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| Name | Symbol | Market | Type |
|---|---|---|---|
| Qutoutiao Inc | NASDAQ:QTT | NASDAQ | Depository Receipt |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.182 | 0.18 | 0.181 | 0 | 00:00:00 |
| ☐ |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
| ☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
| ☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
| ☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
|
American Depositary Shares, every four representing one Class A ordinary shares
|
QTT
|
NASDAQ Global Select Market
|
||
|
Class A Ordinary Shares, par value US$0.0001 per share*
|
N/A
|
NASDAQ Global Select Market
|
| * |
Not for trading, but only in connection with the listing on the NASDAQ Global Select Market of American depositary shares.
|
| Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
|
Non-accelerated
filer
|
☐ | Emerging growth company | ☒ | |||
| † |
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
|
| U.S. GAAP ☒ |
International Financial Reporting Standards as issued
by the International Accounting Standards Board ☐
|
Other ☐ |
|
Page
|
||||||
| 3 | ||||||
|
ITEM 1.
|
3 | |||||
|
ITEM 2.
|
3 | |||||
|
ITEM 3.
|
3 | |||||
|
ITEM 4.
|
47 | |||||
|
ITEM 4A.
|
70 | |||||
|
ITEM 5.
|
70 | |||||
|
ITEM 6.
|
94 | |||||
|
ITEM 7.
|
104 | |||||
|
ITEM 8.
|
105 | |||||
|
ITEM 9.
|
106 | |||||
|
ITEM 10.
|
10
7
|
|||||
|
ITEM 11.
|
112 | |||||
|
ITEM 12.
|
113 | |||||
| 116 | ||||||
|
ITEM 13.
|
116 | |||||
|
ITEM 14.
|
116 | |||||
|
ITEM 15.
|
116 | |||||
|
ITEM 16A.
|
117 | |||||
|
ITEM 16B.
|
118 | |||||
|
ITEM 16C.
|
118 | |||||
|
ITEM 16D.
|
118 | |||||
|
ITEM 16E.
|
119 | |||||
|
ITEM 16F.
|
119 | |||||
|
ITEM 16G.
|
119 | |||||
|
ITEM 16H.
|
119 | |||||
| 120 | ||||||
|
ITEM 17.
|
120 | |||||
|
ITEM 18.
|
120 | |||||
|
ITEM 19.
|
120 | |||||
| • |
“installed users” are to the aggregate number of unique mobile devices that have downloaded and launched our relevant mobile application at least once;
|
| • |
“ADSs” are to American depositary shares, with every four ADSs representing one Class A ordinary share, and “ADRs” are to American depositary receipts that evidence ADSs;
|
| • |
“CAGR” are to compound annual growth rate;
|
| • |
“China” and the “PRC” are to the People’s Republic of China, excluding, for the purposes of this annual report only, Taiwan, the Hong Kong Special Administrative Region and the Macao Special Administrative Region;
|
| • |
“DAUs” are to the number of unique mobile devices that accessed our relevant mobile application on a given day. “Combined average DAUs” for a particular period is the average of the DAUs for all of our mobile applications on each day during that period;
|
| • |
“MAUs” are to the number of unique mobile devices that accessed our relevant mobile application in a given month. “Combined average MAUs” for a particular period is the average of the MAUs for all of our mobile applications in each month during that period;
|
| • |
“oCPC” are to optimized
cost-per-click
|
| • |
“oCPM” are to optimized
cost-per-thousand-impressions
|
| • |
“R&D” are to research and development;
|
| • |
“registered users” are to users that have registered accounts on our relevant mobile application;
|
| • |
“RMB” or “Renminbi” are to the legal currency of China;
|
| • |
“lower-tier cities” are to cities in China that are not
tier-1
and
tier-2
cities;
|
| • |
“tier-1
and
tier-2
cities” refer to
(i) tier-1
cities in China, which are Beijing, Shanghai, Guangzhou and Shenzhen and
(ii) tier-2
cities in China, which are Hangzhou, Nanjing, Jinan, Chongqing, Qingdao, Dalian, Ningbo, Xiamen, Tianjin, Chengdu, Wuhan, Harbin, Shenyang, Xi’an, Changchun, Changsha, Fuzhou, Zhengzhou, Shijiazhuang, Suzhou, Foshan, Dongguan, Wuxi, Yantai, Taiyuan, Hefei, Kunming, Nanchang, Nanning, Tangshan, Wenzhou and Zibo;
|
| • |
“US$,” “U.S. dollars,” or “dollars” are to the legal currency of the United States; and
|
| • |
“we,” “us,” “our company” and “our” are to Qutoutiao Inc., its consolidated VIEs and their respective subsidiaries, as the context requires.
|
| • |
our goal and strategies;
|
| • |
our ability to maintain and strengthen our position as a leader amongst mobile content platform companies in China’s mobile content industry;
|
| • |
our expansion plans;
|
| • |
our ability to monetize through advertising and other products and services that we plan to introduce;
|
| • |
our future business development, financial condition and results of operations, including our expectations regarding the impact of the
COVID-19
pandemic on our business, financial condition and results of operations;
|
| • |
PRC laws, regulations, and policies relating to the Internet and Internet content providers; and
|
| • |
general economic and business conditions.
|
| ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|
| ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE
|
| ITEM 3. |
KEY INFORMATION
|
|
A.
|
Selected Financial Data
|
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2016
|
2017
|
2018
|
2019
|
2020
|
||||||||||||||||||||
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||||||||
|
(in thousands, except for percentages, share and per share data)
|
||||||||||||||||||||||||
|
Condensed Consolidated Statement of Operations Data:
|
||||||||||||||||||||||||
|
Revenues
(1)
:
|
||||||||||||||||||||||||
|
Advertising and marketing revenues
|
57,880 | 512,883 | 2,814,258 | 5,415,321 | 5,046,835 | 773,461 | ||||||||||||||||||
|
Other revenue
|
74 | 4,170 | 207,888 | 154,760 | 238,360 | 36,530 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net revenues
|
|
57,954
|
|
|
517,053
|
|
|
3,022,146
|
|
|
5,570,081
|
|
|
5,285,195
|
|
|
809,992
|
|
||||||
|
Cost of revenues
(2)
|
(7,178 | ) | (76,481 | ) | (503,613 | ) | (1,640,632 | ) | (1,674,416 | ) | (256,616 | ) | ||||||||||||
|
Gross profit
|
|
50,776
|
|
|
440,572
|
|
|
2,518,533
|
|
|
3,929,449
|
|
|
3,610,779
|
|
|
553,376
|
|
||||||
|
Operating expenses
(2)
:
|
||||||||||||||||||||||||
|
Research and development expenses
|
(2,627 | ) | (15,317 | ) | (270,108 | ) | (926,232 | ) | (947,871 | ) | (145,268 | ) | ||||||||||||
|
Sales and marketing expenses
|
(54,633 | ) | (494,724 | ) | (3,250,038 | ) | (5,489,708 | ) | (3,381,561 | ) | (518,247 | ) | ||||||||||||
|
General and administrative expenses
|
(4,427 | ) | (25,947 | ) | (980,725 | ) | (267,033 | ) | (392,815 | ) | (60,202 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Total operating expenses
|
|
(61,687
|
)
|
|
(535,988
|
)
|
|
(4,500,871
|
)
|
|
(6,682,973
|
)
|
|
(4,722,247
|
)
|
|
(723,716
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Other operating income
|
— | — | 725 | 30,292 | 79,298 | 12,153 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Loss from operations
(3)
|
|
(10,911
|
)
|
|
(95,416
|
)
|
|
(1,981,613
|
)
|
|
(2,723,232
|
)
|
|
(1,032,169
|
)
|
|
(158,187
|
)
|
||||||
|
Interest income
|
51 | 674 | 27,087 | 48,440 | 10,419 | 1,597 | ||||||||||||||||||
|
Interest expense
|
— | — | — | (26,878 | ) | (38,143 | ) | (5,846 | ) | |||||||||||||||
|
Foreign exchange related gains/(losses), net
|
— | — | 4,134 | 1,869 | (7,183 | ) | (1,101 | ) | ||||||||||||||||
|
Investment income/(loss)
|
— | — | 4,215 | 6,327 | (31,788 | ) | (4,872 | ) | ||||||||||||||||
|
Other income/(expenses), net
|
(2 | ) | (17 | ) | (69 | ) | 9,049 | (7,309 | ) | (1,120 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Loss before income taxes
|
|
(10,862
|
)
|
|
(94,760
|
)
|
|
(1,946,247
|
)
|
|
(2,684,425
|
)
|
|
(1,106,174
|
)
|
|
(169,529
|
)
|
||||||
|
Income tax benefit/(expense)
|
— | — | 401 | (4,843 | ) | 1,007 | 154 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net loss
|
|
(10,862
|
)
|
|
(94,760
|
)
|
|
(1,945,846
|
)
|
|
(2,689,268
|
)
|
|
(1,105,166
|
)
|
|
(169,374
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net loss attributable to
non-controlling
interests
|
— | — | 3,275 | 587 | 728 | 112 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net loss attributable to Qutoutiao Inc.
|
|
(10,862
|
)
|
|
(94,760
|
)
|
|
(1,942,572
|
)
|
|
(2,688,681
|
)
|
|
(1,104,439
|
)
|
|
(169,263
|
)
|
||||||
|
Accretion to convertible redeemable preferred shares redemption value
|
— | (6,012 | ) | (101,807 | ) | — | — | — | ||||||||||||||||
|
Accretion to redemption value of convertible redeemable preferred shares of a subsidiary
|
— | — | (978 | ) | (20,548 | ) | (48,277 | ) | (7,399 | ) | ||||||||||||||
|
Gains on repurchase of convertible redeemable preferred shares
|
— | — | 18,332 | — | — | — | ||||||||||||||||||
|
Gains on repurchase of convertible redeemable preferred shares of a subsidiary
|
— | — | — | — | 14,842 | 2,275 | ||||||||||||||||||
|
Deemed dividend to preferred shareholders
|
— | — | (1,917 | ) | — | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net loss attributable to Qutoutiao Inc.’s ordinary shareholders
|
|
(10,862
|
)
|
|
(100,772
|
)
|
|
(2,028,941
|
)
|
|
(2,709,229
|
)
|
|
(1,137,874
|
)
|
|
(174,387
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net loss
|
(10,862 | ) | (94,760 | ) | (1,945,846 | ) | (2,689,268 | ) | (1,105,166 | ) | (169,374 | ) | ||||||||||||
|
Other comprehensive income/(loss)
|
||||||||||||||||||||||||
|
Foreign currency translation adjustment, net of nil tax
|
— | 25 | (16,454 | ) | (1,505 | ) | 102,254 | 15,671 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Total comprehensive loss
|
|
(10,862
|
)
|
|
(94,735
|
)
|
|
(1,962,300
|
)
|
|
(2,690,773
|
)
|
|
(1,002,912
|
)
|
|
(153,703
|
)
|
||||||
|
Comprehensive loss attributable to
non-controlling
interests
|
— | — | 3,275 | 587 | 728 | 112 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Comprehensive loss attributable to Qutoutiao Inc.
