liabilities, interests or operations without prior written consent from Lanting Jishi or other party designated by Lanting Jishi, including entry into any loan or other debtor-creditor relationship with any third party or the making of any equity investment in any third party, the sale or purchase of any asset or right to or from any third party or creation of guarantees or any other security on any of its assets in favor of any third party, or creation of any other obligation on any of its assets. In addition, directors, supervisors, chairman, general managers, financial controllers or other senior managers of Lanting VIEs must be Lanting Jishi’s nominees. Furthermore, Lanting VIEs and their registered shareholders have agreed to accept and stringently implement proposals set forth by Lanting Jishi regarding employment and business and financial management. Lanting Jishi is entitled to any dividends declared by Lanting VIEs. The business operation agreements will be valid until the liquidation of Lanting VIEs, unless terminated earlier at Lanting Jishi’s sole discretion.

Exclusive technical support and consulting service agreements: Under the Exclusive Technical Support and Consulting Service Agreements entered into between Lanting Jishi and Lanting VIEs, Lanting Jishi agreed to provide Lanting VIEs with technology support and consulting services, including the maintenance of computer rooms and websites, the provision of technology platforms required for operations, provision and maintenance of office networks, the conception, configuration, design, updating and maintenance of web pages, the maintenance of customer service platforms, employee training, advertisements, publicity and promotions, and provision of logistics support for product sales and services. Lanting VIEs agreed to pay a service fee equal to substantially all of their net income, an amount equivalent to the amount of the respective VIEs’ operating revenue for the then current quarter after the deduction of: (1) working capital necessary for the maintaining of the daily operations of the respective VIEs; and (2) the amount of cash required for the respective VIEs’ capital expenditures. The exclusive technical support and consulting service agreements will be valid until the liquidation of Lanting VIEs, unless terminated earlier at Lanting Jishi’s sole discretion.

Share pledge agreements: Under the Share Pledge Agreements entered into among Lanting Jishi, Lanting VIEs, and the shareholders of Lanting VIEs, the registered shareholders of Lanting VIEs pledged all of their respective equity interest in favor of Lanting Jishi to secure Lanting VIEs and their shareholders’ obligations under the various contractual agreements, including the business operation agreements and the exclusive technical support and consulting service agreements described above. If Lanting VIEs or any of their respective registered shareholders breach any of their respective contractual obligations under these agreements, Lanting Jishi, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interest. The registered shareholders of our VIEs agreed not to transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in our VIEs, without Lanting Jishi’s prior written consent. Unless terminated at Lanting Jishi’s sole discretion, the share pledge agreements will be valid until our VIEs and their shareholders fulfill all contractual obligations under the business operation agreements, the exclusive technical support and consulting service agreements and the equity disposal agreements. Our PRC counsel, Guangdong Lianyue Law Firm, has advised us that the pledges on the equity interest of Lanting VIEs were created and effective as such pledges have already been registered with the relevant local branch of the SAIC in accordance with the PRC Property Rights Law.

(ii) Qianhai Xuyi

Exclusive technical support and consulting service agreements: Under the Exclusive Technical Support and Consulting Service Agreements entered into between Qianghai Xuyi and Ezbuy VIEs, Qianhai Xuyi agreed to provide Ezbuy VIEs with technology support and consulting services, including the provision of technology platforms required for operations, provision and maintenance of office networks, the conception, configuration, design, updating and maintenance of web pages, employee training, advertisements and other technology services required for the operations. Ezbuy VIEs agreed to pay a service fee equal to substantially all of their net income, an amount equivalent to the amount of the respective VIEs’ operating revenue for the then current quarter after the deduction of: (1) working capital necessary for the maintaining of the daily operations of the respective VIEs; and (2) the amount of cash required for the respective VIEs’ capital expenditures. The exclusive technical support and consulting service agreements will be valid for 10 years unless terminated earlier at Qianhai Xuyi’s sole discretion or the liquidation of Ezbuy VIEs.

Powers of attorney: Each registered shareholder of Ezbuy VIEs has executed a power of attorney appointing Qianhai Xuyi or its designee to be his or her attorney, and irrevocably authorizing them to vote on his or her behalf on all of the matters concerning our VIEs that may require shareholders’ approval, including nominating and electing directors, general managers and other executive officers. The powers of attorney will be irrevocably effective as long as the registered shareholders remain as shareholders of Ezbuy VIEs.

Exclusive option agreements: Under the Exclusive Option Agreements entered into among Qianhai Xuyi, Ezbuy VIEs, and the shareholders of Ezbuy VIEs, Qianhai Xuyi or its designated party has exclusive options to purchase, when and to the extent permitted under PRC law, all or part of the equity interest in Ezbuy VIEs. The exercise price for the options to purchase all or part of the equity interest will be the minimum amount of consideration permissible under the then applicable PRC law. The agreements are valid for two years and can be extended indefinitely at Qianhai Xuyi’s option.

