Cover Page
Cover Page | 6 Months Ended |
Jun. 30, 2019 | |
Document Information [Line Items] | |
Amendment Flag | false |
Document Type | 6-K |
Document Period End Date | Jun. 30, 2019 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q2 |
Entity Central Index Key | 0001733298 |
Current Fiscal Year End Date | --12-31 |
Entity Registrant Name | Qutoutiao Inc. |
Entity File Number | 001-38644 |
UNAUDITED INTERIM CONDENSED CON
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Dec. 31, 2018CNY (¥) | |
Current assets: | ||||
Cash and cash equivalents | ¥ 2,103,479,913 | $ 306,406,397 | ¥ 2,186,288,246 | |
Short-term investments | 184,088,800 | 26,815,557 | 115,436,080 | |
Accounts receivable, net | 410,329,309 | 59,771,203 | 203,984,074 | |
Amount due from related parties | 104,097,946 | [1],[2] | 15,163,576 | |
Prepayments and other current assets | 142,508,846 | 20,758,754 | 120,365,506 | |
Total current assets | 2,944,504,814 | 428,915,487 | 2,626,073,906 | |
Non-current assets: | ||||
Property and equipment, net | 18,799,411 | 2,738,443 | 13,929,542 | |
Right-of-use asset, net | 64,171,819 | 9,347,679 | ||
Intangible assets | 92,333,723 | 13,449,923 | 94,527,598 | |
Goodwill | 7,268,330 | 1,058,752 | 7,268,330 | |
Long-term investments | 32,498,800 | 4,733,984 | ||
Other non-current assets | 27,614,520 | 4,022,507 | 10,672,141 | |
Total non-current assets | 242,686,603 | 35,351,288 | 126,397,611 | |
Total assets | 3,187,191,417 | 464,266,775 | 2,752,471,517 | |
Current liabilities (including current liabilities of the consolidated variable interest entity ("VIEs") and its subsidiaries without recourse to the Company amounting to RMB1,652,254,389 and RMB2,769,079,393, as of December 31, 2018 and June 30, 2019, respectively): | ||||
Accounts payable (including accounts payable of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB73,087,671 and RMB238,068,415 as of December 31, 2018 and June 30, 2019, respectively) | 255,180,417 | 37,171,219 | 131,249,219 | |
Amount due to a related party (including amount due to a related party of the consolidated variable interest entity ("VIE") and VIE's subsidiaries without recourse to the Company of nil as of June 30, 2019) | 6,841,157 | [3],[4] | 996,527 | |
Registered users' loyalty payable (including registered users' loyalty payable of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB249,881,449 and RMB172,120,365 as of December 31, 2018 and June 30, 2019, respectively) | 178,912,204 | 26,061,501 | 256,661,934 | |
Advance from advertising customers (including advance from advertising customers of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB152,181,358 and RMB164,606,216 as of December 31, 2018 and June 30, 2019, respectively) | 166,090,687 | 24,193,836 | 155,099,317 | |
Salary and welfare payable (including salary and welfare payable of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB41,665,582 and RMB72,032,140 as of December 31, 2018 and June 30, 2019, respectively) | 73,901,862 | 10,765,020 | 43,422,202 | |
Tax payable (including tax payable of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB100,757,561 and RMB91,918,811 as of December 31, 2018 and June 30, 2019, respectively) | 92,118,427 | 13,418,562 | 101,286,721 | |
Lease liabilities, current (including Lease liabilities, current of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of nil and RMB24,935,349 as of December 31, 2018 and June 30, 2019, respectively) | 32,117,473 | 4,678,437 | ||
Accrued liabilities related to users' loyalty programs (including Accrued liabilities related to users' loyalty program of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB44,133,812 and RMB46,255,061 as of December 31, 2018 and June 30, 2019, respectively) | 46,255,061 | 6,737,809 | 44,133,812 | |
Accrued liabilities and other current liabilities (including Accrued liabilities and other current liabilities of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB360,711,336 and RMB461,629,127 as of December 31, 2018 and June 30, 2019, respectively) | 478,383,268 | 69,684,380 | 379,130,559 | |
Total current liabilities | 1,329,800,556 | 193,707,291 | 1,110,983,764 | |
Non-current liabilities: | ||||
Other non-current liabilities | 8,419,246 | 1,226,401 | 9,686,219 | |
Lease liabilities, non-current | 26,586,966 | 3,872,828 | ||
Deferred tax liabilities | 22,430,277 | 3,267,338 | 23,631,899 | |
Convertible loan | 1,183,152,486 | 172,345,592 | ||
Non-current liabilities | 1,240,588,975 | 180,712,159 | 33,318,118 | |
Total liabilities | 2,570,389,531 | 374,419,450 | 1,144,301,882 | |
Commitments and contingencies | ||||
Mezzanine equity: | ||||
Redeemable non-controlling interests | 130,481,205 | 19,006,731 | 96,936,855 | |
Total mezzanine equity | 130,481,205 | 19,006,731 | 96,936,855 | |
Shareholders' equity: | ||||
Additional paid-in capital | 4,031,844,904 | 587,304,429 | 3,684,130,058 | |
Treasury stock (US$0.0001 par value; 9,500,000 and 8,955,425 shares as of December 31, 2018 and June 30, 2019, respectively) | (102,630,674) | (14,949,843) | ||
Accumulated other comprehensive loss | (31,637,042) | (4,608,455) | (16,428,875) | |
Accumulated deficit | (3,407,814,586) | (496,404,164) | (2,153,235,425) | |
Total Qutoutiao Inc. shareholders' equity | 489,805,743 | 71,348,251 | 1,514,507,305 | |
Non-controlling interests | (3,485,062) | (507,657) | (3,274,525) | |
Total shareholders' equity | 486,320,681 | 70,840,594 | 1,511,232,780 | |
Total liabilities, mezzanine equity and shareholders' equity | 3,187,191,417 | 464,266,775 | 2,752,471,517 | |
Class A Ordinary Shares | ||||
Shareholders' equity: | ||||
Ordinary shares | 18,750 | 2,731 | 16,292 | |
Class B Ordinary Shares | ||||
Shareholders' equity: | ||||
Ordinary shares | ¥ 24,391 | $ 3,553 | ¥ 25,255 | |
[1] | For the six months ended June 30, 2018, the Group charged advertising and marketing service of RMB1.2 million to a company in which the founder of the Company was a member of key management (the founder was no longer a member of management of that company after September 2018). For the six months ended June 30, 2019, a total of RMB144.5 million of advertising and marketing services was provided to companies under common control of the founder, which includes integrated marketing solution services. | |||
[2] | The Group provided agent and platform services between the advertising customers and a company in which the founder of the Company was a member of key management by facilitating the advertising customers to display their advertisements. The founder was no longer a member of management of that company as of December 31, 2018. | |||
[3] | For the six months ended June 30, 2018, the Group entered into a cooperation agreement with Series B1 shareholder to promote the Company’s mobile application, and the cooperation agreement requires the Company to prepay a total service fee of RMB31.5 million which will be recognized as expense over 3 years. Total service fee recognized as expense amounted to RMB5.5 million. After the IPO in September 2018, the Series B1 shareholder has no right to nominate the board member of the Company and has only 1.5% voting power of the Company and no ability to exercise significant influence. As a result, the Series B1 shareholder was no longer a related party of the Company after September 2018. For the six months ended June 30, 2019, the service fee charged from related parties represented the expense charged from a different company under common control of the founder which provided the Group with advertising and marketing service. | |||
[4] | For the six months ended June 30, 2019, the Group entered into a CPM (cost per impression) arrangement with a media platform under the common control of the founder to for the Group’s customers’ advertisement placement. The total service fee charged from related parties amounted to RMB14.8 million for the six months ended June 30, 2019. |
UNAUDITED INTERIM CONDENSED C_2
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) | Jun. 30, 2019CNY (¥)shares | Jun. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2018$ / shares |
Current liabilities | ¥ 1,329,800,556 | $ 193,707,291 | ¥ 1,110,983,764 | |
Accounts payable, current | 255,180,417 | 37,171,219 | 131,249,219 | |
Loyalty payable, current | 178,912,204 | 26,061,501 | 256,661,934 | |
Advance from advertising customers, current | 166,090,687 | 24,193,836 | 155,099,317 | |
Salary and welfare payable, current | 73,901,862 | 10,765,020 | 43,422,202 | |
Tax payable, current | 92,118,427 | 13,418,562 | 101,286,721 | |
Lease liabilities, current | 32,117,473 | 4,678,437 | ||
Accrued liabilities, current | 46,255,061 | 6,737,809 | 44,133,812 | |
Accrued liabilities and other current liabilities | ¥ 478,383,268 | $ 69,684,380 | ¥ 379,130,559 | |
Treasury stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||
Treasury stock, shares | shares | 8,955,425 | 8,955,425 | 9,500,000 | |
Variable Interest Entities | ||||
Current liabilities | ¥ 2,769,079,393 | ¥ 1,652,254,389 | ||
Accounts payable, current | 238,068,415 | 73,087,671 | ||
Loyalty payable, current | 172,120,365 | 249,881,449 | ||
Advance from advertising customers, current | 164,606,216 | 152,181,358 | ||
Salary and welfare payable, current | 72,032,140 | 41,665,582 | ||
Tax payable, current | 91,918,811 | 100,757,561 | ||
Lease liabilities, current | 24,935,349 | 0 | ||
Accrued liabilities, current | 46,255,061 | 44,133,812 | ||
Accrued liabilities and other current liabilities | ¥ 461,629,127 | ¥ 360,711,336 | ||
Class A Ordinary Shares | ||||
Ordinary shares, par value | $ / shares | $ 0.0001 | 0.0001 | ||
Ordinary shares, shares authorized | shares | 50,000,000 | 50,000,000 | 50,000,000 | |
Ordinary shares, shares, issued | shares | 39,332,122 | 39,332,122 | 37,022,806 | |
Ordinary shares, shares, outstanding | shares | 30,376,697 | 30,376,697 | 27,522,806 | |
Class B Ordinary Shares | ||||
Ordinary shares, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||
Ordinary shares, shares authorized | shares | 34,248,442 | 34,248,442 | 34,248,442 | |
Ordinary shares, shares, issued | shares | 32,937,193 | 32,937,193 | 34,248,442 | |
Ordinary shares, shares, outstanding | shares | 32,937,193 | 32,937,193 | 34,248,442 |
UNAUDITED INTERIM CONDENSED C_3
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | 6 Months Ended | ||
Jun. 30, 2019CNY (¥)¥ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018CNY (¥)¥ / sharesshares | |
Net revenues | ¥ 2,504,796,664 | $ 364,864,772 | ¥ 717,834,732 |
Cost of revenues | (625,881,154) | (91,169,869) | (142,625,585) |
Cost of revenues-related parties | (14,758,169) | (2,149,770) | (3,367,626) |
Gross profit | 1,864,157,341 | 271,545,133 | 571,841,521 |
Operating expenses: | |||
Research and development expenses | (376,702,160) | (54,872,857) | (62,912,378) |
Sales and marketing expenses | (2,618,050,696) | (381,362,082) | (832,021,879) |
Sales and marketing expenses-related parties | (669,123) | (97,469) | (4,917,963) |
General and administrative expenses | (147,548,555) | (21,492,870) | (193,885,977) |
Total operating expenses | (3,142,970,534) | (457,825,278) | (1,093,738,197) |
Other operating income | 10,789,713 | 1,571,699 | |
Loss from operations | (1,268,023,480) | (184,708,446) | (521,896,676) |
Interest income | 30,354,642 | 4,421,652 | 5,388,699 |
Interest expense | (8,485,508) | (1,236,054) | |
Foreign exchange related gains (losses), net | (2,535,037) | (369,270) | 2,098,062 |
Other expenses, net | (2,008,351) | (292,549) | (25,598) |
Loss before income taxes | (1,250,697,734) | (182,184,667) | (514,435,513) |
Income tax benefit | 1,201,622 | 175,036 | |
Net loss | (1,249,496,112) | (182,009,631) | (514,435,513) |
Net loss attributable to non-controlling interests | 210,537 | 30,668 | |
Net loss attributable to Qutoutiao Inc. | (1,249,285,575) | (181,978,963) | (514,435,513) |
Accretion to convertible redeemable preferred shares redemption value | (5,293,586) | (771,098) | (58,963,543) |
Deemed dividend to preferred shareholders | (1,916,871) | ||
Net loss attributable to Qutoutiao Inc.'s ordinary shareholders | (1,254,579,161) | (182,750,061) | (575,315,927) |
Net loss | (1,249,496,112) | (182,009,631) | (514,435,513) |
Other comprehensive loss | |||
Foreign currency translation adjustment, net of nil tax | (15,208,167) | (2,215,319) | (12,562,130) |
Total comprehensive loss | (1,264,704,279) | (184,224,950) | (526,997,643) |
Comprehensive loss attributable to non-controlling interests | 210,537 | 30,668 | |
Comprehensive loss attributable to Qutoutiao Inc. | ¥ (1,264,493,742) | $ (184,194,282) | ¥ (526,997,643) |
Net loss per share | |||
— Basic and diluted | (per share) | ¥ (20.01) | $ (2.92) | ¥ (23.74) |
Weighted average number of ordinary shares used in per share calculation: | |||
— Basic and Diluted | shares | 62,684,261 | 62,684,261 | 24,238,324 |
Advertising and Marketing Revenue | |||
Net revenues | ¥ 2,300,718,045 | $ 335,137,370 | ¥ 668,687,403 |
Advertising And Marketing Revenue Related Parties | |||
Net revenues | 144,462,450 | 21,043,328 | 1,183,492 |
Other Revenue | |||
Net revenues | ¥ 59,616,169 | $ 8,684,074 | 42,670,745 |
Other Revenue Related Parties | |||
Net revenues | ¥ 5,293,092 |
UNAUDITED INTERIM CONDENSED C_4
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) | 6 Months Ended | ||
Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018CNY (¥) | |
Statement of Comprehensive Income [Abstract] | |||
Foreign currency translation adjustment, tax | ¥ 0 | $ 0 | ¥ 0 |
UNAUDITED INTERIM CONDENSED C_5
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) | CNY (¥) | USD ($) | Series A Convertible Redeemable Preferred SharesCNY (¥) | Series A1 Convertible Redeemable Preferred SharesCNY (¥) | Series B1 Convertible Redeemable Preferred SharesCNY (¥) | Series B2 Convertible Redeemable Preferred SharesCNY (¥) | Series B3 Convertible Redeemable Preferred SharesCNY (¥) | Outstanding Ordinary SharesCNY (¥)shares | Additional Paid-In CapitalCNY (¥) | Treasury StocksCNY (¥)shares | Accumulated Other Comprehensive IncomeCNY (¥) | Accumulated DeficitCNY (¥) | Accumulated DeficitSeries A Convertible Redeemable Preferred SharesCNY (¥) | Accumulated DeficitSeries A1 Convertible Redeemable Preferred SharesCNY (¥) | Accumulated DeficitSeries B1 Convertible Redeemable Preferred SharesCNY (¥) | Accumulated DeficitSeries B2 Convertible Redeemable Preferred SharesCNY (¥) | Accumulated DeficitSeries B3 Convertible Redeemable Preferred SharesCNY (¥) | Non-controlling InterestsCNY (¥) |
Beginning balance at Dec. 31, 2017 | ¥ (108,560,011) | ¥ 15,723 | ¥ 8,856,316 | ¥ 24,651 | ¥ (117,456,701) | |||||||||||||
Beginning balance, shares at Dec. 31, 2017 | shares | 24,062,500 | 10,000,000 | ||||||||||||||||
Distribution to the founder (Note 16) | 6,837,374 | (6,837,374) | ||||||||||||||||
Share-based compensation expense | 185,383,475 | 185,383,475 | ||||||||||||||||
Accretion to convertible redeemable preferred shares redemption value | (58,963,543) | ¥ (10,643,883) | ¥ (3,274,935) | ¥ (21,349,500) | ¥ (18,092,345) | ¥ (5,602,880) | ¥ (10,643,883) | ¥ (3,274,935) | ¥ (21,349,500) | ¥ (18,092,345) | ¥ (5,602,880) | |||||||
Deemed dividend to preferred shareholders | 1,916,871 | (1,916,871) | ||||||||||||||||
Exercise of share options | 317 | ¥ 317 | ||||||||||||||||
Exercise of share options, shares | shares | 500,000 | (500,000) | ||||||||||||||||
Net loss | (514,435,513) | (514,435,513) | ||||||||||||||||
Foreign currency translation | (12,562,130) | (12,562,130) | ||||||||||||||||
Ending balance at Jun. 30, 2018 | (509,137,405) | ¥ 16,040 | 202,994,036 | (12,537,479) | (699,610,002) | |||||||||||||
Ending balance, shares at Jun. 30, 2018 | shares | 24,562,500 | 9,500,000 | ||||||||||||||||
Beginning balance at Dec. 31, 2018 | 1,511,232,780 | ¥ 41,547 | 3,684,130,058 | (16,428,875) | (2,153,235,425) | ¥ (3,274,525) | ||||||||||||
Beginning balance, shares at Dec. 31, 2018 | shares | 61,771,248 | 9,500,000 | ||||||||||||||||
Share-based compensation expense | 135,571,831 | 135,571,831 | ||||||||||||||||
Accretion to convertible redeemable preferred shares redemption value | (5,293,586) | $ (771,098) | ||||||||||||||||
Accretion on Series A convertible redeemable preferred shares of a subsidiary | ¥ (5,293,586) | ¥ (5,293,586) | ||||||||||||||||
Issuance of ordinary shares upon follow-on public offering, net of issuance costs (Note 3),shares | shares | 831,967 | |||||||||||||||||
Issuance of ordinary shares upon follow-on public offering, net of issuance costs (Note 3),value | 212,143,573 | ¥ 558 | 212,143,015 | |||||||||||||||
Repurchase of ordinary shares ,Value | (102,630,674) | ¥ (102,630,674) | ||||||||||||||||
Repurchase of ordinary shares ,Shares | shares | (828,925) | 828,925 | ||||||||||||||||
Exercise of share options | 1,036 | ¥ 1,036 | ||||||||||||||||
Exercise of share options, shares | shares | 1,539,600 | (1,373,500) | ||||||||||||||||
Net loss | (1,249,496,112) | (1,249,285,575) | (210,537) | |||||||||||||||
Foreign currency translation | (15,208,167) | (15,208,167) | ||||||||||||||||
Ending balance at Jun. 30, 2019 | ¥ 486,320,681 | $ 70,840,594 | ¥ 43,141 | ¥ 4,031,844,904 | ¥ (102,630,674) | ¥ (31,637,042) | ¥ (3,407,814,586) | ¥ (3,485,062) | ||||||||||
Ending balance, shares at Jun. 30, 2019 | shares | 63,313,890 | 8,955,425 |
UNAUDITED INTERIM CONDENSED C_6
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | 6 Months Ended | ||||
Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018CNY (¥) | |||
Cash flows from operating activities | |||||
Net loss | ¥ (1,249,496,112) | $ (182,009,631) | ¥ (514,435,513) | ||
Adjustments for: | |||||
Depreciation of property and equipment | 4,095,448 | 596,569 | 1,549,432 | ||
Amortization of intangible assets | 4,878,682 | 710,660 | |||
Amortization of right-of-use asset and interest of lease liabilities | 16,990,715 | 2,474,977 | |||
Deferred tax benefit | (1,201,622) | (175,036) | |||
Share-based compensation | 135,571,831 | 19,748,264 | 185,383,475 | ||
Changes in assets and liabilities, net of impact of acquisition: | |||||
Accounts receivable | (206,345,235) | (30,057,572) | 9,497,772 | ||
Amount due from related parties | (104,097,946) | (15,163,576) | |||
Prepayment to a related party | (27,792,710) | ||||
Prepayments and other current assets | (27,380,063) | (3,988,356) | (11,769,599) | ||
Other non-current assets | (12,980,696) | (1,890,852) | (737,690) | ||
Accounts payable | 123,931,198 | 18,052,614 | 7,103,222 | ||
Amount due to related parties | 6,841,157 | 996,527 | 7,570,862 | ||
Registered users' loyalty payable | (77,749,730) | (11,325,525) | 116,060,910 | ||
Salary and welfare payable | 30,479,660 | 4,439,863 | 7,570,229 | ||
Tax payable | (9,168,294) | (1,335,513) | 1,231,483 | ||
Accrued liabilities related to users' loyalty programs | 2,121,249 | 308,995 | (37,992,439) | ||
Accrued liabilities and other current liabilities | 97,402,200 | 14,188,231 | 42,482,144 | ||
Advances from advertising customers | 10,991,370 | 1,601,074 | 72,539,949 | ||
Operating lease liabilities | (17,220,336) | (2,508,425) | |||
Non-current liabilities | (1,266,973) | (184,555) | |||
Non-current interest payable-convertible loan | 8,485,508 | 1,236,054 | |||
Net cash used in operating activities | (1,265,117,989) | (184,285,213) | (141,738,473) | ||
Cash flows from investing activities: | |||||
Purchase of short-term investments | (2,204,224,400) | (321,081,486) | (761,200,000) | ||
Purchase of equity investments | (32,498,800) | (4,733,984) | |||
Prepayment for purchase of online audio/video content platform | (43,018,464) | ||||
Proceeds from maturity of short-term investments | 2,135,914,590 | 311,131,040 | 890,610,000 | ||
Purchase of intangible assets | (2,684,807) | (391,086) | |||
Cash paid for acquisitions, net of cash acquired | (10,729,825) | ||||
Purchase of property and equipment | (12,927,000) | (1,883,030) | (5,794,062) | ||
Proceeds from disposal of property and equipment | 175,634 | ||||
Net cash provided by/(used in) investing activities | (116,420,417) | (16,958,546) | 70,043,283 | ||
Cash flows from financing activities: | |||||
Proceeds from public offerings, net of issuance costs | 212,813,023 | [1] | 30,999,712 | [1] | (4,281,169) |
Proceeds from Convertible Loan, net of issuance costs | 1,175,923,897 | 171,292,629 | |||
Payment for repurchase of ordinary shares | (102,630,674) | (14,949,843) | |||
Net cash provided by financing activities | 1,313,463,749 | 191,327,568 | 1,501,333,428 | ||
Net increase in cash and cash equivalents | (68,074,657) | (9,916,191) | 1,429,638,238 | ||
Effect of exchange rate changes on cash and cash equivalents | (14,733,676) | (2,146,202) | 58,202,210 | ||
Cash and cash equivalents at the beginning of period | 2,186,288,246 | 318,468,790 | 278,458,413 | ||
Cash and cash equivalents at the end of period | 2,103,479,913 | 306,406,397 | 1,766,298,861 | ||
Supplemental disclosure of cash flow information: | |||||
Accounts payable related to the purchase of property and equipment | 263,000 | ||||
Accrued Follow On Offering expense | 669,450 | 97,516 | |||
Accrued Convertible Loan expense | 1,307,205 | 190,416 | |||
Accrued preferred share issuance cost | 2,311,276 | ||||
Deemed dividend to preferred shares shareholders | 1,916,871 | ||||
Series A Shares | Subsidiary | |||||
Cash flows from financing activities: | |||||
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs | 27,357,503 | 3,985,070 | |||
Series B1 Convertible Redeemable Preferred Shares | |||||
Cash flows from financing activities: | |||||
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs | 651,736,522 | ||||
Series B2 Convertible Redeemable Preferred Shares | |||||
Cash flows from financing activities: | |||||
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs | 569,316,830 | ||||
Series B3 Convertible Redeemable Preferred Shares | |||||
Cash flows from financing activities: | |||||
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs | 284,561,245 | ||||
Series A Preferred Shares | |||||
Supplemental disclosure of cash flow information: | |||||
Accretion to preferred shares redemption value | 10,643,883 | ||||
Series A Preferred Shares | Subsidiary | |||||
Supplemental disclosure of cash flow information: | |||||
Accretion to preferred shares redemption value | ¥ 5,293,586 | $ 771,098 | |||
Series A1 Preferred Shares | |||||
Supplemental disclosure of cash flow information: | |||||
Accretion to preferred shares redemption value | 3,274,935 | ||||
Series B1 Preferred Shares | |||||
Supplemental disclosure of cash flow information: | |||||
Accretion to preferred shares redemption value | 21,349,500 | ||||
Series B2 Preferred Shares | |||||
Supplemental disclosure of cash flow information: | |||||
Accretion to preferred shares redemption value | 18,092,345 | ||||
Series B3 Preferred Shares | |||||
Supplemental disclosure of cash flow information: | |||||
Accretion to preferred shares redemption value | ¥ 5,602,880 | ||||
[1] | For the six months ended June 30, 2018, the cash outflow amount represented cash paid for initial public offering costs prior to the completion of the Company’s IPO. |
Organization and Principal Acti
Organization and Principal Activities | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Principal Activities | 1. Organization and Principal Activities (a) Principal activities Qutoutiao Inc. (the “Company”), an exempted company with limited liability incorporated in the Cayman Islands, (i) its various equity-owned consolidated subsidiaries, (ii) its controlled affiliates, and (iii) the subsidiaries of its controlled affiliates are collectively referred to as the “Group”. The Group’s principal activity is to operate mobile platforms Qutoutiao (“QTT”), Quduopai (QDP) and Midu (“MD”) for the distribution, consumption and sharing of light entertainment content. The Group generates revenue primarily by providing cost-effective and targeted advertising solutions through the mobile platforms in the People’s Republic of China (“PRC”), through its controlled affiliates and their wholly-owned subsidiaries thereof (collectively referred to as the “Affiliated Entities”). As of June 30, 2019, the Company’s principal subsidiaries and consolidated Affiliated Entities are as follows: Name of subsidiaries and VIEs Date of establishment/ acquisition Place of incorporation Percentage of direct or indirect economic ownership Wholly owned subsidiaries of the Company: InfoUniversal Limited(“InfoUniversal”) Established on August 15, 2017 Hong Kong 100 % Shanghai Quyun Internet Technology Co., Ltd. (“Quyun WFOE”) Established on October 13,2017 PRC 100 % Shanghai Dianguan Network Technology Co., Ltd. (“Dianguan”) Acquired on February 2, 2018 PRC 100 % QTT Asia Ltd. (“QTT Asia”) Established on April 10, 2018 British Islands(“BVI”) 100 % Shanghai Zhicao Information Technology Co., Ltd. (“Zhicao WFOE”) Established on December 4,2018 PRC 100 % Variable Interest Entity (“VIEs”) Shanghai Jifen Culture Communications Co., Ltd. (“Jifen or Jifen VIE”) Established on January 10, 2012 PRC 100 % Beijing Churun Internet Technology Co.,Ltd. (“Churun VIE”) Acquired on November 1, PRC 100 % Shanghai Big Rhinoceros Horn Information Technology, Co., Ltd (“Big Rhinoceros Horn VIE”) Established on November 9,2018 PRC 100 % Shanghai Longshu Information Technology Co., Ltd (“Longshu VIE”) Established on PRC 100 % Subsidiaries of Variable Interest Entity (“VIE subsidiaries”) Shanghai Xike Information Technology Service Co., Ltd. (“Xike”) Established on July 14, 2016 PRC 100 % Shanghai Tuile Information Technology Service Co., Ltd. (“Tuile”) Established on July 14, 2016 PRC 100 % Anhui Zhangduan Internet Technology Co., Ltd. (“Zhangduan”) Established on March 31, 2017 PRC 100 % Beijing Qukandian Internet Technology Co., Ltd (“Qukandian”) Established on April 13, 2017 PRC 100 % (b) Liquidity The Group has incurred losses from operations since inception. The Group incurred net losses of RMB514.4 million and RMB1,249.3 million for the six months ended June 30, 2018 and 2019, respectively. Accumulated deficit amounted to RMB2,153.2 million and RMB3,407.8 million as of December 31, 2018 and June 30, 2019, respectively. Net cash used in operating activities was approximately RMB141.7 million and RMB1,265.1 million for the six months ended June 30, 2018 and 2019, respectively. As of December 31, 2018 and June 30, 2019, the Group’s working capital was RMB1,515.1 million and RMB1,614.7 million, respectively. As of June 30, 2019, the Group had cash and cash equivalent of RMB2,103.5 million and short-term investments of RMB184.1 million. The Group’s liquidity is dependent on its ability to generate cash from operating activities, obtain capital financing from equity or debt investors and adjust the pace of i ts o its includes adjusting the pace of its operation expansion, and increasing revenue while controlling operating cost and expenses to generate positive operating cash flows . Based on cash flows projection from operating activities and the existing balance of cash and cash equivalents and short-term investments, management is of the opinion that the Group has sufficient funds to meet its anticipated working capital requirements and capital expenditures in the ordinary course of business for the next twelve months from the issuance of these unaudited interim consolidated financial statements. Based on the above considerations, the Group’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of operations. |
Principal Accounting Policies