|
|
(10,862
|
)
|
|
(94,735
|
)
|
|
(1,959,025
|
)
|
|
(2,690,186
|
)
|
|
(1,002,185
|
)
|
|
(153,592
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net loss per share attributable to Qutoutiao Inc.’s ordinary shareholders
|
||||||||||||||||||||||||
|
— Basic and diluted
|
(0.45 | ) | (3.95 | ) | (52.69 | ) | (39.41 | ) | (15.69 | ) | (2.40 | ) | ||||||||||||
|
Weighted average number of ordinary shares used in per share calculation:
(4)
|
||||||||||||||||||||||||
|
— Basic and diluted
|
24,062,500 | 25,542,031 | 38,507,184 | 68,749,981 | 72,513,077 | 72,513,077 | ||||||||||||||||||
| (1) |
Revenues from transactions with related parties are set forth below for the periods indicated:
|
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2016
|
2017
|
2018
|
2019
|
2020
|
||||||||||||||||||||
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
|
Advertising and marketing revenues
|
— | — | 17,447 | 473,216 | 250,875 | 38,448 | ||||||||||||||||||
|
Other revenue
|
— | — | 29,597 | — | — | — | ||||||||||||||||||
| (2) |
Cost of revenues and operating expenses from transactions with related parties are set forth below for the periods indicated:
|
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2016
|
2017
|
2018
|
2019
|
2020
|
||||||||||||||||||||
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
|
Cost of revenues
|
120 | 484 | 6,020 | 42,412 | 31,051 | 4,759 | ||||||||||||||||||
|
Research and development expenses
|
166 | 220 | — | — | — | — | ||||||||||||||||||
|
Sales and marketing expenses
|
74 | 950 | 23,671 | 3,284 | 4,192 | 642 | ||||||||||||||||||
|
General and administrative expenses
|
2,664 | 15,134 | — | — | — | — | ||||||||||||||||||
| (3) |
We recognized share-based compensation expenses of RMB951.6 million, RMB272.0 million and RMB463.2 million (US$71.0 million) in 2018, 2019 and 2020, respectively. Share-based compensation expenses in 2018 included RMB864.7 million that related to certain ordinary shares beneficially owned by certain of our
co-founders
that became restricted pursuant to share restriction deeds entered into by them in January 2018 and fully vested upon completion of our initial public offering in September 2018.
|
| (4) |
The number of ordinary shares used in the per share calculation does not include the ordinary shares held by our equity incentive trusts, which, although legally issued and outstanding, are accounted for as treasury shares and as a result, are not deemed as outstanding from an accounting perspective. See “Item 6. Directors, Senior Management and Employees—B. Compensation—Equity Incentive Trusts.”
|
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2016
|
2017
|
2018
|
2019
|
2020
|
||||||||||||||||||||
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
|
Summary Consolidated Balance Sheets:
|
||||||||||||||||||||||||
|
Cash and cash equivalents
|
269 | 278,458 | 2,186,288 | 347,817 | 494,475 | 75,782 | ||||||||||||||||||
|
Restricted cash
|
— | — | — | 27,872 | 100,316 | 15,374 | ||||||||||||||||||
|
Short-term investments
|
12,370 | 129,770 | 115,436 | 1,276,831 | 391,033 | 59,928 | ||||||||||||||||||
|
Total current assets
|
29,758 | 466,208 | 2,626,074 | 2,692,227 | 2,472,316 | 378,899 | ||||||||||||||||||
|
Total assets
|
29,896 | 476,581 | 2,752,472 | 2,940,197 | 2,915,858 | 446,875 | ||||||||||||||||||
|
Registered users’ loyalty payable
|
1,023 | 20,977 | 256,662 | 134,145 | 72,627 | 11,131 | ||||||||||||||||||
|
Accrued liabilities related to users’ loyalty programs
|
24,509 | 187,003 | 44,134 | 89,185 | 100,088 | 15,339 | ||||||||||||||||||
|
Total liabilities
|
41,087 | 311,246 | 1,144,302 | 3,149,696 | 3,107,695 | 476,275 | ||||||||||||||||||
|
Total mezzanine equity
|
— | 273,895 | 96,937 | 495,845 | 1,093,526 | 167,590 | ||||||||||||||||||
|
Total Qutoutiao Inc. shareholders’ equity (deficit)
|
(11,191 | ) | (108,560 | ) | 1,514,507 | (701,482 | ) | (1,280,775 | ) | (196,287 | ) | |||||||||||||
|
Non-controlling
interests
|
— | — | (3,274 | ) | (3,862 | ) | (4,589 | ) | (703 | ) | ||||||||||||||
|
Total shareholders’ equity (deficit)
|
(11,191 | ) | (108,560 | ) | 1,511,233 | (705,344 | ) | (1,285,364 | ) | (196,991 | ) | |||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2016
|
2017
|
2018
|
2019
|
2020
|
||||||||||||||||||||
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
|
Net loss attributable to Qutoutiao Inc.
|
|
(10,862
|
)
|
|
(94,760
|
)
|
|
(1,942,572
|
)
|
|
(2,688,681
|
)
|
|
(1,104,439
|
)
|
|
(169,263
|
)
|
||||||
|
Add: share-based compensation expenses:
|
||||||||||||||||||||||||
|
Cost of revenues
|
1 | 942 | 5,711 | 6,190 | 12,905 | 1,978 | ||||||||||||||||||
|
Research and development
|
149 | 1,317 | 29,623 | 138,792 | 204,333 | 31,316 | ||||||||||||||||||
|
Sales and marketing
|
35 | 939 | 9,538 | 45,042 | 86,656 | 13,281 | ||||||||||||||||||
|
General and administrative
|
209 | 181 | 906,754 | 81,955 | 159,320 | 24,417 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Non-GAAP
net loss attributable to Qutoutiao Inc.
|
|
(10,468
|
)
|
|
(91,381
|
)
|
|
(990,945
|
)
|
|
(2,416,702
|
)
|
|
(641,225
|
)
|
|
(98,271
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
B.
|
Capitalization and Indebtedness
|
|
C.
|
Reasons for the Offer and Use of Proceeds
|
|
D.
|
Risk Factors
|
| • |
We have a limited operating history, which makes it difficult to evaluate our business.
|
| • |
If we fail to acquire new users or retain existing users, or if user engagement on our platform declines, our business, results of operations and financial condition may be materially and adversely affected.
|
| • |
We have incurred net losses and negative cash flows from operating activities in the past, and we may not achieve or sustain profitability. In addition, the maturity of the Convertible Loan on April 4, 2022 will have a significant impact on our liquidity.
|
| • |
Our inability to fully comply with Audio-visual Program Provisions may expose us to administrative sanctions, which would materially and adversely affect our business, results of operations and financial condition.
|
| • |
If we do not continue to increase the strength of our brand, we may not be able to maintain current or attract new users and customers for our products and services.
|
| • |
Any catastrophe, including natural catastrophes and outbreaks of health pandemics and other extraordinary events, could disrupt our business operation. For example, the
COVID-19
pandemic may have a material adverse effect on our business, results of operations and financial condition, as well as the trading price of the ADSs.
|
| • |
If we are unable to compete effectively in the industry we operate, our business, results of operations and financial condition may be materially and adversely affected.
|
| • |
We generate a substantial majority of our revenues from advertising and marketing. A decline in our advertising and marketing revenues could harm our business.
|
| • |
Privacy concerns relating to our products and services and the use of user information could damage our reputation, deter current and potential users and customers from using our mobile applications and negatively impact our business.
|
| • |
Our operations depend on the performance of the Internet infrastructure and fixed telecommunications networks in China.
|
| • |
We rely on contractual arrangements with our consolidated VIEs and their respective shareholders to operate our business, which may not be as effective as direct ownership in providing operational control and otherwise materially and adversely affect our business.
|
| • |
The shareholders of our consolidated VIEs may have potential conflicts of interest with us, which may materially and adversely affect our business, results of operations and financial condition.
|
| • |
If the PRC government deems that the contractual arrangements in relation to our consolidated VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
|
| • |
Substantial uncertainties exist with respect to whether the controlling of PRC onshore variable interest entities by foreign investors via contractual arrangements will be recognized as “foreign investment” and how it may impact the viability of our current corporate structure and operations.
|
| • |
Changes in the political and economic policies of the PRC government may materially and adversely affect our business, results of operations and financial condition and may result in our inability to sustain our growth and expansion strategies.
|
| • |
There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations.
|
| • |
PRC regulations relating to investments in offshore companies by PRC residents may subject our
PRC-resident
beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries or limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits.
|
| • |
We rely to a significant extent on dividends and other distributions on equity paid by our principal operating subsidiaries to fund offshore cash and financing requirements. Any limitation on the ability of our PRC operating subsidiaries to make payments to us could materially and adversely affect our ability to conduct our business.
|
| • |
Our ADSs may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect auditors who are located in China. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment. Additionally, the inability of the PCAOB to conduct inspections deprives our investors with the benefits of such inspections.
|
| • |
The trading price of the ADSs may be volatile, which could result in substantial losses to you.
|
| • |
Because we do not expect to pay cash dividends in the foreseeable future, you may not receive any return on your investment unless you sell your Class A ordinary shares or ADSs for a price greater than that which you paid for them.
|
| • |
Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings.
|
| • |
The dual-class structure of our ordinary shares may adversely affect the trading market for the ADSs.
|
| • |
You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.
|
| • |
We are an emerging growth company and may take advantage of certain reduced reporting requirements.
|
| • |
retain existing users on, and attract new users to, our platform;
|
| • |
present real-time customized feeds to users based on their profiles, behaviors and social relationships;
|
| • |
maintain the effectiveness of our user loyalty programs;
|
| • |
maintain stable relationships with our content providers;
|
| • |
develop and implement successful monetization measures;
|
| • |
convince advertising customers of the benefits of our advertising and marketing services compared to alternative forms of marketing;
|
| • |
increase brand awareness through marketing and promotional activities;
|
| • |
upgrade existing technology and infrastructure and develop new technologies to support increasing user traffic, improve user experience, expand functionality and ensure system stability;
|
| • |
successfully compete with other companies that are currently in, or may in the future enter, our industry;
|
| • |
attract, retain and motivate talented employees;
|
| • |
adapt to the evolving regulatory environment; and
|
| • |
defend ourselves against litigation, regulatory, intellectual property, privacy or other claims.