Share pledge agreements: Under the Share Pledge Agreements entered into among Qianhai Xuyi, Ezbuy VIEs, and the shareholders of Ezbuy VIEs, the registered shareholders of Ezbuy VIEs pledged all of their respective equity interest in favor of Qianhai Xuyi to secure Ezbuy VIEs and their shareholders’ obligations under the various contractual agreements, including the exclusive option agreements and the exclusive technical support and consulting service agreements described above. If Ezbuy VIEs or any of their respective registered shareholders breach any of their respective contractual obligations under these agreements, Qianhai Xuyi, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interest. The registered shareholders of Ezbuy VIEs agreed not to transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in Ezbuy VIEs, without Lanting Jishi’s prior written consent. The share pledge agreements will be valid until Ezbuy VIEs and their shareholders fulfill all contractual obligations under the exclusive option agreements and the exclusive technical support and consulting service agreements. Our PRC counsel, Guangdong Lianyue Law Firm, has advised us that the pledges on the equity interest of Jiaxing Xuyang, Chongqing Xuyi were created and are effective as such pledges have already been registered with the relevant local branch of the SAIC in accordance with the PRC Property Rights Law and the pledge on the equity interest of Shenzhen Xuyi was created and in the process of being registered with the relevant local branch of the SAIC in accordance with the PRC Property Rights Law.

Spousal consent letters: Under the spousal consent letters, the spouses of certain shareholders of Ezbuy VIEs acknowledged that a certain percentage of the equity interest in Ezbuy VIEs held by and registered in the name of their respective spouse will be disposed of pursuant to the equity disposal agreement and share pledge agreement. These spouses understand that such equity interest is held by their respective spouse on behalf of Qianhai Xuyi, and they will not take any action to interfere with the disposition of such equity interests, including, without limitation, claiming that such equity interest constitute communal property of marriage.

(d) Risks in relation to VIE structure

The Group believes that pledgees’ contractual arrangements with the VIEs are in compliance with the PRC law and are legally enforceable. The shareholders of the VIEs are also shareholders of the Company and therefore have no current interest in seeking to act contrary to the contractual arrangements. However, uncertainties in the PRC legal system could limit the Group’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. The Company’s ability to control the VIEs also depends on the power of attorney pledgees have 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.

In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the PRC government could:

revoke the Group’s business and operating licenses;

require the Group to discontinue or restrict operations;

restrict the Group’s right to collect revenues;

block the Group’s websites;

require the Group to restructure the operations in such a way as to compel the Group to establish a new enterprise, re-apply for the necessary licenses or relocate their businesses, staff and assets;

impose additional conditions or requirements with which the Group may not be able to comply; or

take other regulatory or enforcement actions against the Group that could be harmful to the Group’s business.

The imposition of any of these penalties may result in a material and adverse effect on the Group’s ability to conduct the Group’s business. In addition, if the imposition of any of these penalties causes the Group to lose the rights to direct the activities of the VIEs and its subsidiary or the right to receive their economic benefits, the Group would possibly no longer be able to consolidate the VIEs.

The following consolidated financial information of the Group’s VIEs was included in the accompanying consolidated financial statements as of and for the years ended, after elimination of intercompany balances and transactions within the Group:


	December 31,
	2018		2019

Total assets	$	6,492	$	9,734
Total liabilities	$	4,678	$	1,147


	Year ended December 31,
	2017		2018		2019

Revenues	$	—	$	3	$	1,054
Net loss	$	(7,507)	$	(7,490)	$	(8,496)


	Year ended December 31,
	2017		2018		2019

Net cash provided by / (used in) operating activities	$	3,073	$	(7,519)	$	1,193
Net cash (used in) / provided by investing activities	$	(3,069)	$	473	$	(188)
Net cash provided by financing activities	$	—	$	—	$	—

As of December 31, 2019, there was no pledge or collateralization of the consolidated VIEs’ assets. None of the consolidated VIEs’ assets can only be used to settle the VIEs’ obligations. The creditors of the VIEs do not have recourse to the general credit of the Company or its consolidated subsidiaries.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financial instruments and fair value measurements (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Liabilities:
Convertible promissory notes	$ 51,922
Level 3
Liabilities:
Convertible promissory notes	$ 51,922