Principal Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Principal Accounting Policies | 2. Principal Accounting Policies (a) Basis of preparation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position and results of operations and cash flows as of June 30, 2019 and for the six-month periods ended June 30, 2018 and 2019. The year-end condensed balance sheet data as of December 31, 2018 was derived from audited financial statements, but does not include all disclosures required by US GAAP. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s Annual Report on Form 20-F Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below. (b) Use of estimates The preparation of the Group’s consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from such estimates. The Company believes that revenue recognition, liabilities related to loyalty programs, consolidation of VIEs, determination of share-based compensation and impairment assessment of long-lived assets that reflect more significant judgments are estimates used in the preparation of its consolidated financial statements. Management bases the estimates on historical experience and on various other assumptions as discussed elsewhere to the consolidated financial statements that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could materially differ from these estimates. (c) Consolidation The Group’s consolidated financial statements include the financial statements of the Company, its subsidiaries, its VIEs and VIEs’ subsidiaries for which the Company or its subsidiary is the primary beneficiary. All transactions and balances among the Company, its subsidiaries, its VIEs have been eliminated upon consolidation. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A VIE is an entity in which the Company, or its subsidiary, through contractual agreements, bears the risks of, and enjoys the rewards normally associated with ownership of the entity. In determining whether the Company or its subsidiaries are the primary beneficiary, the Company considered whether it has the power to direct activities that are significant to the VIEs’ economic performance, and also the Group’s obligation to absorb losses of the VIEs that could potentially be significant to the VIEs or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. The Company’s WOFEs and ultimately the Company hold all the variable interests of the VIEs and its subsidiaries, and have been determined to be the primary beneficiaries of the VIEs. The following table sets forth the assets, liabilities, results of operations and cash flows of VIEs and its subsidiaries, which are included in the Group’s consolidated financial statements. Transactions between the VIEs and its subsidiaries are eliminated in the balances presented below: As of December 31, 2018 June 30, 2019 Assets Current assets Cash and cash equivalents 19,464,246 8,037,363 Short-term investments 5,000,000 77,250,000 Accounts receivable, net 200,289,537 407,093,056 Amount due from subsidiaries of the Company 291,902,904 549,272,236 Amount due from related parties — 92,962,134 Prepayments and other current assets 80,565,668 95,686,339 Total current asset 597,222,355 1,230,301,128 Non-current Investments — 5,000,000 Property and equipment, net 13,376,314 17,649,497 Right-of-use — 52,419,053 Intangible assets — 2,612,613 Other non-current 8,945,774 25,596,111 Total non-current 22,322,088 103,277,274 Total assets 619,544,443 1,333,578,402 Liabilities Current liabilities Accounts payable 73,087,671 238,068,415 Amount due to subsidiaries of the Company 629,835,620 1,497,513,909 Registered users’ loyalty payable 249,881,449 172,120,365 Advance from advertising customers 152,181,358 164,606,216 Salary and welfare payable 41,665,582 72,032,140 Tax payable 100,757,561 91,918,811 Lease liabilities, current — 24,935,349 Accrued liabilities related to users’ loyalty programs 44,133,812 46,255,061 Accrued liabilities and other current liabilities 360,711,336 461,629,127 Total current liabilities 1,652,254,389 2,769,079,393 Non-current Lease liabilities, non-current — 22,207,796 Total non-current — 22,207,796 Total liabilities 1,652,254,389 2,791,287,189 Six months ended June 30, 2018 2019 Net revenues 712,036,682 2,762,489,629 Net loss (514,632,981 ) (909,376,001 ) Six months ended June 30, 2018 2019 Net cash used in operating activities (280,080,346 ) (336,305,135 ) Net cash provided by/(used in) investing activities 92,990,105 (88,029,748 ) Net cash provided by financing activities 275,200,311 412,908,000 Net increase/(decrease) in cash and cash equivalents 88,110,070 (11,426,883 ) In accordance with the aforementioned VIE agreements, the Company has power to direct activities of the VIEs, and can have assets transferred out of VIEs. Therefore the Company considers that there is no asset in VIEs that can be used only to settle obligations of the VIEs, except for registered capital, as of December 31, 2018 and June 30, 2019. As the VIEs and their subsidiaries were incorporated as limited liability company under the PRC Company Law, the creditors do not have recourse to the general credit of the Company for all the liabilities of the VIEs. There were no pledges or collateralization of the Affiliated Entities’ assets. As the Company is conducting its business mainly through the Affiliated Entities, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. There is no VIEs where the Company has variable interest but is not the primary beneficiary. The Group believes that the contractual arrangements among its shareholders and WFOEs comply with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and if the shareholders of the VIEs were to reduce their interests 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. The Company’s ability to control the VIEs also depends on the voting rights proxy and the effect of the share pledge under the Equity Interest Pledge Agreement and the WFOEs have to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Company believes this voting right proxy is legally enforceable but may not be as effective as direct equity ownership. (d) Functional Currency and Foreign Currency Translation The Group uses Renminbi (“RMB”) as its reporting currency. The functional currency of the Company and its subsidiaries incorporated outside of PRC is the United States dollar (“US$”), while the functional currency of the PRC entities in the Group is RMB as determined based on the criteria of ASC 830, Foreign Currency Matters. Transactions denominated in other than the functional currencies are re-measured re-measured The financial statements of the Group are translated from the functional currency to the reporting currency, RMB. Assets and liabilities of the subsidiaries are translated into RMB using the exchange rate in effect at each balance sheet date. Income and expense items are generally translated at the average exchange rates prevailing during the fiscal year. Foreign currency translation adjustments arising from these are accumulated as a separate component of shareholders’ deficit on the consolidated financial statement. The exchange rates used for translation on December 31, 2018 and June 30, 2019 were US$1.00= RMB6.8632 and RMB6.8747, respectively, representing the index rates stipulated by the People’s Bank of China. (e) Convenience Translation Translations of balances in the Group’s consolidated balance sheet, consolidated statement of operations and comprehensive loss and consolidated statement of cash flows from RMB into US$ as of and for the six months ended June 30, 2019 are solely for the convenience of the readers and were calculated at the rate of US$1.00 = RMB6.865, representing the certified exchange rate published by the US Federal Reserve Board on June 28, 2019. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on June 30, 2019, or at any other rate. (f) Fair value of financial instruments 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. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value include: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities. Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. The Group’s financial instruments consist principally of cash and cash equivalents, short-term investments, accounts receivable, accounts payable, advance from advertising customers, registered users’ loyalty payable, other liabilities, and a convertible loan that was issued in April 2019. As of December 31, 2018 and June 30, 2019, the carrying values of cash and cash equivalents, accounts receivable, accounts payable, advance from customers, registered users’ loyalty payable and other liabilities approximated their fair values reported in the consolidated balance sheets due to the short-term maturities of these instruments. As of June 30, 2019, the estimated fair value of the long-term convertible loan approximates its carrying value due to the short duration between the issuance and period-end On a recurring basis, the Group measures its short-term investments at fair value. The following table sets forth the Group’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy: As of December 31, 2018 Level 1 Level 2 Level 3 Balance at Assets Short-term investments—Wealth management products — 115,436,080 — 115,436,080 As of June 30, 2019 Level 1 Level 2 Level 3 Balance at Assets Short-term investments—Wealth management products — 184,088,800 — 184,088,800 (g) Cash and Cash Equivalents Cash and cash equivalents include cash in bank and time deposits placed with banks or other financial institutions, which have original maturities of three months or less at the time of purchase and are readily convertible to known amounts of cash. (h) Short-term investments Short-term investments include investments in wealth management products issued by certain banks which are redeemable by the Company at any time. The wealth management products are unsecured with variable interest rates and primarily invested in debt securities issued by the PRC government, corporate debt securities and central bank bills. The Company measures the short-term investments at fair value using the quoted subscription or redemption prices published by these banks. The change in fair value is recorded as interest income amounted to RMB1.7 million and RMB3.6 million in the consolidated statements of comprehensive loss for the six months ended June 30, 2018 and June 30, 2019, respectively. (i) Accounts receivable, net Accounts receivable are presented net of allowance for doubtful accounts. The Group uses specific identification in providing for bad debts when facts and circumstances indicate that collection is doubtful and based on factors listed in the following paragraph. If the financial conditions of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowance may be required. The Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance for doubtful accounts on general basis taking into consideration various factors including but not limited to historical collection experience and credit-worthiness of the customers as well as the age of the individual receivables balance. Additionally, the Company makes specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability. (j) Property and equipment, net Property and equipment are stated at historical cost less accumulated depreciation and impairment loss, if any. Depreciation is calculated using the straight-line method over their estimated useful lives. The estimated useful lives are as follows: Leasehold improvements Over the shorter of lease term or 2 – 5 years Office equipment 3 – 5 years Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of comprehensive loss. (k) Equity investments The Company’s long-term investments were accounted for using the equity method, which are securities that the Company does not control, but are able to exert significant influence over the investee. These investments are measured at cost less any impairment, plus or minus the Company’s share of equity method investee income or loss. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. The Company monitors its investments for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, the operating performance of the companies including current earnings trends and other company-specific information. As of June 30, 2019, the Company’s equity investment is an investment in a fund that has not completed set-up. (l) Goodwill and intangible assets Intangible assets Intangible assets include the acquired right to operate an online audio/video content platform (Note 9) and computer software, which are amortized using the straight-line method over their estimated useful li v The estimated useful lives are as follows: Acquired right to operate an online audio/video content platform 10 years Computer software 3 - 10 years The estimated life of intangible assets subject to amortization is reassessed if circumstances occur that indicate the life has changed. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. No impairment of intangible assets was recognized for the six-month Goodwill Goodwill represents the excess of the total cost of the acquisition over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed of the acquired entity as a result of the Company’s acquisitions of interests in its subsidiaries and VIEs. Goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired. The Company first assesses qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying value. In the qualitative assessment, the Company considers primary factors such as industry and market considerations, overall financial performance of the reporting unit and other specific information related to the operations. If the reporting unit does not pass the qualitative assessment, the Company estimates its fair value and compares the fair value with the carrying value of its reporting unit, including goodwill. If the fair value is greater than the carrying value of its reporting unit, no impairment is recorded. If the fair value is less than the carrying value, an impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The impairment charge would be recorded to earnings in the consolidated statements of operations. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units and the determination of the fair value of each reporting unit. The Company estimates the fair value of the reporting unit using a discounted cash flow model. This valuation approach considers various assumptions including projections of future cash flows, perpetual growth rates and discount rates. The assumptions about future cash flows and growth rates are based on management’s assessment of a number of factors, including the reporting unit’s recent performance against budget, performance in the market that the reporting unit serves, as well as industry and general economic data from third party sources. Discount rate assumptions reflect an assessment of the risk inherent in those future cash flows. Changes to the underlying businesses could affect the future cash flows, which in turn could affect the fair value of the reporting unit. Management performs its annual goodwill impairment test as of . Each quarter the Company reviews the events and circumstances to determine if there are indicators that goodwill may be impaired. As of June 30 , 2019 , there is no event or any circumstance that the Company identified, which indicated that the fair value of the Company’s reporting unit was substantially lower than the respective carrying value. There was no six-month , 2018 and 2019 . (m) Impairment of long-lived assets other than Goodwill For other long-lived assets including property and equipment and other non-current (n) Leases Prior to the adoption of ASC 842 on January 1, 2019: Leases, including leases of office spaces, where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Payments made under operating leases are recognized as an expense on a straight-line basis over the lease term. The Group had no capital leases for any of the years stated herein. Upon and hereafter the adoption of ASC 842 on January 1, 2019: The Company determines if an arrangement is a lease or contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities, current and non-current, in the Company’s consolidated balance sheets. The Company does not have any finance leases as of the adoption date or June , . ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which it calculates based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. The Company has elected to adopt the following lease practical expedients in conjunction with the adoption of ASU 2016-02: (i) elect for each lease to not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component; (ii) for leases that have lease terms of months or less and does not include a purchase option that is reasonably certain to exercise, the Company elected not to apply ASC recognition requirements; and (iii) the Company elected to apply the package of practical expedients for existing arrangements entered into prior to January , to not reassess (a) whether an arrangement is or contains a lease, (b) the lease classification applied to existing leases, and (c) initial direct costs. (o) Advances from advertising customers Certain third party advertising customers pay in advance to purchase advertising services. Cash proceeds received from customers are initially recorded as advances from advertising customers and are recognized as revenues when revenue recognition criteria are met. (p) Revenue recognition A. Significant accounting policy The Group has adopted the new revenue standard, ASC 606, by applying the full retrospective method. Revenues are recognized when or as the control of a good or service is transferred to the customer. Depending on the terms of the contract and the laws that apply to the contract, control of the goods and services may be transferred over time or at a point in time. Control of the goods and services is transferred over time if the Group’s performance: • provides all of the benefits received and consumed simultaneously by the customer; • creates and enhances an asset that the customer controls as the Group performs; or • does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. If control of the goods and services transfers over time, revenue is recognized over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the customer obtains control of the goods and services. The progress towards complete satisfaction of the performance obligation is measured based on one of the following methods that best depict the Group’s performance in satisfying the performance obligation: • direct measurements of the value transferred by the Group to the customer; or • the Group’s efforts or inputs to the satisfaction of the performance obligation. B. Nature of services The following is a description of principal activities from which the Group generates its revenue. (i) Advertising and marketing T The determination of whether revenue should be reported on a gross or net basis is based on an assessment of whether the Group is acting as the principal or an agent in the transaction. In determining whether the Group acts as the principal or an agent, the Group follows the accounting guidance for principal-agent considerations. Such determination involves judgment and is based on evaluation of the terms of each arrangement. a. Advertising and marketing services provided to advertising customers Before February 2018, the Group engaged certain advertising customers through a third-party advertising agent (“advertising agent”). In the arrangement with this advertising agent, it served as the Group’s sales agent in selling the Group’s advertising solutions to other second-tier advertising agents. The end advertisers are the customers of the Group as they specifically select Qutoutiao to display its advertisement and the performance obligation of the Group is to provide the underlying advertising display services. The advertising agent earns a commission of 2% of the advertising revenue in the arrangement in return for providing bidding system for placement on Qutoutiao which the Company recognized as cost of revenue. The Group provides advertising and marketing services to advertising customers and recognizes advertising and marketing revenue on a gross basis as clicks are delivered. The Group receives refundable advance payments from advertising customers through this advertising agent and reconciles the advertising and marketing revenue with this advertising agent on a weekly basis. If the advance payment deposited in the Group is not ultimately used for the advertisement on Qutoutiao, the Group refunds the advance payment back to advertising customers through this advertising agent. In February 2018, the Group acquired 100% equity interests of this advertising agent with a total consideration of RMB15.0 million (Note 3). After the acquisition, the Group effectively provides advertising and marketing services to these advertising customers directly and continues to recognize revenue on a gross basis as impressions are delivered. Besides this arrangement, the Group also provides advertising and marketing service to advertising customers directly. S In May 2019, the Group also started a new business stream of providing integrated marketing solution services to its customers based on their customized needs. The services include but are not limited to design and execute of a systematic marketing plan online and offline, come up with best solutions for online promotion of the customers’ mobile application by selecting appropriate advertisement platforms, design the advertisement clips, monitor advertisement effects, organize offline marketing campaigns featuring social media influencers and circulate marketing messages to the customers’ end consumers. The Group pays the vendors or suppliers when costs are incurred and advertisements are displayed while the Group charges the service fees to the customers based on specified achievements, i.e. a Gross Merchandise Volume (“GMV”) which revenue is recognized based on number of first effective purchase, or Cost per Action (“CPA”) basis which revenue is recognized based on number of registered new users. The Group is the primary obligor ultimately responsible for delivering the tailored marketing services to the customers in the arrangement, it has the discretion in pricing and takes certain risks of loss as the achievements can’t be guaranteed while the costs can have already been incurred. Hence, the Group provides the tailored marketing planning and solution services to customers as the principal and recognizes the revenue on a gross basis . b. Advertising and marketing services provided to advertising platforms The Group provides advertising and marketing services to other third-party advertising platforms. In the arrangement with these advertising platforms, these advertising platforms are the customers of the Group and the performance obligation of the Group is to provide traffic service to these advertising platforms. Therefore, the Group recognizes revenue based on the net amount as impressions or clicks are delivered. The Group reconciles and settles the advertising revenue with these advertising platforms on a monthly basis. (ii) Other services a. Online marketplace service The Group operates an online marketplace which users can access merchandise offered by third-party merchandise suppliers. The suppliers are the customers of the Group as these suppliers are the primary obligor to provide goods and delivery service to the users and the performance obligation of the Group is to provide matching service for the suppliers. The Group acts as an agent in this transaction and recognize revenue when the matching service is completed. The Group settles the payment with suppliers on a monthly basis. b. Agent and platform service After the acquisition of the advertising agent in February 2018 (Note 3), the Group also provides agent and platform service by facilitating the advertising customers to select third-party advertising platforms to display their advertisements. The Group recognizes revenue from the advertising customers based on the net amount equal to certain agreed percentage of the gross revenue earned by the third-party advertising platforms when impressions or clicks are successfully delivered. C. Disaggregation of revenue In the following table, revenue is disaggregated by major service line and gross vs net recognition. Six months ended June 30, 2018 2019 RMB RMB US$(Note 2(e)) Major service line Advertising and marketing service provided to advertising customers, recorded gross (1)(3) 533,983,843 1,894,943,812 276,029,688 Advertising and marketing service provided to advertising platforms, recorded net 135,887,052 550,236,683 80,151,010 Other service (2) 47,963,837 59,616,169 8,684,074 717,834,732 2,504,796,664 364,864,772 (1) For the six months ended June 30, 2018 and 2019, revenue in advertising services provided to advertising customers , , respectively, and includes advertising and marketing services provided to related parties which amounted to RMB 1.2 144.5 (2) For the six months ended June 30, 2018 and 2019, revenue in other services include the agent and platform services which amounted to RMB44.0 million and RMB28.9 million, respectively. For the six months ended June 30, 2018, the aforementioned agent and platform services also include RMB 5.3 (q) Cost of revenues The Group’s cost of revenues consists primarily of (i) agent fees retained by the third party advertising agents, and c in-house (r) Research and development expenses Research and development expenses consist primarily of (i) salary and welfare for research and development personnel, (ii) office rental expenses and (iii) depreciation of office premise and servers utilized by research and development personnel. Costs incurred during the research stage are expensed as incurred. Costs incurred in the development stage, prior to the establishment of technological feasibility, which is when a working model is available, are expensed when incurred. The Company accounts for internal use software development costs in accordance with guidance on intangible assets and internal |
Significant Equity Transactions
Significant Equity Transactions and Acquisitions | 6 Months Ended |
Jun. 30, 2019 | |
Significant Equity Transactions And Acquisitions [Abstract] | |
Significant Equity Transactions and Acquisitions | 3. Significant equity transactions and acquisitions (a) Initial public offering In September 2018, the Company completed its initial public offering on the NASDAQ Global Select Market of 13,800,000 American Depositary Shares (“ADS”) (including 1,800,000 ADSs sold upon the full exercise of the underwriters’ over-allotment option) (every four ADS represents one Class A ordinary share, for a total ordinary shares offering of 3,450,000 shares), at a price of US$7.00 per ADS for a total offering size of approximately US$96.6 million. The net proceeds raised from the IPO amounted to approximately RMB590.9 million (US$85.9 million) after deducting underwriting discounts and commissions and other offering expenses. Upon the completion of the IPO, all classes of preferred shares of the Company were converted and designated as Class A ordinary shares on a one-for-one 34,248,442 one-for-one one-for-one In respect of all matters subject to shareholders’ vote, each holder of Class A ordinary share is entitled to one (b) Follow-on On April 5, 2019, the Company completed a follow-on follow-on (c) Business acquisition The Company accounted for its acquisition in accordance with ASC 805, “Business Combination” (“ASC 805”). The result of the acquiree’s operation has been included in the consolidated financial statements since the acquisition date. The excess of the fair value of the acquired entity over the fair value of net tangible and intangible assets acquired was recorded as goodwill, which is not deductible for corporate income taxation purposes. Acquisition of Dianguan In February 2018, the Company acquired 100 15.0 The acquisition was recorded as a business combination. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: Fair value of consideration transferred: RMB Cash 15,000,000 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 4,270,175 Short-term investments 9,940,000 Prepayments and other current assets 30,936,027 Property and equipment, net 17,978 Accounts payable (364,242 ) Salary and welfare payable (778,438 ) Tax payable (9,933,408 ) Advance from advertising customers (24,664,513 ) Accrued liabilities and other current liabilities (1,691,909 ) Total identifiable net assets acquired 7,731,670 Goodwill 7,268,330 Total purchase consideration 15,000,000 The excess of purchase price over tangible assets and identifiable intangible assets acquired and liabilities assumed was recorded as goodwill. Goodwill associated with acquisition of Dianguan was attributed to the expected synergy arising from the consolidation operations. The acquired goodwill is not deductible for tax purposes. Acquisition-related costs were insignificant and were included in general and administrative expenses for the year ended December 31, 2018. No additional costs were incurred in 2019. Based on the Company’s assessment, the revenues and net earnings of Dianguan were not considered material in 2018 prior to the acquisition date. Pro forma results of operations for the acquisition described above have not been presented because they are not material to the consolidated statements of operations and comprehensive loss, either individually or in aggregate. |
Risks and Concentration
Risks and Concentration | 6 Months Ended |
Jun. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Risks and Concentration | 4. Risks and Concentration (a) Concentration of revenues For the six months ended June 30, 2018, Customer B contributed 12% of total net revenues of the Group. For the six months ended June 30, 2019, Customer C contributed 11% of total net revenue of the Group. (b) Concentration of accounts receivable The Group has not experienced any significant recoverability issue with respect to its accounts receivable. The Group conducts credit evaluations on its platforms and customers and generally does not require collateral or other security from such platforms and customers. The Group periodically evaluates the creditworthiness of the existing platforms in determining an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific customers. The following table summarized customers with greater than 10% of the accounts receivables and amounts due from related parties: As of December 31, 2018 June 30, 2019 Customer A — advertising platform 14 % 11 % Customer B — advertising platform * * Customer C — advertising platform 29 % 36 % Customer D — advertising customer 14 % * Customer E — advertising platform 10 % * Customer F — advertising platform — 10 % Customer G — advertising and marketing customer (related parties) — 20 % * Less than 10% (c) Credit risk The Group’s credit risk arises from cash and cash equivalents, short-term investments, prepayments and other current assets, and accounts receivable. The carrying amounts of these financial instruments represent the maximum amount of loss due to credit risk. The Group expects that there is no significant credit risk associated with the cash and cash equivalents and short-term investments which are held by reputable financial institutions in the jurisdictions where the Company, its subsidiaries and the Affiliated Entities are located. The Group believes that it is not exposed to unusual risks as these financial institutions have high credit quality. The Group has no significant concentrations of credit risk with respect to its prepayments. Accounts receivable are typically unsecured and are derived from revenue earned through third party advertising platforms and customers, as well as related parties. The risk with respect to accounts receivable is mitigated by credit evaluations performed on them. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 6 Months Ended |
Jun. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | 5. Cash and cash equivalents Cash and cash equivalents represent cash on hand and demand deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal or use. The following table sets forth a breakdown of cash and cash equivalents by currency denomination and jurisdiction as of December 31, 2018 and June 30, 2019. RMB RMB equivalent (US$) RMB equivalent (HKD/SGD/IDR) Total in RMB Overseas China Overseas China Overseas China Non VIE VIE Non VIE VIE Non VIE VIE December 31, 2018 — 39,016,535 19,464,246 2,125,034,745 2,269,863 — 502,857 — — 2,186,288,246 June 30, 2019 2,036,528,937 20,890,359 8,036,781 4,304,762 31,762,509 582 1,955,983 — — 2,103,479,913 |
Accounts Receivable, Net
Accounts Receivable, Net | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
Accounts Receivable, Net | 6. Accounts receivable, net As of December 31, 2018 June 30, 2019 Accounts receivable, gross 203,984,074 410,329,309 Less: allowance for doubtful accounts — — Accounts receivable, net 203,984,074 410,329,309 |
Prepayments and Other Assets
Prepayments and Other Assets | 6 Months Ended |
Jun. 30, 2019 | |
Prepaid Expense and Other Assets [Abstract] | |