|
| • |
our ability to grow our user base and user engagement;
|
| • |
fluctuations in spending by our advertising customers, including as a result of seasonality or other factors;
|
| • |
our ability to attract and retain advertising customers;
|
| • |
the occurrence of planned or unplanned significant events, including events that may cause substantial share-based compensation or other charges;
|
| • |
the development and introduction of new content formats, products or services or changes in features of existing content formats, products or services;
|
| • |
the impact of competitors or competitive products and services;
|
| • |
increases in our costs and expenses that we may incur to grow and expand our operations and to remain competitive;
|
| • |
changes in the legal or regulatory environment or proceedings, including with respect to security, privacy or enforcement by government regulators, including fines, orders or consent decrees; and
|
| • |
changes in Chinese or global business or macroeconomic conditions.
|
| • |
We operate our mobile applications in China through businesses controlled via contractual arrangements versus direct ownership due to restrictions on foreign investment in businesses providing value-added telecommunication services, including substantially all of our paid services and advertising services.
|
| • |
Uncertainties relating to the regulation of the Internet business in China, including evolving licensing practices, give rise to the risk that some of our permits, licenses or operations may be subject to challenge, which may be disruptive to our business, subject us to sanctions or require us to increase capital, compromise the enforceability of relevant contractual arrangements, or have other adverse effects on us. The numerous and often vague restrictions on acceptable content in China subject us to potential civil and criminal liability, temporary blockage of our mobile applications or complete shut-down of our mobile applications. For example, the State Secrecy Bureau, which is directly responsible for the protection of state secrets of all Chinese government and Chinese Communist Party organizations, is authorized to block any website or mobile applications it deems to be leaking state secrets or failing to meet the relevant regulations relating to the protection of state secrets in the distribution of online information. In addition, the Law on Preservation of State Secrets which became effective on October 1, 2010 provides that whenever an Internet service provider detects any leakage of state secrets in the distribution of online information, it should stop the distribution of such information and report to the authorities of state security and public security. As per request of the authorities of state security, public security or state secrecy, the Internet service provider should delete any content on its website that may lead to disclosure of state secrets. Failure to do so on a timely and adequate basis may subject the service provider to liability and certain penalties imposed by the State Security Bureau, Ministry of Public Security and/or MIIT or their respective local counterparts.
|
| • |
On September 28, 2009, the General Administration of Press and Publication (the predecessor of GAPPRFT), or the GAPP, and the National Office of Combating Pornography and Illegal Publications jointly published a circular expressly prohibiting foreign investors from participating in Internet game operating business via wholly owned, equity joint venture or cooperative joint venture investments in China, and from controlling and participating in such businesses directly or indirectly through contractual or technical support arrangements. On February 4, 2016, the GAPPRFT and the MIIT jointly issued the
Rules for the Administration for Internet Publishing Services
|
| • |
revoking our business and operating licenses;
|
| • |
levying fines on us;
|
| • |
confiscating any of our income that they deem to be obtained through illegal operations;
|
| • |
shutting down our services;
|
| • |
discontinuing or restricting our operations in China;
|
| • |
imposing conditions or requirements with which we may not be able to comply;
|
| • |
requiring us to change our corporate structure and contractual arrangements;
|
| • |
restricting or prohibiting our use of the proceeds from overseas offering to finance our consolidated VIE’s business and operations; and
|
| • |
taking other regulatory or enforcement actions that could be harmful to our business.
|
| • |
regulatory developments affecting us or our industry;
|
| • |
announcements of studies and reports relating to the quality of our credit offerings or those of our competitors;
|
| • |
changes in the economic performance or market valuations of other mobile content platform companies;
|
| • |
actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results;
|
| • |
changes in financial estimates by securities research analysts;
|
| • |
conditions in the markets for mobile content and targeted advertising and marketing services;
|
| • |
announcements by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments;
|
| • |
additions to or departures of our senior management;
|
| • |
fluctuations of exchange rates between the Renminbi and the U.S. dollar;
|
| • |
release or expiry of
lock-up
or other transfer restrictions on our outstanding shares or the ADSs; and
|
| • |
sales or perceived potential sales of additional ordinary shares or ADSs.
|
| • |
at least 75% of our gross income is passive income, or
|
| • |
at least 50% of the value (determined based on a quarterly average) of our assets is attributable to assets that produce or are held for the production of passive income, which include cash, such as cash raised in our initial public offering and
follow-on
public offering.
|
| ITEM 4. |
INFORMATION ON THE COMPANY
|
|
A.
|
History and Development of the Company
|
| • |
Shanghai Jifen, our consolidated VIE, primarily engages in the operation of our
Qutoutiao
|
| • |
Big Rhinoceros Horn, our consolidated VIE, primarily engages in the operation of our
Midu Novels
Midu Lite
|
| • |
Anhui Zhangduan, our consolidated VIE, primarily engages in content management;
|
| • |
Beijing Qukandian Internet Technology Co., Ltd., or Beijing Qukandian, a subsidiary of Shanghai Jifen, primarily engages in content procurement;
|
| • |
Shanghai Dianguan Internet Technology Co., Ltd., or Shanghai Dianguan, our subsidiary in China acquired in February 2018, primarily provides advertising and marketing services;
|
| • |
Shanghai Quyun Internet Technology Co., Ltd, or Shanghai Quyun, our subsidiary, primarily engages in technology R&D;
|
| • |
Shanghai Chenxing Software Technology Co., Ltd., or Shanghai Chenxing, a subsidiary of Shanghai Quyun, primarily engages in technology R&D;
|
| • |
Shanghai Zhicao Information Technology Co., Ltd, or Shanghai Zhicao, our subsidiary, primarily engages in technology R&D;
|
| • |
Shanghai Heitu Internet Technology Co., Ltd, or Shanghai Heitu, a subsidiary of Shanghai Jifen, primarily engages in the operation of online games;
|
| • |
Shanghai Zheyun Internet Technology Co., Ltd, or Shanghai Zheyun, a subsidiary of Shanghai Jifen, primarily engages in the operation of certain innovative tool applications;
|
| • |
Hubei Rapid Information Technology Co., Ltd. or Hubei Rapid, our consolidated VIE, primarily engages in the operation of online video business; and
|
| • |
Beijing Supreme Pole International Sports Development Co., Ltd, a subsidiary of our consolidated VIE, Beijing Churun Technology Co. Ltd., primarily engages in the operation of live-streaming business.
|
|
B.
|
Business Overview
|
|
For the Three Months Ended
|
||||||||||||||||||||||||||||||||
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
|||||||||||||||||||||||||
|
2019
|
2020
|
|||||||||||||||||||||||||||||||
|
(in millions, except for daily time spent data)
|
||||||||||||||||||||||||||||||||
|
Combined Average MAUs during the period
|
111.4 | 119.3 | 133.9 | 137.9 | 138.3 | 136.5 | 120.5 | 124.7 | ||||||||||||||||||||||||
|
Combined Average DAUs during the period
|
37.5 | 38.7 | 42.1 | 45.7 | 45.6 | 43.0 | 39.7 | 32.3 | ||||||||||||||||||||||||
|
New Installed Users
|
108.7 | 113.7 | 119.9 | 123.0 | 109.2 | 132.2 | 67.3 | 50.3 | ||||||||||||||||||||||||
|
Average daily time spent per DAU during the period (minutes)
|
62.1 | 60.0 | 61.3 | 59.4 | 62.4 | 55.2 | 55.3 | 50.3 | ||||||||||||||||||||||||
|
For the Three Months Ended
|
||||||||||||||||||||||||||||||||
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
|||||||||||||||||||||||||
|
2019
|
2020
|
|||||||||||||||||||||||||||||||
|
(in RMB)
|
||||||||||||||||||||||||||||||||
|
Average net revenue per DAU per day
|
0.33 | 0.39 | 0.36 | 0.39 | 0.34 | 0.37 | 0.31 | 0.44 | ||||||||||||||||||||||||
|
User Engagement Expenses per DAU per day
|
0.17 | 0.13 | 0.14 | 0.14 | 0.12 | 0.12 | 0.07 | 0.05 | ||||||||||||||||||||||||
|
User Acquisition Expenses per New Installed User
|
6.21 | 6.93 | 6.58 | 5.54 | 4.60 | 3.30 | 5.73 | 7.89 | ||||||||||||||||||||||||
|
For the Three Months Ended
|
||||||||||||||||||||||||||||||||
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
|||||||||||||||||||||||||
|
2019
|
2020
|
|||||||||||||||||||||||||||||||
|
DAUs of loyalty program inclined apps
|
81.9 | % | 77.2 | % | 74.8 | % | 63.2 | % | 55.9 | % | 47.4 | % | 39.4 | % | 48.1 | % | ||||||||||||||||
|
DAUs of other apps
|
18.1 | % | 22.8 | % | 25.2 | % | 36.8 | % | 44.1 | % | 52.6 | % | 60.6 | % | 51.9 | % | ||||||||||||||||
| • |
Algorithm-based Screening
pre-set
keywords, and we utilize artificial intelligence to identify inappropriate images and videos. The screening system automatically declines content that does not meet the standards of our platform and flags suspicious content for manual review by our content management team.
|
| • |
Manual Review
|
| • |
Complaint Procedure
pre-existing
content, violation of law, factual mistake, low quality or plagiarism. The user also needs to provide a written commentary to support the complaint. We remove the relevant content if we conclude that the complaint is valid. In addition, while the complaint is under review, we may also temporarily block the relevant content from being further delivered until we can investigate the complaint and reach a conclusion.
|
| • |
Content Tagging
|
| • |
Interest and Social Graphs
|
| • |
Recommendation
|
| • |
Interest and Social Graphing
|
| • |
Content Recommendation Engine
|
| • |
Advertising
|
| • |
Content Screening Technology
pre-set
keywords. We utilize artificial intelligence to identify inappropriate or objectionable content from images, speeches and videos, significantly increasing efficiency over manual review. We also apply deep learning methods to analyze complex visual content. Through big data and continuous training, our system is able to monitor and identify objectionable visual content with a high degree of accuracy. The screening system automatically declines content that does not meet the standards of our platform and flags suspicious content for manual review by our content management team.
|
| • |
Fraud Detection
|
|
C.
|
Regulations
|
| • |
the production, duplication, importation, release or broadcasting of Internet cultural products;
|
| • |
the dissemination of online cultural products on the Internet or transmission thereof via Internet or mobile phone networks to users’ terminals such as computers, fixed-line or mobile phones, television sets, gaming consoles and Internet surfing service sites such as Internet cafés for the purpose of browsing, using or downloading such products; or
|
| • |
the exhibition or holding of contests related to Internet cultural products.