PARENT ONLY INFORMATION - Condensed Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current assets
Prepaid expenses and other current assets	$ 3,619	$ 5,554	$ 5,811
Amounts due from subsidiaries and VIEs	4,600
TOTAL ASSETS	113,201		103,587
Current Liabilities
Convertible promissory notes			51,922
Accrued expenses and other current liabilities	28,642	$ 22,582	22,688
TOTAL LIABILITIES	81,320		111,392
(DEFICIT) / EQUITY
Ordinary shares	14		11
Additional paid-in capital	262,888		239,269
Forward contracts	15,769
Treasury shares, at cost	(27,512)		(27,261)
Accumulated deficit	(217,888)		(218,887)
Accumulated other comprehensive loss	(1,444)		(932)
Stockholders' Equity Attributable to Noncontrolling Interest	54		(5)
TOTAL (DEFICIT) / EQUITY	31,881		(7,805)	$ 55,470	$ 65,836
TOTAL LIABILITIES AND (DEFICIT) / EQUITY	113,201		103,587
LightInTheBox Holding Co., Ltd.
Current assets
Cash and cash equivalents	134		311
Prepaid expenses and other current assets	209		168
Amounts due from subsidiaries and VIEs	164,146		166,636
TOTAL ASSETS	164,489		167,115
Current Liabilities
Convertible promissory notes			51,922
Accrued expenses and other current liabilities	618		1,880
Deficit of investment in Subsidiaries and VIEs	132,044		121,113
TOTAL LIABILITIES	132,662		174,915
(DEFICIT) / EQUITY
Ordinary shares	14		11
Additional paid-in capital	(262,888)		(239,269)
Forward contracts	15,769
Treasury shares, at cost	(27,512)		(27,261)
Accumulated deficit	(217,888)		(218,887)
Accumulated other comprehensive loss	(1,444)		(932)
TOTAL (DEFICIT) / EQUITY	31,827		(7,800)
TOTAL LIABILITIES AND (DEFICIT) / EQUITY	$ 164,489		$ 167,115

SHARE OPTIONS (Tables)

12 Months Ended

Dec. 31, 2019

SHARE OPTIONS

Schedule of assumptions used for estimating the fair value of each option granted on the date of grant


	Year ended December 31,
	2017			2018
Risk-free interest rate per annum		2.45	%		2.90-3.20	%
Exercise multiple		2.2			2.2
Expected volatility		71.7	%		66.4-69.5	%
Expected dividend yield		0	%		0	%
Fair value of ordinary shares	$	0.70			0.44-1.04
Expected terms (in years)		10			10

(1)

Risk-free interest rate

Risk-free interest rate was estimated based on the yield to maturity of China international government bonds with a maturity period close to the contractual term of the options.

(2)

Exercise multiple

Exercise multiple represents the value of the underlying share as a multiple of exercise price of the option which, if achieved, results in exercise of the option.

(3)

Volatility

The volatility of the underlying ordinary shares during the life of the options was estimated based on the historical stock price volatility of the Company’s publicly traded stock.

(4)

Dividend yield

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

(5)

Fair value of underlying ordinary shares

The fair value of the underlying ordinary shares is determined based on the closing market price of the ADS of the Company as of the grant date.

Summary of the stock option activity under the 2008 Plan


		Weighted average
		exercise price
	Options granted	per option

Outstanding at January 1, 2019	619,650	$	1.61
Granted	—	$	—
Exercised	(93,000)	$	0.01
Forfeited	(321,950)	$	1.58
Outstanding at December 31, 2019	204,700	$	2.39

Summary of information regarding the share options granted


	As of December 31, 2019
				Weighted-
		Weighted-		average remaining
		average exercise		contractual	Aggregate
	Options Number	price per option		life (years)	intrinsic value

Options
Outstanding	204,700	$	2.39	4.83	$	—
Exercisable	200,700	$	2.42	4.77	$	—
Expected to vest	4,000	$	0.89	7.83	$	—

SEGMENT REPORTING

12 Months Ended

Dec. 31, 2019

SEGMENT REPORTING

SEGMENT REPORTING

19. SEGMENT REPORTING

The Group’s chief operating decision maker has been identified as the Chief Executive Officer who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group uses the management approach to determine the operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker for making decisions, allocating resources and assessing the performance.

Prior to 2016, the Group’s operations were organized into one operating segment. In 2016, following the further expansion in service business and revenue generated from services beginning to account for a material portion of the total revenue, the Group operated and reviewed its performance in two segments: (i) Product sales which consisted of online retailing of consumer products, and (ii) Services which consisted of provision of services such as technical services and logistic services to other e-commerce retailers. Furthermore, the Group’s chief operating decision maker evaluates performance based on each reporting segment’s revenues, costs and gross profit and is not provided with asset information by segment.

There were no separate segment assets and segment liabilities information provided to the Group's Chief Executive Officer, as he does not use this information to allocate resources to or evaluate the performance of the segments.