Prepayments and Other Assets | 7. Prepayments and other assets As of December 31, 2018 June 30, 2019 Prepayment and other current assets Value-added tax receivable 20,640,519 53,478,995 Deferred cost for incentive payment to customer 22,842,164 17,138,284 Prepayment for the use of contents (3) 7,166,442 15,321,271 Deposit to third-party payment service providers (1) 24,888,833 12,466,401 Loans and advance to employees 5,389,935 11,947,219 Lease deposits-current portion 1,017,056 738,509 Deposit to a third-party for advertisement services (2) — 10,000,000 Interest receivable 2,958,984 9,206,512 Deposit to third-party advertising platforms (4) 5,000,000 5,000,000 Prepayments of business insurance 2,996,381 1,963,729 Prepayments of advertisement fee (2) 17,669,507 1,689,512 Prepayments of IT service fee 705,580 509,635 Prepayment of office lease 5,609,752 — Others 3,480,353 3,048,779 120,365,506 142,508,846 Non-current Long-term prepayments of advertisement fee (2) — 13,901,780 Long-term lease deposits 7,424,707 11,116,786 Long-term prepaid server fee 2,087,264 1,301,887 Prepayment for purchase of property and equipment 1,160,170 1,294,067 10,672,141 27,614,520 (1) Deposit to third party payment service providers represent cash prepaid to the Group’s third party on-line , 2018 and June 30 , 2019 , no allowance for doubtful accounts was provided for the prepayment. (2) Prepayments of advertisement fee represent prepayments made to service providers for future services to promote the Company’s mobile applications through online and media advertising. Such service providers charge expenses based on activities during the month, and once confirmed by the Company, the expenses will be deducted from the prepayments already made by the Company. Prepayments of advertising fee is recorded when prepayments are made to service providers and are expensed as services are provided. (3) Prepayment for the use of contents represents the payment to the content providers for the use of the content on the Company’s mobile applications for a period from 6 to 12 months. In June 2019, the Company also entered into an arrangement with a literature content provider based in China for the use of their content library on the Company’s mobile applications for two years. (4) Deposit to third-party advertising platforms represents the deposit made to third-party advertising platforms that the Group provides agent and platform service by facilitating the advertising customers to select third-party advertising platforms to display the advertisements. The deposit is used to secure the timely payment of the agent and platform service fee received by the Group to the third-party platforms. |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 8. Property and equipment, net Property and equipment consist of the following: As of December 31, 2018 June 30, 2019 Cost: Office equipment 10,883,248 17,979,597 Leasehold improvements 7,705,824 9,574,794 Total cost 18,589,072 27,554,391 Less: Accumulated depreciation (4,659,530 ) (8,754,980 ) Property and equipment, net 13,929,542 18,799,411 Depreciation expense recognized for the six months ended June 30, 2018 and 2019 are summarized as follows: Six months ended June 30, 2018 2019 Cost of revenues 467,538 1,327,502 Research and development expenses 683,365 2,026,004 Sales and marketing expenses 89,986 350,989 General and administrative expenses 308,543 390,953 Total 1,549,432 4,095,448 |
Intangible Assets, Net
Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | 9. Intangible assets, net Intangible assets consist of the following: As of December 31, 2018 June 30, 2019 Cost: Acquired right to operate an online audio/video content platform 96,129,761 96,129,761 Computer software — 2,684,807 Total cost 96,129,761 98,814,568 Less: Accumulated amortization (1,602,163 ) (6,480,845 ) Intangible assets, net 94,527,598 92,333,723 The right to operate an online audio/video content platform was acquired on November 1, 2018 through an acquisition of 100% equity interests of a company for a total cash considerations of RMB72.1 million. The acquisition was accounted for as an asset acquisition rather than a business combination as the company does not meet the criteria of a business and substantially all of the fair value of the gross assets acquired would be concentrated in a single asset, which met the screen test criteria to be an asset acquisition for the adopted ASU 2017-01. The acquired right to operate an online audio/video content platform with amount of RMB96.1 million is amortized over 10 years on a straight-line basis. Amortization expense recognized for the six months ended June 30, 2018 and 2019 is nil and RMB4.8 million, recorded in cost of revenues. The Company will record estimated amortization expenses of RMB4.8 million for the remainder of 2019 and RMB9.6 million for the years ending December 31, 2020, 2021, 2022 and 2023, respectively. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | 10. Leases The Company leases facilities under non-cancellable right-of-use (a) The components of lease expenses were as follows: Six months ended June 30, 2019 Lease cost: Amortization of right-of-use 15,667,643 Interest of lease liabilities 1,323,072 Expenses for short-term leases within 12 months 105,817 Total lease cost 17,096,532 (b) Supplemental cash flow information related to leases was as follows: Six months ended June 30, 2019 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating lease payments 17,220,336 Right-of-use 39,560,604 (c) Supplemental balance sheet information related to leases was as follows: Six months ended June 30, 2019 Operating leases Operating lease right-of-use 64,171,819 Operating lease liabilities, current (32,117,473 ) Operating lease liabilities, non-current (26,586,966 ) Total operating lease liabilities (58,704,439 ) As of June 30, 2019 Weighted-average remaining lease term Operating leases 2.2 years Weighted-average discount rate Operating leases 5.7 % (d) Maturities of lease liabilities were as follows: As of June 30, 2019 Remainder of 2019 18,146,111 2020 28,519,929 2021 13,759,180 2022 2,574,821 Total undiscounted lease payments 63,000,041 Less: imputed interest (4,295,602 ) Total lease liabilities 58,704,439 (e) Future minimum lease payments for the Company’s operating leases were as follows: As of December 31, 2018 2019 35,453,783 2020 21,057,299 2021 3,180,192 2022 and thereafter — 59,691,274 |
Tax Payable
Tax Payable | 6 Months Ended |
Jun. 30, 2019 | |
Tax Payable [Abstract] | |
Tax Payable | 11. Tax payable As of December 31, 2018 June 30, 2019 Value added tax 98,020,846 88,229,955 Individual income tax withholding 1,721,939 3,245,045 Urban maintenance and construction tax 1,256,633 269,788 Stamp duty 287,303 373,639 Total 101,286,721 92,118,427 The Group’s revenues are subject to value-added tax at a rate of approximately 6%. |
Accrued Liabilities and Other L
Accrued Liabilities and Other Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities and Other Liabilities | 12. Accrued liabilities and other liabilities As of December 31, 2018 June 30, 2019 Accrued liabilities and other current liabilities Accrued advertising and marketing expense 288,782,409 364,356,163 Cultural development fee and other tax surcharges (1) 76,151,018 103,554,000 Deferred non-refundable incentive payment from depositary bank (2) 2,597,700 2,597,700 Follow on offering issuance cost — 2,062,410 Accrued employee welfare expense 4,709,056 1,493,000 Convertible loan issuance cost — 1,307,205 Accrued professional fees 6,074,086 1,279,746 Accrued Series A convertible redeemable preferred shares issuance cost of a subsidiary 126,146 — Others 690,144 1,733,044 379,130,559 478,383,268 Non-current Deferred non-refundable incentive payment from depositary bank (2) 9,686,219 8,419,246 Total 388,816,778 486,802,514 (1) The Group is subject to a cultural development fee on the provision of advertising services in the PRC. The applicable tax rate is 3% of the net advertising revenues. (2) The Company received non-refundable $ a reduction to general and administrative expense s million as a reduction to general and administrative expenses |
Convertible Loan
Convertible Loan | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Convertible loan | 13. Convertible Loan On March 28, 2019, the Company entered into a convertible loan agreement with Alibaba Investment Limited (“Alibaba”), pursuant to which Alibaba advanced approximately US$171.1 million in aggregate principal amount, which will mature on April 4, 2022 (the “Convertible Loan”). The transaction was completed on April 4, 2019. The Convertible Loan will bear interest at a rate of 3.00% per annum, which will be waived in case of conversion or payable at maturity. The Convertible Loan will be unsecured and unsubordinated and mature in three years after the drawdown, unless previously repaid or converted in accordance with their terms prior to such date. The Convertible Loan may be converted at Alibaba’s option on or after the date falling 240 calendar days after the date of the agreement or upon the occurrence of an event of default (as defined in the indenture agreement) at a conversion price of US$60.00 per ordinary share, equivalent to US$15.00 per ADS, subject to adjustment under the terms of the indenture agreement. Management assessed that the likelihood of an event of default is remote. The Company assessed the Convertible Loan under ASC 815 and concluded that: • Since the conversion option is considered indexed to the Company’s own stock, bifurcation of conversion option from the Convertible Loan is not required as the scope exception prescribed in ASC 815-10-15-74 • There was no BCF attribute to the Convertible Loan as the set conversion price for the Convertible Loan was greater than the fair value of the ordinary share price at date of issuance; Considering the above, the Company has accounted for the Convertible Loan in accordance with ASC 470 as a single instrument as a long-term liability; the value of the Convertible Loan was measured by the cash received of US$171.1 million (RMB1,175.9 million). The debt issuance cost s million and net of issuance costs, was RMB1,183.2 m |
Convertible Redeemable Preferre
Convertible Redeemable Preferred Shares | 6 Months Ended |
Jun. 30, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Convertible Redeemable Preferred Shares | 14. Convertible redeemable preferred shares On September 29, 2017, the Company issued 4,945,055 shares of Series A convertible redeemable preferred shares (the “Series A Shares”) for US$6.5520 per share for cash of US$32,400,000. On November 14, 2017, the Company issued 1,373,626 shares of Series A1 convertible redeemable preferred shares (the “Series A1 Shares”) for US$7.2800 per share for cash of US$10,000,000. On March 4, 2018, the Company issued 5,420,144 shares of Series B1 convertible redeemable preferred shares (the “Series B1 Shares”) for US$19.3722 per share for cash of US$105,000,000. Subsequent to the Series B1 Closing, the investor, who is a leading provider of Internet Value-added Services, and the Company’s PRC entities entered into a cooperation agreement that the investor will promote the Company’s mobile application and will charge the Company a service fee. See (1) below for accounting treatment. On March 8, 2018, the Company issued 3,895,728 shares of Series B2 convertible redeemable preferred shares (the “Series B2 Shares”) for US$23.6156 per share for cash of US$92,000,000. On April 27, 2018, the Company issued 1,751,539 shares of Series B3 convertible redeemable preferred shares (the “Series B3 Shares”) for US$25.9772 per share for cash of US$45,500,000. On September 4, 2018, the Company issued 1,450,520 shares of Series C1 convertible redeemable preferred shares (the “Series C1 Shares”) at US$34.47 per share for total consideration of US$50,000,000 to a third party investor (“Series C1 Investor A”). The appraised fair value of Series C1 shares is US$36.78 per share. Concurrently, the Company entered into a cooperation agreement with Series C1 Investor A, under which the Group will provide advertising service to Series C1 Investor A. See (2) below for accounting treatment of the discount. On September 11, 2018, the Company entered into a supplemental agreement with Series C1 Investor A, under which the number of shares subscribed by Series C1 Investor A has been reduced from 1,450,520 to 290,104. The change of numbers has been concluded by the Company as an extinguishment of mezzanine equity as a separate transaction. See (3) below for accounting treatment of the extinguishment. On September 4, 2018, the Company issued 145,052 shares of Series C1 convertible redeemable preferred shares at US$37.2280 per share for total consideration of US$5,400,000 to another third party investor (“Series C1 Investor B”). The Series A, Series A1, Series B1, Series B2, Series B3 and Series C1 shares are collectively referred to as the Preferred Shares. Upon the Series B1 Shares issuance Closing, several terms of the Series A Shares and Series A1 Shares have been updated to be consistent with the new issued Series B1 Shares’ rights summarized as follows: (1) The non-cumulative (2) The term of redemption requirement for Series A Shares and Series A1 Shares has been changed from six years from the date of relevant Series Closing Date to five years from the date of Series B1 Shares issuance Closing; (3) The percentage to calculate the liquidation amount was modified from 100% to 120% for Series A Shares and Series A1 Shares; (4) The definition of a Qualified IPO. The Company evaluated the modifications in accordance with its accounting policy and concluded that they are modifications, rather than extinguishment of Preferred Shares because the Company determined that the amendment did not add, remove, significantly change a substantive contractual term or to the nature of the overall instrument. The intention of the modification was to align the redemption rights and dividends right among existing Preferred Shareholders and the incoming Preferred Shareholders. The modifications that resulted in difference of between the fair value of the modified Series A and Series A1 Preferred Shares and the carrying value of Series A and Series A1 Preferred Shares on the modification date have been recorded as a deemed dividend of RMB1,916,871 against the accumulated deficit. The key terms of the Series A, Series A1, Series B1, Series B2, Series B3 and Series C1 Shares after the modifications are as follows: Conversion rights Each Preferred Share shall be convertible into such number of ordinary shares at the Preferred Share-to-Ordinary Each Preferred Share may, at the option of the holder thereof, be converted at any time after the date of issuance of such Preferred Shares into Ordinary Shares based on the then-effective Conversion Price. In addition, each share of the Series A, A1, B1, B2, B3 and C1 Shares would automatically be converted into ordinary shares of the Company (i) upon the closing of an initial public offering of the Company’s shares or (ii) upon the date specified by written consent or agreement of its shareholders. The Company determined that there were no beneficial conversion features identified for any of the Preferred Shares during any of the periods . re-evaluate Dividend rights The Series C1 Preferred Shareholders shall be entitled to receive, in preference to any dividend on the ordinary shares, non-cumulative The Series B1, B2, B3 Preferred Shareholders shall be entitled to receive, in preference to any dividend on the ordinary shares, non-cumulative The Series A, A1 Preferred Shareholders shall also be entitled to receive, in preference to any dividend on the ordinary shares, non-cumulative Except the Exempted Dividends (as defined below), no dividend, whether in cash, in property, in shares in the Company or otherwise may be declared or paid on any other class or series of shares unless and until the Preferred Dividends are first paid in full. Exempted Dividends means (1) a dividend payable solely in Ordinary Shares and to all shareholders of the Company on a pro rata basis, (2) the purchase, repurchase or redemption of Ordinary Shares by the Company at no more than cost from terminated employees, officers or consultants in accordance with the ESOP, or pursuant to written contractual arrangements with the Company approved by the Board (so long as such approval includes the approval of the Series A Director and the Series B1 Director), (3) the purchase, repurchase or redemption of Preferred Shares (including in connection with the conversion of such Preferred Shares into Ordinary Shares). Voting rights The holders of the Series A, A1, B1, B2, B3 and C1 Shares shall be entitled to such number of votes equal to the whole number of ordinary shares into which such Series, A1, B1, B2, B3 and C1 Shares are convertible. Liquidation preference In the event of any liquidation, dissolution or winding up of the Company, all assets and funds of the Company legally available for distribution to the shareholders shall, by reason of the shareholders’ ownership of the shares, be distributed as follows: First, the holders of the Series C1 Shares shall be entitled to receive for each such Preferred Share held by such holder, on parity with each other and prior and in preference to any distribution of any of the assets or funds of the Company to the holders of the Series B1, B2, B3, A, A1 and Ordinary Shares by reason of their ownership of such shares, the amount equal to: (i) for each Series C1 Preferred Share, one hundred and twenty percent (120%) of the applicable Series C1 Issue Price, plus all accrued but unpaid dividends on such Series C1 Preferred Share. Second, the holders of the Series B1, B2 and B3 Shares shall be entitled to receive for each such Preferred Share held by such holder, on parity with each other and prior and in preference to any distribution of any of the assets or funds of the Company to the holders of the Series A and A1 Preferred Shareholders by reason of their ownership of such shares, the amount equal to one hundred percent (120%) of the applicable Series B1, B2, B3 Issue Price, plus all accrued but unpaid dividends on such Preferred Shares. Third, the holders of the Series A Shares and Series A1 Shares shall be entitled to receive for each such Preferred Share held by such holder, on parity with each other and prior and in preference to any distribution of any of the assets or funds of the Company to the holders of the Ordinary Shares by reason of their ownership of such shares, the amount equal to one hundred percent (120%) of the applicable Series A and A1 Issue Price, plus all accrued but unpaid dividends on such Preferred Shares. If the assets and funds available for distribution among the Preferred Shareholders shall be insufficient to permit the payment to such holders of the full amount, then the entire remaining assets and funds of the Company legally available for distribution to such shareholders shall be distributed ratably among the shareholders in proportion. Fourth, if there are any assets or funds remaining after the aggregate amount have been distributed or paid in full to the applicable holders of Series A, A1, B1, B2, B3, C1 Shares, the remaining assets and funds of the Company available for distribution shall be distributed ratably among all shareholders according to the relative number of Ordinary Shares held by such holders on an as if converted basis. A Deemed Liquidation Event shall be deemed to be any change of control event such as a liquidation, dissolution or winding up, merger and acquisition, reorganization of the Company, a sale, transfer, lease or other disposition of all or substantially all of the assets of any Group Company or the exclusive, irrevocable licensing of all or substantially all of any Group Company’s intellectual property to a third party. Any proceeds, whether in cash or properties, resulting from a Deemed Liquidation Event shall be distributed in accordance with the liquidation preference above. Redemption right For Series A, A1, B1, B2, B3 or C1 Shares, at the written request of any Series A or Series A1 Shareholder(s) who individually or in the aggregate hold(s) at least fifty one percent (51%) of all the issued and outstanding such Preferred Shares (“Initial Redemption Notice”), the Company shall redeem all or portion of the outstanding Series A, A1, B1, B2, B3 or C1 Shares respectively held by such Shareholder(s) upon the following redemption event: (i) the Company’s failure to complete a Qualified IPO within five (5) years after the date of the Series B1 Shares issuance Closing; (ii) any material breach by any Warrantor (as defined in the Series A, A1, B1, B2, B3 or Series C1 Purchase Agreement) in the Transaction Documents (as defined in the such Series Preferred Purchase Agreement, including those duly amended and restated versions from time to time) which causes a Material Adverse Effect (as defined in the such Series Preferred Purchase Agreement) on the business of the Group Companies or any holder of the Series A, A1, B1, B2, B3 or Series C1 Shares, or in the event any Warrantor gives any material misrepresentation or engages in wi l In addition, the Company shall (1) promptly thereafter provide all of the other holders of Preferred Shares notice of the Initial Redemption Notice and of their right to participate in such redemption, which right is exercisable by each such holder in their own discretion by delivering a written notice (each, a “Redemption Notice”) by hand or letter mail or courier service to the Company at its principal executive offices within fifteen (15) days of the giving of such notice by the Company, requesting and specifying redemption of all or part of their Preferred Shares, and (2) pay to each holder (each, a “Redeeming Preferred Shareholder”) of a Preferred Share for which an Initial Redemption Notice or a Redemption Notice has been timely submitted (each, a “Redeeming Preferred Share”). The redemption price for each Series A, A1, B1, B2, B3 or Series C1 Shares shall be determined in accordance with the following formula: IP x (110 %) N + D, where IP = Series A, A1, B1, B2, B3 or Series C1 Issue Price; N = a fraction the numerator of which is the number of calendar days between date the Series A, A1, B1, B2, B3 or Series C1 Issue Date and the date on which the Redemption Price is paid and the denominator of which is 365; D = all declared but unpaid dividends on each Series A, A1, B1, B2, B3 or Series C1 Shares up to the date of redemption, proportionally adjusted for share subdivisions, share dividends, reorganizations, reclassifications, consolidations or mergers. Warrant Before the issuance of Series B2 Shares, one of investors entered into a Loan and Guarantee agreement with the Company on February 12, 2018, pursuant to which the investor lent US$5,000,000 to the VIE while the Company issued a warrant to the investor to the right to purchase 211,724 Series B2 Shares at an exercise price of $23.62 per share. On March 21, 2018, the investor exercised the warrant and subscribed to 211,724 Series B2 Preferred Shares. The US$5,000,000 loan has been settled and converted to the investor’s 211,724 entitled shares upon the exercise of the warrant. Given that the outstanding period of the loan and warrant was within a month, the value of the conversion feature in the loan and the warrant was determined to be immaterial. (1) Accounting of Preferred Shares The Company classified the Preferred Shares in the mezzanine section of the consolidated balance sheets because they were convertible at the holders’ option any time after the date of issuance of such shares and were contingently redeemable upon the occurrence of certain liquidation events outside of the Company’s control, including the Company’s failure to complete a Qualified IPO within five years following the date of Series B1 Closing. A Qualified IPO is defined as a firm commitment underwritten public offering of the Ordinary Shares of the Company (or depositary receipts or depositary shares therefor) in the United States pursuant to an effective registration statement under the United States Securities Act of 1933, as amended or in another jurisdiction which results in the Ordinary Shares trading publicly on a recognized international securities exchange approved by the majority Preferred Shareholders, with (i) if such public offering takes place within 5 years of the Series B1 Closing, minimum pre-money For the six months ended June 30, 2018 and 2019, the issuance costs incurred were RMB34.4 million and nil. The Qualified Public Offering deadline is five years following the Closing of Series B1. As such, the failure to complete a Qualified Public Offering by March 4, 2023 would be considered the earliest redemption date for all Preferred Shares. Based on the Company’s valuation results, the Series B1 Shares were issued on March 4, 2018 at $19.37 per share with an 18% discount compared with the fair value at $22.46 per share of the Series B1 Shares on the issuance date. On March 8, 2018, the Series B2 Shares were issued at $23.62 per share at fair value. Although the Company entered into the cooperation agreement with the B1 investor which would expire in 2021, management concluded the terms were not advantageous in terms of prices or payment terms, and the services covered were not exclusive or unique for the Company, that service fees in the agreement were determined based on market value and that the Company could have obtained similar services with similar prices from other service suppliers. As a result, the cooperation agreement with the investors for the Series B1 Shares were accounted for separately from the issuance of the Series B1 Shares. The Company also determined that the conversion price was higher than the estimated fair value of the ordinary shares on the issuance date and as such that there was no beneficial conversion feature embedded in the issuance of the Series B1 Shares. Accordingly the Company did not separately account for the discount on the issuance price of Series B1 Shares. The Company recognized accretion to the respective redemption value of the Preferred Shares over the period starting from issuance date to the earliest redemption date according to the redemption price calculation described above except for Series C1 issued to Series C1 investor A, the related accounting treatment was described in (2) Accounting of discount in Series C1 convertible redeemable preferred shares insurance price below. Preferred shares are denominated in USD and the reporting currency of the Company is RMB. Therefore, foreign currency translation adjustments arising from the fluctuation of the exchange rate between USD and RMB When the preferred shareholders converted their preferred shares to ordinary shares upon completion of the IPO in September 2018, the Company calculated the accretion value of the preferred share through the IPO date and the difference between the carrying value of the preferred shares on the IPO date and the paid-in paid-in (2) Accounting of the discount offered to Series C1 Investor A As mentioned above, the per share cash consideration of US$34.47 received from Series C1 Investor A was lower than the appraised fair value of US$36.78 per share. The discount between the fair value and cash consideration was offered since to Series C1 Investor A has entered into a cooperation agreement with the Company and is going to be a future customer of the Company. Therefore, the discount of US$3.35 million (RMB22.8 million) has been accounted for as upfront incentive payment to customer. The upfront incentive payment shall be charged to expense during the one year period in which the Company will provide advertising service to Series C1 Investor A. As of June 30, 2019, the carrying value of the incentive payment was RMB17.1 million, reduced by the amount of advertising services that have been received by the customer to date in 2019. (3) Accounting of the extinguishment of mezzanine equity related to Series C1 Investor A As mentioned above, the Company assessed and concluded that the reduction of shares committed from 1,450,520 to 290,104 is an extinguishment of mezzanine equity. The extinguishment of the preferred shares was recorded at fair value on repurchase day. A gain, which was the difference of US$2.68 million (RMB18.3 million) between the excess of the fair value of the consideration over the carrying value of preferred shares upon the repurchase date, was recorded in accumulated deficit as of December 31, 2018. (4) Agreement for issuance of Series C2 Shares On August 27, 2018, the Company entered into a share subscription agreement with a subsidiary of Shanghai Dongfang Newspaper Co., Ltd., commonly known as “The Paper”, a leading online news service provider in China. The Paper is a subsidiary of Shanghai United Media Group, which is a wholly state- owned enterprise. Pursuant to the a share subscription agreement, the Company agreed to issue 1,480,123 Series C2 convertible redeemable preferred shares (or ordinary shares once the Company completes its initial public offering) (“Series C2 Shares”) to The Paper for consideration of US$55,102,061, of which US$20,408,171 or US$13.79 per share (“Series C2 Cash Price”) and certain business and strategic cooperation between The Paper and the Group. To the extent the closing of the share subscription is after the completion of IPO, the same number of ordinary shares will be issued to The Paper in lieu of series C2 preferred shares. The share subscription agreement also provides that The Paper will have the right to designate one director to the Company’s board of directors. In addition, Shanghai Jifen (VIE entity of the Group) has agreed to issue equity interests representing 1% of its enlarged share capital to The Paper at a nominal price which has not been completed as of June 30, 2019. Since the share subscription agreement did not represent a firm commitment to issue shares until the regulatory approval is obtained, and the Company has completed IPO in September 2018, the Company has not recognized the issuance of ordinary shares as June 30, 2019. During September 2019, the aforementioned share subscription was approved by the relevant PRC government authorities and the ordinary shares were issued. Refer to Note 2 3 |
Ordinary Share