|
| • |
complying with security protection obligations in accordance with tiered requirements with respect to maintenance of the security of Internet systems, which include formulating internal security management rules and developing manuals, appointing personnel who will be responsible for Internet security, adopting technical measures to prevent computer viruses and activities that threaten Internet security, adopting technical measures to monitor and record status of network operations, holding Internet security training events, retaining user logs for at least six months, and adopting measures such as data classification, key data backup, and encryption for the purpose of securing networks from interference, vandalism, or unauthorized visits, and preventing network data from leakage, theft, or tampering;
|
| • |
verifying users’ identities before signing agreements or providing services such as network access, domain name registration, landline telephone or mobile phone access, information publishing, or real-time communication services;
|
| • |
clearly indicating the purposes, methods and scope of the information collection, the use of information collection, and obtain the consent of those from whom the information is collected when collecting or using personal information;
|
| • |
strictly preserving the privacy of user information they collect, and establish and maintain systems to protect user privacy; and
|
| • |
strengthening management of information published by users. When the network operators discover information prohibited by laws and regulations from publication or dissemination, they shall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading, saving relevant records, and reporting to the relevant governmental agencies
|
|
D.
|
Organizational Structure
|
| (1) |
Mr. Eric Siliang Tan, Mr. Lei Li, Tianjin Shanshi Technology L.P., Shanghai Xihu Cultural Transmission Co., Ltd. and Shanghai Xinpai Management Consulting Co., Ltd., an affiliate of The Paper, hold 44.55%, 14.85%, 19.80%, 19.80% and 1% equity interest in Shanghai Jifen, respectively.
|
| (2) |
We acquired Shanghai Dianguan in February 2018.
|
| (3) |
Include Beijing Qukandian, Shanghai Xike, Shanghai Tuile Information Technology Service Co., Ltd., Tianjin Quwen Internet Technology Co., Ltd, Shanghai Heitu and Shanghai Zheyun.
|
| (4) |
Ms. Min Gao and Ms. Wanting Xu held 60% and 40% equity interest in Big Rhinoceros Horn, respectively.
|
| (5) |
Mr. Zhongliang Pan and Mr. Mengdie Hua held 60% and 40% equity interest in Beijing Churun, respectively.
|
| (6) |
Ms. Wanting Xu and Ms. Min Gao held 60% and 40% equity interest in Anhui Zhangduan, respectively.
|
| (7) |
Mainly include Shanghai DragonS Information Technology Co., Ltd., or DragonS Information, and Hubei Rapid Information Technology Co., Ltd., or Rapid Information. Mr. Biao Liu and Mr. Zhongyuan Zhang held 60% and 40% equity interest in DragonS Information, respectively. Ms. Linhong Wang and Ms. Jun Sun held 60% and 40% equity interest in Rapid Information, respectively.
|
| (8) |
Mainly include Beijing Supreme Pole International Sports Promotion Co., Ltd.
|
| • |
exercise effective control over our consolidated VIEs and their subsidiaries;
|
| • |
receive substantially all the economic benefits of our consolidated VIEs; and
|
| • |
have an exclusive option to purchase all or part of the equity interests and assets of our consolidated VIEs when and to the extent permitted by PRC law.
|
| • |
the ownership structures of Shanghai Quyun and Shanghai Zhicao, or our WFOEs, and our consolidated VIEs in China, do not violate any applicable PRC law, regulation, or rule currently in effect; and
|
| • |
the contractual arrangements among our WFOEs, our consolidated VIEs and their respective shareholders governed by PRC laws are valid, binding and enforceable in accordance with their terms and applicable PRC laws, rules, and regulations currently in effect, and will not violate any applicable PRC law, regulation, or rule currently in effect.
|
|
E.
|
Facilities
|
|
ITEM 4A.
|
UNRESOLVED STAFF COMMENTS
|
|
ITEM 5.
|
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|
|
A.
|
Operating Results
|
|
For the Three Months Ended
|
||||||||||||||||||||||||||||||||
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
|||||||||||||||||||||||||
|
2019
|
2020
|
|||||||||||||||||||||||||||||||
|
(in millions, except for daily time spent data)
|
||||||||||||||||||||||||||||||||
|
Combined Average MAUs during the period
|
111.4 | 119.3 | 133.9 | 137.9 | 138.3 | 136.5 | 120.5 | 124.7 | ||||||||||||||||||||||||
|
Combined Average DAUs during the period
|
37.5 | 38.7 | 42.1 | 45.7 | 45.6 | 43.0 | 39.7 | 32.3 | ||||||||||||||||||||||||
|
New Installed Users
|
108.7 | 113.7 | 119.9 | 123.0 | 109.2 | 132.2 | 67.3 | 50.3 | ||||||||||||||||||||||||
|
Average daily time spent per DAU during the period (minutes)
|
62.1 | 60.0 | 61.3 | 59.4 | 62.4 | 55.2 | 55.3 | 50.3 | ||||||||||||||||||||||||
|
For the Three Months Ended
|
||||||||||||||||||||||||||||||||
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
March 31,
|
June 30,
|
September 30,
|
December 31,
|
|||||||||||||||||||||||||
|
2019
|
2020
|
|||||||||||||||||||||||||||||||
|
(in RMB)
|
||||||||||||||||||||||||||||||||
|
Average net revenue per DAU per day
|
0.33 | 0.39 | 0.36 | 0.39 | 0.34 | 0.37 | 0.31 | 0.44 | ||||||||||||||||||||||||
|
User Engagement Expenses per DAU per day
|
0.17 | 0.13 | 0.14 | 0.14 | 0.12 | 0.12 | 0.07 | 0.05 | ||||||||||||||||||||||||
|
User Acquisition Expenses per New Installed User
|
6.21 | 6.93 | 6.58 | 5.54 | 4.60 | 3.30 | 5.73 | 7.89 | ||||||||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||||||||||||
|
2018
|
2019
|
2020
|
||||||||||||||||||||||||||
|
RMB
|
%
|
RMB
|
%
|
RMB
|
US$
|
%
|
||||||||||||||||||||||
|
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
|
Revenues:
|
||||||||||||||||||||||||||||
|
Advertising and marketing revenues
|
2,814,258 | 93.1 | 5,415,321 | 97.2 | 5,046,835 | 773,461 | 95.5 | |||||||||||||||||||||
|
Other revenue
|
207,888 | 6.9 | 154,760 | 2.8 | 238,360 | 36,530 | 4.5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net revenues
|
|
3,022,146
|
|
|
100.0
|
|
|
5,570,081
|
|
|
100.0
|
|
|
5,285,195
|
|
|
809,991
|
|
|
100.0
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (1) |
Revenues from transactions with related parties are set forth below for the periods indicated:
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
2019
|
2020
|
||||||||||||||
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Advertising and marketing revenues
|
17,447 | 473,216 | 250,875 | 38,448 | ||||||||||||
|
Other revenue
|
29,597 | — | — | — | ||||||||||||
| (1) |
Cost of revenues from transactions with related parties are set forth below for the years indicated:
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||
|
2018
|
2019
|
2020
|
||||||||||||||||||||||||||
|
RMB
|
%
|
RMB
|
%
|
RMB
|
US$
|
%
|
||||||||||||||||||||||
|
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
|
Cost of revenues-related party
|
6,020 | 0.2 | 42,412 | 0.8 | 31,051 | 4,759 | 0.6 | |||||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||||||||||||
|
2018
|
2019
|
2020
|
||||||||||||||||||||||||||
|
RMB
|
%
|
RMB
|
%
|
RMB
|
US$
|
%
|
||||||||||||||||||||||
|
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
|
Operating expenses
(1)
:
|
||||||||||||||||||||||||||||
|
Research and development expenses
|
270,108 | 8.9 | 926,232 | 16.6 | 947,871 | 145,268 | 17.9 | |||||||||||||||||||||
|
Sales and marketing expenses
|
3,250,038 | 107.5 | 5,489,708 | 98.6 | 3,381,561 | 518,247 | 64.0 | |||||||||||||||||||||
|
General and administrative expenses
|
980,725 | 32.5 | 267,033 | 4.8 | 392,815 | 60,202 | 7.4 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Total operating expenses
|
|
4,500,871
|
|
|
148.9
|
|
|
6,682,973
|
|
|
120.0
|
|
|
4,722,247
|
|
|
723,716
|
|
|
89.3
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (1) |
Operating expenses from transactions with related parties are set forth below for the years indicated:
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||
|
2018
|
2019
|
2020
|
||||||||||||||||||||||||||
|
RMB
|
%
|
RMB
|
%
|
RMB
|
US$
|
%
|
||||||||||||||||||||||
|
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
|
Research and development-related party
|
— | — | — | — | — | — | — | |||||||||||||||||||||
|
Sales and marketing-related party
|
23,671 | 0.8 | 3,284 | 0.1 | 4,192 | 642 | 0.1 | |||||||||||||||||||||
|
General and administrative-related party
|
— | — | — | — | — | — | — | |||||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||||||||||||
|
2018
|
2019
|
2020
|
||||||||||||||||||||||||||
|
RMB
|
%
|
RMB
|
%
|
RMB
|
US$
|
%
|
||||||||||||||||||||||
|
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
|
Cost of revenues
|
5,711 | 0.2 | 6,190 | 0.1 | 12,904 | 1,978 | 0.3 | |||||||||||||||||||||
|
Research and development expenses
|
29,623 | 1.0 | 138,792 | 2.5 | 204,333 | 31,315 | 3.9 | |||||||||||||||||||||
|
Sales and marketing expenses
|
9,538 | 0.3 | 45,041 | 0.8 | 86,656 | 13,281 | 1.6 | |||||||||||||||||||||
|
General and administrative expenses
|
906,754 | 30.0 | 81,955 | 1.5 | 159,320 | 24,417 | 3.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Total
|
|
951,626
|
|
|
31.5
|
|
|
271,978
|
|
|
4.9
|
|
|
463,214
|
|
|
70,991
|
|
|
8.8
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| • |
exercise effective control over our consolidated VIEs and their subsidiaries;
|
| • |
receive substantially all of the economic benefits of our consolidated VIEs; and
|
| • |
have an exclusive option to purchase all or part of the equity interests and assets of our consolidated VIEs when and to the extent permitted by PRC law.
|
|
2018
|
2019
|
2020
|
||||||||||
|
Expected volatility
(1)
|
50.71% ~ 51.25% | 49.92% ~ 50.65% | 57.77% ~ 58.65% | |||||||||
|
Risk-free interest rate
(2)
|
2.83% ~ 3.15% | 1.80% ~ 2.52% | 0.82% ~ 1.09% | |||||||||
|
Exercise multiple
|
2.8 | 2.8 | 2.8 | |||||||||
|
Expected dividend yield
(3)
|
0.00% | 0.00% | 0.00% | |||||||||
|
Contractual term
|
10 | 10 | 10 | |||||||||
|
Expected forfeiture rate (post-vesting)
|
0.00% ~ 20.00% | 0.00% ~ 20.00% | 0.00% ~ 20.00% | |||||||||
|
Fair value of the common share on the date of option grant (RMB)
|
122.52 ~ 153.23 | 94.96 ~ 310.64 | 41.50 ~ 77.78 | |||||||||
| (1) |
Expected volatility is estimated based on the average of historical volatilities of the comparable companies in the same industry as at the valuation dates.
