United States securities and exchange commission logo
March 10, 2021
Peter Hui Zhang
Chairman and Chief Executive Officer
Full Truck Alliance Co. Ltd.
c/o Cogency Global Inc.
10 East 40th Street, 10th Floor
New York, N.Y. 10016
Re: Full Truck Alliance
Co. Ltd.
Draft Registration
Statement on Form F-1
Submitted February
11, 2021
CIK No. 0001838413
Dear Mr. Zhang:
We have reviewed your draft registration statement 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 this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form F-1
Cover Page
1. Please disclose on the
cover page that you will be a controlled company following the
offering.
Risk Factors, page 10
2. You disclose that
shippers may use more than one account and/or may share the same
account with other
shippers. Please add a risk factor, if true, that shipper MAUs may
underestimate or
overestimate the number of active shippers in a given month.
Peter Hui Zhang
FirstName
Full Truck LastNamePeter Hui Zhang
Alliance Co. Ltd.
Comapany
March NameFull Truck Alliance Co. Ltd.
10, 2021
March2 10, 2021 Page 2
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FirstName LastName
Selected Consolidated Financial Data, page 89
3. Please include your redeemable preferred shares in your Selected
Consolidated Balance
Sheet Data on page 91. Refer to paragraph 2 of the Instructions to
Item 301 of Regulation
S-K.
Non-GAAP Financial Measures, page 91
4. We note you currently reconcile Non-GAAP adjusted net income/(loss)
from Net loss
from continuing operations. Please revise your reconciliation to begin
from the most
directly comparable GAAP measure. Refer to Item 10(e)(1)(i) of
Regulation S-K.
Our Monetization Model, page 95
5. We note the three metrics you provide in the table. It appears that
these metrics would
include paying and non-paying shippers. Please advise. If so, tell us
your consideration of
providing these metrics between paying and non-paying shippers. In
addition, please
provide additional disclosure to indicate how each of these items is
currently or will
generate revenue.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Revenues, page 99
6. You state that you charge shippers membership fees for posting
shipping orders on your
platform. However, you disclose on page 141 that you use a freemium
model in which
shippers can post a certain number of shipping orders on your platform
free of charge and
must pay membership fees in order to post additional shipping orders.
Please clarify the
disclosure in this section. Also, tell us what consideration you have
given to disclosing
the number of paying shippers for each period in addition to shipper
MAUs.
Cost of revenue, page 105
7. Please revise your discussion of cost of revenue to discuss the
changes in cost of revenue
by revenue component.
Nine Months ended September 30, 2020 Compared to the Nine Months ended
September 30,
2019
Revenues, page 105
8. We note your revenue from freight matching services as well as your
revenue from value-
added services both decreased as a result of lower toll fees. Please
clarify why both of
these revenue components are impacted by toll fees.
General and administrative expenses, page 107
9. We note your general and administrative expenses increased by 68.8%
for the nine
months ended September 30, 2020 compared to the nine months ended
September 30,
Peter Hui Zhang
FirstName
Full Truck LastNamePeter Hui Zhang
Alliance Co. Ltd.
Comapany
March NameFull Truck Alliance Co. Ltd.
10, 2021
March3 10, 2021 Page 3
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FirstName LastName
2019. Although you provide the factors for this change, it does not
appear that you
quantify these factors. Please quantify the material factors that
resulted in this change.
Similar concerns apply to your sales and marketing expenses and
research and
development expenses. Refer to Section III.B of SEC Release No.
33-8350.
Liquidity and Capital Resources, page 110
10. We note your disclosure on page 60 which discusses the PRC government
control of
currency exchange. Revise to disclose, by respective denominations,
the amount of cash
located in the PRC and subject to restrictions, and cash located
outside of the PRC. For
entities within China, disclose the amount of cash, by denomination,
held by VIEs
separately from the amount of cash held by other entities.
Management
Compensation of Directors and Executive Officers, page 171
11. Please update your disclosure to provide compensation information for
your last full
financial year. Refer to Item 4 of Form F-1 and Item 6.B of Form 20-F.
Principal Shareholders, page 174
12. Please disclose the natural person or persons who exercise the voting
and/or dispositive
powers with respect to the securities owned by SVF entities and Master
Quality Group
Limited.
Description of Share Capital
Registration Rights, page 191
13. Please identify the shareholders who are parties to the shareholders
agreement.
Consolidated Statement of Operations and Comprehensive Loss , page F-6
14. Please revise your statement of operations to show Impairment loss as
an Operating
expense. Refer to Rule 5-03 of Regulation S-X. In addition, provide
footnote disclosure
that provides a description of the impaired long-lived asset and the
facts and
circumstances leading to the impairment, as well as the method or
methods for
determining fair value. Refer to ASC 360-10-50-2.
Notes to the Consolidated Financial Statements
Note 2. Principal Accounting Policies
2.10 Loans receivable, net, page F-18
15. Your disclosures suggest that the loan receivables are being held as
an investment instead
of as for sale. Please confirm. If so, explain why the loan receivable
activity is being
presented as an operating activity instead of an investment activity
in your Consolidated
Statement of Cash Flows. We refer you to ASC 230-10-45-12.
Peter Hui Zhang
FirstName
Full Truck LastNamePeter Hui Zhang
Alliance Co. Ltd.