The following table presents selected financial information relating to the Group’s segments:


	Year ended December 31, 2019
	Product sales		Services		Consolidated

Revenues	$	236,705	$	6,921	$	243,626
Cost of revenues		144,061		1,968		146,029
Gross profit		92,644		4,953		97,597
Unallocated operating expenses						113,649
Loss from operations						(16,052)
Interest income						297
Interest expense						(66)
Change in fair value of convertible promissory notes						14,591
Other income, net						283
Loss before income tax expense and gain from equity method investment					$	(947)


	Year ended December 31, 2018
	Product sales		Services		Consolidated

Revenues	$	216,407	$	11,132	$	227,539
Cost of revenues		156,326		10,017		166,343
Gross profit		60,081		1,115		61,196
Unallocated operating expenses						98,677
Loss from operations						(37,481)
Interest income						487
Interest expense						(5)
Change in fair value of convertible promissory notes						(22,791)
Loss before income tax expense					$	(59,790)


	Year ended December 31, 2017
	Product sales		Services		Consolidated

Revenues	$	293,951	$	25,930	$	319,881
Cost of revenues		189,816		24,445		214,261
Gross profit		104,135		1,485		105,620
Unallocated operating expenses						115,787
Loss from operations						(10,167)
Exchange loss on offshore bank accounts						(89)
Interest income						581
Loss before income tax expense					$	(9,675)


	Year ended December 31,
	2017		2018		2019

Apparel	$	99,160	$	72,871	$	78,954
Other general merchandise (1)		194,791		143,536		157,751
Total product sales revenues	$	293,951	$	216,407	$	236,705

(1)Others mainly include products such as small accessories and gadgets, home garden, electronics and communication devices and others.

The following table summarizes the Group’s total revenues generated in different geographic locations and as a percentage of total revenues.


	Year ended December 31,
	2017			2018			2019
	Revenues		%	Revenues		%	Revenues		%

Europe	$	153,697	48.1	$	109,781	48.2	$	87,586	36.0
North America		73,339	22.9		51,206	22.5		37,932	15.6
Other countries		92,845	29.0		66,552	29.3		118,108	48.4
Total revenues	$	319,881	100.0	$	227,539	100.0	$	243,626	100.0

Europe’s revenues include revenues from France of $34,693, $22,900 and $18,012 during the years ended December 31, 2017, 2018 and 2019, respectively. North America’s revenues include revenues from the United States of, $60,810, $40,148 and $29,794 during the years ended December 31, 2017, 2018 and 2019, respectively.

As of December 31, 2017, 2018 and 2019 substantially all of long-lived assets of the Group are located in the PRC and Singapore.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Acquired intangible assets, net (Details)		12 Months Ended
	Dec. 10, 2018	Dec. 31, 2019
Technology Platform
Acquired intangible assets, net
Useful lives	5 years
Technology Platform \| Minimum
Acquired intangible assets, net
Useful lives		3 years
Technology Platform \| Maximum
Acquired intangible assets, net
Useful lives		5 years
Members
Acquired intangible assets, net
Useful lives		4 years
Branding
Acquired intangible assets, net
Useful lives	10 years	10 years
In-progress Orders
Acquired intangible assets, net
Useful lives	1 month 6 days	1 month 6 days

EMPLOYEE BENEFIT PLANS	12 Months Ended
EMPLOYEE BENEFIT PLANS	Dec. 31, 2019
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS	17. EMPLOYEE BENEFIT PLANS Full time employees in the PRC, Singapore, Malaysia and Thailand participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. The PRC labor regulations require the Group to make contributions based on certain percentages of the employees’ basic salaries. Other than the contribution, there is no further obligation under these plans. The total contribution for such employee benefits was $5,258, $5,358 and $6,774 for the years ended December 31, 2017, 2018 and 2019, respectively.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME
Foreign currency translation adjustment, net of income taxes	$ 0	$ 0	$ 0

GOODWILL (Tables)

12 Months Ended

Dec. 31, 2019

GOODWILL

Schedule of changes in carrying amounts of goodwill and accumulated impairment losses


	Ador Inc		Ezbuy		Total
Balance at January 1, 2018
Goodwill	$	690	$	—	$	690
Accumulated impairment loss		—		—		—
	$	690	$	—	$	690
Goodwill acquired during the year		—		27,479		27,479
Impairment loss		—		—		—
Balance at December 31, 2018
Goodwill	$	690	$	27,479	$	28,169
Accumulated impairment loss		—		—		—
	$	690	$	27,479	$	28,169
Effect of exchange rate changes on goodwill		—		(247)		(247)
Impairment loss		—		—		—
Balance at December 31, 2019
Goodwill	$	690	$	27,232	$	27,922
Accumulated impairment loss		—		—		—
	$	690	$	27,232	$	27,922