|
| (2) |
The risk-free interest rate of periods within the contractual life of the share option is based on the market yield of the Chinese sovereign bond/U.S. government bond with a maturity life equal to the expected life to expiration.
|
| (3) |
We have no history or expectation of paying dividends on our ordinary shares.
|
|
Date of Options Grant
|
Options/
Restricted
Shares
Granted
|
Exercise
Price
|
Fair Value of
Option/
Restricted
Shares
|
Fair Value
of Ordinary
Shares
|
Discount for
Lack of
Marketability
|
Discount
Rate
|
Type of
Valuations
|
|||||||||||||||||||||
|
January 3, 2018
|
15,937,500 | — | US$ | 8.0401 | US$ | 8.0401 | 14.0 | % | 28.0 | % | Contemporaneous | |||||||||||||||||
|
February 28, 2018
|
2,004,725 | US$ | 0.0001 | US$ | 19.3517 | US$ | 19.3518 | 13.5 | % | 23.0 | % | Contemporaneous | ||||||||||||||||
|
March 31, 2018
|
137,685 | US$ | 0.0001 | US$ | 20.3320 | US$ | 20.3321 | 13.0 | % | 23.0 | % | Contemporaneous | ||||||||||||||||
|
June 30, 2018
|
750,610 | US$ | 0.0001 | US$ | 23.1428 | US$ | 23.1429 | 8.0 | % | 22.1 | % | Contemporaneous | ||||||||||||||||
| • |
our operating and financial performance;
|
| • |
current business conditions and projections;
|
| • |
our stage of development;
|
| • |
the prices, rights, preferences and privileges of our convertible preferred shares relative to our ordinary shares;
|
| • |
the likelihood of occurrence of liquidity event or redemption event;
|
| • |
any adjustment necessary to recognize a lack of marketability for our ordinary shares; and
|
| • |
the market performance of industry peers.
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||
|
2018
|
2019
|
2020
|
||||||||||||||||||||||||||
|
RMB
|
%
|
RMB
|
%
|
RMB
|
US$
|
%
|
||||||||||||||||||||||
|
(in thousands, except for percentages, share and per share data)
|
||||||||||||||||||||||||||||
|
Revenues
(1)
:
|
||||||||||||||||||||||||||||
|
Advertising and marketing revenues
|
2,814,258 | 93.1 | 5,415,321 | 97.2 | 5,046,835 | 773,461 | 95.5 | |||||||||||||||||||||
|
Other revenue
|
207,888 | 6.9 | 154,760 | 2.8 | 238,360 | 36,530 | 4.5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net revenues
|
|
3,022,146
|
|
|
100.0
|
|
|
5,570,081
|
|
|
100.0
|
|
|
5,285,195
|
|
|
809,992
|
|
|
100.0
|
|
|||||||
|
Cost of revenues
(2)
|
(503,613 | ) | (16.7 | ) | (1,640,632 | ) | (29.5 | ) | (1,674,416 | ) | (256,616 | ) | (31.7 | ) | ||||||||||||||
|
Gross profit
|
|
2,518,533
|
|
|
83.3
|
|
|
3,929,449
|
|
|
70.5
|
|
|
3,610,779
|
|
|
553,376
|
|
|
68.3
|
|
|||||||
|
Operating expenses
(2)
:
|
||||||||||||||||||||||||||||
|
Research and development expenses
|
(270,108 | ) | (8.9 | ) | (926,232 | ) | (16.6 | ) | (947,871 | ) | (145,268 | ) | (17.9 | ) | ||||||||||||||
|
Sales and marketing expenses
|
(3,250,038 | ) | (107.5 | ) | (5,489,708 | ) | (98.6 | ) | (3,381,561 | ) | (518,247 | ) | (64.0 | ) | ||||||||||||||
|
General and administrative expenses
|
(980,725 | ) | (32.5 | ) | (267,033 | ) | (4.8 | ) | (392,815 | ) | (60,202 | ) | (7.4 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Total operating expenses
|
|
(4,500,871
|
)
|
|
(148.9
|
)
|
|
(6,682,973
|
)
|
|
(120.0
|
)
|
|
(4,722,247
|
)
|
|
(723,716
|
)
|
|
(89.3
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Other operating income
|
725 | 0.0 | 30,292 | 0.5 | 79,298 | 12,153 | 1.5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Loss from operations
(3)
|
|
(1,981,613
|
)
|
|
(65.6
|
)
|
|
(2,723,232
|
)
|
|
(48.9
|
)
|
|
(1,032,169
|
)
|
|
(158,187
|
)
|
|
(19.5
|
)
|
|||||||
|
Interest income
|
27,087 | 0.9 | 48,440 | 0.9 | 10,419 | 1,597 | 0.2 | |||||||||||||||||||||
|
Interest expense
|
— | — | (26,878 | ) | (0.5 | ) | (38,143 | ) | (5,846 | ) | (0.7 | ) | ||||||||||||||||
|
Foreign exchange related gains/(loss), net
|
4,134 | 0.1 | 1,869 | 0.0 | (7,183 | ) | (1,101 | ) | (0.1 | ) | ||||||||||||||||||
|
Investment income/(loss)
|
4,215 | 0.1 | 6,327 | 0.1 | (31,788 | ) | (4,872 | ) | (0.6 | ) | ||||||||||||||||||
|
Other income/(expenses), net
|
(69 | ) | 0.0 | 9,049 | 0.2 | (7,309 | ) | (1,120 | ) | (0.1 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Loss before income taxes
|
|
(1,946,247
|
)
|
|
(64.4
|
)
|
|
(2,684,425
|
)
|
|
(48.2
|
)
|
|
(1,106,174
|
)
|
|
(169,529
|
)
|
|
(20.9
|
)
|
|||||||
|
Income tax benefit/(expense)
|
401 | 0.0 | (4,843 | ) | (0.1 | ) | 1,007 | 154 | 0.0 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net loss
|
|
(1,945,846
|
)
|
|
(64.4
|
)
|
|
(2,689,268
|
)
|
|
(48.3
|
)
|
|
(1,105,166
|
)
|
|
(169,374
|
)
|
|
(20.9
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net loss attributable to
non-controlling
interests
|
3,275 | 0.1 | 587 | 0.0 | 728 | 112 | 0.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net loss attributable to Qutoutiao Inc.
|
|
(1,942,572
|
)
|
|
(64.3
|
)
|
|
(2,688,681
|
)
|
|
(48.3
|
)
|
|
(1,104,439
|
)
|
|
(169,263
|
)
|
|
(20.9
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (1) |
Revenues from transactions with related parties are set forth below for the periods indicated:
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
2019
|
2020
|
||||||||||||||
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Advertising and marketing revenue
|
17,447 | 473,216 | 250,875 | 38,448 | ||||||||||||
|
Other revenue
|
29,597 | — | — | — | ||||||||||||
| (2) |
Cost of revenues and operating expenses from transactions with related parties are set forth below for the periods indicated:
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||
|
2018
|
2019
|
2020
|
||||||||||||||||||||||||||
|
RMB
|
%
|
RMB
|
%
|
RMB
|
US$
|
%
|
||||||||||||||||||||||
|
(in thousands, except for percentages)
|
||||||||||||||||||||||||||||
|
Cost of revenues
|
6,020 | 0.2 | 42,412 | 0.8 | 31,051 | 4,759 | 0.6 | |||||||||||||||||||||
|
Research and development expenses
|
— | — | — | — | — | — | — | |||||||||||||||||||||
|
Sales and marketing expenses
|
23,671 | 0.8 | 3,284 | 0.1 | 4,192 | 642 | 0.1 | |||||||||||||||||||||
|
General and administrative expenses
|
— | — | — | — | — | — | — | |||||||||||||||||||||
| (3) |
We recognized share-based compensation expenses of RMB951.6 million, RMB272.0 million and RMB463.2 million (US$71.0 million) in 2018, 2019 and 2020, respectively. Share-based compensation expenses in 2018 included RMB864.7 million that relates to certain ordinary shares beneficially owned by certain of our
co-founders
that became restricted pursuant to share restriction deeds entered into by them in January 2018 and fully vested upon completion of our initial public offering in September 2018.
|
| • |
Research and development expenses. Our research and development expenses increased from RMB926.2 million in 2019 to RMB947.9 million (US$145.3 million) in 2020. The increase was primarily due to the increase in share-based compensation, partially offset by the decrease in salaries and benefits. Share-based compensation expenses recognized in research and development expenses increased from RMB138.8million in 2019 to RMB204.3 million (US$31.3 million) in 2020. Research and development expenses as a percentage of our net revenues increased from 16.6% in 2019 to 17.9% in 2020.
|
| • |
Sales and marketing expenses. Our sales and marketing expenses decreased from RMB5,489.7 million in 2019 to RMB3,381.6 million (US$518.2 million) in 2020. The decrease was primarily due to decreases in user acquisition expenses and user engagement expenses, as we continuously optimize our loyalty program and traffic acquisition strategy.
|
| • |
General and administrative expenses. Our general and administrative expenses increased from RMB267.0 million in 2019 to RMB392.8 million (US$60.2 million) in 2020. The increase was primarily due to the increase in
bad-debt
provision for account receivables as we adopted
ASC-326
Measurement of Credit Losses on Financial Instruments
|
| • |
Research and development expenses. Our research and development expenses increased from RMB270.1 million in 2018 to RMB926.2 million in 2019. The increase was primarily due to an increase in our researcher headcount as part of our continued research and development efforts to enhance our technological capability, more specifically, our
AI-based
content recommendation technology. Share-based compensation expenses recognized in research and development expenses increased from RMB29.6 million in 2018 to RMB138.8million in 2019. Research and development expenses as a percentage of our net revenues increased from 8.9% in 2018 to 16.6% in 2019.
|
| • |
Sales and marketing expenses. Our sales and marketing expenses increased from RMB3,250.0 million in 2018 to RMB5,489.7 million in 2019. The increase was primarily due to increase in user engagement expenses, user acquisition expenses and other sales and marketing expenses.
|
| • |
General and administrative expenses. Our general and administrative expenses decreased from RMB980.7 million in 2018 to RMB267.0 million in 2019. This decrease was primarily due to a decrease in share-based compensation expenses recognized from RMB906.8 million in 2018 to RMB82.0 million in 2019, as we incurred significant share-based compensation expense in 2018 related to certain ordinary shares beneficially owned by
certain co-founders that became
restricted pursuant to share restriction deeds entered into in January 2018 and fully vested upon completion of our initial public offering in September 2018. This also contributed to a decrease in general and administrative expenses as a percentage of our net revenues from 32.5% in 2018 to 4.8% in 2019. Excluding share-based compensation expenses, general and administrative expenses were RMB185.1 million in 2019, representing an increase of 150.2% year-over-year, mainly due to an increase in personnel related expenses as our business continued to grow at a faster pace than the overall Chinese advertising industry.
