Mail Stop 3561
December 1, 2017
Mr. Brent Y. Suen
Chief Executive Officer
Weyland Tech, Inc.
198 Wellington Street
8/F The Wellington
Central, Hong Kong SAR
Hong Kong HKSAR
Re: Weyland Tech, Inc.
Form 10-K for Fiscal Year Ended December 31, 2016
Filed March 31, 2017
Form 10-Q for Fiscal Quarter Ended September 30, 2017
Filed November 14, 2017
Form 8-K, Filed April 13, 2017
Form 8-K, Filed May 9, 2017
File No. 000-51815
Dear Mr. Suen:
We have reviewed your filings and have the following comments. In some
of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Form 10-K for Fiscal Year Ended December 31, 2016
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of
Operations
Overview, page 11
1. In future filings, please provide additional disclosure about the
agreements referenced on
pages 11-12, to the extent they are important to your business. In doing
so, please briefly
describe your obligations under each such agreement and the
counter-party's obligations
Mr. Brent Suen
Weyland Tech, Inc.
December 1, 2017
Page 2
to you. If material, please file these agreements as exhibits to your
next periodic
report. Please refer to Item 601(b)(10) of Regulation S-K.
Results of Operation for the Fiscal Year Ended December 31, 2016, page 14
2. In future filings, please quantify to the extent practicable the factors
you cite as impacting
your results of operations. For example, please quantify the increase in
revenues
attributable to additional subscription sales through existing
Cooperation Agreements and
the revenues attributable to new subscriptions sold to existing
customers. Please also
provide narrative or quantitative disclosure, to the extent practicable,
that provides
investors with insight as to the primary geographic regions from which
you derive
revenue. Please refer to Item 303 of Regulation S-K.
Financial Statements for the Year Ended December 31, 2016
Note 2 Summary of Significant Accounting Policies
Revenue Recognition, page F-8
3. Please tell us in more detail how you generate revenue. In doing so,
please respond to the
following:
You indicate on page 11 that you have entered into several types of
agreements,
including software licensing agreements to provide a "white label"
rollout of your
CreateApp platform in certain geographies, software licensing
agreements to
distribute your CreateApp platform in certain geographies, certain
strategic
cooperation agreements, an exclusive customer agreement, and a
master service
agreement. You also refer at the bottom of page 13 to generating
sales through a
direct sales model, a reseller model, and a white label sales model.
Please tell us
whether the disclosures on pages 11 and 13 are using different
terminology to refer to
the same type of contracts or whether these represent distinct types
of contracts.
For each type of contract that contributed a significant portion of
your revenue in
2016 or the nine months ended September 30, 2017, please tell us in
more detail what
services you are providing your customer, how and when you generate
revenue from
the contract, and what types of cost of services you incur. If your
customer is a
reseller or distributor, also tell us what services, if any, the
reseller or distributor is
providing to the end user and whether the reseller or distributor
receives any
compensation for those services. Additionally, please tell us if
resellers or
distributors pay you a fee independent of their sales to end users
or whether your
revenue is solely dependent on their sales to end users.
Your accounting policy refers to multiple-element arrangements, such
as instances
where you design a custom website and separately offer other
services. If multiple-
Mr. Brent Suen
Weyland Tech, Inc.
December 1, 2017
Page 3
element arrangements comprise a significant portion of your revenue,
please tell us
the methodology that you use to allocate revenue to the various
elements.
Please tell us the typical length of your software licenses or
whether they are
perpetual licenses. Also tell us whether your software licenses
typically include other
deliverables such as when-and-if-available upgrades or post-contract
customer
support, and if so, how you account for these other deliverables.
Item 9 A(T). Controls and Procedures, page 16
4. We note your disclosure that as of the end of the period covered by your
10-K you
carried out an evaluation as required by Rule 13a-15 under the Exchange
Act of the
effectiveness of the design and operation of your disclosure controls
and procedures.
However, you have not provided your principal executive and financial
officer's
conclusions regarding whether your disclosure controls and procedures
are effective.