Ordinary Share | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Ordinary Share | 15. Ordinary Share On July 17, 2017, Qutoutiao Inc. was incorporated as Limited Liability Company with authorized share capital of US$50,000 divided into 50,000 shares with par value US$1.00 each. On September 1, 2017, the authorized share capital of US$50,000, which represented 50,000 issued shares, was subdivided into 500,000,000 shares. In November 2017, a shareholder of the Company sold certain ordinary shares to third party investors at US$7.28 per share. The sale of ordinary shares is a transaction amongst shareholders and did not impact the Group’s consolidated financial statements. In January 2018, the founders entered into Share Restriction Deeds with the Company such that a total of 15,937,500 ordinary shares of the Company held by the founders became restricted and will vest over periods from 24 months to 34 months. Prior to the end of the vesting periods, all the remaining restricted shares shall vest immediately and no longer constitute restricted shares upon a Deemed Liquidation Event or IPO of the Company. In the event that the founder voluntarily and unilaterally terminates his employment/ service contract with any applicable Group entities or his employment or service relationship is terminated by any applicable Group entities for cause as stated in the Deed, the related founder shall sell to the Company, and the Company shall repurchase from the founder, all of the restricted shares (not vested shares) at a price of US$0.0001 per share. For accounting purposes, this transaction has been reflected retrospectively similar to a reverse stock split and presented in the balance sheet as of December 31, 2017 and statement of shareholders’ deficit as a reduction of the numbers of issued and outstanding ordinary shares. Upon the execution of the Share Restriction Deeds in January 2018, the total 15,937,500 ordinary shares were presented as an increase of the numbers of issued ordinary shares, with the grant to be recognized as share-based compensation over the vesting periods at their then fair value on January 3, 2018 (Note 1 6 In February 2018, the Company established a trust to hold 10,000,000 of the Company’s issued shares. These ordinary shares were contributed by the founder and held in trust for the benefit of the employees who are under the 2017 Plan to be issued based on the discretion of the board of directors of the Company. The ordinary shares issued to the trust are accounted for as treasury shares of the Company and presented as such for all periods presented. The trust does not hold any other assets or liabilities as at June 30, 2019, nor earn any income nor incur any expenses for the six months ended June 30, 2018 and 2019. From January to March 2018, shareholders of the Company sold certain ordinary shares to third party investors at about US$23.62 per share. Except for the sale of ordinary share to existing shareholders which resulted in share-based compensation of RMB1.4 million, the sale of ordinary shares is a transaction amongst shareholders and did not impact the Group’s consolidated financial statements. In September 2018, the Company completed its initial public offering on the NASDAQ Global Select Market of 13,800,000 American Depositary Shares (“ADS”) (including 1,800,000 ADSs sold upon the full exercise of the underwriters’ over-allotment option) (every four ADS represents one Class A ordinary share, for a total ordinary shares offering of 3,450,000 shares), at a price of US$7.00 per ADS for a total offering size of approximately US$96.6 million. The net proceeds raised from the IPO amounted to approximately RMB590.9 million (US$85.9 million) after deducting underwriting discounts and commissions and other offering expenses. Upon the completion of the IPO, all classes of preferred shares of the Company were converted and designated as Class A ordinary shares on a one-for-one one-for-one one-for-one |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Compensation | 16. Share-based compensation (a) Share option plan In January 2019, the board of the directors of the Company approved a 2019 Equity incentive plan. The equity incentive plan replaced the 2017 equity incentive plan and 2018 equity incentive plan that the Company previously adopted in their entirety and assumed the awards previously granted under these two plans. On March 5, 2019, the Company increased the aggregate number of Class A ordinary shares reserved for issuance pursuant to awards granted under the equity incentive plan by 3.5% of the total number of Class A ordinary shares and Class B ordinary shares outstanding as of December 31, 2018. Share-based compensation expense related to the option awards granted to the employees amounted to approximately RMB25.4 million and RMB117.1 million for the six months ended June 30, 2018 and 2019. Share-based awards related to the option awards granted to the employees of companies under common control of the founder were measured at fair value at the grant dates and amounts of RMB6.8 million and nil was recognized as dividends distributed to the founder for the six months ended June 30, 2018 and 2019, respectively. In 2018 and 2019 some employees of companies under common control of the founder were transferred to be the Company’s employee. The related unvested options granted were not modified in connection with the change in status, but future service is still necessary to earn the award over the remaining periods. Accordingly, the share-based compensation expense related to the unvested options were measured as if the related unvested options were newly granted at the date of the change and recognized over the remaining vesting periods. For the six months ended June 30, 2018 and 2019, share-based compensation expense related to the employees transferred from sister company amounted to RMB1.1 million and RMB18.5 million, respectively. (b) Restricted shares to founders with service conditions On January 3, 2018, the founders entered into Share Restriction Deeds with the Company such that a total of 15,937,500 ordinary shares of the Company held by the founders became restricted and will vest over periods from 24 months to 34 months starting January 2018. Prior to the end of the vesting periods, all the remaining restricted shares shall vest immediately and no longer constitute restricted shares upon a Deemed Liquidation Event or IPO of the Company. In the event that the founder voluntarily and unilaterally terminates his employment/service contract with any applicable Group entities or his employment or service relationship is terminated by any applicable Group entities for cause as stated in the Deed, the related founder shall sell to the Company, and the Company shall repurchase from the founder, all of the restricted shares (not vested shares) at a price of US$0.0001 per share. This transaction has been reflected retrospectively similar to a reverse stock split, with a grant of the 15,937,500 restricted shares recognized in January 2018 at their fair value. The grant is being treated as share-based compensation over the vesting periods, and the estimated grant date fair value of the 15,937,500 ordinary shares approximated to at RMB864.7 million (US$128.1 million). Share-based compensation expense of RMB215.0 million (US$33.1 million) were recorded as share-based compensation expense through the completion of IPO. Upon the completion of IPO in September, 2018 which was prior to the end of the vesting periods, the entire remaining unrecognized compensation expenses approximating RMB649.7 million (US$95.0 million) was expensed immediately. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 17. Income Taxes The Company has incurred net accumulated operating losses for income tax purposes since its inception. The Company believes that it is more likely than not that these net accumulated operating losses and other deferred tax assets will not be utilized in the future. Therefore, the Company has provided full valuation allowances for the deferred tax assets as of December 31, 2018 and June 30, 2019. |
Other Operating Income
Other Operating Income | 6 Months Ended |
Jun. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Other Operating Income | 18. Other Operating Income The Chinese tax bureau implemented a new tax rule which states that for the period between April 1, 2019 to December 31, 2021, companies from selected service industries (i.e. postal services, telecommunication services, modern services and lifestyle services) qualify for, an additional 10 percent super deduction of input VAT in addition to the existing, deductible input VAT. For the six months ended June 30, 2019, the Company recorded a benefit from the super deduction of RMB10.8 million in other operating income. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests And Noncontrolling Interests | 6 Months Ended |
Jun. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Redeemable Non-Controlling Interests | 1 9 Redeemable non-controlling non-controlling (a) Redeemable non-controlling In November 14, 2018, Fun literature, one of the Company’s wholly owned subsidiaries, entered into preferred share purchase agreements with certain third party investors (“Fun preferred shareholders”) to issue 3,763,440 shares of series A redeemable convertible preferred shares (Fun Preferred Shares) at the price of US$3.72 per share for an aggregate issuance price of US$14.0 million (RMB97.1 million). The Fun Preferred Shares on an as-if-converted On March 29, 2019, Fun Literature entered into an additional preferred share agreement with a new third party investor t as-if-converted Pursuant to the preferred share agreement, the Fun preferred shareholders have the right to convert all or any portion of their preferred shareholdings into ordinary shares of Fun literature at the initial conversion ratio of 1:1 at any time after the date of issuance of the preferred shares, and the conversion ratio is subject to adjustment for dilution, including but not limited to stock splits, stock dividends and recapitalization. In addition, the Fun Preferred Shares will automatically convert into the Fun Literature’s ordinary shares upon the occurrence of a qualified initial public offering (as defined in the share purchase agreement), at the then effective and applicable conversion price. The other main rights, preferences and privileges of Fun Preferred Shares are as follows: Dividend rights If the board of Fun literature declares dividend, the Investors have the same rights as the ordinary shareholders. Liquidation preferences In the event of any liquidation, dissolution or winding up of Fun literature, either voluntarily or involuntarily, the Fun preferred shareholders rank pari passu with the ordinary shareholders. Redemption rights The Fun preferred shareholders have the right to require Fun literature to purchase all the shares from the Fun preferred shareholders within five years after the closing of the issuance by the holders in the event that (i) a qualified initial public offering has not occurred, or (ii)) any material breach of representations and warranties, covenants or obligations made or borne by any The Company that cause material adverse effect on any Fun preferred shareholders, or (iii) any the Company engages in willful or fraudulent misconducts that cause material adverse effect on any Fun preferred shareholders. The redemption need to be done within 60 days from the date on which the Fun preferred shareholders raise their written request. The redemption price equals initial investment plus 10% annual compound interests. Voting rights The Fun preferred shareholders have the number of votes as equal to the number of shares they hold. Since the Fun Preferred Shares are redeemable at a determinable price on a determinable date, at the option of the holder, or upon occurrence of an event that is not solely within the control of Fun Literature, the Fun Preferred Shares are accounted for as redeemable non-controlling Subsequently, the redeemable non-controlling The Company’s redeemable non-controlling 2019 is summarized as follows: Six months ended Beginning balance as at December 31, 2018 96,936,855 Issuance of Redeemable non-controlling 27,483,649 Foreign exchange impacts 767,115 Accretion to redemption value of redeemable non-controlling 5,293,586 Ending balance as at June 30, 2019 130,481,205 The Company did not have any redeemable non-controlling (b) Non-controlling interests Non-controlling non-controlling non-controlling non-controlling non-controlling |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 20 Related Party transactions As of December 31, 2018 and June 30, 2019, the transactions with and amount due to/from related parties was as follows: Transaction amount with related parties Six months ended June 30, 2018 2019 Services provided by the Group Advertising and marketing service provided to related parties (1) 1,183,492 144,462,450 Agent and platform service provided to a related party (2) 5,293,092 — Six months ended June 30, 2018 2019 Services received by the Group Advertisement costs charged from a related party (3) — 14,758,169 Advertising service fee charged from related parties (4) 2,783,291 669,123 iCloud server and other service fee charged from a related party (5) 5,502,298 — Balance amount with related parties As of December 31, 2018 June 30, 2019 Amount due from related parties (1) & (2) — 104,097,946 Amount due to related parties (3) & (4) — 6,841,157 (1) For the six m d million to a company in which the founder of the Company was a member of key management (the founder was no longer a member of management of that company after September 2018). For the six months ended June 30, 2019, a total of RMB144.5 million of advertising and marketing services was provided to companies under common control of the founder, which includes integrated marketing solution services. (2) The Group provided agent and platform services between the advertising customers and a company in which the founder of the Company was a member of key management by facilitating the advertising customers to display their advertisements. The founder was no longer a member of management of that company as of December 31, 201 8 (3) For the six months ended June 30, 2019, the Group entered into a CPM (cost per impression) arrangement with a media platform under the common control of the founder to for the Group’s customers’ advertisement placement. The total service fee charged from related parties amounted to RMB14.8 million for the six months ended June 30, 201 9 (4) For the six months ended June 30, 2018, the Group entered into a cooperation agreement with Series B1 shareholder to promote the Company’s mobile application, and the cooperation agreement requires the Company to prepay a total service fee of RMB31.5 million which will be recognized as expense over 3 years. Total service fee recognized as expense amounted to RMB5.5 million. After the IPO in September 2018, the Series B1 shareholder has no right to nominate the board member of the Company and has only 1.5 % voting power of the Company and no ability to exercise significant influence. As a result, the Series B1 shareholder was no longer a related party of the Company after September 2018. For the six months ended June 30, 2019, the service fee charged from related parties represented the expense charged from a different company under common control of the founder which provided the Group with advertising and marketing service. (5) The service fee mainly represented iCloud server and short message service fees charged from Series B1 shareholder through September 2018. After the IPO in September 2018, the Series B1 shareholder has no right to nominate the board member of the Company and has only 1.5 % voting power of the Company and no ability to exercise significant influence. As a result, the Series B1 shareholder was no longer a related party of the Company after September 2018. |
Basic and Diluted Net Loss per
Basic and Diluted Net Loss per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss per Share | 2 1 Basic and diluted net loss per share Basic loss per share and diluted loss per share have been calculated in accordance with ASC 260 on computation of earnings per share for the six months ended June 30, 2018 and 2019 as follows: Six months ended June 30, 2018 Six months ended June 30, 2019 Numerator: Net loss attributable to Qutoutiao Inc. (514,435,513 ) (1,249,285,575 ) Accretion on Series A convertible redeemable preferred shares redemption value (10,643,883 ) — Accretion on Series A1 convertible redeemable preferred shares redemption value (3,274,935 ) — Accretion on Series B1 convertible redeemable preferred shares redemption value (21,349,500 ) — Accretion on Series B2 convertible redeemable preferred shares redemption value (18,092,345 ) — Accretion on Series B3 convertible redeemable preferred shares redemption value (5,602,880 ) — Deemed dividend to preferred shareholders (1,916,871 ) — Accretion on redemption value of Series A convertible redeemable preferred shares of a subsidiary (Note 1 9 — (5,293,586 ) Net loss attributable to ordinary shareholders-Basic and diluted (575,315,927 ) (1,254,579,161 ) Denominator: Denominator for basic and diluted loss per share Weighted-average ordinary shares outstanding (Note) Basic and diluted 24,238,324 62,684,261 Basic and diluted loss per share (23.74 ) (20.01 ) Denominator for basic and diluted loss per ADS Weighted-average ADS outstanding (Note) Basic and diluted 96,953,296 250,737,044 Basic and diluted loss per ADS (5.93 ) (5.00 ) For the six months ended June 30, 2018 and 2019, assumed conversion of the Preferred Shares have not been reflected in the dilutive calculations pursuant to ASC 260, “Earnings Per Share,” due to the anti- dilutive effect as a result of the Group’s net loss. The effects of all outstanding share options and restricted shares granted to the founders have also been excluded from the computation of diluted loss per share for the six months ended June 30, 2018 and 2019 due to their anti-dilutive effect. The following ordinary shares equivalent were excluded from the computation of diluted net loss per ordinary share for the periods presented because including them would have had an anti-dilutive effect: Six months ended June 30, 2018 June 30, 2019 Preferred shares — weighted average 12,642,574 — Share options — weighted average 9,911,869 11,288,731 Restricted shares — weighted average 10,569,386 — |
Commitment and Contingencies
Commitment and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 2 2 Commitments and contingencies (a) Content fee The Group has entered into non-cancelable As of June 30, 2019, future minimum payments with respect to these agreements consist of the following: RMB US$ (Note 2(e)) Years Ending December 31, Remainder of 2019 102,396,667 14,915,756 2020 162,521,191 23,673,881 2021 61,832,143 9,006,867 (b) Capital and other commitments As of June 30, 2019, future minimum payments under non-cancellable RMB US$ (Note 2(e)) Years Ending December 31, Remainder of 2019 178,967,000 26,069,483 2020 36,252,000 5,280,699 (c) Litigation In the ordinary course of the business, the Group is subject to periodic legal or administrative proceedings. As of June 30, 2019, the Group is not a party to any legal or administrative proceedings, which will have a material adverse effect on the Group’s business, financial position, results of operations and cash flows. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent events | 2 3 Subsequent events (a) On July 16, 2019, the Company began to undergo product upgrades and temporarily suspended content updates and certain commercial activities on Midu Novels in compliance with regulatory requirements, and have subsequently resumed its regular content updates and commercial activities since October 16, 2019. ( b Pursuant to Note 14 (4), on September 23, 2019, Qutoutiao Inc. obtained the relevant PRC government approval and completed the share purchase agreement with Shanghai Dongfang Newspaper Co., Ltd., commonly known as “The Paper”. The Company then issued 1,480,123 Class A ordinary shares for an aggregate cash consideration of $20,408,171 (RMB140.1 million), amounting to a cash consideration of US$13.79 per share ($3.45 per ADS). The Paper will also carry out the performance of certain strategic cooperation agreements for a fee charge with Shanghai Jifen, the consolidated VIE, for certain years . In addition, Shanghai Jifen issued equity interests representing 1% of its enlarged share capital to The Paper at a nominal price. A representative from The Paper will hold one seat on Jifen’s Board of Directors not to participate on the VIE’s decision making process but to oversee the compliance and enhance quality of content on the Company’s platforms. The Paper will not absorb the losses allocation, if any, from the VIE. The Company believes that its control over the consolidated VIE and its subsidiaries and the economic benefits received from the consolidated VIE will not be adversely affected and will continue to consolidate the VIE. The 1% equity interests held by The Paper will represent non-controlling ( c On September 24, 2019, one of the Group’s subsidiaries, Fun Literature Limited, completed Series B financing in the amount of US$ 100,000,000 8,794,703 Series B Preferred Shares for US$5.69 per share for a in this financing round. In addition to similar preferential rights granted to Fun Literature Limited’s Series A Preferred Shares as described in Note 1 9 |
Principal Accounting Policies (
Principal Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Preparation | (a) Basis of preparation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position and results of operations and cash flows as of June 30, 2019 and for the six-month periods ended June 30, 2018 and 2019. The year-end condensed balance sheet data as of December 31, 2018 was derived from audited financial statements, but does not include all disclosures required by US GAAP. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses during the reporting periods. Actual results could materially differ from those estimates. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s Annual Report on Form 20-F Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below. |
Use of Estimates | (b) Use of estimates The preparation of the Group’s consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from such estimates. The Company believes that revenue recognition, liabilities related to loyalty programs, consolidation of VIEs, determination of share-based compensation and impairment assessment of long-lived assets that reflect more significant judgments are estimates used in the preparation of its consolidated financial statements. Management bases the estimates on historical experience and on various other assumptions as discussed elsewhere to the consolidated financial statements that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could materially differ from these estimates. |
Consolidation | (c) Consolidation The Group’s consolidated financial statements include the financial statements of the Company, its subsidiaries, its VIEs and VIEs’ subsidiaries for which the Company or its subsidiary is the primary beneficiary. All transactions and balances among the Company, its subsidiaries, its VIEs have been eliminated upon consolidation. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A VIE is an entity in which the Company, or its subsidiary, through contractual agreements, bears the risks of, and enjoys the rewards normally associated with ownership of the entity. In determining whether the Company or its subsidiaries are the primary beneficiary, the Company considered whether it has the power to direct activities that are significant to the VIEs’ economic performance, and also the Group’s obligation to absorb losses of the VIEs that could potentially be significant to the VIEs or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. The Company’s WOFEs and ultimately the Company hold all the variable interests of the VIEs and its subsidiaries, and have been determined to be the primary beneficiaries of the VIEs. The following table sets forth the assets, liabilities, results of operations and cash flows of VIEs and its subsidiaries, which are included in the Group’s consolidated financial statements. Transactions between the VIEs and its subsidiaries are eliminated in the balances presented below: As of December 31, 2018 June 30, 2019 Assets Current assets Cash and cash equivalents 19,464,246 8,037,363 Short-term investments 5,000,000 77,250,000 Accounts receivable, net 200,289,537 407,093,056 Amount due from subsidiaries of the Company 291,902,904 549,272,236 Amount due from related parties — 92,962,134 Prepayments and other current assets 80,565,668 95,686,339 Total current asset 597,222,355 1,230,301,128 Non-current Investments — 5,000,000 Property and equipment, net 13,376,314 17,649,497 Right-of-use — 52,419,053 Intangible assets — 2,612,613 Other non-current 8,945,774 25,596,111 Total non-current 22,322,088 103,277,274 Total assets 619,544,443 1,333,578,402 Liabilities Current liabilities Accounts payable 73,087,671 238,068,415 Amount due to subsidiaries of the Company 629,835,620 1,497,513,909 Registered users’ loyalty payable 249,881,449 172,120,365 Advance from advertising customers 152,181,358 164,606,216 Salary and welfare payable 41,665,582 72,032,140 Tax payable 100,757,561 91,918,811 Lease liabilities, current — 24,935,349 Accrued liabilities related to users’ loyalty programs 44,133,812 46,255,061 Accrued liabilities and other current liabilities 360,711,336 461,629,127 Total current liabilities 1,652,254,389 2,769,079,393 Non-current Lease liabilities, non-current — 22,207,796 Total non-current — 22,207,796 Total liabilities 1,652,254,389 2,791,287,189 Six months ended June 30, 2018 2019 Net revenues 712,036,682 2,762,489,629 Net loss (514,632,981 ) (909,376,001 ) Six months ended June 30, 2018 2019 Net cash used in operating activities (280,080,346 ) (336,305,135 ) Net cash provided by/(used in) investing activities 92,990,105 (88,029,748 ) Net cash provided by financing activities 275,200,311 412,908,000 Net increase/(decrease) in cash and cash equivalents 88,110,070 (11,426,883 ) In accordance with the aforementioned VIE agreements, the Company has power to direct activities of the VIEs, and can have assets transferred out of VIEs. Therefore the Company considers that there is no asset in VIEs that can be used only to settle obligations of the VIEs, except for registered capital, as of December 31, 2018 and June 30, 2019. As the VIEs and their subsidiaries were incorporated as limited liability company under the PRC Company Law, the creditors do not have recourse to the general credit of the Company for all the liabilities of the VIEs. There were no pledges or collateralization of the Affiliated Entities’ assets. As the Company is conducting its business mainly through the Affiliated Entities, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. There is no VIEs where the Company has variable interest but is not the primary beneficiary. The Group believes that the contractual arrangements among its shareholders and WFOEs comply with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and if the shareholders of the VIEs were to reduce their interests 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. The Company’s ability to control the VIEs also depends on the voting rights proxy and the effect of the share pledge under the Equity Interest Pledge Agreement and the WFOEs have to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Company believes this voting right proxy is legally enforceable but may not be as effective as direct equity ownership. |
Functional Currency and Foreign Currency Translation | (d) Functional Currency and Foreign Currency Translation The Group uses Renminbi (“RMB”) as its reporting currency. The functional currency of the Company and its subsidiaries incorporated outside of PRC is the United States dollar (“US$”), while the functional currency of the PRC entities in the Group is RMB as determined based on the criteria of ASC 830, Foreign Currency Matters. Transactions denominated in other than the functional currencies are re-measured re-measured The financial statements of the Group are translated from the functional currency to the reporting currency, RMB. Assets and liabilities of the subsidiaries are translated into RMB using the exchange rate in effect at each balance sheet date. Income and expense items are generally translated at the average exchange rates prevailing during the fiscal year. Foreign currency translation adjustments arising from these are accumulated as a separate component of shareholders’ deficit on the consolidated financial statement. The exchange rates used for translation on December 31, 2018 and June 30, 2019 were US$1.00= RMB6.8632 and RMB6.8747, respectively, representing the index rates stipulated by the People’s Bank of China. |
Convenience Translation | (e) Convenience Translation Translations of balances in the Group’s consolidated balance sheet, consolidated statement of operations and comprehensive loss and consolidated statement of cash flows from RMB into US$ as of and for the six months ended June 30, 2019 are solely for the convenience of the readers and were calculated at the rate of US$1.00 = RMB6.865, representing the certified exchange rate published by the US Federal Reserve Board on June 28, 2019. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on June 30, 2019, or at any other rate. |
Fair Value of Financial Instruments | (f) Fair value of financial instruments 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. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs that may be used to measure fair value include: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities. Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. The Group’s financial instruments consist principally of cash and cash equivalents, short-term investments, accounts receivable, accounts payable, advance from advertising customers, registered users’ loyalty payable, other liabilities, and a convertible loan that was issued in April 2019. As of December 31, 2018 and June 30, 2019, the carrying values of cash and cash equivalents, accounts receivable, accounts payable, advance from customers, registered users’ loyalty payable and other liabilities approximated their fair values reported in the consolidated balance sheets due to the short-term maturities of these instruments. As of June 30, 2019, the estimated fair value of the long-term convertible loan approximates its carrying value due to the short duration between the issuance and period-end On a recurring basis, the Group measures its short-term investments at fair value. The following table sets forth the Group’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy: As of December 31, 2018 Level 1 Level 2 Level 3 Balance at Assets Short-term investments—Wealth management products — 115,436,080 — 115,436,080 As of June 30, 2019 Level 1 Level 2 Level 3 Balance at Assets Short-term investments—Wealth management products — 184,088,800 — 184,088,800 |