|
|
B.
|
Liquidity and Capital Resources
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
2019
|
2020
|
||||||||||||||
|
RMB
|
RMB
|
RMB
|
US$
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Selected Consolidated Cash Flows Data:
|
||||||||||||||||
|
Net cash provided by/(used in) operating activities
|
(434,765 | ) | (2,367,295 | ) | (863,774 | ) | (132,379 | ) | ||||||||
|
Net cash provided by/(used in) investing activities
|
(72,493 | ) | (1,224,152 | ) | 782,545 | 119,930 | ||||||||||
|
Net cash provided by financing activities
|
2,298,044 | 1,768,001 | 307,246 | 47,164 | ||||||||||||
|
Net increase/(decrease) in cash, cash equivalents and restricted cash
|
1,790,787 | (1,823,445 | ) | 226,517 | 34,715 | |||||||||||
|
Effect of exchange rate changes on cash and cash equivalents
|
117,043 | 12,846 | (7,415 | ) | (1,136 | ) | ||||||||||
|
Cash, cash equivalents and restricted cash at beginning of the year
|
278,458 | 2,186,288 | 375,689 | 57,577 | ||||||||||||
|
Cash, cash equivalents and restricted cash at the end of the year
|
2,186,288 | 375,689 | 594,791 | 91,156 | ||||||||||||
|
C.
|
Research and Development
|
|
D.
|
Trend Information
|
|
E.
|
Off-Balance
Sheet Arrangements
|
|
F.
|
Tabular Disclosure of Contractual Obligations
|
|
Payment due by period
|
||||||||||||||||||||||||
|
Total
|
Less than
1 Year
|
1 – 3 Years
|
3 – 5 Years
|
More than
5 Years
|
||||||||||||||||||||
|
RMB
|
US$
|
RMB
|
||||||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
|
Content fee
|
116,152 | 17,801 | 103,289 | 12,863 | — | — | ||||||||||||||||||
|
Capital and other commitments
|
9,208 | 1,411 | 8,926 | 282 | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Total
|
|
125,360
|
|
|
19,212
|
|
|
112,215
|
|
|
13,145
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
G.
|
Safe Harbor
|
|
ITEM
6.
|
DIRECTORS, SENIOR
MANAGEMENT AND EMPLOYEES
|
|
A.
|
Directors and Senior Management
|
|
Name
|
Age
|
Position/Title
|
||
| Eric Siliang Tan | 41 |
Co-founder,
chairman and chief executive officer
|
||
| Lei Li | 38 |
Co-founder
and vice chairman
|
||
| Feng Li | 44 | Independent director | ||
| James Jun Peng | 46 | Independent director | ||
| Jianfei Dong | 39 |
Director and
co-president
|
||
| Oliver Yucheng Chen | 42 | Director | ||
| Xiaolu Zhu | 37 | Chief financial officer | ||
| Sihui Chen | 36 |
Co-founder
and chief operating officer
|
||
| Zhiliang Wang | 37 |
Co-founder
and chief technology officer
|
|
B.
|
Compensation
|
|
Name
|
Position
|
Class A
Ordinary
Shares
Underlying
Options
Awarded
|
Option
Exercise
Price
|
Grant Date
|
Option
Expiration
Date
|
|||||||||
|
Zhiliang Wang
|
Chief technology officer | 2,372,965 | US$ | 0.0001 | June 30, 2016 | June 30, 2026 | ||||||||
|
Sihui Chen
|
Chief operating officer | 957,655 | US$ | 0.0001 | June 30, 2016 | June 30, 2026 | ||||||||
|
Jianfei Dong
|
Director and
co-president
|
* | US$ | 0.0001 | June 30, 2018 | June 30, 2028 | ||||||||
| * | US$ | 0.0001 | March 31, 2019 | March 31, 2029 | ||||||||||
|
Xiaolu Zhu
|
Chief financial officer | * | US$ | 0.0001 | June 30, 2019 | June 30, 2029 | ||||||||
| * | US$ | 0.0001 | September 30, 2019 | September 30, 2029 | ||||||||||
| * |
Less than 1% of our outstanding shares
|
|
C.
|
Board Practices
|
| • |
selecting the independent auditor;
|
| • |
pre-approving
auditing and
non-auditing
services permitted to be performed by the independent auditor;
|
| • |
annually reviewing the independent auditor’s report describing the auditing firm’s internal quality control procedures, any material issues raised by the most recent internal quality control review, or peer review, of the independent auditors and all relationships between the independent auditor and our company;
|
| • |
setting clear hiring policies for employees and former employees of the independent auditors;
|
| • |
reviewing with the independent auditor any audit problems or difficulties and management’s response;
|
| • |
reviewing and, if material, approving all related party transactions on an ongoing basis;
|
| • |
reviewing and discussing the annual audited financial statements with management and the independent auditor;
|
| • |
reviewing and discussing with management and the independent auditors major issues regarding accounting principles and financial statement presentations;
|
| • |
reviewing reports prepared by management or the independent auditors relating to significant financial reporting issues and judgments;
|
| • |
discussing earnings press releases with management, as well as financial information and earnings guidance provided to analysts and rating agencies;
|
| • |
reviewing with management and the independent auditors the effect of regulatory and accounting initiatives, as well as
off-balance
sheet structures, on our financial statements;
|
| • |
discussing policies with respect to risk assessment and risk management with management, internal auditors and the independent auditor;
|
| • |
timely reviewing reports from the independent auditor regarding all critical accounting policies and practices to be used by our company, all alternative treatments of financial information within U.S. GAAP that have been discussed with management and all other material written communications between the independent auditor and management;
|
| • |
establishing procedures for the receipt, retention and treatment of complaints received from our employees regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters;
|
| • |
annually reviewing and reassessing the adequacy of our audit committee charter;
|
| • |
such other matters that are specifically delegated to our audit committee by our board of directors from time to time;
|
| • |
meeting separately, periodically, with management, internal auditors and the independent auditor; and
|
| • |
reporting regularly to the full board of directors.
|
| • |
reviewing, evaluating and, if necessary, revising our overall compensation policies;
|
| • |
reviewing and evaluating the performance of our directors and senior officers and determining the compensation of our senior officers;
|
| • |
reviewing and approving our senior officers’ employment agreements with us;
|
| • |
setting performance targets for our senior officers with respect to our incentive—compensation plan and equity-based compensation plans;
|
| • |
administering our equity-based compensation plans in accordance with the terms thereof; and such other matters that are specifically delegated to the remuneration committee by our board of directors from time to time.
|
| • |
selecting and recommending to the board nominees for election by the shareholders or appointment by the board;
|
| • |
reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity;
|
| • |
making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and
|
| • |
advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.
|
| • |
conducting and managing the business of our company;
|
| • |
representing our company in contracts and deals;
|
| • |
appointing attorneys for our company;
|
| • |
select senior management;
|
| • |
providing employee benefits and pension;
|
| • |
managing our company’s finance and bank accounts;
|
| • |
exercising the borrowing powers of our company and mortgaging the property of our company; and
|
| • |
exercising any other powers conferred by the shareholders’ meetings or under our amended and restated memorandum and articles of association.
|
|
D.
|
Employees
|
|
Function
|
Number of
Employees
|
% of Total
|
||||||
|
Content management
|
471 | 27.6 | ||||||
|
Technology and product development
|
884 | 51.9 | ||||||
|
Sales, customer service and marketing
|
167 | 9.8 | ||||||
|
General administration
|
182 | 10.7 | ||||||
|
|
|
|
|
|||||
|
Total
|
|
1,704
|
|
|
100.0
|
|
||
|
|
|
|
|
|||||
|
E.
|
Share Ownership
|
| • |
each of our directors and executive officers; and
|
| • |
each person known to us to own beneficially 5.0% or more of our ordinary shares.
|
|
Ordinary Shares Beneficially Owned
|
||||||||||||||||
|
Class A
Ordinary
Shares
|
Class B
Ordinary
Shares
|
Percentage
of total
ordinary
shares
|
Percentage
of aggregate
voting
power***
|
|||||||||||||
|
Directors and Executive Officers:**
|
||||||||||||||||
|
Eric Siliang Tan
(1)
|
— | 27,123,442 | 35.8 | % | 72.9 | % | ||||||||||
|
Lei Li
(2)
|
— | 5,813,751 | 7.7 | % | 15.6 | % | ||||||||||
|
Zhiliang Wang
(5)
|
1,852,965 | — | 2.4 | % | 0.5 | % | ||||||||||
|
Sihui Chen
|
* | — | * | — | ||||||||||||
|
James Jun Peng
|
— | — | — | — | ||||||||||||
|
Feng Li
|
— | — | — | — | ||||||||||||
|
Jianfei Dong
|
* | — | * | — | ||||||||||||
|
Xiaolu Zhu
|
* | — | — | — | ||||||||||||
|
Oliver Yucheng Chen
|
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Directors and Executive Officers as a Group
|
2,940,620 | 32,937,193 | 47.3 | % | 89.3 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Principal Shareholders
|
||||||||||||||||
|
Innotech Group Holdings Ltd.
(1)
|
— | 27,123,442 | 35.8 | % | 72.9 | % | ||||||||||
|
Qu World Limited
(3)
|
3,876,500 | — | 5.1 | % | 1.0 | % | ||||||||||
|
News List Ltd.