SUBSEQUENT EVENTS	12 Months Ended
SUBSEQUENT EVENTS	Dec. 31, 2019
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	22. SUBSEQUENT EVENTS From late January 2020, the COVID-19 was rapidly evolving in China and globally. Since then, the business and transportation disruptions have caused adverse impacts to the Group’s operations and led to incremental costs. Demands for certain categories of products have been negatively affected by the COVID-19 outbreak, while epidemic products were stimulated positively. The Group’s results of operation and consolidated financial position of 2020 will be affected to a certain extent, which will depend on the future developments of the outbreak, including new development concerning the global severity of and actions taken to contain the outbreak, which are highly uncertain and unpredictable.

EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands	12 Months Ended
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
EMPLOYEE BENEFIT PLANS
Total contribution for employee benefits	$ 6,774	$ 5,358	$ 5,258

LEASES (Tables)

12 Months Ended

Dec. 31, 2019

LEASES

Schedule of components of lease costs


		For the year ended December 31, 2019
Operating lease costs		4,956
Short-term lease costs		2,189
Financing lease costs:
Amortization of ROU assets		247
Interests		66
Total lease costs		7,458


Other information	For the year ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	4,526
Operating cash flows from financing leases	290
Financing cash flows from financing leases	66
ROU assets obtained in exchange for new operating lease liabilities	10,060
ROU obtained in exchange for new finance lease liabilities	—
Weighted-average remaining lease term (in years):
Operating leases	6.45
Financing leases	3.65
Weighted-average discount rate:
Operating leases	5.03	%
Financing leases	5.44	%

Schedule of future minimum lease payments for operating and financing leases

Future minimum lease payments for operating and financing leases as of December 31, 2019 are as follows:


	Operating Leases	Finance Leases
2020	3,516	361
2021	2,303	361
2022	1,632	325
2023	1,398	187
2024	1,193	34
2025 and thereafter	4,325	—
Total minimum lease payments	14,367	1,268
Less: Imputed interest	(2,096)	(113)
Total lease liability balance	12,271	1,155

Minimum payments related to leases not yet commenced as of December 31,2019	827	—

Schedule of future minimum lease payments under non-cancellable operating lease agreements


For the year ending December 31,
2019	$	4,646
2020		2,153
2021		740
	$	7,539

Schedule of minimum future lease payments under the capital leases


For the year ending December 31,
2019	$	369
2020		367
2021		362
2022		321
2023		185
2024		34
Total minimum lease payments		1,638
Less amount representing interest		(183)
Present value of minimum lease payments		1,455
Less current portion of minimum lease		(299)
Long-term present value of minimum lease payment	$	1,156

NONVESTED SHARES (Details) - 2008 Plan - Nonvested shares - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Nonvested shares
Nonvested shares granted	1,829,000	244,000	272,000	296,000	3,154,800	2,800,300	711,571
Vesting period		4 years	4 years
Minimum
Nonvested shares
Vesting period				3 months	3 months	3 years	2 years
Maximum
Nonvested shares
Vesting period				4 years	4 years	4 years	4 years
Vest immediately
Nonvested shares
Nonvested shares granted	1,549,000
Vest over a period of two years
Nonvested shares
Nonvested shares granted	280,000
Vesting period	2 years

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Receivable From Payment Processing Agencies Current	$ 217		$ 1,386
Prepayment to suppliers	967		838
Rental deposits and prepaid rents	680		268
Deferred expense	350		686
Others	1,405		2,633
Total	$ 3,619	$ 5,554	$ 5,811

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of estimated useful lives of property and equipment


	Useful lives

Leasehold improvements	Lesser of the lease term or estimated useful life of the assets
Furniture, fixtures and office equipment	0.2 - 5	years
Software and IT equipment	0.1 - 3	years
Vehicles	0.6 - 9	years

Schedule of estimated useful lives of identifiable intangible assets


	Useful lives

Domain name/Trade name	Indefinite life
Technology	3-5	years
Members	4	years
Branding	10	years
In-progress orders	0.1	year

Schedule of changes in contract liability


	For the year ended
	December 31, 2018		December 31, 2019
Contract liability as of January 1	$	5,248	10,246
Cash received in advance, net of VAT		199,899	240,460
Revenue recognized from opening balance of contract liability		(5,248)	(10,246)
Revenue recognized from contract liability arising during current year		(189,653)	(226,130)
Contract liability as of December 31	$	10,246	14,330