Comapany
March NameFull Truck Alliance Co. Ltd.
10, 2021
March4 10, 2021 Page 4
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FirstName LastName
2.18 Revenue recognition , page F-24
16. We note you recognize revenue related to your freight brokerage
services on a net basis at
the point of fulfillment of the shipping order. Tell us how you
concluded to recognize this
revenue at the point of fulfillment rather than over the period of
fulfilment. Refer to ASC
606-10-55-6 and Basis for Conclusions of ASU 2014-09 BC 126.
Disaggregation of revenues, page F-24
17. Please expand to disclose disaggregated revenue amounts for revenue
earned at a point in
time and revenue earned over time. Refer to ASC 606-10-55-91(f). In
addition, please
revise your disclosure to identify the revenue stream that utilizes
the invoice expedient
and the stream that has variable consideration that you reference in
this footnote. Indicate
whether a customer will utilize more than one revenue stream. If so,
please disclose how
you determine the transaction price and how you allocate revenue to
each performance
obligation in these circumstances.
2.19 Cost of revenues, page F-25
18. We note that the Value Added Taxes ( VAT ) represents a
significant portion of your cost
of revenues. Please expand your disclosure to discuss the nature of
the VAT and how it is
calculated. In this regard, we note it represents approximately 84% of
your cost of
revenues for the nine months ended September 30, 2020. In addition,
please clarify and
disclose why you believe the VAT should be included in revenue on a
gross basis and that
you are the principal.
2.28 Segment reporting, page F-27
19. It appears that you have concluded that you have one operating
segment. Please provide
us with your analysis of your conclusion, including your consideration
if you have more
than one operating segment. In this regard, we note the following
items;
As noted on page 130, Yunmanman and Huochebang were founded in
2013 and
2011, respectively, and these two companies were merged to create
FTA in 2017.
Your corporate structure diagram on page 8 appears to show two
distinct entities that
flow into FTA.
On page 9, you identify your two main websites are www.ymm56.com
and
www.huochebang.cn.
As noted on the cover of your filing, you appear to have two
separate principal
executive offices.
In light of the above items, it appears that you have two operating
segments. Please
advise. Refer to ASC 280-10-50.
Note 6. Loans Receivable, Net, page F-30
20. Please expand your disclosure to clarify the nature of your loans and
who is the counter
party. In addition, please consider the disclosures outlined in ASC
310-10-50. For
Peter Hui Zhang
Full Truck Alliance Co. Ltd.
March 10, 2021
Page 5
example, please disclose the credit quality information, nonaccrual
status and trouble debt
restructuring policy.
Notes to the Unaudited Condensed Consolidated Financial Statements, page F-61
21. We note your disclosures on pages 106 and 107 for each of your
operating expense line
items for the nine months ended September 30, 2020, that salary
expenses decreased as a
result of headcount optimization. Please provide footnote disclosure
to disclose the
applicable costs related to this reduction. Refer to ASC 420-10-50. In
addition, consider
presenting restructuring charges on a separate line item if material.
Refer to SAB Topic
5P(1).
2.5 Short-term investments, page F-64
22. We note your short-term investments include time deposits with
original maturities of
longer than three months but less than one year and trading securities
measured at fair
value at each period end. Please break-out your short-term investments
balance between
these two types of investments in your footnote. Refer to ASC
320-10-50.
Note 3. Fair Value Measurement, page F-68
23. For your assets and liabilities measured at fair value on a recurring
and nonrecurring basis,
please revise to provide the disclosures required by ASC 820-10-50.
Note 7. Share-Based Compensation, page F-70
24. Please provide a summary of options granted for one year preceding the
filing of this draft
registration statement. Please provide the date and amount of each
option grant along with
estimated fair value of the underlying shares of common stock.
Reconcile and explain the
differences between the fair values determined on each grant date
including the difference
between the most recent grant date fair value and the midpoint of your
offering range.
This reconciliation should describe significant intervening events
within the company and
changes in assumptions with the valuation methodologies employed that
explain the
changes in fair value of your common stock up to the filing of the
registration statement.
Continue to provide us with updates to the above analysis for all
equity related
transactions through the effectiveness date of the registration
statement.
General
25. Please supplementally provide us with copies of all written
communications, as defined
FirstName LastNamePeter Hui Zhang
in Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your
Comapany NameFull
behalf, present Truck Alliance
to potential Co. Ltd.
investors in reliance on Section 5(d) of
the Securities Act,
whether or not
March 10, 2021 Page 5 they retain copies of the communications.
FirstName LastName
Peter Hui Zhang
FirstName
Full Truck LastNamePeter Hui Zhang
Alliance Co. Ltd.
Comapany
March NameFull Truck Alliance Co. Ltd.
10, 2021
March6 10, 2021 Page 6
Page
FirstName LastName
You may contact Ryan Rohn, Staff Accountant, at (202) 551-3739 or
Stephen Krikorian,
Accounting Branch Chief, at (202) 551-3488 if you have questions regarding
comments on the
financial statements and related matters. Please contact Matthew Crispino,
Staff Attorney, at
(202) 551-3456 or Jan Woo, Legal Branch Chief, at (202) 551-3453 with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: Yi Gao, Esq.