(2)
|
— | 5,813,751 | 7.7 | % | 15.6 | % | ||||||||||
|
Mount McKinley Investment Limited
(4)
|
4,425,745 | — | 5.8 | % | 1.2 | % | ||||||||||
| * |
Less than 1% of our outstanding shares.
|
| ** |
The business address for our directors and executive officers is Building No.8, Shanghai Pudong Software Park, 519 Yi De Road, Pudong New Area, Shanghai 200124, People’s Republic of China.
|
| *** |
For each person and group included in this column, the percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class. In respect of all matters upon which the ordinary shares are entitled to vote, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to ten (10) votes, voting together as one class. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.
|
| (1) |
Represents 27,123,442 Class B ordinary shares that are held by Innotech Group Holdings Ltd., a limited liability company established in the Cayman Islands. Innotech Group Holdings Ltd. is indirectly wholly owned by a trust of which Mr. Eric Siliang Tan and his family are beneficiaries. The registered address of Innotech Group Holdings Ltd. is P.O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman,
KY1-1205,
Cayman Islands.
|
| (2) |
Represents 5,813,751 Class B ordinary shares that are held by News List Ltd., a limited liability company established in the British Virgin Islands. News List Ltd. is indirectly wholly owned by a trust of which Mr. Lei Li and his family are beneficiaries. The registered address of News List Ltd. is Craigmuir Chambers, Road Town, Tortola, British Virgin Islands.
|
| (3) |
Represents 3,876,500 Class A ordinary shares held by Qu World Limited, a limited liability company established in the British Virgin Islands, as a nominee of our equity incentive trust. Qu World Limited is wholly owned by The Core Trust Company Limited, a trust company established in Hong Kong that acts as the trustee of our equity incentive trust. Registered address of Qu World Limited is Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. The trust deed for our equity incentive trust provides that the trustee shall not have any voting power in relation to the 3,876,500 Class A ordinary shares held by Qu World Limited.
|
| (4) |
Represents 4,425,745 Class A ordinary shares in the form of 17,702,980 ADSs held by Mount McKinley Investment Limited, a company incorporated in British Virgin Islands, as reported in Amendment No.1 to the Schedule 13G filed on February 2, 2021. Mount McKinley Investment Limited is a wholly-owned subsidiary of Tencent Holdings Limited, a company incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange. The registered address of Mount McKinley Investment Limited is 29/F., Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong. The registered address of Tencent Holdings Limited is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman
KY1-1111,
Cayman Islands.
|
| (5) |
Represents 1,852,965 Class A ordinary shares issuable to Mr. Zhiliang Wang upon exercise of the share options granted under our equity incentive plan that have vested or are expected to vest within 60 days from the date of this annual report.
|
| ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
|
A.
|
Major Shareholders
|
|
B.
|
Related Party Transactions
|
|
C.
|
Interests of Experts and Counsel
|
| ITEM 8. |
FINANCIAL INFORMATION
|
|
A.
|
Consolidated Statements and Other Financial Information
|
|
B.
|
Significant Changes
|
|
ITEM 9.
|
THE OFFER AND LISTING
|
|
A.
|
Offering and Listing Details
|
|
B.
|
Plan of Distribution
|
|
C.
|
Markets
|
|
D.
|
Selling Shareholders
|
|
E.
|
Dilution
|
|
F.
|
Expenses of the Issue
|
|
ITEM 10.
|
ADDITIONAL INFORMATION
|
|
A.
|
Share Capital
|
|
B.
|
Memorandum and Articles of Association
|
|
C.
|
Material Contracts
|
|
D.
|
Exchange Controls
|
|
E.
|
Taxation
|
| (1) |
that no law which is enacted in the Cayman Islands imposing any tax to be levied on profits or income or gains or appreciation shall apply to us or our operations; and
|
| (2) |
that no tax be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable by the Company:
|
| (a) |
on or in respect of the shares, debentures or other obligations of the Company; or
|
| (b) |
by way of withholding in whole or in part of any relevant payment as defined in section 6(3) of the Tax Concessions Act (as amended).
|
| • |
an individual who is a citizen or resident of the United States;
|
| • |
a corporation (or other entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
|
| • |
an estate the income of which is subject to United States federal income taxation regardless of its source; or
|
| • |
a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.
|
| • |
a dealer in securities or currencies;
|
| • |
a financial institution;
|
| • |
a regulated investment company;
|
| • |
a real estate investment trust;
|
| • |
an insurance company;
|
| • |
a
tax-exempt
organization;
|
| • |
a person holding our ADSs or Class A ordinary shares as part of a hedging, integrated or conversion transaction, a constructive sale or a straddle;
|
| • |
a trader in securities that has elected the
mark-to-market
|
| • |
a person liable for alternative minimum tax;
|
| • |
a person who owns or is deemed to own 10% or more of our stock by vote or value;
|
| • |
a partnership or other pass-through entity for United States federal income tax purposes;
|
| • |
a person required to accelerate the recognition of any item of gross income with respect to our ADSs or Class A ordinary shares as a result of such income being recognized on an applicable financial statement; or
|
| • |
a person whose “functional currency” is not the United States dollar.
|
| • |
at least 75% of our gross income is passive income, or
|
| • |
at least 50% of the value (determined based on a quarterly average) of our assets is attributable to assets that produce or are held for the production of passive income.
|
| • |
the excess distribution or gain will be allocated ratably over your holding period for the ADSs or Class A ordinary shares,
|
| • |
the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and
|
| • |
the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.
|
|
F.
|
Dividends and Paying Agents
|
|
G.
|
Statement by Experts
|
|
H.
|
Documents on Display
|
|
I.
|
Subsidiary Information
|
|
ITEM 11.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
ITEM 12.
|
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|
|
A.
|
Debt Securities
|
|
B.
|
Warrants and Rights
|
|
C.
|
Other Securities
|
|
D.
|
American Depositary Shares
|
|
Persons depositing or withdrawing shares or ADS holders must pay:
|
For:
|
|
| US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) |
Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property
Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
|
|
| US$0.05 (or less) per ADS | Any cash distribution to ADS holders | |
| A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs | Distribution of securities distributed to holders of deposited securities (including rights) that are distributed by the depositary to ADS holders | |
| US$0.05 (or less) per ADS per calendar year | Depositary services | |
| Registration or transfer fees | Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares | |
| Expenses of the depositary |
Cable and facsimile transmissions (when expressly provided in the deposit agreement)
Converting foreign currency to U.S. dollars
|
|
| Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes | As necessary | |
| Any charges incurred by the depositary or its agents for servicing the deposited securities | As necessary | |
| ITEM 13. |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|
| ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|
| ITEM 15. |
CONTROLS AND PROCEDURES
|
|
ITEM 16A.
|
AUDIT COMMITTEE FINANCIAL EXPERT
|
|
ITEM 16B.
|
CODE OF ETHICS
|
|
ITEM 16C.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
|
For the Year Ended
December 31,
|
||||||||
|
2019
|
2020
|
|||||||
|
(In thousands of US dollars)
|
||||||||
|
Audit Fees
(1)
|
1,151 | 1,073 | ||||||
|
Tax Fees
(2)
|
22 | — | ||||||
|
All Other Fees
|
— | — | ||||||
|
|
|
|
|
|||||
|
Total
|
1,173 | 1,073 | ||||||
|
|
|
|
|
|||||
| (1) |
“Audit fees” means the aggregate fees billed for each of the fiscal years listed for professional services rendered by our principal auditors for the audit or review of our annual or quarterly financial statements, fees for assurance services rendered in connection with our initial public offering in 2018, and fees related to the
follow-on
offering in 2019.
|
| (2) |
“Tax fees” represents the aggregate fees for professional services rendered by our principal auditors for tax compliance.
|
|
ITEM 16D.
|
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|
|
ITEM 16E.
|
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|
|
Period
|
Total
Number
of ADSs
Purchased
|
Average
Price
Paid per
ADS
(1)
|
Total
Number
of ADSs
Purchased
as Part of
Publicly
Announced
Plans or
Programs
(2)
|
Approximate
Dollar
Value of
ADSs that
May Yet Be
Purchased
Under the
Program
(2)
|
||||||||||
|
January 2020
|
— | — | 4,665,700 | 29,435,841 | ||||||||||
|
February 2020
|
— | — | 4,665,700 | 29,435,841 | ||||||||||
|
March 2020
|
— | — | 4,665,700 | 29,435,841 | ||||||||||
|
April 2020
|
— | — | 4,665,700 | 29,435,841 | ||||||||||
|
May 2020
|
— | — | 4,665,700 | 29,435,841 | ||||||||||
|
June 2020
|
— | — | 4,665,700 | 29,435,841 | ||||||||||
|
July 2020
|
— | — | 4,665,700 | 29,435,841 | ||||||||||
|
August 2020
|
— | — | 4,665,700 | 29,435,841 | ||||||||||
|
September 2020
|
— | — | 4,665,700 | 29,435,841 | ||||||||||
|
October 2020
|
— | — | 4,665,700 | 29,435,841 | ||||||||||
|
November 2020
|
— | — | 4,665,700 | 29,435,841 | ||||||||||
|
December 2020
|
— | — | 4,665,700 | 29,435,841 | ||||||||||
| (1) |
Every four of the ADSs represent one Class A ordinary share. The average price per ADS is calculated using the execution price for each repurchase excluding commissions paid to brokers.
|
| (2) |
We announced a share repurchase program approved by our board of directors in May 2019, under which we may repurchase up to US$50 million worth of our outstanding ADSs over a period of twelve months. Under the share repurchase program, we may repurchase our ADSs from time to time through open market transactions at prevailing market prices, privately negotiated transactions, block trades or any combination thereof. In addition, we will also effect repurchase transactions in compliance with Rule
10b5-1
and/or Rule
10b-18
under the Securities Exchange Act of 1934, as amended, and its insider trading policy. The number of ADSs repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with our working capital requirements, general business conditions and other factors.
|
|
ITEM 16F.
|
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
|
|
ITEM 16G.
|
CORPORATE GOVERNANCE
|
|
ITEM 16H.
|
MINE SAFETY DISCLOSURE
|
|
ITEM 17.
|
FINANCIAL STATEMENTS
|
|
ITEM 18.
|
FINANCIAL STATEMENTS
|
|
ITEM 19.
|
EXHIBITS
|
|
Exhibit
Number
|
Description of Document
|
|
| 101.INS* | Inline XBRL Instance Document—this instance document does not appear on the Interactive Data File because its XBRL tags are not embedded within the Inline XBRL document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
| * |
Filed herewith
|
| ** |
Furnished herewith
|
| † |
Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation
S-K.
The omitted information is (i) not material and (ii) would likely cause competitive harm to the Company if publicly disclosed. Schedules have been omitted from this exhibit pursuant to Item 601(a)(5) of Regulation
S-K.