Schedule of liabilities measured at fair value on a recurring basis


	December 31, 2018
	Level 1		Level 2		Level 3		Total Fair Value
Liabilities:
Convertible promissory notes	$	—	$	—	$	51,922	$	51,922

ASU 2016-02

Schedule of the impact of adoption of the new revenue standard requirements on the consolidated balance sheet


		Adjustments due
	Balance as of	to the adoption of	Balance as of
	December 31, 2018	ASU 2016-02	January 1, 2019
Assets:
Prepaid expenses and other current assets	5,811	(257)	5,554
Operating lease right-of-use assets	—	6,263	6,263
Liabilities:
Operating lease liabilities (current)	—	3,752	3,752
Operating lease liabilities (non-current)	—	2,360	2,360
Accrued expenses and other current liabilities	22,688	(106)	22,582


		Effect of the
		adoption of ASU
	Legacy	2016-02	Balance as of
	GAAP	Higher/(lower)	December 31, 2019
Assets:
Prepaid expenses and other current assets	4,141	(522)	3,619
Operating lease right-of-use assets	—	12,233	12,233
Liabilities:
Operating lease liabilities (current)	—	3,470	3,470
Operating lease liabilities (non-current)	—	8,801	8,801
Accrued expenses and other current liabilities	29,202	(560)	28,642

PARENT ONLY INFORMATION (Tables)

12 Months Ended

Dec. 31, 2019

PARENT ONLY INFORMATION

Condensed Balance Sheets


	December 31,
	2018		2019
ASSETS
Current assets
Cash and cash equivalents	$	311	$	134
Prepaid expenses and other current assets		168		209
Amounts due from subsidiaries and VIEs		166,636		164,146
TOTAL ASSETS	$	167,115	$	164,489

LIABILITIES AND (DEFICIT) / EQUITY

Current Liabilities
Convertible promissory notes		51,922		—
Accrued expenses and other current liabilities		1,880		618
Deficit of investment in subsidiaries and VIEs		121,113		132,044
TOTAL LIABILITIES	$	174,915	$	132,662

(DEFICIT) / EQUITY
Ordinary shares	$	11	$	14
Additional paid-in capital		239,269		262,888
Forward contracts		—		15,769
Treasury shares, at cost		(27,261)		(27,512)
Accumulated deficit		(218,887)		(217,888)
Accumulated other comprehensive loss		(932)		(1,444)
TOTAL (DEFICIT) / EQUITY		(7,800)		31,827
TOTAL LIABILITIES AND (DEFICIT) / EQUITY	$	167,115	$	164,489

Condensed Statements of Comprehensive Income


	Year ended December 31
	2017		2018		2019
General and administrative		2,246		1,145		1,113
Operating loss		(2,246)		(1,145)		(1,113)
Share of loss from subsidiaries and VIEs		(7,407)		(35,665)		(12,479)
Interest income		105		—		—
Change in fair value of convertible promissory notes		—		(22,791)		14,591
(Loss) / Income before income taxes		(9,548)		(59,601)		999
Income tax expense		—		—		—
Net (loss) / income		(9,548)		(59,601)		999
Other comprehensive (loss) / income:
Foreign currency translation adjustment, net of nil income taxes		380		(733)		(512)
Total comprehensive (loss) / income	$	(9,168)	$	(60,334)	$	487

Condensed Statements of Cash Flows


	Year ended December 31,
	2017		2018		2019

Net (loss) / income		(9,548)		(59,601)		999
Share of loss from subsidiaries and VIEs		7,407		35,665		12,479
Change in fair value of convertible promissory notes		—		22,791		(14,591)
Prepaid expenses and other current assets		112		283		(41)
Accrued expenses and other current liabilities		(126)		(1,469)		(1,262)
Net cash used in operating activities	$	(2,155)	$	(2,331)	$	(2,416)
Changes in amounts due from subsidiaries and VIEs		(23,883)		4,512		2,490
Net cash (used in) / provided by investing activities	$	(23,883)	$	4,512	$	2,490
Proceeds from private placement and options exercised		37		13		—
Repurchase of ordinary shares		(3,101)		(3,354)		(251)
Net cash used in financing activities	$	(3,064)	$	(3,341)	$	(251)
Net decrease in cash and cash equivalents		(29,102)		(1,160)		(177)
Cash and cash equivalents at beginning of the year		30,573		1,471		311
Cash and cash equivalents at end of the year		1,471		311		134

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Newly adopted accounting pronouncements (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Total cash, cash equivalents, and restricted cash in the statement of cash flows	$ 40,445	$ 39,802	$ 70,014	$ 91,075