Cash and Cash Equivalents | (g) Cash and Cash Equivalents Cash and cash equivalents include cash in bank and time deposits placed with banks or other financial institutions, which have original maturities of three months or less at the time of purchase and are readily convertible to known amounts of cash. |
Short-term Investments | (h) Short-term investments Short-term investments include investments in wealth management products issued by certain banks which are redeemable by the Company at any time. The wealth management products are unsecured with variable interest rates and primarily invested in debt securities issued by the PRC government, corporate debt securities and central bank bills. The Company measures the short-term investments at fair value using the quoted subscription or redemption prices published by these banks. The change in fair value is recorded as interest income amounted to RMB1.7 million and RMB3.6 million in the consolidated statements of comprehensive loss for the six months ended June 30, 2018 and June 30, 2019, respectively. |
Accounts Receivable, Net | (i) Accounts receivable, net Accounts receivable are presented net of allowance for doubtful accounts. The Group uses specific identification in providing for bad debts when facts and circumstances indicate that collection is doubtful and based on factors listed in the following paragraph. If the financial conditions of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowance may be required. The Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance for doubtful accounts on general basis taking into consideration various factors including but not limited to historical collection experience and credit-worthiness of the customers as well as the age of the individual receivables balance. Additionally, the Company makes specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability. |
Property and Equipment, Net | (j) Property and equipment, net Property and equipment are stated at historical cost less accumulated depreciation and impairment loss, if any. Depreciation is calculated using the straight-line method over their estimated useful lives. The estimated useful lives are as follows: Leasehold improvements Over the shorter of lease term or 2 – 5 years Office equipment 3 – 5 years Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of comprehensive loss. |
Equity investments | (k) Equity investments The Company’s long-term investments were accounted for using the equity method, which are securities that the Company does not control, but are able to exert significant influence over the investee. These investments are measured at cost less any impairment, plus or minus the Company’s share of equity method investee income or loss. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. The Company monitors its investments for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, the operating performance of the companies including current earnings trends and other company-specific information. As of June 30, 2019, the Company’s equity investment is an investment in a fund that has not completed set-up. |
Goodwill and Intangible Assets | (l) Goodwill and intangible assets Intangible assets Intangible assets include the acquired right to operate an online audio/video content platform (Note 9) and computer software, which are amortized using the straight-line method over their estimated useful li v The estimated useful lives are as follows: Acquired right to operate an online audio/video content platform 10 years Computer software 3 - 10 years The estimated life of intangible assets subject to amortization is reassessed if circumstances occur that indicate the life has changed. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. No impairment of intangible assets was recognized for the six-month Goodwill Goodwill represents the excess of the total cost of the acquisition over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed of the acquired entity as a result of the Company’s acquisitions of interests in its subsidiaries and VIEs. Goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired. The Company first assesses qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying value. In the qualitative assessment, the Company considers primary factors such as industry and market considerations, overall financial performance of the reporting unit and other specific information related to the operations. If the reporting unit does not pass the qualitative assessment, the Company estimates its fair value and compares the fair value with the carrying value of its reporting unit, including goodwill. If the fair value is greater than the carrying value of its reporting unit, no impairment is recorded. If the fair value is less than the carrying value, an impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The impairment charge would be recorded to earnings in the consolidated statements of operations. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units and the determination of the fair value of each reporting unit. The Company estimates the fair value of the reporting unit using a discounted cash flow model. This valuation approach considers various assumptions including projections of future cash flows, perpetual growth rates and discount rates. The assumptions about future cash flows and growth rates are based on management’s assessment of a number of factors, including the reporting unit’s recent performance against budget, performance in the market that the reporting unit serves, as well as industry and general economic data from third party sources. Discount rate assumptions reflect an assessment of the risk inherent in those future cash flows. Changes to the underlying businesses could affect the future cash flows, which in turn could affect the fair value of the reporting unit. Management performs its annual goodwill impairment test as of . Each quarter the Company reviews the events and circumstances to determine if there are indicators that goodwill may be impaired. As of June 30 , 2019 , there is no event or any circumstance that the Company identified, which indicated that the fair value of the Company’s reporting unit was substantially lower than the respective carrying value. There was no six-month , 2018 and 2019 . |
Impairment of Long-Lived Assets Other Than Goodwill | (m) Impairment of long-lived assets other than Goodwill For other long-lived assets including property and equipment and other non-current |
Leases | (n) Leases Prior to the adoption of ASC 842 on January 1, 2019: Leases, including leases of office spaces, where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Payments made under operating leases are recognized as an expense on a straight-line basis over the lease term. The Group had no capital leases for any of the years stated herein. Upon and hereafter the adoption of ASC 842 on January 1, 2019: The Company determines if an arrangement is a lease or contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities, current and non-current, in the Company’s consolidated balance sheets. The Company does not have any finance leases as of the adoption date or June , . ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which it calculates based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. The Company has elected to adopt the following lease practical expedients in conjunction with the adoption of ASU 2016-02: (i) elect for each lease to not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component; (ii) for leases that have lease terms of months or less and does not include a purchase option that is reasonably certain to exercise, the Company elected not to apply ASC recognition requirements; and (iii) the Company elected to apply the package of practical expedients for existing arrangements entered into prior to January , to not reassess (a) whether an arrangement is or contains a lease, (b) the lease classification applied to existing leases, and (c) initial direct costs. |
Advances From Advertising Customers | (o) Advances from advertising customers Certain third party advertising customers pay in advance to purchase advertising services. Cash proceeds received from customers are initially recorded as advances from advertising customers and are recognized as revenues when revenue recognition criteria are met. |
Revenue Recognition | (p) Revenue recognition A. Significant accounting policy The Group has adopted the new revenue standard, ASC 606, by applying the full retrospective method. Revenues are recognized when or as the control of a good or service is transferred to the customer. Depending on the terms of the contract and the laws that apply to the contract, control of the goods and services may be transferred over time or at a point in time. Control of the goods and services is transferred over time if the Group’s performance: • provides all of the benefits received and consumed simultaneously by the customer; • creates and enhances an asset that the customer controls as the Group performs; or • does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date. If control of the goods and services transfers over time, revenue is recognized over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the customer obtains control of the goods and services. The progress towards complete satisfaction of the performance obligation is measured based on one of the following methods that best depict the Group’s performance in satisfying the performance obligation: • direct measurements of the value transferred by the Group to the customer; or • the Group’s efforts or inputs to the satisfaction of the performance obligation. B. Nature of services The following is a description of principal activities from which the Group generates its revenue. (i) Advertising and marketing T The determination of whether revenue should be reported on a gross or net basis is based on an assessment of whether the Group is acting as the principal or an agent in the transaction. In determining whether the Group acts as the principal or an agent, the Group follows the accounting guidance for principal-agent considerations. Such determination involves judgment and is based on evaluation of the terms of each arrangement. a. Advertising and marketing services provided to advertising customers Before February 2018, the Group engaged certain advertising customers through a third-party advertising agent (“advertising agent”). In the arrangement with this advertising agent, it served as the Group’s sales agent in selling the Group’s advertising solutions to other second-tier advertising agents. The end advertisers are the customers of the Group as they specifically select Qutoutiao to display its advertisement and the performance obligation of the Group is to provide the underlying advertising display services. The advertising agent earns a commission of 2% of the advertising revenue in the arrangement in return for providing bidding system for placement on Qutoutiao which the Company recognized as cost of revenue. The Group provides advertising and marketing services to advertising customers and recognizes advertising and marketing revenue on a gross basis as clicks are delivered. The Group receives refundable advance payments from advertising customers through this advertising agent and reconciles the advertising and marketing revenue with this advertising agent on a weekly basis. If the advance payment deposited in the Group is not ultimately used for the advertisement on Qutoutiao, the Group refunds the advance payment back to advertising customers through this advertising agent. In February 2018, the Group acquired 100% equity interests of this advertising agent with a total consideration of RMB15.0 million (Note 3). After the acquisition, the Group effectively provides advertising and marketing services to these advertising customers directly and continues to recognize revenue on a gross basis as impressions are delivered. Besides this arrangement, the Group also provides advertising and marketing service to advertising customers directly. S In May 2019, the Group also started a new business stream of providing integrated marketing solution services to its customers based on their customized needs. The services include but are not limited to design and execute of a systematic marketing plan online and offline, come up with best solutions for online promotion of the customers’ mobile application by selecting appropriate advertisement platforms, design the advertisement clips, monitor advertisement effects, organize offline marketing campaigns featuring social media influencers and circulate marketing messages to the customers’ end consumers. The Group pays the vendors or suppliers when costs are incurred and advertisements are displayed while the Group charges the service fees to the customers based on specified achievements, i.e. a Gross Merchandise Volume (“GMV”) which revenue is recognized based on number of first effective purchase, or Cost per Action (“CPA”) basis which revenue is recognized based on number of registered new users. The Group is the primary obligor ultimately responsible for delivering the tailored marketing services to the customers in the arrangement, it has the discretion in pricing and takes certain risks of loss as the achievements can’t be guaranteed while the costs can have already been incurred. Hence, the Group provides the tailored marketing planning and solution services to customers as the principal and recognizes the revenue on a gross basis . b. Advertising and marketing services provided to advertising platforms The Group provides advertising and marketing services to other third-party advertising platforms. In the arrangement with these advertising platforms, these advertising platforms are the customers of the Group and the performance obligation of the Group is to provide traffic service to these advertising platforms. Therefore, the Group recognizes revenue based on the net amount as impressions or clicks are delivered. The Group reconciles and settles the advertising revenue with these advertising platforms on a monthly basis. (ii) Other services a. Online marketplace service The Group operates an online marketplace which users can access merchandise offered by third-party merchandise suppliers. The suppliers are the customers of the Group as these suppliers are the primary obligor to provide goods and delivery service to the users and the performance obligation of the Group is to provide matching service for the suppliers. The Group acts as an agent in this transaction and recognize revenue when the matching service is completed. The Group settles the payment with suppliers on a monthly basis. b. Agent and platform service After the acquisition of the advertising agent in February 2018 (Note 3), the Group also provides agent and platform service by facilitating the advertising customers to select third-party advertising platforms to display their advertisements. The Group recognizes revenue from the advertising customers based on the net amount equal to certain agreed percentage of the gross revenue earned by the third-party advertising platforms when impressions or clicks are successfully delivered. C. Disaggregation of revenue In the following table, revenue is disaggregated by major service line and gross vs net recognition. Six months ended June 30, 2018 2019 RMB RMB US$(Note 2(e)) Major service line Advertising and marketing service provided to advertising customers, recorded gross (1)(3) 533,983,843 1,894,943,812 276,029,688 Advertising and marketing service provided to advertising platforms, recorded net 135,887,052 550,236,683 80,151,010 Other service (2) 47,963,837 59,616,169 8,684,074 717,834,732 2,504,796,664 364,864,772 (1) For the six months ended June 30, 2018 and 2019, revenue in advertising services provided to advertising customers , , respectively, and includes advertising and marketing services provided to related parties which amounted to RMB 1.2 144.5 (2) For the six months ended June 30, 2018 and 2019, revenue in other services include the agent and platform services which amounted to RMB44.0 million and RMB28.9 million, respectively. For the six months ended June 30, 2018, the aforementioned agent and platform services also include RMB 5.3 |
Cost of Revenues | (q) Cost of revenues The Group’s cost of revenues consists primarily of (i) agent fees retained by the third party advertising agents, and c in-house |
Research and Development Expense | (r) Research and development expenses Research and development expenses consist primarily of (i) salary and welfare for research and development personnel, (ii) office rental expenses and (iii) depreciation of office premise and servers utilized by research and development personnel. Costs incurred during the research stage are expensed as incurred. Costs incurred in the development stage, prior to the establishment of technological feasibility, which is when a working model is available, are expensed when incurred. The Company accounts for internal use software development costs in accordance with guidance on intangible assets and internal use software. This requires capitalization of qualifying costs incurred during the software’s application development stage and to expense costs as they are incurred during the preliminary project and post implementation/operation stages. For the six months ended June 30, 2018 and 2019, the Company has not capitalized any costs related to internal use software because the inception of the Group software development costs qualified for capitalization have been insignificant. |
Sales And Marketing Expenses | (s) Sales and marketing expenses Sales and marketing expenses consist primarily of (i) rewards to registered users related to loyalty programs, (ii) advertising and marketing expenses, (iii) charges for short mobile message service to registered users and (iv) salary and welfare for sales and marketing personnel. The advertising and marketing expenses amounted to RMB184.4 million and RMB1,325.9 million for the six months ended June 30, 2018 and 2019, respectively. |
General and Administrative Expenses | (t) General and administrative expenses General and administrative expenses consist primarily of (i) salary and welfare for general and administrative personnel, (ii) office expense, (iii) professional service fees and (iv) stock-based compensation expense. |
User Loyalty Programs | (u) User loyalty programs The Group has loyalty programs for its registered users in its mobile platforms Qutoutiao and Quduopai to enhance user stickiness and incentivize word-of-mouth new-registered On Qutoutiao, the Group’s users can redeem earned rewards, which is in a form of cash credits reflecting the same amount of cash value, upon request. The Group offers its users the flexibility to choose a number of rewards payment options, including i) online cash out, when the cash credits balance exceeds a certain cash out threshold or at a lower cash out threshold if the users log on Qutoutiao for a certain number of consecutive days, ii) purchasing products mainly through online marketplace. On Quduopai, the Group’s users can also earn cash credits (reflecting the same amount of cash value) that they may cash out when the cash credits balance exceeds a certain threshold. Before April 9, 2018, the Group’s users on Quduopai could also earn loyalty points, which could only be exchanged for coupons issued to the Group by a third-party, which can be used to purchase goods or service on that third-party’s group buying website. The Group did not recognize any expenses or liability for those loyalty points earned on Quduopai since the Group did not bear any additional cost to settle these loyalty points awarded to its users before April 9, 2018. Starting from April 9, 2018, the Group’s users on Quduopai who are not content providers, can also start to earn and redeem earned rewards, which is in a form of cash credits reflecting the same amount of cash value, upon request. Users can cash out the rewards when the cash credits balance exceeds a certain cash out threshold. All the outstanding loyalty point granted to users on Quduopai were converted to rewards upon the enacting of the revised loyalty program in April 2018. As a result, the Company recorded costs of RMB62,359 in the sales and marketing expenses in April 2018. In November 2018, the Company, as a result of the change of business strategy, announced the change of the loyalty program on Quduopai and reversed the unused rewards under the original loyalty program amounted to RMB11.6 million in the consolidated statements of comprehensive loss for the fourth quarter of 2018. The user’s agreement provides that rewards expire after one month. However, the Group may, at its discretion, provide rewards to its users even after one month expiration period. Starting from May 2018, rewards to its users are cleared from their accounts and will not be redeemed when the users are inactive for 90 days. The Group’s experience indicates that a certain portion of rewards is never redeemed by its users, which the Group refers to as a “breakage”. The liability accrued for the reward is reduced by the estimated breakage that is expected to occur. The Group estimates breakage based upon its analysis of relevant reward history and redemption pattern as well as considering the expiration period of the rewards under the users agreement. In the assessment of breakage, each individual user’s account is categorized into certain pools of different range of outstanding rewards, and then further grouped into certain sub-groups sub-groups sub-group Once the amount of accumulated unredeemed rewards for individual user exceeds the cash out threshold or the continuous log-on The actual cost to settle the estimated liability may differ from the estimated liability recorded. As of December 31, 2018 and June 30, 2019, users’ reward recorded in “Registered users’ loyalty payable” are RMB256.7 million and RMB178.9 million, respectively, and estimated users’ rewards recorded in “Accrued liabilities related to users’ loyalty programs” are RMB44.1 million and RMB46.3 million, respectively. The decrease of registered users’ loyalty payable from December 31, 2018 to June 30, 2019 was mainly due to the Company’s ongoing efforts in optimizing user engagement expenses. |
Employee Social Security And Welfare Benefits | (v) Employee social security and welfare benefits Employees of the Group in the PRC are entitled to staff welfare benefits including pension, work-related injury benefits, maternity insurance, medical insurance, unemployment benefit and housing fund plans through a PRC government-mandated multi-employer defined contribution plan. The Group is required to contribute to the plan based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group’s obligations are limited to the amounts contributed and no legal obligation beyond the contributions made. |
Income Taxes | (w) Income taxes Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive loss in the period of change. 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. Uncertain tax positions The guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statements recognition and measurement of a tax position taken or expected to be taken in a tax return. Guidance was also provided on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating the Group’s uncertain tax positions and determining its provision for income taxes. The Group recognizes interests and penalties, if any, under accrued expenses and other current liabilities on its consolidated balance sheets and under other expenses in its statements of operations and comprehensive loss. The Group did not recognize any significant interest and penalties associated with uncertain tax positions for the six months ended June 30, 2018 and 2019. As of December 31, 2018 and June 30, 2019, the Group did not have any significant unrecognized uncertain tax positions. |
Share repurchases | (x) Share repurchases Effective May 28, 2019, the Board of Directors approved a share repurchase program to repurchase in the open market up to US$50 million worth of outs tanding ADSs of the Company, every four of which represents one class A ordinary share, from time to time over the next 12 months, depending on market conditions, share price and other factors, as well as subject to the memorandum and articles of association, the relevant rules under United States securities laws and regulations, and the relevant stock exchange rules. The program may be suspended or discontinued at any time. These repurchased ADSs were recorded as treasury stock and were accounted for under the cost method. Under the cost method, when the Company’s shares are acquired for purposes other than retirement, the costs of the acquired stock will be shown separately as a deduction from the total of capital stock. No repurchased shares of common stock have been retired. Up to June 30, 2019, 3,315,700 outstanding ADSs (828,925 shares) were repurchased with a total consideration of RMB102.6 million. |
Share-Based Compensation | (y) Share-based compensation Share-based compensation costs are measured at the grant date. The share-based compensation expenses have been categorized as either cost of revenue, general and administrative expenses, selling and marketing expenses or research and development expenses, depending on the job functions of the grantees. Option granted to employees For the options granted to employees, the compensation expense is recognized using the straight-line method over the requisite service period. Forfeitures are estimated at the time of grant, with such estimate updated periodically and with actual forfeitures recognized currently to the extent they differ from the estimate. In determining the fair value of the Company’s share options, the binomial option pricing model has been applied . O non-employee Prior to the adoption of ASU 2018-07 1, 2019: For share-based awards granted to non-employees, the Group accounts for the related share-based compensation expenses in accordance with ASC subtopic, 505-50 (“ASC 505-50”), Equity-Based Payments to Non-Employees. Under the provision of ASC 505-50, options of the Company issued to non-employees are measured based on fair value of the options which are determined by using the binomial option pricing model. These options are measured as of the earlier of the date at which either: commitment for performance by the non-employee has been reached; or the non-employee’s performance is complete. Subsequent to the completion of the performance, the share-based award is assessed in accordance with ASC to determine whether the award meets the definition of a derivative. Upon and hereafter the adoption of ASU 2018-07 1, 2019: Non-employee |
Statutory Reserves | (z) Statutory reserves The Group’s subsidiaries, consolidated VIEs and its subsidiaries incorporated in the PRC are required on an annual basis to make appropriations of retained earnings set at certain percentage of after-tax Appropriation to the statutory general reserve should be at least 10% of the after tax net income determined in accordance with the legal requirements in the PRC until the reserve is equal to 50% of the entities’ registered capital. The Group is not required to make appropriation to other reserve funds and the Group does not have any intentions to make appropriations to any other reserve funds. The general reserve fund can only be used for specific purposes, such as setting off the accumulated losses, enterprise expansion or increasing the registered capital. Appropriations to the general reserve funds are classified in the consolidated balance sheets as statutory reserves. There are no legal requirements in the PRC to fund these reserves by transfer of cash to restricted accounts, and the Group has not done so. Relevant laws and regulations permit payments of dividends by the PRC subsidiaries and affiliated companies only out of their retained earnings, if any, as determined in accordance with respective accounting standards and regulations. Accordingly, the above balances are not allowed to be transferred to the Company in terms of cash dividends, loans or advances. |
Related Parties | (aa) Related parties Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation. |
Dividends | (ab) Dividends Dividends are recognized when declared. No dividends were declared for the six months ended June 30, 2018 and 2019, respectively. The Group does not have any present plan to pay any dividends on ordinary shares in the foreseeable future. The Group currently intends to retain the available funds and any future earnings to operate and expand its business. |
Loss Per Share | (ac) Loss per share Basic loss per share is computed by dividing net loss attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the year using the two class method. Using the two class method, net loss is allocated between ordinary shares and other participating securities (i.e. preferred shares) based on their participating rights. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalents shares outstanding during the year. Dilutive equivalent shares are excluded from the computation of diluted loss per share if their effects would be anti-dilutive. Ordinary share equivalents consist of the ordinary shares issuable in connection with the Group’s convertible redeemable preferred shares using the if-converted |
