United States securities and exchange commission logo
July 14, 2020
Eric Siliang Tan
Chief Executive Officer
Qutoutiao Inc.
11/F, Block 3, XingChuang Technology Center
5005 Shen Jiang Road, Pudong New Area
Shanghai 200120
People s Republic of China
Re: Qutoutiao Inc.
Form 20-F for the
Fiscal Year Ended December 31, 2019
File No. 001-38644
Dear Mr. Tan:
We have reviewed your filing 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 20-F for the Fiscal Year Ended December 31, 2019
Item 5. Operating and Financial Review and Prospects
Key Operating Metrics, page 80
1. Please clarify how
changes in your installed users, MAUs, DAUs and average time spent
per DAU correlate with
the significant growth in your advertising and marketing
revenues. In this
respect, provide us with a quantitative and qualitative analysis of how
changes in your
revenues each quarterly period correlate with changes in your operating
metrics. In addition,
please clarify whether the installed users are active users or are
cumulative users over
time. Revise your disclosures accordingly.
A. Operating Results
Results of Operations, page 93
Eric Siliang Tan
FirstName LastNameEric Siliang Tan
Qutoutiao Inc.
Comapany
July NameQutoutiao Inc.
14, 2020
July 14,
Page 2 2020 Page 2
FirstName LastName
2. Please explain why you no longer disclose the number of advertising
clicks on your
platform and revenue per click for each period presented, which were
metrics disclosed in
prior filings, including your Form 20-F filed April 11, 2019. Price
and volume disclosures
such as the number of advertising clicks on your platform and revenue
per click including
an analysis of any trends or uncertainties appears to be important
information necessary to
understanding your results of operations. We refer you to Part I,
Items 5A and 5D of
Form 20-F and Section III.B of SEC Release 33-8350.
B. Liquidity and Capital Resources, page 98
3. We note from your risk factor disclosures on page 10 that your ability
to continue as a
going concern is dependent on management s ability to successfully
execute your business
plans, which includes adjusting the pace of your operation expansion
and controlling
operating cost and expenses to reduce the cash used in operating cash
flows. Please
describe management s plans in greater detail and how those plans
alleviate substantial
doubt as to your ability to continue as a going concern. Address any
additional
information about relevant events or conditions and management s
plans that have
become available in subsequent interim periods. We refer to ASC
205-40-50-(12 through
14).
Consolidated Financial Statements
Note 21. Related Party transactions, page F-59
4. We note from your disclosures on page F-39 that Customer
F-advertising and marketing
customer (related party) represents 28% of your accounts receivable
balance as of
December 31, 2019. We further note that you separately present amounts
due from
related parties in connection with a service fee of RMB473.2 million
charged to related
parties for advertising and marketing services provided to companies
under the common
control of the founder, to help promote these companies online
applications, which were
developed in late 2018. Describe in greater detail the nature, terms
and manner of
settlement for these related party transactions. Explain whether there
is a concentration
risk associated with the amounts due from related parties. Tell us
whether these related
party transactions were consummated on terms that are equivalent to
those that prevail in
arm s length transactions and if so, how such representations can be
substantiated. We
refer you to ASC 850-10-50. In addition, tell us your consideration of
separately
disclosing the accounts receivable due from Customer F on the face of
your consolidated
balance sheets. We refer you to Rule 5-02(3)(a)(2) of Regulation S-X.
5. In your discussions of revenue in MD&A and your earnings releases, you
should
separately discuss and analyze revenues recognized from Related
Parties.
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.
Eric Siliang Tan
Qutoutiao Inc.
July 14, 2020
Page 3
You may contact Morgan Youngwood, Staff Accountant at 202-551-3479 or
Stephen
Krikorian, Accounting Branch Chief at 202-551-3488 if you have questions
regarding comments
on the financial statements and related matters.
FirstName LastNameEric Siliang Tan Sincerely,
Comapany NameQutoutiao Inc.
Division of Corporation
Finance
July 14, 2020 Page 3 Office of Technology
FirstName LastName