CONSOLIDATED STATEMENTS OF CASH FLOWS (parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of cash and cash equivalents and restricted cash to the consolidated balance sheets
Cash and cash equivalents	$ 37,736	$ 38,808	$ 68,441
Restricted cash	2,709	994	1,573
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	40,445	39,802	70,014
Supplemental cash flow information:
Income taxes paid	(133)	(55)	$ (81)
Interest expense paid	(66)	(4)
Noncash investing activities:
Issuance of convertible promissory notes as the consideration of acquisition of Ezbuy		(29,131)
Acquisition of property, plant and equipment included in long-term payable	(758)	(1,170)
Purchase of property and equipment included in accrued expenses and other current liabilities	758	$ 1,170
Disposal of property and equipment included in prepaid expenses and other current assets	(400)
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities	10,060
Disposal of long term investment included in amounts due from related parties	$ 4,223

ACQUISITION (Tables)

12 Months Ended

Dec. 31, 2019

ACQUISITION

Schedule of fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date


	As of December 10, 2018
Cash and cash equivalents	$	3,683
Accounts receivable		35
Inventories		4,694
Prepaid expenses and other current assets		1,418
Property and equipment, net		2,982
Intangible assets, net		9,895
Long-term rental deposits		400
Accounts payable		(6,601)
Advance from customers		(9,734)
Accrued expenses and other current liabilities		(3,954)
Long-term payable		(1,170)
Fair value of non-controlling interest		4
Goodwill		27,479
Total purchase consideration	$	29,131

Schedule of unaudited consolidated pro forma summary


	Pro Forma - Unaudited
	Year Ended December 31,
	2017		2018
Revenues	$	477,326	$	337,695
Net loss	$	21,593	$	70,884

ACQUIRED INTANGIBLE ASSETS, NET (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Acquired intangible assets, net
Gross carrying amount	$ 11,262	$ 11,385
Accumulated amortization	(1,724)	(473)
Accumulated impairment loss	(1,022)	(1,022)
Net carrying amount	8,516	9,890
Amortization expenses	1,264	298	$ 5
Impairment loss of intangible assets	0
Expected amortization expenses
2020	1,264
2021	1,264
2022	1,264
2023	1,216
2024	684
Technology Platform
Acquired intangible assets, net
Intangible assets subject to amortization	90	90
Accumulated amortization	(90)	(90)
Non-compete Agreement
Acquired intangible assets, net
Intangible assets subject to amortization	9	9
Accumulated amortization	(7)	(7)
Accumulated impairment loss	(2)	(2)
Customer Base
Acquired intangible assets, net
Intangible assets subject to amortization	32	32
Accumulated amortization	(22)	(22)
Accumulated impairment loss	(10)	(10)
Technology
Acquired intangible assets, net
Intangible assets subject to amortization	2,915	2,951
Accumulated amortization	(660)	(85)
Net carrying amount	2,255	2,866
Branding
Acquired intangible assets, net
Intangible assets subject to amortization	6,786	6,871
Accumulated amortization	(735)	(57)
Net carrying amount	6,051	6,814
In-progress Orders
Acquired intangible assets, net
Intangible assets subject to amortization	190	192
Accumulated amortization	(190)	(192)
Members
Acquired intangible assets, net
Intangible assets subject to amortization	20	20
Accumulated amortization	(20)	(20)
Trademark/Domain Name
Acquired intangible assets, net
Intangible assets not subject to amortization	1,220	1,220
Accumulated impairment loss	(1,010)	(1,010)
Net carrying amount	$ 210	$ 210

ACQUISITION - Pro-forma summary (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Consolidated pro forma summary
Revenues	$ 337,695	$ 477,326
Net loss	$ 70,884	$ 21,593