Comprehensive Loss | (ad) Comprehensive loss Comprehensive loss is defined as the change in shareholders’ deficit of the Company during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive loss is reported in the consolidated statements of comprehensive loss. Accumulated other comprehensive losses of the Group include the foreign currency translation adjustments. |
Segment Reporting | (ae) Segment reporting Operating segments are defined as components of an enterprise engaging in businesses activities for which separate financial information is available that is regularly evaluated by the Group’s chief operating decision makers in deciding how to allocate resources and assess performance. The Group’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results including revenue, gross profit and operating profit at a consolidated level only. The Group does not distinguish between markets for the purpose of making decisions about resources allocation and performance assessment. Hence, the Group has only one operating segment and one reportable segment. |
Recently adopted accounting pronouncements | (af) Recently adopted accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, 2016-02”), right-of-use The Company adopted ASC 842 using the modified retrospective transition approach, to be applied to leases existing as of, or entered into after, January 1, 2019. Prior period results continue to be presented under ASC 840 based on the accounting standards originally in effect for such periods. The Company’s accounting policy under ASC 842, as well as the optional practical expedients elected, has been detailed in accounting policy (n) Leases above. In connection with the adoption of ASC 842, on January 1, 2019, the Company recorded an impact of RMB50.4 million on its assets and RMB47.1 million on its liabilities for the recognition of operating lease right-of-use-assets In January 2017, the FASB issued ASU 2017-04, 2017-04 In , the Financial Accounting Standard Board (“FASB”) issued ASU 2018-02, Income Statement — Reporting Comprehensive Income (Topic — Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, to allow entities to reclassify the income tax effects of tax reform legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) on items within accumulated other comprehensive income to retained earnings. ASU 2018-02 is effective for fiscal years and interim periods within those years beginning after , and early adoption is permitted. The Company adopted ASU 2018-02 on January , and the adoption did not have a material impact on the Company’s consolidated financial statements and the related disclosures. In , the Financial Accounting Standard Board (“FASB”) issued ASU 2018-07, Compensation – Stock Compensation (Topic — Improvements to Nonemployee Share-Based Payment Accounting, to align the accounting for share-based payment awards issued to nonemployees with the guidance applicable to grants to employees and remove requirement to reassess classification of nonemployee awards under other literature upon vesting. ASU 2018-07 is effective for the public entities for fiscal years and interim periods within those years beginning after December , , and early adoption is permitted. The Company adopted ASU 2018-07 on January , and the adoption did not have a material impact on the Company’s consolidated financial statements and the related disclosures. |
Recently Issued Accounting Pronouncements | (ag) Recently issued accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13, held-to-maturity available-for-sale available-for-sale 2016-13 In August 2018, the FASB issued ASU 2018-13, |
Organization and Principal Ac_2
Organization and Principal Activities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Principal Subsidiaries and Consolidated Affiliated Entities | As of June 30, 2019, the Company’s principal subsidiaries and consolidated Affiliated Entities are as follows: Name of subsidiaries and VIEs Date of establishment/ acquisition Place of incorporation Percentage of direct or indirect economic ownership Wholly owned subsidiaries of the Company: InfoUniversal Limited(“InfoUniversal”) Established on August 15, 2017 Hong Kong 100 % Shanghai Quyun Internet Technology Co., Ltd. (“Quyun WFOE”) Established on October 13,2017 PRC 100 % Shanghai Dianguan Network Technology Co., Ltd. (“Dianguan”) Acquired on February 2, 2018 PRC 100 % QTT Asia Ltd. (“QTT Asia”) Established on April 10, 2018 British Islands(“BVI”) 100 % Shanghai Zhicao Information Technology Co., Ltd. (“Zhicao WFOE”) Established on December 4,2018 PRC 100 % Variable Interest Entity (“VIEs”) Shanghai Jifen Culture Communications Co., Ltd. (“Jifen or Jifen VIE”) Established on January 10, 2012 PRC 100 % Beijing Churun Internet Technology Co.,Ltd. (“Churun VIE”) Acquired on November 1, PRC 100 % Shanghai Big Rhinoceros Horn Information Technology, Co., Ltd (“Big Rhinoceros Horn VIE”) Established on November 9,2018 PRC 100 % Shanghai Longshu Information Technology Co., Ltd (“Longshu VIE”) Established on PRC 100 % Subsidiaries of Variable Interest Entity (“VIE subsidiaries”) Shanghai Xike Information Technology Service Co., Ltd. (“Xike”) Established on July 14, 2016 PRC 100 % Shanghai Tuile Information Technology Service Co., Ltd. (“Tuile”) Established on July 14, 2016 PRC 100 % Anhui Zhangduan Internet Technology Co., Ltd. (“Zhangduan”) Established on March 31, 2017 PRC 100 % Beijing Qukandian Internet Technology Co., Ltd (“Qukandian”) Established on April 13, 2017 PRC 100 % |
Principal Accounting Policies_2
Principal Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Assets, Liabilities, Result of Operations and Cash Flows of VIEs and its Subsidiaries | The following table sets forth the assets, liabilities, results of operations and cash flows of VIEs and its subsidiaries, which are included in the Group’s consolidated financial statements. Transactions between the VIEs and its subsidiaries are eliminated in the balances presented below: As of December 31, 2018 June 30, 2019 Assets Current assets Cash and cash equivalents 19,464,246 8,037,363 Short-term investments 5,000,000 77,250,000 Accounts receivable, net 200,289,537 407,093,056 Amount due from subsidiaries of the Company 291,902,904 549,272,236 Amount due from related parties — 92,962,134 Prepayments and other current assets 80,565,668 95,686,339 Total current asset 597,222,355 1,230,301,128 Non-current Investments — 5,000,000 Property and equipment, net 13,376,314 17,649,497 Right-of-use — 52,419,053 Intangible assets — 2,612,613 Other non-current 8,945,774 25,596,111 Total non-current 22,322,088 103,277,274 Total assets 619,544,443 1,333,578,402 Liabilities Current liabilities Accounts payable 73,087,671 238,068,415 Amount due to subsidiaries of the Company 629,835,620 1,497,513,909 Registered users’ loyalty payable 249,881,449 172,120,365 Advance from advertising customers 152,181,358 164,606,216 Salary and welfare payable 41,665,582 72,032,140 Tax payable 100,757,561 91,918,811 Lease liabilities, current — 24,935,349 Accrued liabilities related to users’ loyalty programs 44,133,812 46,255,061 Accrued liabilities and other current liabilities 360,711,336 461,629,127 Total current liabilities 1,652,254,389 2,769,079,393 Non-current Lease liabilities, non-current — 22,207,796 Total non-current — 22,207,796 Total liabilities 1,652,254,389 2,791,287,189 Six months ended June 30, 2018 2019 Net revenues 712,036,682 2,762,489,629 Net loss (514,632,981 ) (909,376,001 ) Six months ended June 30, 2018 2019 Net cash used in operating activities (280,080,346 ) (336,305,135 ) Net cash provided by/(used in) investing activities 92,990,105 (88,029,748 ) Net cash provided by financing activities 275,200,311 412,908,000 Net increase/(decrease) in cash and cash equivalents 88,110,070 (11,426,883 ) |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table sets forth the Group’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy: As of December 31, 2018 Level 1 Level 2 Level 3 Balance at Assets Short-term investments—Wealth management products — 115,436,080 — 115,436,080 As of June 30, 2019 Level 1 Level 2 Level 3 Balance at Assets Short-term investments—Wealth management products — 184,088,800 — 184,088,800 |
Schedule of Estimated Useful Lives | The estimated useful lives are as follows: Leasehold improvements Over the shorter of lease term or 2 – 5 years Office equipment 3 – 5 years |
Schedule of Disaggregation of Revenue | In the following table, revenue is disaggregated by major service line and gross vs net recognition. Six months ended June 30, 2018 2019 RMB RMB US$(Note 2(e)) Major service line Advertising and marketing service provided to advertising customers, recorded gross (1)(3) 533,983,843 1,894,943,812 276,029,688 Advertising and marketing service provided to advertising platforms, recorded net 135,887,052 550,236,683 80,151,010 Other service (2) 47,963,837 59,616,169 8,684,074 717,834,732 2,504,796,664 364,864,772 (1) For the six months ended June 30, 2018 and 2019, revenue in advertising services provided to advertising customers , , respectively, and includes advertising and marketing services provided to related parties which amounted to RMB 1.2 144.5 (2) For the six months ended June 30, 2018 and 2019, revenue in other services include the agent and platform services which amounted to RMB44.0 million and RMB28.9 million, respectively. For the six months ended June 30, 2018, the aforementioned agent and platform services also include RMB 5.3 |
Significant Equity Transactio_2
Significant Equity Transactions and Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Significant Equity Transactions And Acquisitions [Abstract] | |
Schedule of Fair Value of Consideration Transferred | Fair value of consideration transferred: RMB Cash 15,000,000 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents 4,270,175 Short-term investments 9,940,000 Prepayments and other current assets 30,936,027 Property and equipment, net 17,978 Accounts payable (364,242 ) Salary and welfare payable (778,438 ) Tax payable (9,933,408 ) Advance from advertising customers (24,664,513 ) Accrued liabilities and other current liabilities (1,691,909 ) Total identifiable net assets acquired 7,731,670 Goodwill 7,268,330 Total purchase consideration 15,000,000 |
Risks and Concentration (Tables
Risks and Concentration (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Summary of Customers with Greater than 10% of Accounts Receivables And Amounts Due From Related Parties | The following table summarized customers with greater than 10% of the accounts receivables and amounts due from related parties: As of December 31, 2018 June 30, 2019 Customer A — advertising platform 14 % 11 % Customer B — advertising platform * * Customer C — advertising platform 29 % 36 % Customer D — advertising customer 14 % * Customer E — advertising platform 10 % * Customer F — advertising platform — 10 % Customer G — advertising and marketing customer (related parties) — 20 % * Less than 10% |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table sets forth a breakdown of cash and cash equivalents by currency denomination and jurisdiction as of December 31, 2018 and June 30, 2019. RMB RMB equivalent (US$) RMB equivalent (HKD/SGD/IDR) Total in RMB Overseas China Overseas China Overseas China Non VIE VIE Non VIE VIE Non VIE VIE December 31, 2018 — 39,016,535 19,464,246 2,125,034,745 2,269,863 — 502,857 — — 2,186,288,246 June 30, 2019 2,036,528,937 20,890,359 8,036,781 4,304,762 31,762,509 582 1,955,983 — — 2,103,479,913 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | As of December 31, 2018 June 30, 2019 Accounts receivable, gross 203,984,074 410,329,309 Less: allowance for doubtful accounts — — Accounts receivable, net 203,984,074 410,329,309 |
Prepayments and Other Assets (T
Prepayments and Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Prepaid Expense and Other Assets [Abstract] | |
Schedule of Other Assets | As of December 31, 2018 June 30, 2019 Prepayment and other current assets Value-added tax receivable 20,640,519 53,478,995 Deferred cost for incentive payment to customer 22,842,164 17,138,284 Prepayment for the use of contents (3) 7,166,442 15,321,271 Deposit to third-party payment service providers (1) 24,888,833 12,466,401 Loans and advance to employees 5,389,935 11,947,219 Lease deposits-current portion 1,017,056 738,509 Deposit to a third-party for advertisement services (2) — 10,000,000 Interest receivable 2,958,984 9,206,512 Deposit to third-party advertising platforms (4) 5,000,000 5,000,000 Prepayments of business insurance 2,996,381 1,963,729 Prepayments of advertisement fee (2) 17,669,507 1,689,512 Prepayments of IT service fee 705,580 509,635 Prepayment of office lease 5,609,752 — Others 3,480,353 3,048,779 120,365,506 142,508,846 Non-current Long-term prepayments of advertisement fee (2) — 13,901,780 Long-term lease deposits 7,424,707 11,116,786 Long-term prepaid server fee 2,087,264 1,301,887 Prepayment for purchase of property and equipment 1,160,170 1,294,067 10,672,141 27,614,520 (1) Deposit to third party payment service providers represent cash prepaid to the Group’s third party on-line , 2018 and June 30 , 2019 , no allowance for doubtful accounts was provided for the prepayment. (2) Prepayments of advertisement fee represent prepayments made to service providers for future services to promote the Company’s mobile applications through online and media advertising. Such service providers charge expenses based on activities during the month, and once confirmed by the Company, the expenses will be deducted from the prepayments already made by the Company. Prepayments of advertising fee is recorded when prepayments are made to service providers and are expensed as services are provided. (3) Prepayment for the use of contents represents the payment to the content providers for the use of the content on the Company’s mobile applications for a period from 6 to 12 months. In June 2019, the Company also entered into an arrangement with a literature content provider based in China for the use of their content library on the Company’s mobile applications for two years. (4) Deposit to third-party advertising platforms represents the deposit made to third-party advertising platforms that the Group provides agent and platform service by facilitating the advertising customers to select third-party advertising platforms to display the advertisements. The deposit is used to secure the timely payment of the agent and platform service fee received by the Group to the third-party platforms. |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following: As of December 31, 2018 June 30, 2019 Cost: Office equipment 10,883,248 17,979,597 Leasehold improvements 7,705,824 9,574,794 Total cost 18,589,072 27,554,391 Less: Accumulated depreciation (4,659,530 ) (8,754,980 ) Property and equipment, net 13,929,542 18,799,411 |
Summary of Depreciation Expense | Depreciation expense recognized for the six months ended June 30, 2018 and 2019 are summarized as follows: Six months ended June 30, 2018 2019 Cost of revenues 467,538 1,327,502 Research and development expenses 683,365 2,026,004 Sales and marketing expenses 89,986 350,989 General and administrative expenses 308,543 390,953 Total 1,549,432 4,095,448 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consist of the following: As of December 31, 2018 June 30, 2019 Cost: Acquired right to operate an online audio/video content platform 96,129,761 96,129,761 Computer software — 2,684,807 Total cost 96,129,761 98,814,568 Less: Accumulated amortization (1,602,163 ) (6,480,845 ) Intangible assets, net 94,527,598 92,333,723 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of components of lease expenses | (a) The components of lease expenses were as follows: Six months ended June 30, 2019 Lease cost: Amortization of right-of-use 15,667,643 Interest of lease liabilities 1,323,072 Expenses for short-term leases within 12 months 105,817 Total lease cost 17,096,532 |
Schedule of Supplemental Cash Flow information Related to Leases | (b) Supplemental cash flow information related to leases was as follows: Six months ended June 30, 2019 Other information Cash paid for amounts included in the measurement of lease liabilities: Operating lease payments 17,220,336 Right-of-use 39,560,604 |
Schedule of Supplemental BaIance Sheet information Related to Leases | (c) Supplemental balance sheet information related to leases was as follows: Six months ended June 30, 2019 Operating leases Operating lease right-of-use 64,171,819 Operating lease liabilities, current (32,117,473 ) Operating lease liabilities, non-current (26,586,966 ) Total operating lease liabilities (58,704,439 ) As of June 30, 2019 Weighted-average remaining lease term Operating leases 2.2 years Weighted-average discount rate Operating leases 5.7 % |
Summary of maturities of lease liabilities | (d) Maturities of lease liabilities were as follows: As of June 30, 2019 Remainder of 2019 18,146,111 2020 28,519,929 2021 13,759,180 2022 2,574,821 Total undiscounted lease payments 63,000,041 Less: imputed interest (4,295,602 ) Total lease liabilities 58,704,439 |
Schedule of Future Minimum Payments under Non-cancellable Operating Leases for Office Rental | (e) Future minimum lease payments for the Company’s operating leases were as follows: As of December 31, 2018 2019 35,453,783 2020 21,057,299 2021 3,180,192 2022 and thereafter — 59,691,274 |
Tax Payable (Tables)
Tax Payable (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Tax Payable [Abstract] | |
Schedule of Tax Payable | As of December 31, 2018 June 30, 2019 Value added tax 98,020,846 88,229,955 Individual income tax withholding 1,721,939 3,245,045 Urban maintenance and construction tax 1,256,633 269,788 Stamp duty 287,303 373,639 Total 101,286,721 92,118,427 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Liabilities and Other Liabilities | As of December 31, 2018 June 30, 2019 Accrued liabilities and other current liabilities Accrued advertising and marketing expense 288,782,409 364,356,163 Cultural development fee and other tax surcharges (1) 76,151,018 103,554,000 Deferred non-refundable incentive payment from depositary bank (2) 2,597,700 2,597,700 Follow on offering issuance cost — 2,062,410 Accrued employee welfare expense 4,709,056 1,493,000 Convertible loan issuance cost — 1,307,205 Accrued professional fees 6,074,086 1,279,746 Accrued Series A convertible redeemable preferred shares issuance cost of a subsidiary 126,146 — Others 690,144 1,733,044 379,130,559 478,383,268 Non-current Deferred non-refundable incentive payment from depositary bank (2) 9,686,219 8,419,246 Total 388,816,778 486,802,514 (1) The Group is subject to a cultural development fee on the provision of advertising services in the PRC. The applicable tax rate is 3% of the net advertising revenues. (2) The Company received non-refundable $ a reduction to general and administrative expense s million as a reduction to general and administrative expenses |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests And Noncontrolling Interests (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Noncontrolling Interest [Abstract] | |
Schedule of Redeemable Noncontrolling Interests Activities | The Company’s redeemable non-controlling 2019 is summarized as follows: Six months ended Beginning balance as at December 31, 2018 96,936,855 Issuance of Redeemable non-controlling 27,483,649 Foreign exchange impacts 767,115 Accretion to redemption value of redeemable non-controlling 5,293,586 Ending balance as at June 30, 2019 130,481,205 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Transaction and Balance Amount Due to/from Related Parties | As of December 31, 2018 and June 30, 2019, the transactions with and amount due to/from related parties was as follows: Transaction amount with related parties Six months ended June 30, 2018 2019 Services provided by the Group Advertising and marketing service provided to related parties (1) 1,183,492 144,462,450 Agent and platform service provided to a related party (2) 5,293,092 — Six months ended June 30, 2018 2019 Services received by the Group Advertisement costs charged from a related party (3) — 14,758,169 Advertising service fee charged from related parties (4) 2,783,291 669,123 iCloud server and other service fee charged from a related party (5) 5,502,298 — Balance amount with related parties As of December 31, 2018 June 30, 2019 Amount due from related parties (1) & (2) — 104,097,946 Amount due to related parties (3) & (4) — 6,841,157 (1) For the six m d million to a company in which the founder of the Company was a member of key management (the founder was no longer a member of management of that company after September 2018). For the six months ended June 30, 2019, a total of RMB144.5 million of advertising and marketing services was provided to companies under common control of the founder, which includes integrated marketing solution services. (2) The Group provided agent and platform services between the advertising customers and a company in which the founder of the Company was a member of key management by facilitating the advertising customers to display their advertisements. The founder was no longer a member of management of that company as of December 31, 201 8 (3) For the six months ended June 30, 2019, the Group entered into a CPM (cost per impression) arrangement with a media platform under the common control of the founder to for the Group’s customers’ advertisement placement. The total service fee charged from related parties amounted to RMB14.8 million for the six months ended June 30, 201 9 (4) For the six months ended June 30, 2018, the Group entered into a cooperation agreement with Series B1 shareholder to promote the Company’s mobile application, and the cooperation agreement requires the Company to prepay a total service fee of RMB31.5 million which will be recognized as expense over 3 years. Total service fee recognized as expense amounted to RMB5.5 million. After the IPO in September 2018, the Series B1 shareholder has no right to nominate the board member of the Company and has only 1.5 % voting power of the Company and no ability to exercise significant influence. As a result, the Series B1 shareholder was no longer a related party of the Company after September 2018. For the six months ended June 30, 2019, the service fee charged from related parties represented the expense charged from a different company under common control of the founder which provided the Group with advertising and marketing service. (5) The service fee mainly represented iCloud server and short message service fees charged from Series B1 shareholder through September 2018. After the IPO in September 2018, the Series B1 shareholder has no right to nominate the board member of the Company and has only 1.5 % voting power of the Company and no ability to exercise significant influence. As a result, the Series B1 shareholder was no longer a related party of the Company after September 2018. |
Basic and Diluted Net Loss pe_2
Basic and Diluted Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic Loss per Share and Diluted Loss per Share | Basic loss per share and diluted loss per share have been calculated in accordance with ASC 260 on computation of earnings per share for the six months ended June 30, 2018 and 2019 as follows: Six months ended June 30, 2018 Six months ended June 30, 2019 Numerator: Net loss attributable to Qutoutiao Inc. (514,435,513 ) (1,249,285,575 ) Accretion on Series A convertible redeemable preferred shares redemption value (10,643,883 ) — Accretion on Series A1 convertible redeemable preferred shares redemption value (3,274,935 ) — Accretion on Series B1 convertible redeemable preferred shares redemption value (21,349,500 ) — Accretion on Series B2 convertible redeemable preferred shares redemption value (18,092,345 ) — Accretion on Series B3 convertible redeemable preferred shares redemption value (5,602,880 ) — Deemed dividend to preferred shareholders (1,916,871 ) — Accretion on redemption value of Series A convertible redeemable preferred shares of a subsidiary (Note 1 9 — (5,293,586 ) Net loss attributable to ordinary shareholders-Basic and diluted (575,315,927 ) (1,254,579,161 ) Denominator: Denominator for basic and diluted loss per share Weighted-average ordinary shares outstanding (Note) Basic and diluted 24,238,324 62,684,261 Basic and diluted loss per share (23.74 ) (20.01 ) Denominator for basic and diluted loss per ADS Weighted-average ADS outstanding (Note) Basic and diluted 96,953,296 250,737,044 Basic and diluted loss per ADS (5.93 ) (5.00 ) |
Schedule of Share Equivalent Excluded from Computation of Diluted Net Loss per Ordinary Share | The following ordinary shares equivalent were excluded from the computation of diluted net loss per ordinary share for the periods presented because including them would have had an anti-dilutive effect: Six months ended June 30, 2018 June 30, 2019 Preferred shares — weighted average 12,642,574 — Share options — weighted average 9,911,869 11,288,731 Restricted shares — weighted average 10,569,386 — |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments with Respect to Agreements | As of June 30, 2019, future minimum payments with respect to these agreements consist of the following: RMB US$ (Note 2(e)) Years Ending December 31, Remainder of 2019 102,396,667 14,915,756 2020 162,521,191 23,673,881 2021 61,832,143 9,006,867 |
Schedule of Future Minimum Payments under Non-cancellable Capital Expenditure | As of June 30, 2019, future minimum payments under non-cancellable RMB US$ (Note 2(e)) Years Ending December 31, Remainder of 2019 178,967,000 26,069,483 2020 36,252,000 5,280,699 |
Organization and Principal Ac_3
Organization and Principal Activities - Schedule of Principal Subsidiaries and Consolidated Affiliated Entities (Details) | Aug. 15, 2017 | Jun. 30, 2019 |
InfoUniversal | ||
Subsidiary Or Equity Method Investee [Line Items] | ||
Date of establishment | Aug. 15, 2017 | |
Place of incorporation | Hong Kong | |
Percentage of direct or indirect economic ownership | 100.00% | 100.00% |
Quyun WFOE | ||
Subsidiary Or Equity Method Investee [Line Items] | ||
Date of establishment | Oct. 13, 2017 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
Dianguan | ||
Subsidiary Or Equity Method Investee [Line Items] | ||
Date of acquisition | Feb. 2, 2018 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
QTT Asia | ||
Subsidiary Or Equity Method Investee [Line Items] | ||
Date of establishment | Apr. 10, 2018 | |
Place of incorporation | British Virgin Islands (“BVI”) | |
Percentage of direct or indirect economic ownership | 100.00% | |
Zhicao WFOE | ||
Subsidiary Or Equity Method Investee [Line Items] | ||
Date of establishment | Dec. 4, 2018 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
Jifen | ||
Subsidiary Or Equity Method Investee [Line Items] | ||
Date of establishment | Jan. 10, 2012 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
Churun VIE | ||
Subsidiary Or Equity Method Investee [Line Items] | ||
Date of acquisition | Nov. 1, 2018 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
Big Rhinoceros Horn VIE | ||
Subsidiary Or Equity Method Investee [Line Items] | ||
Date of establishment | Nov. 9, 2018 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
Longshu VIE | ||
Subsidiary Or Equity Method Investee [Line Items] | ||
Date of establishment | Jan. 1, 2019 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
Xike | ||
Subsidiary Or Equity Method Investee [Line Items] | ||
Date of establishment | Jul. 14, 2016 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
Tuile | ||
Subsidiary Or Equity Method Investee [Line Items] | ||
Date of establishment | Jul. 14, 2016 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
Zhangduan | ||
Subsidiary Or Equity Method Investee [Line Items] | ||
Date of establishment | Mar. 31, 2017 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% | |
Qukandian | ||
Subsidiary Or Equity Method Investee [Line Items] | ||
Date of establishment | Apr. 13, 2017 | |
Place of incorporation | PRC | |
Percentage of direct or indirect economic ownership | 100.00% |
Organization and Principal Ac_4
Organization and Principal Activities - Additional Information (Details) | 6 Months Ended | ||||||
Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018CNY (¥) | Jun. 30, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2017CNY (¥) | |
Variable Interest Entity [Line Items] | |||||||
Net losses | ¥ 1,249,285,575 | $ 181,978,963 | ¥ 514,435,513 | ||||
Accumulated deficit | 3,407,814,586 | $ 496,404,164 | ¥ 2,153,235,425 | ||||
Net cash used in operating activities | (1,265,117,989) | $ (184,285,213) | (141,738,473) | ||||
Working capital | 1,614,700,000 | 1,515,100,000 | |||||
Cash and cash equivalent | 2,103,479,913 | ¥ 1,766,298,861 | 306,406,397 | 2,186,288,246 | $ 318,468,790 | ¥ 278,458,413 | |
Short-term investments | ¥ 184,088,800 | $ 26,815,557 | ¥ 115,436,080 |
Principal Accounting Policies -
Principal Accounting Policies - Schedule of Assets, Liabilities, Result of Operations and Cash Flows of VIEs and its Subsidiaries (Details) | 6 Months Ended | |||||||
Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018CNY (¥) | Jun. 30, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2017CNY (¥) | ||
Current assets: | ||||||||
Cash and cash equivalents | ¥ 2,103,479,913 | ¥ 1,766,298,861 | $ 306,406,397 | ¥ 2,186,288,246 | $ 318,468,790 | ¥ 278,458,413 | ||
Short-term investments | 184,088,800 | 26,815,557 | 115,436,080 | |||||
Accounts receivable, net | 410,329,309 | 59,771,203 | 203,984,074 | |||||
Amount due from related parties | 104,097,946 | [1],[2] | 15,163,576 | |||||
Prepayments and other current assets | 142,508,846 | 20,758,754 | 120,365,506 | |||||
Total current assets | 2,944,504,814 | 428,915,487 | 2,626,073,906 | |||||
Non-current assets: | ||||||||
Investments | 32,498,800 | 4,733,984 | ||||||
Property and equipment, net | 18,799,411 | 2,738,443 | 13,929,542 | |||||
Right-of-use asset, net | 64,171,819 | 9,347,679 | ||||||
Intangible assets | 92,333,723 | 13,449,923 | 94,527,598 | |||||
Other non-current assets | 27,614,520 | 4,022,507 | 10,672,141 | |||||
Total non-current assets | 242,686,603 | 35,351,288 | 126,397,611 | |||||
Total assets | 3,187,191,417 | 464,266,775 | 2,752,471,517 | |||||
Current liabilities | ||||||||
Lease liabilities, current | 32,117,473 | 4,678,437 | ||||||
Accounts payable, current | 255,180,417 | 37,171,219 | 131,249,219 | |||||
