United States securities and exchange commission logo
September 19, 2022
Karl Kan Zhang
Chairman of the Board and Chief Technology Officer
CooTek(Cayman)Inc.
9-11F, T2, No.16 Lane 399 Xinlong Road, Minhang District
Shanghai, 201101
People's Republic of China
Re: CooTek(Cayman)Inc.
Form 20-F for the
Fiscal Year Ended December 31, 2021
Filed April 29,
2022
File No. 001-38665
Dear Mr. Zhang:
We have reviewed your September 2, 2022 response to our comment
letter 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. Unless we note otherwise, our references to prior comments are
to comments in our
July 21, 2022 letter.
Form 20-F for the Fiscal Year Ended December 31, 2021
Introduction, page 1
1. We note your response
to our prior comment 1. Please revise the definition of "China"
and "PRC" to include
Hong Kong and Macau and clarify that the only time that "China"
and "PRC" does not
include Hong Kong or Macau is when you reference specific laws
and regulations adopted
by the PRC. Additionally, clarify that the legal and operational
risks associated with
operating in China also apply to operations in Hong Kong and
Macau. Lastly, discuss
any commensurate laws and regulations in Hong Kong and Macau,
where applicable
throughout the prospectus, and the risks and consequences to you
including the
enforceability associated with those laws and regulations.
Karl Kan Zhang
CooTek(Cayman)Inc.
September 19, 2022
Page 2
Financial Information Related to the VIEs, page 8
2. Please explain further your response to the first bullet point in
prior comment 7 where you
indicate that the VIEs received funding in the form of loans instead
of charging service
fees from the WFOE. Tell us what the inter-company revenue in the VIE
column
represents and clarify why the VIEs earned revenue from the WFOE or
the Other
Company Subsidiaries. Also, provide us with the revised disclosures
that you intend to
include in future filings regarding your response to this comment.
3. We note your response to the third bullet point in comment 7 where you
provide the
amount of service fees charged by the WFOE, which agrees to the "other
inter-company
service fees" expense included in the VIE column of your consolidating
statements of
operations. Please tell us how such fees are reflected in the WFOE
column. To the extent
such fees are included in "inter-company revenues" in the WFOE column,
revise to
separately disclose, either in the worksheet or a footnote,
inter-company revenues earned
by the WFOE from the VIE pursuant to the Exclusive Business
Cooperation Agreement.
4. We note the proposed revisions to your condensed consolidating cash
flow worksheet
where you intend to reflect the amounts received by the VIE from the
WFOE. Please tell
us how such amounts relate to the consolidating balance sheets. For
example, we note
that the liability for "amounts due to subsidiaries and VIEs" in the
VIE column decreased
from $175.3 million at December 31, 2020 to $137.2 million at December
31, 2021 while
loans from the WFOE to the VIE per the consolidating cash flow
worksheet during fiscal
2021 totaled $80.7 million. Please explain or revise as necessary.
Also, revise the
description of such liability to reflect the fact that this line
includes amounts due from the
VIE to other entities that are not subsidiaries of the VIE. Lastly,
when you include the
revised worksheets in your next response, please ensure that you label
them as
"consolidating" worksheets as indicated in your response to the last
bullet point of our
prior comment.
5. We note your response to the fourth and fifth bullet points of comment
7. As it relates to
the $137.2 million and $175.3 million due to subsidiaries included in
the VIE column of
the consolidating balance sheet at December 31, 2021 and 2020,
respectively, please
provide us with a breakdown of the offsetting receivable amounts
included in the WFOE,
Other Company Subsidiaries or CooTek columns. To the extent you offset
the inter-
FirstName LastNameKarl Kan Zhang
company receivables with the "equity method" losses of the VIE as your
response appears
Comapany NameCooTek(Cayman)Inc.
to indicate, tell us how you determined such offset is appropriate,
particularly since you
do have
September an equity
19, 2022 Pageinterest
2 in the VIE.
FirstName LastName
Karl Kan Zhang
FirstName LastNameKarl Kan Zhang
CooTek(Cayman)Inc.
Comapany 19,
September NameCooTek(Cayman)Inc.
2022
September
Page 3 19, 2022 Page 3
FirstName LastName
You may contact Megan Akst, Senior Staff Accountant at 202-551-3407 or
Kathleen
Collins, Accounting Branch Chief at 202-551-3499 with any questions.
Sincerely,
Division of Corporation
Finance
Office of Technology
cc: Haiping Li