Please amend your filing and revise your disclosure to state in clear
and unqualified
language the conclusions reached by your chief executive officer and
your chief financial
officer on the effectiveness of your disclosure controls and procedures.
This comment is
also applicable to your September 30, 2017 Form 10-Q.
5. If your conclusion is that your disclosure controls and procedures were
effective at either
December 31, 2016 or September 30, 2017, please tell us how your
certifying officers
were able to conclude that your disclosure controls and procedures were
effective in light
of the material weakness you identified in your discussion of internal
control over
financial reporting.
6. We note your disclosure that you have enhanced your current procedures
and will fully
comply with the disclosure controls and procedures and internal controls
over financial
reporting in fiscal year 2017. Please revise your disclosures to
specifically identify and
describe any change in your internal control over financial reporting,
made during your
most recent fiscal quarter, which has materially affected, or is
reasonably likely to
materially affect, your internal control over financial reporting. Refer
to Item 308(c) of
Regulation S-K.
Annual Report of Management on Internal Control over Financial Reporting, page
16
7. We note your disclosure that your management assessed the effectiveness
of your internal
control over financial reporting and, based on that evaluation, they
concluded that during
the period covered by your Form 10-K, your internal controls and
procedures were
effective to detect the inappropriate application of US GAAP rules.
However, we also
note you disclose that the deficiencies that existed in the design or
operation of your
internal controls over financial reporting that adversely affected your
internal controls
represent material weaknesses, and that these material weaknesses have
not been
remediated. Please note that management is precluded from determining
that internal
Mr. Brent Suen
Weyland Tech, Inc.
December 1, 2017
Page 4
control over financial reporting is effective if one or more material
weaknesses in internal
control over financial reporting have been identified. Please amend your
filing to revise
your management's conclusion as to the effectiveness of your internal
control over
financial reporting. Refer to SEC Release No. 33-8238, available on our
website at
https://www.sec.gov/rules/final/33-8238.htm#iib3c.
8. Please also revise your Management's Report on Internal Control over
Financial
Reporting to disclose the framework you used in your evaluation of
internal control over
financial reporting. Please refer to SEC Release No. 33-8238, Section
B.3a. for guidance
on selecting an appropriate framework.
Item 13. Certain Relationships and Related Transactions, and Director
Independence
Transactions with Related Persons, page 23
9. Your disclosure elsewhere identifies Mr. Foong as a named executive
officer and the
creator of CreateApp, a platform licensed to the company. In future
filings, please
include discussion of the CreateApp transactions, including the "Global
Exclusive
Licensing" agreement referenced on page 13, pursuant to Item 404 of
Regulation S-K, or
advise why you believe such disclosure is not required.
Current Reports on Form 8-K, Filed April 13, 2017 and May 9, 2017
10. It appears that information is redacted from the agreements filed as
exhibits 4.1, 4.2 and
10.1 to the aforementioned current reports. It does not appear,
however, that you have
sought confidential treatment for this information. Please file
complete, unredacted
copies of each of those agreements with your next current or periodic
report. Alternatively, if you believe that confidential treatment of
particular information
is warranted, you may request confidential treatment pursuant to Rule
24b-2 of the
Exchange Act. For guidance in preparing a confidential treatment
request, please refer to
Staff Legal Bulletin No. 1A (Feb. 28, 1997 with the July 11, 2001
addendum).
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Mr. Brent Suen
Weyland Tech, Inc.
December 1, 2017
Page 5
You may contact Sondra Snyder, Staff Accountant at (202) 551-3332 or me,
at (202)
551-3737 if you have questions regarding comments on the financial statements
and related
matters. Please contact Courtney Haseley, Staff Attorney at (202) 551-7689 or
Lisa Kohl, Legal
Branch Chief at (202) 551-3252 with any other questions.
Sincerely,
/s/ Jennifer Thompson
Jennifer Thompson
Accounting Branch
Chief
Office of Consumer
Products