RELATED PARTY TRANSACTIONS	12 Months Ended
RELATED PARTY TRANSACTIONS	Dec. 31, 2019
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	20. RELATED PARTY TRANSACTIONS Zhejiang Aokang Shoes Co., Ltd. (“Aokang”) became a shareholder of the Company in 2015 and held 18.1% of the outstanding shares of the Company as of December 31, 2017. In 2017, the Company purchased goods from Aokang amounted to $0.4. Zall E-commerce and its subsidiary Zall Development (HK) Holding Company Limited (collectively referred to “Zall”) became shareholders of the Company in 2016 and held 29.5% of the outstanding shares of the Company as of December 31, 2019. For the years ended December 31, 2018 and 2019, the Group entered into the following contracts with the subsidiaries of Zall: The Group entered into sales contracts with Hankou North Import and Export Service Co., Ltd. ("Hankou North”) to sell cotton products in 2018, which is one of Zall’s subsidiaries. The total transaction amount in 2018 was $325 and all settled as of December 31, 2018. The Group entered into a logistics agency contract with Hankou North in 2018 and the total logistic service fee in 2018 and 2019 was $4,302 and $1,952, respectively. As of December 31, 2018 and 2019, $1,550 and negative $62 has not been settled, respectively. The Group entered into a logistics agency contract with Zall Foreign Trade Service (Hong Kong) Company Limited (“Zall HK”) in 2018, which is one of Zall’s subsidiaries. The total logistic service fee in 2018 and 2019 was $4,186 and $770, respectively. As of December 31, 2018 and 2019, about $1,007 and negative $53 has not been settled, respectively. The Group entered into a Contract of Network Marketing Technical Services with Zall HK in 2018. The total advertising fee in 2018 and 2019 was $7,441 and $8,334, respectively. As of December 31, 2018 and 2019, $2,396 and $220 has not been settled, respectively. The Group leased offices on behalf of Jiashi Financial Information Service (Hangzhou) Co., Ltd. ("Jiashi”) since October 1, 2018, which is one of Zall‘s subsidiaries. The total rental fee received from Jiashi was $26 in 2018. The Group signed a Share Transfer Agreement with Wuhan Zall Internet Technology Co., Ltd in 2019. The total purchase price was $4,223. As of December 31, 2019, $4,223 has not been settled. See Note 9 for details of the share transfer. The Group entered into a Contract of GPS Project Technical Services with Hankou North in 2019. The total technical services fee received from Hankou North was $123 in 2019 and all settled as of December 31, 2019. The Group entered into a Contract of Technical Development Services with Demon Network Technology (Hong Kong) Co., Ltd. (“Demon Hong Kong ”) in 2019. The total technical services fee received from Demon Hong Kong in 2019 was $749. As of December 31, 2019, $315 has not been received. The Group entered into a Contract of Website Maintenance Services with Shanghai Zhijie E-Commerce Co., Ltd in 2018. Shanghai Zhijie E-Commerce Co., Ltd is an affiliate of the Group. The total service fee in 2019 was $189. As of December 31, 2019, $19 has not been settled.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2019

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation

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

(b) Basis of consolidation

(d) Use of estimates

(e) Cash and cash equivalents

(f) Restricted cash

(g) Inventories

(h) Property and equipment, net

Property and equipment, net, resulting from direct purchase, is stated at cost less accumulated depreciation.

Depreciation are calculated on a straight-line basis over the following estimated useful lives:


	Useful lives

Leasehold improvements	Lesser of the lease term or estimated useful life of the assets
Furniture, fixtures and office equipment	0.2 - 5	years
Software and IT equipment	0.1 - 3	years
Vehicles	0.6 - 9	years

(i) Acquired intangible assets, net


	Useful lives

Domain name/Trade name	Indefinite life
Technology	3-5	years
Members	4	years
Branding	10	years
In-progress orders	0.1	year

(j) Long-term investments

The Group’s long-term investments consist of equity investment without readily determinable fair value and equity method investment.

Equity investments without readily determinable fair value

Equity method investment

(k) Impairment of long-lived assets and intangible assets with definite life

Long-lived assets, such as property and equipment and definite-lived intangible assets, are stated at cost less accumulated depreciation or amortization.

(l) Impairment of goodwill and indefinite-lived intangible assets

(m) Business combinations

(n) Treasury shares, at cost

(o) Revenue recognition

Periods prior to January 1, 2018

Product sales

The Group recognizes revenue from the sale of apparel and other general merchandise through its websites and other online platforms.

Revenue is stated net of value added tax (“VAT”), discounts and return allowances.

Outbound shipping charges to customers are included as a part of the revenues. Outbound shipping-related costs are included in the cost of product sales.

Service

Period commencing January 1, 2018

The adoption of new revenue standard did not impact retained earnings as of January 1, 2018.

Product sales

Services and others

(p) Contract Balances

Changes in the Group’s contract liability are presented in the following table for the years ended December 31, 2018 and 2019:


	For the year ended
	December 31, 2018		December 31, 2019
Contract liability as of January 1	$	5,248	10,246
Cash received in advance, net of VAT		199,899	240,460
Revenue recognized from opening balance of contract liability		(5,248)	(10,246)
Revenue recognized from contract liability arising during current year		(189,653)	(226,130)
Contract liability as of December 31	$	10,246	14,330

(q) Cost of revenues

Product sales

Services

(r) Fulfillment

(s) Selling and marketing

(t) General and administrative

(u) Fair value

Level 1-inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

(v) Financial instruments and fair value measurements

The following table present the fair value hierarchy for the liabilities measured at fair value on a recurring basis at December 31, 2018:


	December 31, 2018
	Level 1		Level 2		Level 3		Total Fair Value
Liabilities:
Convertible promissory notes	$	—	$	—	$	51,922	$	51,922