Registered users' loyalty payable (including registered users' loyalty payable of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB249,881,449 and RMB172,120,365 as of December 31, 2018 and June 30, 2019, respectively) | 178,912,204 | 26,061,501 | 256,661,934 | |||||
Advance from advertising customers (including advance from advertising customers of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB 152,181,358 and RMB 164,606,216 as of December 31, 2018 and June 30, 2019, respectively) | 166,090,687 | 24,193,836 | 155,099,317 | |||||
Salary and welfare payable, current | 73,901,862 | 10,765,020 | 43,422,202 | |||||
Tax payable, current | 92,118,427 | 13,418,562 | 101,286,721 | |||||
Accrued liabilities related to users' loyalty programs (including Accrued liabilities related to users' loyalty program of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB44,133,812 and RMB46,255,061 as of December 31, 2018 and June 30, 2019, respectively) | 46,255,061 | 6,737,809 | 44,133,812 | |||||
Accrued liabilities and other current liabilities (including Accrued liabilities and other current liabilities of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB360,711,336 and RMB461,629,127 as of December 31, 2018 and June 30, 2019, respectively) | 478,383,268 | 69,684,380 | 379,130,559 | |||||
Total current liabilities | 1,329,800,556 | 193,707,291 | 1,110,983,764 | |||||
Non-current liabilities: | ||||||||
Lease liabilities, non-current | 26,586,966 | 3,872,828 | ||||||
Non-current liabilities | 1,240,588,975 | 180,712,159 | 33,318,118 | |||||
Total liabilities | 2,570,389,531 | $ 374,419,450 | 1,144,301,882 | |||||
Net revenues | 2,504,796,664 | $ 364,864,772 | 717,834,732 | |||||
Net loss | (1,249,285,575) | (181,978,963) | (514,435,513) | |||||
Net cash used in operating activities | (1,265,117,989) | (184,285,213) | (141,738,473) | |||||
Net cash provided by/(used in) investing activities | (116,420,417) | (16,958,546) | 70,043,283 | |||||
Net cash provided by financing activities | 1,313,463,749 | 191,327,568 | 1,501,333,428 | |||||
Net increase in cash and cash equivalents | (68,074,657) | $ (9,916,191) | 1,429,638,238 | |||||
VIEs and its subsidiaries | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 8,037,363 | 19,464,246 | ||||||
Short-term investments | 77,250,000 | 5,000,000 | ||||||
Accounts receivable, net | 407,093,056 | 200,289,537 | ||||||
Amount due from subsidiaries of the Company | 549,272,236 | 291,902,904 | ||||||
Amount due from related parties | 92,962,134 | |||||||
Prepayments and other current assets | 95,686,339 | 80,565,668 | ||||||
Total current assets | 1,230,301,128 | 597,222,355 | ||||||
Non-current assets: | ||||||||
Investments | 5,000,000 | |||||||
Property and equipment, net | 17,649,497 | 13,376,314 | ||||||
Right-of-use asset, net | 52,419,053 | |||||||
Intangible assets | 2,612,613 | |||||||
Other non-current assets | 25,596,111 | 8,945,774 | ||||||
Total non-current assets | 103,277,274 | 22,322,088 | ||||||
Total assets | 1,333,578,402 | 619,544,443 | ||||||
Current liabilities | ||||||||
Lease liabilities, current | 24,935,349 | |||||||
Accounts payable, current | 238,068,415 | 73,087,671 | ||||||
Amount due to subsidiaries of the Company | 1,497,513,909 | 629,835,620 | ||||||
Registered users' loyalty payable (including registered users' loyalty payable of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB249,881,449 and RMB172,120,365 as of December 31, 2018 and June 30, 2019, respectively) | 172,120,365 | 249,881,449 | ||||||
Advance from advertising customers (including advance from advertising customers of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB 152,181,358 and RMB 164,606,216 as of December 31, 2018 and June 30, 2019, respectively) | 164,606,216 | 152,181,358 | ||||||
Salary and welfare payable, current | 72,032,140 | 41,665,582 | ||||||
Tax payable, current | 91,918,811 | 100,757,561 | ||||||
Accrued liabilities related to users' loyalty programs (including Accrued liabilities related to users' loyalty program of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB44,133,812 and RMB46,255,061 as of December 31, 2018 and June 30, 2019, respectively) | 46,255,061 | 44,133,812 | ||||||
Accrued liabilities and other current liabilities (including Accrued liabilities and other current liabilities of the consolidated VIEs and VIE's subsidiaries without recourse to the Company of RMB360,711,336 and RMB461,629,127 as of December 31, 2018 and June 30, 2019, respectively) | 461,629,127 | 360,711,336 | ||||||
Total current liabilities | 2,769,079,393 | 1,652,254,389 | ||||||
Non-current liabilities: | ||||||||
Lease liabilities, non-current | 22,207,796 | |||||||
Non-current liabilities | 22,207,796 | |||||||
Total liabilities | 2,791,287,189 | ¥ 1,652,254,389 | ||||||
Net revenues | 2,762,489,629 | 712,036,682 | ||||||
Net loss | (909,376,001) | (514,632,981) | ||||||
Net cash used in operating activities | (336,305,135) | (280,080,346) | ||||||
Net cash provided by/(used in) investing activities | (88,029,748) | 92,990,105 | ||||||
Net cash provided by financing activities | 412,908,000 | 275,200,311 | ||||||
Net increase in cash and cash equivalents | ¥ (11,426,883) | ¥ 88,110,070 | ||||||
[1] | For the six months ended June 30, 2018, the Group charged advertising and marketing service of RMB1.2 million to a company in which the founder of the Company was a member of key management (the founder was no longer a member of management of that company after September 2018). For the six months ended June 30, 2019, a total of RMB144.5 million of advertising and marketing services was provided to companies under common control of the founder, which includes integrated marketing solution services. | |||||||
[2] | The Group provided agent and platform services between the advertising customers and a company in which the founder of the Company was a member of key management by facilitating the advertising customers to display their advertisements. The founder was no longer a member of management of that company as of December 31, 2018. |
Principal Accounting Policies_3
Principal Accounting Policies - Additional Information (Details) | May 28, 2019USD ($)shares | Apr. 30, 2018CNY (¥) | Feb. 28, 2018CNY (¥) | Jun. 30, 2019CNY (¥)Segmentshares | Jun. 30, 2019USD ($)Segmentshares | Jun. 30, 2018CNY (¥) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jan. 01, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Accounting Policies [Line Items] | ||||||||||
Shares repurchased value | ¥ 102,630,674 | |||||||||
Common stock shares retired | shares | 0 | |||||||||
Operating lease right of use asset recognition | 64,171,819 | $ 9,347,679 | ||||||||
Operating lease liability recognition | ¥ 58,704,439 | |||||||||
Exchange rates used for translation | 687.47 | 687.47 | 686.32 | |||||||
Convenience translation, noon buying rate of US$ using RMB | 686.5 | 686.5 | ||||||||
Interest income | ¥ 3,600,000 | ¥ 1,700,000 | ||||||||
Impairment of intangible assets | ¥ 0 | |||||||||
Goodwill Impairment | $ | $ 0 | $ 0 | ||||||||
Percentage of advertising agency commission | 2.00% | 2.00% | ||||||||
Equity interest acquired | 100.00% | |||||||||
Total consideration | ¥ 15,000,000 | |||||||||
Cultural development fee and surcharges | ¥ 39,100,000 | 16,600,000 | ||||||||
Applicable tax rate of cultural development fee for advertising services revenues | 3.00% | 3.00% | ||||||||
Advertising and marketing expenses | ¥ 1,325,900,000 | 184,400,000 | ||||||||
Reversal of unused rewards upon change of original loyalty program | ¥ 11,600,000 | |||||||||
Costs related to users rewards granted | 1,430,800,000 | 707,100,000 | ||||||||
Rewards redeemed amount | 1,347,000,000 | 548,100,000 | ||||||||
Total estimated breakage amount | 42,600,000 | ¥ 59,100,000 | ||||||||
Users reward recorded in registered users loyalty payable | 178,912,204 | $ 26,061,501 | 256,661,934 | |||||||
Estimated users rewards recorded in accrued liabilities related to users loyalty programs | 46,255,061 | $ 6,737,809 | ¥ 44,133,812 | |||||||
Interest and penalties associated with uncertain tax positions | 0 | |||||||||
Unrecognized uncertain tax positions | ¥ 0 | |||||||||
Number of operating segments | Segment | 1 | 1 | ||||||||
Number of reportable segments | Segment | 1 | 1 | ||||||||
ASU 2016-02 | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Operating lease right of use asset recognition | ¥ 50,400,000 | |||||||||
Operating lease liability recognition | ¥ 47,100,000 | |||||||||
Sales and Marketing Expenses | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Loyalty program cost | ¥ 62,359 | |||||||||
Accrued rewards reversed amount | ¥ 175,900,000 | ¥ 171,800,000 | ||||||||
Minimum | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Goodwill Impairment Likelihood Percentage | 50.00% | 50.00% | ||||||||
Percentage of after tax net income to be allocated to general reserve under PRC law. | 10.00% | 10.00% | ||||||||
Maximum | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Percentage of required general reserve registered capital ratio to de force compulsory net profit allocation to general reserve | 50.00% | 50.00% | ||||||||
Common Stock [Member] | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Number of shares repurchased | shares | (828,925) | (828,925) | ||||||||
American Depositary Shares | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Stock Repurchase Program Authorized Amount | $ | $ 50,000,000 | |||||||||
Number of shares repurchased | shares | 3,315,700 | 3,315,700 |
Principal Accounting Policies_4
Principal Accounting Policies - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value Measurements Recurring - Short-term Investments - CNY (¥) | Jun. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Short-term investments—Wealth management products | ¥ 184,088,800 | ¥ 115,436,080 |
Level 2 | ||
Assets | ||
Short-term investments—Wealth management products | ¥ 184,088,800 | ¥ 115,436,080 |
Principal Accounting Policies_5
Principal Accounting Policies - Schedule of Estimated Useful Lives (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Leasehold Improvements | |
Property Plant And Equipment [Line Items] | |
Property and equipment, Estimated useful lives | Over the shorter of lease term or 2 – 5 years |
Minimum | Office Equipment | |
Property Plant And Equipment [Line Items] | |
Property and equipment, Estimated useful lives | 3 years |
Maximum | Office Equipment | |
Property Plant And Equipment [Line Items] | |
Property and equipment, Estimated useful lives | 5 years |
Principal Accounting Policies_6
Principal Accounting Policies - Straight-Line Method Over Their Estimated Useful Lives (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Acquired right to operate an online audio/video content platform | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Computer software | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Computer software | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Principal Accounting Policies_7
Principal Accounting Policies - Straight-Line Method Over Their Estimated Useful Lives (Details) (Parenthetical) | 6 Months Ended | ||
Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018CNY (¥) | |
Property, Plant and Equipment [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | ¥ 2,504,796,664 | $ 364,864,772 | ¥ 717,834,732 |
Advertising Services | |||
Property, Plant and Equipment [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 107,900,000 | 0 | |
Advertising Services | Related Parties [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 144,500,000 | 1,200,000 | |
Agent And Platform Service Fees | |||
Property, Plant and Equipment [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | ¥ 28,900,000 | 44,000,000 | |
Agent And Platform Service Fees | Related Parties [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | ¥ 5,300,000 |
Principal Accounting Policies_8
Principal Accounting Policies - Schedule of Disaggregation of Revenue (Details) | 6 Months Ended | |||
Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018CNY (¥) | ||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | ¥ 2,504,796,664 | $ 364,864,772 | ¥ 717,834,732 | |
Advertising and Marketing Service Provided to Advertising Customers Recorded Gross | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | [1] | 1,894,943,812 | 276,029,688 | 533,983,843 |
Advertising and Marketing Service Provided to Advertising Platforms Recorded Net | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | 550,236,683 | 80,151,010 | 135,887,052 | |
Other Service | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenue | [2] | ¥ 59,616,169 | $ 8,684,074 | ¥ 47,963,837 |
[1] | For the six months ended June 30, 2018 and 2019, revenue in advertising services provided to advertising customers, recorded gross, include integrated marketing solution services which amounted to nil and RMB107.9 million, respectively, and includes advertising and marketing services provided to related parties which amounted to RMB1.2 million and RMB144.5 million, respectively. Refer to Note 20 for additional details. | |||
[2] | For the six months ended June 30, 2018 and 2019, revenue in other services include the agent and platform services which amounted to RMB 44RMB44.0 million and RMB 28RMB28.9 million, respectively. For the six months ended June 30, 2018, the aforementioned agent and platform services also include RMB5.3 million of services that were provided to a related party. Refer to Note 20 for additional details. |
Significant Equity Transactio_3
Significant Equity Transactions and Acquisitions - Additional Information (Details) | Apr. 05, 2019CNY (¥)shares | Apr. 05, 2019USD ($)$ / sharesshares | Sep. 18, 2018CNY (¥)shares | Sep. 18, 2018USD ($)$ / sharesshares | Sep. 30, 2018CNY (¥)shares | Sep. 30, 2018USD ($)shares | Feb. 28, 2018CNY (¥) | Jun. 30, 2019CNY (¥)shares | Jun. 30, 2019USD ($)shares | Jun. 30, 2018CNY (¥) | Dec. 31, 2018shares | Jul. 17, 2017shares | ||
Significant Equity Transactions And Acquisitions [Line Items] | ||||||||||||||
Offering price per ADS | $ / shares | $ 10 | |||||||||||||
Acquisition transaction Cost | ¥ | ¥ 0 | |||||||||||||
Proceeds from initial public offering | ¥ 212,100,000 | $ 31,000,000 | ¥ 212,813,023 | [1] | $ 30,999,712 | [1] | ¥ (4,281,169) | |||||||
Ordinary shares, shares authorized | 50,000 | |||||||||||||
Equity interest acquired | 100.00% | |||||||||||||
Dianguan | ||||||||||||||
Significant Equity Transactions And Acquisitions [Line Items] | ||||||||||||||
Equity interest acquired | 100.00% | |||||||||||||
Cash consideration | ¥ | ¥ 15,000,000 | |||||||||||||
Class A Ordinary Shares | ||||||||||||||
Significant Equity Transactions And Acquisitions [Line Items] | ||||||||||||||
Preferred shares, conversion basis | one-for-one | one-for-one | ||||||||||||
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 | ||||||||||||
Number of each holder entitled of votes | one | |||||||||||||
Class B Ordinary Shares | ||||||||||||||
Significant Equity Transactions And Acquisitions [Line Items] | ||||||||||||||
Ordinary shares, shares authorized | 34,248,442 | 34,248,442 | ||||||||||||
Restricted shares vested to founders designated as Class B ordinary share | 15,937,500 | 15,937,500 | ||||||||||||
Number of each holder entitled of votes | ten | ten | ||||||||||||
Selling Shareholders | ||||||||||||||
Significant Equity Transactions And Acquisitions [Line Items] | ||||||||||||||
Number of shares offered | 1,668,033 | 1,668,033 | ||||||||||||
Selling Shareholders | American Depositary Shares | ||||||||||||||
Significant Equity Transactions And Acquisitions [Line Items] | ||||||||||||||
Number of shares offered | 6,672,132 | 6,672,132 | ||||||||||||
Initial Public Offering | ||||||||||||||
Significant Equity Transactions And Acquisitions [Line Items] | ||||||||||||||
Proceeds from initial public offering | ¥ 590,900,000 | $ 85,900,000 | ||||||||||||
Initial Public Offering | American Depositary Shares | ||||||||||||||
Significant Equity Transactions And Acquisitions [Line Items] | ||||||||||||||
Number of shares offered | 13,800,000 | 13,800,000 | 13,800,000 | 13,800,000 | ||||||||||
Common stock, conversion basis | ADSs sold upon the full exercise of the underwriters’ over-allotment option) (every four ADS represents one Class A ordinary share | ADSs sold upon the full exercise of the underwriters’ over-allotment option) (every four ADS represents one Class A ordinary share | ||||||||||||
Number of ordinary share | 3,450,000 | 3,450,000 | ||||||||||||
Share price | $ / shares | $ 7 | |||||||||||||
Total offering size value | $ | $ 96,600,000 | |||||||||||||
Proceeds from initial public offering | ¥ 590,900,000 | $ 85,900,000 | ||||||||||||
Over-Allotment Option | American Depositary Shares | ||||||||||||||
Significant Equity Transactions And Acquisitions [Line Items] | ||||||||||||||
Number of shares offered | 1,800,000 | 1,800,000 | 1,800,000 | 1,800,000 | ||||||||||
Parent Company [Member] | ||||||||||||||
Significant Equity Transactions And Acquisitions [Line Items] | ||||||||||||||
Number of shares offered | 831,967 | 831,967 | ||||||||||||
Parent Company [Member] | American Depositary Shares | ||||||||||||||
Significant Equity Transactions And Acquisitions [Line Items] | ||||||||||||||
Number of shares offered | 3,327,868 | 3,327,868 | ||||||||||||
[1] | For the six months ended June 30, 2018, the cash outflow amount represented cash paid for initial public offering costs prior to the completion of the Company’s IPO. |
Significant Equity Transactio_4
Significant Equity Transactions and Acquisitions - Schedule of Fair Value of Consideration Transferred (Details) | 1 Months Ended | |||
Feb. 28, 2018CNY (¥) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Dec. 31, 2018CNY (¥) | |
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Goodwill | ¥ 7,268,330 | $ 1,058,752 | ¥ 7,268,330 | |
Dianguan | ||||
Business Acquisition [Line Items] | ||||
Cash | ¥ 15,000,000 | |||
Recognized amounts of identifiable assets acquired and liabilities assumed: | ||||
Cash and cash equivalents | 4,270,175 | |||
Short-term investments | 9,940,000 | |||
Prepayments and other current assets | 30,936,027 | |||
Property and equipment, net | 17,978 | |||
Accounts payable | (364,242) | |||
Salary and welfare payable | (778,438) | |||
Tax payable | (9,933,408) | |||
Advance from advertising customers | (24,664,513) | |||
Accrued liabilities and other current liabilities | (1,691,909) | |||
Total identifiable net assets acquired | 7,731,670 | |||
Goodwill | 7,268,330 | |||
Total purchase consideration | ¥ 15,000,000 |
Risks and Concentration - Addit
Risks and Concentration - Additional Information (Details) - Customer Concentration Risk | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Concentration Risk [Line Items] | ||
Concentration of revenues percentage | 0 | |
Total Net Revenue | Customer C | ||
Concentration Risk [Line Items] | ||
Concentration of revenues percentage | 11.00% | |
Total Net Revenue | Customer B | ||
Concentration Risk [Line Items] | ||
Concentration of revenues percentage | 12.00% |
Risks and Concentration - Summa
Risks and Concentration - Summary of Customers with Greater than 10% of Accounts Receivables and Amounts Due from Related Parties (Details) - Accounts Receivables - Customer Concentration Risk - Advertising Platform/Customer | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Customer A | ||
Concentration Risk [Line Items] | ||
Concentration of accounts receivable percentage | 11.00% | 14.00% |
Customer C | ||
Concentration Risk [Line Items] | ||
Concentration of accounts receivable percentage | 36.00% | 29.00% |
Customer D | ||
Concentration Risk [Line Items] | ||
Concentration of accounts receivable percentage | 14.00% | |
Customer E | ||
Concentration Risk [Line Items] | ||
Concentration of accounts receivable percentage | 10.00% | |
Customer F | ||
Concentration Risk [Line Items] | ||
Concentration of accounts receivable percentage | 10.00% | |
Customer G | ||
Concentration Risk [Line Items] | ||
Concentration of accounts receivable percentage | 20.00% |
Risks and Concentration - Sum_2
Risks and Concentration - Summary of Customers with Greater than 10% of Accounts Receivables and Amounts Due from Related Parties (Parenthetical) (Details) - Accounts Receivables - Customer Concentration Risk - Advertising Platform/Customer | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Customer B | Maximum | ||
Concentration Risk [Line Items] | ||
Concentration of accounts receivable percentage | 10.00% | 10.00% |
Customer D | ||
Concentration Risk [Line Items] | ||
Concentration of accounts receivable percentage | 14.00% | |
Customer D | Maximum | ||
Concentration Risk [Line Items] | ||
Concentration of accounts receivable percentage | 10.00% | |
Customer E | ||
Concentration Risk [Line Items] | ||
Concentration of accounts receivable percentage | 10.00% | |
Customer E | Maximum | ||
Concentration Risk [Line Items] | ||
Concentration of accounts receivable percentage | 10.00% |
Cash and Cash Equivalents - Sch
Cash and Cash Equivalents - Schedules of Cash and Cash Equivalents (Details) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018SGD ($) | Dec. 31, 2018IDR (Rp) | Dec. 31, 2018HKD ($) |
Cash And Cash Equivalents [Line Items] | |||||||
Cash and cash equivalents | ¥ 2,103,479,913 | ¥ 2,186,288,246 | |||||
Overseas | |||||||
Cash And Cash Equivalents [Line Items] | |||||||
Cash and cash equivalents | $ 502,857 | Rp 502,857 | |||||
RMB [Member] | Overseas | |||||||
Cash And Cash Equivalents [Line Items] | |||||||
Cash and cash equivalents | 2,036,528,937 | ||||||
RMB [Member] | China | Non VIE | |||||||
Cash And Cash Equivalents [Line Items] | |||||||
Cash and cash equivalents | 20,890,359 | 39,016,535 | |||||
RMB [Member] | China | VIE | |||||||
Cash And Cash Equivalents [Line Items] | |||||||
Cash and cash equivalents | 8,036,781 | ¥ 19,464,246 | |||||
RMB Equivalent US [Member] | Overseas | |||||||
Cash And Cash Equivalents [Line Items] | |||||||
Cash and cash equivalents | $ | $ 4,304,762 | $ 2,125,034,745 | |||||
RMB Equivalent US [Member] | China | Non VIE | |||||||
Cash And Cash Equivalents [Line Items] | |||||||
Cash and cash equivalents | $ | 31,762,509 | $ 2,269,863 | |||||
RMB Equivalent US [Member] | China | VIE | |||||||
Cash And Cash Equivalents [Line Items] | |||||||
Cash and cash equivalents | $ | $ 582 | ||||||
RMB Equivalent HKD SGD IDR [Member] | Overseas | |||||||
Cash And Cash Equivalents [Line Items] | |||||||
Cash and cash equivalents | ¥ 1,955,983 | $ 502,857 |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Accounts Receivable, Net (Details) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Dec. 31, 2018CNY (¥) |
Receivables [Abstract] | |||
Accounts receivable, gross | ¥ 410,329,309 | ¥ 203,984,074 | |
Less: allowance for doubtful accounts | 0 | 0 | |
Accounts receivable, net | ¥ 410,329,309 | $ 59,771,203 | ¥ 203,984,074 |
Prepayments and Other Assets -
Prepayments and Other Assets - Summary of Other Assets (Details) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Dec. 31, 2018CNY (¥) |
Prepayment and other current assets | |||
Value-added tax receivable | ¥ 53,478,995 | ¥ 20,640,519 | |
Deferred cost for incentive payment to customer | 17,138,284 | 22,842,164 | |
Prepayment for the use of contents | 15,321,271 | 7,166,442 | |
Deposit to third-party payment service providers | 12,466,401 | 24,888,833 | |
Loans and advance to employees | 11,947,219 | 5,389,935 | |
Lease deposits-current portion | 738,509 | 1,017,056 | |
Deposit to a third-party for advertisement services | 10,000,000 | ||
Interest receivable | 9,206,512 | 2,958,984 | |
Deposit to third-party advertising platforms | 5,000,000 | 5,000,000 | |
Prepayments of business insurance | 1,963,729 | 2,996,381 | |
Prepayments of advertisement fee | 1,689,512 | 17,669,507 | |
Prepayments of IT service fee | 509,635 | 705,580 | |
Prepayment of office lease | 5,609,752 | ||
Others | 3,048,779 | 3,480,353 | |
Prepayment and other current assets, current | 142,508,846 | $ 20,758,754 | 120,365,506 |
Non-current | |||
Long-term prepayments of advertisement fee | 13,901,780 | ||
Long-term lease deposits | 11,116,786 | 7,424,707 | |
Long-term prepaid server fee | 1,301,887 | 2,087,264 | |
Prepayment for purchase of property and equipment | 1,294,067 | 1,160,170 | |
Prepayment and other assets, non-current | ¥ 27,614,520 | ¥ 10,672,141 |
Prepayments and Other Assets _2
Prepayments and Other Assets - Summary of Other Assets (Parenthetical) (Details) - CNY (¥) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Allowance for doubtful accounts | ¥ 0 | ¥ 0 |
Minimum | ||
Use of content period of use | 6 months | |
Maximum | ||
Use of content period of use | 12 months |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Dec. 31, 2018CNY (¥) |
Cost: | |||
Total cost | ¥ 27,554,391 | ¥ 18,589,072 | |
Less: Accumulated depreciation | (8,754,980) | (4,659,530) | |
Property and equipment, net | 18,799,411 | $ 2,738,443 | 13,929,542 |
Office Equipment | |||
Cost: | |||
Total cost | 17,979,597 | 10,883,248 | |
Leasehold Improvements | |||
Cost: | |||
Total cost | ¥ 9,574,794 | ¥ 7,705,824 |
Property and Equipment, Net -_2
Property and Equipment, Net - Summary of Depreciation Expense (Details) - CNY (¥) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Property Plant And Equipment [Line Items] | ||
Depreciation expense | ¥ 4,095,448 | ¥ 1,549,432 |
Cost of Revenues | ||
Property Plant And Equipment [Line Items] | ||
Depreciation expense | 1,327,502 | 467,538 |
Research and Development Expenses | ||
Property Plant And Equipment [Line Items] | ||
Depreciation expense | 2,026,004 | 683,365 |
Sales and Marketing Expenses | ||
Property Plant And Equipment [Line Items] | ||
Depreciation expense | 350,989 | 89,986 |
General and Administrative Expenses | ||
Property Plant And Equipment [Line Items] | ||
Depreciation expense | ¥ 390,953 | ¥ 308,543 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets (Details) - CNY (¥) | Jun. 30, 2019 | Dec. 31, 2018 |
Finite Lived Intangible Assets [Line Items] | ||
Total cost | ¥ 98,814,568 | ¥ 96,129,761 |
Less: Accumulated amortization | (6,480,845) | (1,602,163) |
Intangible assets, net | 92,333,723 | 94,527,598 |
Online Audio/Video Content Platform | ||
Finite Lived Intangible Assets [Line Items] | ||
Total cost | 96,100,000 | ¥ 96,129,761 |
Computer Software, Intangible Asset [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Total cost | ¥ 2,684,807 |
Intangible Assets, Net - Additi
Intangible Assets, Net - Additional Information (Details) | 1 Months Ended | 6 Months Ended | ||||
Feb. 28, 2018CNY (¥) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018CNY (¥) | Jun. 30, 2019USD ($) | Dec. 31, 2018CNY (¥) | |
Finite Lived Intangible Assets [Line Items] | ||||||
Amortization Expense | ¥ 4,878,682 | $ 710,660 | ||||
Percentage of equity interest acquired | 100.00% | |||||
Total cash considerations | ¥ 15,000,000 | |||||
Deferred tax liability, intangible assets | ¥ 22,430,277 | $ 3,267,338 | ¥ 23,631,899 | |||
Intangible assets, estimated useful lives | 10 years | 10 years | ||||
Acquired right to operate an online audio/video content platform with amount | ¥ 98,814,568 | 96,129,761 | ||||
Estimated amortization expense of 2019 | 4,800,000 | |||||
Estimated amortization expense of 2020 | 9,600,000 | |||||
Estimated amortization expense of 2021 | 9,600,000 | |||||
Estimated amortization expense of 2022 | 9,600,000 | |||||
Estimated amortization expense of 2023 | ¥ 9,600,000 | |||||
Online Audio/Video Content Platform | ||||||
Finite Lived Intangible Assets [Line Items] | ||||||
Percentage of equity interest acquired | 100.00% | 100.00% | ||||
Total cash considerations | ¥ 72,100,000 | |||||
Deferred tax liability, intangible assets | ¥ 24,000,000 | |||||
Intangible assets, estimated useful lives | 10 years | 10 years | ||||
Acquired right to operate an online audio/video content platform with amount | ¥ 96,100,000 | ¥ 96,129,761 |
Leases - Schedule of components
Leases - Schedule of components of lease expenses (Details) | 6 Months Ended |
Jun. 30, 2019CNY (¥) | |
Lease, Cost [Abstract] | |
Amortization of right-of-use assets | ¥ 15,667,643 |
Interest of lease liabilities | 1,323,072 |
Expenses for short-term leases within 12 months | 105,817 |
Total lease cost | ¥ 17,096,532 |
Leases - Schedule Of Supplement
Leases - Schedule Of Supplemental Cash Flow information Related To Leases (Details) | 6 Months Ended |
Jun. 30, 2019CNY (¥) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating lease payments | ¥ 17,220,336 |
Right-of-use assets obtained in exchange for lease obligations: | ¥ 39,560,604 |
Leases - Schedule Of Suppleme_2
Leases - Schedule Of Supplemental BaIance Sheet information Related To Leases (Details) - Jun. 30, 2019 | CNY (¥) | USD ($) |
Operating leases | ||
Operating lease right-of-use assets | ¥ 64,171,819 | $ 9,347,679 |
Operating lease liabilities, current | (32,117,473) | (4,678,437) |
Operating lease liabilities, non-current | (26,586,966) | $ (3,872,828) |
Total operating lease liabilities | ¥ (58,704,439) | |
Weighted-average remaining lease term | ||
Operating leases | 2 years 2 months 12 days | 2 years 2 months 12 days |
Weighted-average discount rate | ||
Operating leases | 5.70% | 5.70% |
Leases- Summary of maturities o
Leases- Summary of maturities of lease liabilities (Details) | Jun. 30, 2019CNY (¥) |
Remainder of 2019 | ¥ 18,146,111 |
2020 | 28,519,929 |
2021 | 13,759,180 |
2022 | 2,574,821 |
Total undiscounted lease payments | 63,000,041 |
Less: imputed interest | (4,295,602) |
Total operating lease liabilities | ¥ 58,704,439 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Payments under Non-cancellable Operating Leases for Office Rental (Details) | Dec. 31, 2018CNY (¥) |
Leases [Abstract] | |
2019 | ¥ 35,453,783 |
2020 | 21,057,299 |
2021 | 3,180,192 |
2022 and thereafter | |
Total | ¥ 59,691,274 |
Leases - Additional Information
Leases - Additional Information (Details) | Jun. 30, 2019 |
Discount rate | 5.70% |
Tax Payable - Schedule of Tax P
Tax Payable - Schedule of Tax Payable (Details) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Dec. 31, 2018CNY (¥) |
Tax Payable [Abstract] | |||
Value added tax | ¥ 88,229,955 | ¥ 98,020,846 | |
Individual income tax withholding | 3,245,045 | 1,721,939 | |
Urban maintenance and construction tax | 269,788 | 1,256,633 | |
Stamp duty | 373,639 | 287,303 | |
Total | ¥ 92,118,427 | $ 13,418,562 | ¥ 101,286,721 |
Tax Payable - Additional Inform
Tax Payable - Additional Information (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Tax Payable [Abstract] | |
Value added tax rate | 6.00% |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Liabilities - Schedule of Accrued Liabilities and Other Liabilities (Details) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Dec. 31, 2018CNY (¥) |
Accrued liabilities and other current liabilities | |||
Accrued advertising and marketing expense | ¥ 364,356,163 | ¥ 288,782,409 | |
Cultural development fee and other tax surcharges | 103,554,000 | 76,151,018 | |
Deferred non-refundable incentive payment from depositary bank | 2,597,700 | 2,597,700 | |
Follow on offering issuance cost | 2,062,410 | ||
Accrued employee welfare expense | 1,493,000 | 4,709,056 | |
Convertible loan issuance cost | 1,307,205 | ||
Accrued professional fees | 1,279,746 | 6,074,086 | |
Accrued Series A convertible redeemable preferred shares issuance cost of a subsidiary | 126,146 | ||
Others | 1,733,044 | 690,144 | |
Total | 478,383,268 | $ 69,684,380 | 379,130,559 |
Non-current | |||
Deferred non-refundable incentive payment from depositary bank | 8,419,246 | 9,686,219 | |
Total | ¥ 486,802,514 | ¥ 388,816,778 |
Accrued Liabilities and Other_4
Accrued Liabilities and Other Liabilities - Schedule of Accrued Liabilities and Other Liabilities (Parenthetical) (Details) ¥ in Millions, $ in Millions | 1 Months Ended | 6 Months Ended | ||
Sep. 30, 2018CNY (¥) | Sep. 30, 2018USD ($) | Jun. 30, 2019CNY (¥) | Jun. 30, 2018CNY (¥) | |
Payables And Accruals [Abstract] | ||||
Applicable tax rate of cultural development fee for advertising services revenues | 3.00% | |||
Non-refundable incentive payment received from depositary bank | ¥ 12.5 | $ 1.8 | ||
Amount recorded ratably as other gains, arrangement period | 5 years | |||
Incentive amount reduction to general and administrative expenses | ¥ 1.3 | ¥ 0 |
Convertible Loan - Additional I
Convertible Loan - Additional Information (Details) - Alibaba Investment Limited - Convertible Loan Agreement $ / shares in Units, ¥ in Millions, $ in Millions | Mar. 28, 2019CNY (¥) | Mar. 28, 2019USD ($)$ / shares | Jun. 30, 2019CNY (¥) |
Aggregate principal amount of convertible loan | $ | $ 171.1 | ||
Conversion price per share | $ / shares | $ 60 | ||
Convertible loan interest rate per anum | 3.00% | ||
Convertible loan mature period | 3 years | 3 years | |
Convertible loan cash received | ¥ 1,175.9 | $ 171.1 | |
Accrued interest | ¥ | ¥ 8.5 | ||
Convertible loan carrying value | ¥ | ¥ 1,183.2 | ||
Class A Ordinary Shares | |||
Number of calendar days for convertible loan convertible into ordinary shares | 240 days | 240 days | |
American Depositary Shares | |||
Conversion price per share | $ / shares | $ 15 |
Convertible Redeemable Prefer_2
Convertible Redeemable Preferred Shares - Additional Information (Details) | Apr. 05, 2019CNY (¥) | Apr. 05, 2019USD ($) | Sep. 11, 2018CNY (¥)shares | Sep. 11, 2018USD ($)shares | Sep. 10, 2018CNY (¥) | Sep. 04, 2018CNY (¥) | Sep. 04, 2018USD ($)$ / sharesshares | Aug. 27, 2018USD ($)$ / sharesshares | Apr. 27, 2018USD ($)$ / sharesshares | Mar. 21, 2018USD ($)shares | Mar. 08, 2018USD ($)$ / sharesshares | Mar. 04, 2018USD ($)$ / sharesshares | Feb. 12, 2018USD ($)$ / sharesshares | Nov. 14, 2017USD ($)$ / sharesshares | Sep. 29, 2017USD ($)$ / sharesshares | Sep. 30, 2018CNY (¥) | Sep. 30, 2018USD ($) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018CNY (¥) | Jun. 30, 2018USD ($) | Mar. 31, 2018$ / shares | Nov. 30, 2017$ / shares | ||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Fair value per share | $ 23.62 | $ 7.28 | |||||||||||||||||||||||
Conversion Ratio | 1 | 1 | |||||||||||||||||||||||
Dividend | $ | $ 0 | ||||||||||||||||||||||||
Gross proceeds from public offering | ¥ 212,100,000 | $ 31,000,000 | ¥ 212,813,023 | [1] | $ 30,999,712 | [1] | ¥ (4,281,169) | ||||||||||||||||||
Issuance costs incurred | $ 34,400,000 | ||||||||||||||||||||||||
Incentive Carrying value | ¥ | ¥ 17,100,000 | ||||||||||||||||||||||||
Initial Public Offering | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Gross proceeds from public offering | ¥ 590,900,000 | $ 85,900,000 | |||||||||||||||||||||||
Minimum | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Percentage of preferred shares issued and outstanding | 51.00% | 51.00% | |||||||||||||||||||||||
Minimum | Public Offering takes Place Within 5 Years of Series B1 Closing | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Money valuation of public offering | $ | $ 5,000,000,000 | ||||||||||||||||||||||||
Gross proceeds from public offering | $ | 500,000,000 | ||||||||||||||||||||||||
Minimum | Public Offering takes Place Within Year 2018 | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Money valuation of public offering | $ | 3,000,000,000 | ||||||||||||||||||||||||
Gross proceeds from public offering | $ | $ 300,000,000 | ||||||||||||||||||||||||
Maximum | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Period to complete qualified public offering | 5 years | 5 years | |||||||||||||||||||||||
Series A Shares | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Preferred stock, shares issued | shares | 4,945,055 | ||||||||||||||||||||||||
Preferred stock, per share purchase price | $ 6.5520 | ||||||||||||||||||||||||
Preferred stock, cash | $ | $ 32,400,000 | ||||||||||||||||||||||||
Series A1 Shares | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Preferred stock, shares issued | shares | 1,373,626 | ||||||||||||||||||||||||
Preferred stock, per share purchase price | $ 7.2800 | ||||||||||||||||||||||||
Preferred stock, cash | $ | $ 10,000,000 | ||||||||||||||||||||||||
Redeemable convertible preferred shares period after closing | 6 years | 6 years | |||||||||||||||||||||||
Series B1 Convertible Redeemable Preferred Shares | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Preferred stock, shares issued | shares | 5,420,144 | ||||||||||||||||||||||||
Preferred stock, per share purchase price | $ 19.3722 | ||||||||||||||||||||||||
Preferred stock, cash | $ 105,000,000 | 651,736,522 | |||||||||||||||||||||||
Fair value per share | $ 22.46 | ||||||||||||||||||||||||
Redeemable convertible preferred shares period after closing | 5 years | 5 years | |||||||||||||||||||||||
Shares issued price per share | $ 19.37 | ||||||||||||||||||||||||
Percentage of discount compared with fair value | 18.00% | ||||||||||||||||||||||||
Series B1 Convertible Redeemable Preferred Shares | Initial Public Offering | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Offering period | 5 years | 5 years | |||||||||||||||||||||||
Series B2 Convertible Redeemable Preferred Shares | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Preferred stock, shares issued | shares | 3,895,728 | ||||||||||||||||||||||||
Preferred stock, per share purchase price | $ 23.6156 | ||||||||||||||||||||||||
Preferred stock, cash | $ 92,000,000 | 569,316,830 | |||||||||||||||||||||||
Fair value per share | $ 23.62 | ||||||||||||||||||||||||
Series B2 Convertible Redeemable Preferred Shares | Loan and Guarantee Agreement | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Money lent by investor to variable interest entity | $ | $ 5,000,000 | ||||||||||||||||||||||||
Warrant issued to investor for right to purchase shares | shares | 211,724 | 211,724 | |||||||||||||||||||||||
Exercise price of warrants issued | $ 23.62 | ||||||||||||||||||||||||
Warrant exercised and subscribed | shares | 211,724 | ||||||||||||||||||||||||
Loan settled and converted to investor | $ | $ 5,000,000 | ||||||||||||||||||||||||
Series B3 Convertible Redeemable Preferred Shares | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Preferred stock, shares issued | shares | 1,751,539 | ||||||||||||||||||||||||
Preferred stock, per share purchase price | $ 25.9772 | ||||||||||||||||||||||||
Preferred stock, cash | $ 45,500,000 | ¥ 284,561,245 | |||||||||||||||||||||||
Series C1 Convertible Redeemable Preferred Shares | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Preferred stock, shares issued | shares | 1,450,520 | ||||||||||||||||||||||||
Preferred stock, per share purchase price | $ 34.47 | ||||||||||||||||||||||||
Total consideration | $ | $ 50,000,000 | ||||||||||||||||||||||||
Preferred shares, dividend rate percentage | 12.00% | 12.00% | |||||||||||||||||||||||
Preferred stock, liquidation preference percentage | (120.00%) | (120.00%) | |||||||||||||||||||||||
Series C1 Convertible Redeemable Preferred Shares | Series C1 Investor A | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Preferred stock, shares issued | shares | 290,104 | 290,104 | |||||||||||||||||||||||
Fair value per share | $ 36.78 | ||||||||||||||||||||||||
Cash consideration price per share | $ 34.47 | ||||||||||||||||||||||||
Upfront incentive payment | ¥ 22,800,000 | $ 3,350,000 | |||||||||||||||||||||||
Upfront iIncentive payment charged to expense period | 1 year | 1 year | |||||||||||||||||||||||
Gain on difference between excess of fair value over carrying value of preferred share | ¥ 18,300,000 | $ 2,680,000 | |||||||||||||||||||||||
Series C1 Convertible Redeemable Preferred Shares | Series C1 Investor B | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Preferred stock, shares issued | shares | 145,052 | ||||||||||||||||||||||||
Preferred stock, per share purchase price | $ 37.2280 | ||||||||||||||||||||||||
Total consideration | $ | $ 5,400,000 | ||||||||||||||||||||||||
Series A Shares and Series A1 Shares | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Preferred shares, dividend rate percentage | 12.00% | 12.00% | 8.00% | 12.00% | 12.00% | ||||||||||||||||||||
Preferred stock, liquidation preference percentage | (120.00%) | (120.00%) | |||||||||||||||||||||||
Deemed dividend preferred shares | ¥ | ¥ 1,916,871 | ||||||||||||||||||||||||
Series A Shares and Series A1 Shares | Minimum | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Preferred stock, liquidation preference percentage | 100.00% | 100.00% | |||||||||||||||||||||||
Series A Shares and Series A1 Shares | Maximum | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Preferred stock, liquidation preference percentage | 120.00% | 120.00% | |||||||||||||||||||||||
Series B1 Shares, Series B2 Shares and Series B3 Shares | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Preferred shares, dividend rate percentage | 12.00% | 12.00% | |||||||||||||||||||||||
Preferred stock, liquidation preference percentage | (120.00%) | (120.00%) | |||||||||||||||||||||||
Series C2 Shares | Share Subscription Agreement | |||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||
Preferred stock, shares issued | shares | 1,480,123 | ||||||||||||||||||||||||
Preferred stock, cash | $ | $ 20,408,171 | ||||||||||||||||||||||||
Total consideration | $ | $ 55,102,061 | ||||||||||||||||||||||||
Cash consideration price per share | $ 13.79 | ||||||||||||||||||||||||
[1] | For the six months ended June 30, 2018, the cash outflow amount represented cash paid for initial public offering costs prior to the completion of the Company’s IPO. |
Ordinary Share - Additional Inf
Ordinary Share - Additional Information (Details) | Apr. 05, 2019CNY (¥) | Apr. 05, 2019USD ($) | Sep. 18, 2018CNY (¥)shares | Sep. 18, 2018USD ($)$ / sharesshares | Jan. 03, 2018CNY (¥) | Jan. 03, 2018USD ($)$ / shares | Sep. 01, 2017USD ($)shares | Jan. 31, 2019shares | Sep. 30, 2018CNY (¥)shares | Sep. 30, 2018USD ($)$ / sharesshares | Jan. 31, 2018$ / sharesshares | Mar. 31, 2018CNY (¥) | Jun. 30, 2019CNY (¥) | [1] | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018CNY (¥) | Dec. 31, 2018$ / sharesshares | Mar. 31, 2018$ / shares | Feb. 28, 2018shares | Nov. 30, 2017$ / shares | Jul. 17, 2017USD ($)$ / sharesshares | |
Class Of Stock [Line Items] | ||||||||||||||||||||||
Ordinary shares, authorized amount | $ | $ 50,000 | $ 50,000 | ||||||||||||||||||||
Ordinary shares, shares authorized | 50,000 | |||||||||||||||||||||
Ordinary shares, par value | $ / shares | $ 1 | |||||||||||||||||||||
Ordinary shares, shares, issued | 50,000 | |||||||||||||||||||||
Ordinary shares, subdivided into multiple shares | 500,000,000 | |||||||||||||||||||||
Fair value per share | $ / shares | $ 23.62 | $ 7.28 | ||||||||||||||||||||
Share-based compensation expense | ¥ | ¥ 1,400,000 | |||||||||||||||||||||
Proceeds from initial public offering | ¥ 212,100,000 | $ 31,000,000 | ¥ 212,813,023 | $ 30,999,712 | [1] | ¥ (4,281,169) | ||||||||||||||||
Common stock shares vested | 15,937,500 | |||||||||||||||||||||
Initial Public Offering | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Proceeds from initial public offering | ¥ 590,900,000 | $ 85,900,000 | ||||||||||||||||||||
Founders | 2017 Plan | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Ordinary shares, shares, issued | 10,000,000 | |||||||||||||||||||||
Restricted shares | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Shares option granted | 15,937,500 | 15,937,500 | ||||||||||||||||||||
Share price | $ / shares | $ 0.0001 | |||||||||||||||||||||
Restricted shares | Minimum | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Shares vesting period | 24 months | |||||||||||||||||||||
Restricted shares | Maximum | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Shares vesting period | 34 months | |||||||||||||||||||||
Restricted shares | Founders | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Shares option granted | 15,937,500 | |||||||||||||||||||||
Share price | $ / shares | $ 0.0001 | |||||||||||||||||||||
Share-based compensation expense | ¥ 215,000,000 | $ 33,100,000 | ¥ 649,700,000 | $ 95,000,000 | ||||||||||||||||||
Restricted shares | Founders | Minimum | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Shares vesting period | 24 months | 24 months | ||||||||||||||||||||
Restricted shares | Founders | Maximum | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Shares vesting period | 34 months | 34 months | ||||||||||||||||||||
Restricted shares | Founders | Share Restriction Deeds | Initial Public Offering | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Shares option granted | 15,937,500 | 15,937,500 | ||||||||||||||||||||
American Depositary Shares | Initial Public Offering | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Ordinary shares, shares, issued | 3,450,000 | |||||||||||||||||||||
Share price | $ / shares | $ 7 | |||||||||||||||||||||
Number of shares offered | 13,800,000 | 13,800,000 | 13,800,000 | 13,800,000 | ||||||||||||||||||
Proceeds from public offering | $ | $ 96,600,000 | |||||||||||||||||||||
Shares issued price per share | $ / shares | $ 7 | |||||||||||||||||||||
Proceeds from initial public offering | ¥ 590,900,000 | $ 85,900,000 | ||||||||||||||||||||
American Depositary Shares | Over-Allotment Option | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Number of shares offered | 1,800,000 | 1,800,000 | 1,800,000 | 1,800,000 | ||||||||||||||||||
Class B Ordinary Shares | ||||||||||||||||||||||
Class Of Stock [Line Items] | ||||||||||||||||||||||
Ordinary shares, shares authorized | 34,248,442 | 34,248,442 | ||||||||||||||||||||
Ordinary shares, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||||||||||
Ordinary shares, shares, issued | 32,937,193 | 34,248,442 | ||||||||||||||||||||
[1] | For the six months ended June 30, 2018, the cash outflow amount represented cash paid for initial public offering costs prior to the completion of the Company’s IPO. |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Details) $ / shares in Units, ¥ in Millions | Mar. 05, 2019 | Jan. 03, 2018CNY (¥) | Jan. 03, 2018USD ($)$ / sharesshares | Jan. 31, 2019shares | Sep. 30, 2018CNY (¥) | Sep. 30, 2018USD ($) | Jan. 31, 2018$ / sharesshares | Mar. 31, 2018CNY (¥) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018CNY (¥) |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Dividends distributed | $ | $ 0 | ||||||||||
Share-based compensation expense | ¥ 1.4 | ||||||||||
Restricted shares | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Share price | $ / shares | $ 0.0001 | ||||||||||
Shares option granted | shares | 15,937,500 | 15,937,500 | |||||||||
Minimum | Restricted shares | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Shares vesting period | 24 months | ||||||||||
Maximum | Restricted shares | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Shares vesting period | 34 months | ||||||||||
Sister Company | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Share-based compensation expense | ¥ 18.5 | ¥ 1.1 | |||||||||
Founders | Restricted shares | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Number of restricted shares held | shares | 15,937,500 | ||||||||||
Share price | $ / shares | $ 0.0001 | ||||||||||
Shares option granted | shares | 15,937,500 | ||||||||||
Shares option granted, fair value | ¥ 864.7 | $ 128,100,000 | |||||||||
Share-based compensation expense | ¥ 215 | $ 33,100,000 | ¥ 649.7 | $ 95,000,000 | |||||||
Founders | Minimum | Restricted shares | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Shares vesting period | 24 months | 24 months | |||||||||
Founders | Maximum | Restricted shares | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Shares vesting period | 34 months | 34 months | |||||||||
Share Option Plan | Companies under Common Control of Founder | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Dividends distributed | 0 | 6.8 | |||||||||
Share Option Plan | Employees | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Share-based compensation expense | ¥ 117.1 | ¥ 25.4 | |||||||||
Equity Incentive Plan | Class A Ordinary Shares And Class B Ordinary Shares | |||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||
Increased in aggregate number of ordinary shares reserved for future issuances as percentage of ordinary shares outstanding | 3.50% |
Other Operating Income - Additi
Other Operating Income - Additional Information (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Other income (expense), net | |
Super deduction of input VAT | $ 10.8 |
Input Vat Additional Credit Admissible Percentage | 10.00% |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests and Noncontrolling Interests - Additional Information (Details) $ / shares in Units, ¥ in Millions, $ in Millions | Mar. 29, 2019CNY (¥)shares | Nov. 14, 2018CNY (¥)shares | Jun. 30, 2019 | Mar. 29, 2019USD ($)$ / sharesshares | Nov. 14, 2018USD ($)$ / sharesshares | May 31, 2018 | Sep. 29, 2017shares |
Minority Interest [Line Items] | |||||||
Conversion Ratio | 1 | ||||||
Overseas Subsidiary | |||||||
Minority Interest [Line Items] | |||||||
Ownership of subsidiaries | 73.34% | ||||||
Ownership by non-controlling stockholders | 26.66% | ||||||
Series A Convertible Redeemable Preferred Shares | |||||||
Minority Interest [Line Items] | |||||||
Mezzanine equity, shares issued | 4,945,055 | ||||||
Fun Literature [Member] | |||||||
Minority Interest [Line Items] | |||||||
Purchase shares from holders | 5 years | ||||||
Redemption days | 60 days | ||||||
Annual compound interest rate | 10.00% | ||||||
Fun Literature [Member] | Series A Convertible Redeemable Preferred Shares | |||||||
Minority Interest [Line Items] | |||||||
Mezzanine equity, shares issued | 1,097,212 | 3,763,440 | 1,097,212 | 3,763,440 | |||
Preferred stock, per share purchase price | $ / shares | $ 3.72 | $ 3.72 | |||||
Mezzanine equity, aggregate amount of redemption | ¥ 27.5 | ¥ 97.1 | $ 4 | $ 14 | |||
Preferred shares converted basics on issued | 9.00% | 7.00% | |||||
Preferred shares converted basics on outstanding | 91.00% | 93.00% | |||||
Conversion Ratio | 0.01 |
Redeemable Noncontrolling Int_4
Redeemable Noncontrolling Interests and Noncontrolling Interests - Schedule of Redeemable Noncontrolling Interests Activities (Details) | 6 Months Ended |
Jun. 30, 2019CNY (¥) | |
Noncontrolling Interest [Abstract] | |
Beginning balance | ¥ 96,936,855 |
Issuance of Redeemable non-controlling interests, net of issuance costs | 27,483,649 |
Foreign exchange impacts | 767,115 |
Accretion on convertible redeemable preferred shares to redemption value | 5,293,586 |
Ending balance | ¥ 130,481,205 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Transaction and Balance Amount Due to/from Related Parties (Details) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018CNY (¥) | ||
Services provided by the group | |||||
Amount due from related parties | ¥ 104,097,946 | [1],[2] | $ 15,163,576 | ||
Due to Related Parties, Current | 6,841,157 | [3],[4] | $ 996,527 | ||
Advertising and Marketing Service Provided to Related Party | |||||
Services provided by the group | |||||
Amount due from related parties | [1] | 144,462,450 | ¥ 1,183,492 | ||
Agent and Platform Service Provided to Related Party | |||||
Services provided by the group | |||||
Amount due from related parties | [2] | 5,293,092 | |||
Advertising costs charged from a related party | |||||
Services provided by the group | |||||
Account due to a related party | [4] | 14,758,169 | |||
Advertising Service | |||||
Services provided by the group | |||||
Account due to a related party | [3] | ¥ 669,123 | 2,783,291 | ||
iCloud Server and Other Service Fee Charged from Related Party | |||||
Services provided by the group | |||||
Account due to a related party | [5] | ¥ 5,502,298 | |||
[1] | For the six months ended June 30, 2018, the Group charged advertising and marketing service of RMB1.2 million to a company in which the founder of the Company was a member of key management (the founder was no longer a member of management of that company after September 2018). For the six months ended June 30, 2019, a total of RMB144.5 million of advertising and marketing services was provided to companies under common control of the founder, which includes integrated marketing solution services. | ||||
[2] | The Group provided agent and platform services between the advertising customers and a company in which the founder of the Company was a member of key management by facilitating the advertising customers to display their advertisements. The founder was no longer a member of management of that company as of December 31, 2018. | ||||
[3] | For the six months ended June 30, 2018, the Group entered into a cooperation agreement with Series B1 shareholder to promote the Company’s mobile application, and the cooperation agreement requires the Company to prepay a total service fee of RMB31.5 million which will be recognized as expense over 3 years. Total service fee recognized as expense amounted to RMB5.5 million. After the IPO in September 2018, the Series B1 shareholder has no right to nominate the board member of the Company and has only 1.5% voting power of the Company and no ability to exercise significant influence. As a result, the Series B1 shareholder was no longer a related party of the Company after September 2018. For the six months ended June 30, 2019, the service fee charged from related parties represented the expense charged from a different company under common control of the founder which provided the Group with advertising and marketing service. | ||||
[4] | For the six months ended June 30, 2019, the Group entered into a CPM (cost per impression) arrangement with a media platform under the common control of the founder to for the Group’s customers’ advertisement placement. The total service fee charged from related parties amounted to RMB14.8 million for the six months ended June 30, 2019. | ||||
[5] | The service fee mainly represented iCloud server and short message service fees charged from Series B1 shareholder through September 2018. After the IPO in September 2018, the Series B1 shareholder has no right to nominate the board member of the Company and has only 1.5% voting power of the Company and no ability to exercise significant influence. As a result, the Series B1 shareholder was no longer a related party of the Company after September 2018. |
Related Party Transactions - _2
Related Party Transactions - Schedule of Transaction and Balance Amount Due to/from Related Parties (Parenthetical) (Details) - CNY (¥) | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2019 | Sep. 30, 2018 | ||
Service Fee | ||||
Related Party Transaction [Line Items] | ||||
Prepayment of service fee | ¥ 14,800,000 | |||
Advertising and Marketing Service | ||||
Related Party Transaction [Line Items] | ||||
Service fee charged to related parties | 144,500,000 | |||
Advertising and Marketing Service | Founder of the Company | ||||
Related Party Transaction [Line Items] | ||||
Service fee charged to related parties | ¥ 1,200,000 | |||
iCloud Server and Other Service Fee Charged from Related Party | ||||
Related Party Transaction [Line Items] | ||||
Prepayment of service fee | [1] | ¥ 5,502,298 | ||
iCloud Server and Other Service Fee Charged from Related Party | Series B1 Shareholder | ||||
Related Party Transaction [Line Items] | ||||
Voting power percentage | 1.50% | |||
Cooperation Agreement | Series B1 Shareholder | ||||
Related Party Transaction [Line Items] | ||||
Voting power percentage | 1.50% | |||
Prepayment of service fee | 31,500,000 | |||
Total service fee | ¥ 5,500,000 | |||
[1] | The service fee mainly represented iCloud server and short message service fees charged from Series B1 shareholder through September 2018. After the IPO in September 2018, the Series B1 shareholder has no right to nominate the board member of the Company and has only 1.5% voting power of the Company and no ability to exercise significant influence. As a result, the Series B1 shareholder was no longer a related party of the Company after September 2018. |
Basic and Diluted Net Loss pe_3
Basic and Diluted Net Loss per Share - Schedule of Basic Loss per Share and Diluted Loss per Share (Details) | 6 Months Ended | |||
Jun. 30, 2019CNY (¥)¥ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018CNY (¥)¥ / sharesshares | Jun. 30, 2018$ / shares | |
Numerator: | ||||
Net loss | ¥ (1,249,285,575) | $ (181,978,963) | ¥ (514,435,513) | |
Accretion to redemption value | (5,293,586) | |||
Deemed dividend to preferred shareholders | (1,916,871) | |||
Net loss attributable to ordinary shareholders-Basic and diluted | ¥ (1,254,579,161) | $ (182,750,061) | ¥ (575,315,927) | |
Denominator: | ||||
Basic and diluted | shares | 62,684,261 | 62,684,261 | 24,238,324 | |
Basic and diluted loss per share | (per share) | ¥ (20.01) | $ (2.92) | ¥ (23.74) | |
Series A1 Convertible Redeemable Preferred Shares | ||||
Numerator: | ||||
Accretion to redemption value | ¥ (3,274,935) | |||
Series B1 Convertible Redeemable Preferred Shares | ||||
Numerator: | ||||
Accretion to redemption value | (21,349,500) | |||
Series B2 Convertible Redeemable Preferred Shares | ||||
Numerator: | ||||
Accretion to redemption value | (18,092,345) | |||
Series B3 Convertible Redeemable Preferred Shares | ||||
Numerator: | ||||
Accretion to redemption value | (5,602,880) | |||
Series A Shares | ||||
Numerator: | ||||
Accretion to redemption value | ¥ (10,643,883) | |||
Accretion on redemption value of Series A convertible redeemable preferred shares of a subsidiary (Note 19) | ¥ (5,293,586) | |||
American Depositary Shares | ||||
Denominator: | ||||
Basic and diluted | shares | 250,737,044 | 250,737,044 | 96,953,296 | |
Basic and diluted loss per share | $ / shares | $ (5) | $ (5.93) |
Basic and Diluted Net Loss pe_4
Basic and Diluted Net Loss per Share - Schedule of Share Equivalent Excluded from Computation of Diluted Net Loss per Ordinary Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Preferred Shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Weighted average | 12,642,574 | |
Share Options | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Weighted average | 11,288,731 | 9,911,869 |
Restricted shares | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Weighted average | 10,569,386 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments with Respect to Agreements (Details) - Jun. 30, 2019 | CNY (¥) | USD ($) |
Commitments and Contingencies Disclosure [Abstract] | ||
Remainder of 2019 | ¥ 102,396,667 | $ 14,915,756 |
2020 | 162,521,191 | 23,673,881 |
2021 | ¥ 61,832,143 | $ 9,006,867 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-cancellable Capital Expenditure (Details) - Jun. 30, 2019 | CNY (¥) | USD ($) |
Commitments and Contingencies Disclosure [Abstract] | ||
Remainder of 2019 | ¥ 178,967,000 | $ 26,069,483 |
2020 | ¥ 36,252,000 | $ 5,280,699 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ / shares in Units, ¥ in Millions | 1 Months Ended | |||
Sep. 24, 2019USD ($)$ / sharesshares | Sep. 23, 2019CNY (¥) | Sep. 23, 2019USD ($)$ / sharesshares | Sep. 01, 2017shares | |
Subsequent Event [Line Items] | ||||
Number of shares issued | shares | 50,000 | |||
Subsequent Event | Shanghai Dongfang Newspaper Co Ltd | ||||
Subsequent Event [Line Items] | ||||
Number of shares issued | shares | 1,480,123 | |||
Common stock cash consideration | ¥ 140.1 | $ 20,408,171 | ||
Cash consideration price per share | $ 13.79 | |||
VIE Agreement Terms | The Paper will also carry out the performance of certain strategic cooperation agreements for a fee charge with Shanghai Jifen, the consolidated VIE, for certain years. | The Paper will also carry out the performance of certain strategic cooperation agreements for a fee charge with Shanghai Jifen, the consolidated VIE, for certain years. | ||
Subsequent Event | American Depositary Shares | Shanghai Dongfang Newspaper Co Ltd | ||||
Subsequent Event [Line Items] | ||||
Cash consideration price per share | $ 3.45 | |||
The Paper | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Equity interests percentage | 1.00% | |||
Series B Investor | Subsequent Event | Fun Literature Limited | ||||
Subsequent Event [Line Items] | ||||
Number of preferred shares issued | shares | 8,794,703 | |||
Preferred stock cash consideration | $ | $ 100,000,000 | |||
Series B Investor | Subsequent Event | Series B Preferred Shares | Fun Literature Limited | ||||
Subsequent Event [Line Items] | ||||
Preferred stock share price | $ 5.69 | |||
Preferred stock cash consideration | $ | $ 50,000,000 | |||
Simple interest On Put option | 4.00% | |||
Series B Investor | Forecast | Subsequent Event | Series A Preferred Shares | Fun Literature Limited | ||||
Subsequent Event [Line Items] | ||||
Preferred Stock Conversion Price | $ 4.31 |