The Company agrees to furnish supplementally an unredacted copy of the exhibit or a copy of any omitted schedule to the SEC upon its request.
|
| QUTOUTIAO INC. | ||
| By |
/s/ Eric Siliang Tan
|
|
| Name: | Eric Siliang Tan | |
| Title: | Chairman and Chief Executive Officer | |
| F-2 | ||||
| F-3 | ||||
| F-5 | ||||
| F-6 | ||||
|
F-9
|
||||
| F-11 |
|
Advance from customers and deferred revenue (including advance from customers and deferred revenue of the consolidated VIEs and VIE’s subsidiaries without recourse to the Company of RMB246,251,382 and RMB 140,776,350 as of December 31, 2019 and December 31, 2020, respectively)
|
246,630,128 | 140,776,350 | 21,574,920 | |||||||||||
|
Salary and welfare payable (including salary and welfare payable of the consolidated VIEs and VIE’s subsidiaries without recourse to the Company of RMB126,884,752 and RMB115,307,402 as of December 31, 2019 and December 31, 2020, respectively)
|
129,169,734 | 149,703,938 | 22,943,132 | |||||||||||
|
Tax payable (including tax payable of the consolidated VIEs and VIE’s subsidiaries without recourse to the Company of RMB93,025,726 and RMB98,797,489 as of December 31, 2019 and December 31, 2020, respectively)
|
12 | 118,156,494 | 97,143,585 | 14,887,906 | ||||||||||
|
Lease liabilities, current (including lease liabilities, current of the consolidated VIEs and VIE’s subsidiaries without recourse to the Company of RMB31,275,663 and RMB20,030,138 as of December 31, 2019 and December 31, 2020, respectively)
|
11 | 38,210,188 | 20,760,421 | 3,181,674 | ||||||||||
|
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 RMB89,184,947 and RMB100,087,815 as of December 31, 2019 and December 31, 2020, respectively)
|
2(w) | 89,184,947 | 100,087,815 | 15,339,129 | ||||||||||
|
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 RMB761,687,143 and RMB607,455,490 as of December 31, 2019 and December 31, 2020, respectively)
|
13 | 788,495,442 | 763,434,272 | 117,001,418 | ||||||||||
|
Total current liabilities
|
1,875,697,710 | 1,885,990,348 | 289,040,664 | |||||||||||
|
Non-current
liabilities:
|
||||||||||||||
|
Other
non-current
liabilities
|
13 | 7,212,463 | 4,255,931 | 652,250 | ||||||||||
|
Lease liabilities,
non-current
|
11 | 26,651,446 | 23,755,721 | 3,640,724 | ||||||||||
|
Deferred tax liabilities
|
19 | 21,228,656 | 18,825,416 | 2,885,121 | ||||||||||
|
Convertible loan
|
14 | 1,218,905,676 | 1,174,867,883 | 180,056,381 | ||||||||||
|
Non-current
liabilities
|
1,273,998,241 | 1,221,704,951 | 187,234,476 | |||||||||||
|
Total liabilities
|
3,149,695,951 | 3,107,695,299 | 476,275,140 | |||||||||||
|
Commitments and contingencies
|
24 | |||||||||||||
|
Mezzanine equity:
|
||||||||||||||
|
Redeemable
non-controlling
interests
|
21 | 495,844,565 | 1,093,526,058 | 167,590,201 | ||||||||||
|
Shareholders’ deficit:
|
||||||||||||||
|
Class A ordinary shares (US$0.0001 par value, 50,000,000 shares authorized as of December 31, 2019 and 2020; 40,812,245 shares and 42,812,245 issued as of December 31, 2019 and 2020; 32,176,825 shares and 35,321,611 shares outstanding as of December 31, 2019 and 2020)
|
16 | 20,260 | 22,426 | 3,437 | ||||||||||
|
Class B ordinary shares (US$0.0001 par value; 34,248,442 shares authorized as of December 31, 2019 and 2020; 32,937,193 shares issued and outstanding as of December 31, 2019 and 2020)
|
16 | 24,391 | 24,391 | 3,738 | ||||||||||
|
Additional
paid-in
capital
|
4,321,100,861 | 4,784,314,735 | 733,228,312 | |||||||||||
|
Treasury stock (US$0.0001 par value; 8,635,420 and 7,490,634 shares as of December 31, 2019 and December 31, 2020, respectively)
|
(142,228,779 | ) | (142,228,779 | ) | (21,797,514 | ) | ||||||||
|
Accumulated other comprehensive income (loss)
|
(17,934,525 | ) | 84,319,590 | 12,922,543 | ||||||||||
|
Accumulated deficit
|
(4,862,464,162 | ) | (6,007,226,873 | ) | (920,647,797 | ) | ||||||||
|
Total Qutoutiao Inc. shareholders’ deficit
|
(701,481,954 | ) | (1,280,774,510 | ) | (196,287,281 | ) | ||||||||
|
Non-controlling
interests
|
21 | (3,861,667 | ) | (4,589,258 | ) | (703,335 | ) | |||||||
|
Total shareholders’ deficit
|
(705,343,621 | ) | (1,285,363,768 | ) | (196,990,616 | ) | ||||||||
|
Total liabilities, mezzanine equity and shareholders’ deficit
|
2,940,196,895 | 2,915,857,589 | 446,874,725 |
|
Year ended December 31,
|
||||||||||||||||||||
|
Note
|
2018
|
2019
|
2020
|
|||||||||||||||||
|
RMB
|
RMB
|
RMB
|
US$(Note 2(e))
|
|||||||||||||||||
|
Advertising and marketing revenue
|
2,796,810,549 | 4,942,104,752 | 4,795,960,137 | 735,013,048 | ||||||||||||||||
|
Advertising and marketing revenue- related parties
|
22 | 17,447,475 | 473,215,790 | 250,874,596 | 38,448,214 | |||||||||||||||
|
Other revenue
|
178,290,618 | 154,760,062 | 238,360,290 | 36,530,313 | ||||||||||||||||
|
Other revenue-related parties
|
22 | 29,597,143 | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net revenues
|
3,022,145,785 | 5,570,080,604 | 5,285,195,023 | 809,991,575 | ||||||||||||||||
|
Cost of revenues
|
(497,592,461 | ) | (1,598,220,452 | ) | (1,643,365,048 | ) | (251,856,712 | ) | ||||||||||||
|
Cost of revenues-related parties
|
22 | (6,020,268 | ) | (42,411,604 | ) | (31,051,100 | ) | (4,758,789 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Gross profit
|
2,518,533,056 | 3,929,448,548 | 3,610,778,875 | 553,376,074 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Operating expenses:
|
||||||||||||||||||||
|
Research and development expenses
|
2(t) | (270,107,740 | ) | (926,231,578 | ) | (947,870,809 | ) | (145,267,557 | ) | |||||||||||
|
Sales and marketing expenses
|
2(u) | (3,226,367,334 | ) | (5,486,423,653 | ) | (3,377,368,441 | ) | (517,604,359 | ) | |||||||||||
|
Sales and marketing expenses-related parties
|
22 | (23,670,772 | ) | (3,284,223 | ) | (4,192,090 | ) | (642,466 | ) | |||||||||||
|
General and administrative expenses
|
2(v) | (980,725,286 | ) | (267,033,100 | ) | (392,815,316 | ) | (60,201,581 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Total operating expenses
|
(4,500,871,132 | ) | (6,682,972,554 | ) | (4,722,246,656 | ) | (723,715,963 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Other operating income
|
20 | 724,892 | 30,292,356 | 79,298,306 | 12,152,997 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Loss from operations
|
(1,981,613,184 | ) | (2,723,231,650 | ) | (1,032,169,475 | ) | (158,186,892 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Interest income
|
5, 6 | 27,087,009 | 48,440,468 | 10,418,919 | 1,596,769 | |||||||||||||||
|
Interest expense
|
14 | — | (26,878,316 | ) | (38,143,009 | ) | (5,845,672 | ) | ||||||||||||
|
Foreign exchange related gains (loss), net
|
4,133,996 | 1,868,497 | (7,183,462 | ) | (1,100,914 | ) | ||||||||||||||
|
Investment income (loss)
|
6 | 4,214,607 | 6,327,104 | (31,788,048 | ) | (4,871,731 | ) | |||||||||||||
|
Other income/(expenses), net
|
2(ab) | (69,181 | ) | 9,048,926 | (7,308,728 | ) | (1,120,112 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Loss before income taxes
|
(1,946,246,753 | ) | (2,684,424,971 | ) | (1,106,173,803 | ) | (169,528,552 | ) | ||||||||||||
|
Income tax benefit/(expense)
|
19 | 400,541 | (4,842,876 | ) | 1,007,370 | 154,386 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net loss
|
(1,945,846,212 | ) | (2,689,267,847 | ) | (1,105,166,433 | ) | (169,374,166 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net loss attributable to
non-controlling
interests
|
3,274,525 | 587,142 | 727,592 | 111,508 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net loss attributable to Qutoutiao Inc.
|
(1,942,571,687 | ) | (2,688,680,705 | ) | (1,104,438,841 | ) | (169,262,658 | ) | ||||||||||||
|
Accretion to convertible redeemable preferred shares redemption value
|
15 | (101,806,743 | ) | — | — | — | ||||||||||||||
|
Accretion to redemption value of convertible redeemable preferred shares of a subsidiary
|
21 | (978,201 | ) | (20,548,032 | ) | (48,276,771 | ) | (7,398,739 | ) | |||||||||||
|
Gains on repurchase of convertible redeemable preferred shares
|
15 | 18,332,152 | — | — | — | |||||||||||||||
|
Gains on repurchase of convertible redeemable preferred shares of a subsidiary
|
21 | — | — | 14,841,680 | 2,274,587 | |||||||||||||||
|
Deemed dividend to preferred shareholders
|
15 | (1,916,871 | ) | — | — | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net loss attributable to Qutoutiao Inc.’s ordinary shareholders
|
(2,028,941,350 | ) | (2,709,228,737 | ) | (1,137,873,932 | ) | (174,386,810 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net loss
|
(1,945,846,212 | ) | (2,689,267,847 | ) | (1,105,166,433 | ) | (169,374,166 | ) | ||||||||||||
|
Other comprehensive income/(loss)
|
||||||||||||||||||||
|
Foreign currency translation adjustment, net of nil tax
|
(16,453,526 | ) | (1,505,650 | ) | 102,254,115 | 15,671,129 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Total comprehensive loss
|
(1,962,299,738 | ) | (2,690,773,497 | ) | (1,002,912,318 | ) | (153,703,037 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Comprehensive loss attributable to
non-controlling
interests
|
3,274,525 | 587,142 | 727,592 | 111,508 | ||||||||||||||||
|
Comprehensive loss attributable to Qutoutiao Inc.
|
(1,959,025,213 | ) | (2,690,186,355 | ) | (1,002,184,726 | ) | (153,591,529 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Net loss per share attributable to Qutoutiao Inc.’s ordinary shareholders
|
||||||||||||||||||||
|
— Basic and diluted
|
23 | (52.69 | ) | (39.41 | ) | (15.69 | ) | (2.40 | ) | |||||||||||
|
Weighted average number of ordinary shares used in per share calculation:
|
||||||||||||||||||||
|
— Basic and Diluted
|
23 | 38,507,184 | 68,749,981 | 72,513,077 | 72,513,077 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Outstanding ordinary
shares
|
Additional
paid-in
capital
|
Treasury stocks
|
Accumulated
other
comprehensive
loss
|
Total
shareholders’
deficit
|
||||||||||||||||||||||||||||||||||||
|
Number of
Shares
|
Amount
|
Number of
Shares
|
Amount
|
Accumulated
deficit
|
Statutory
reserves
|
Non-controlling
interests
|
||||||||||||||||||||||||||||||||||
|
Balance as of January 1, 2018
|
24,062,500 | 15,723 | 8,856,316 | 10,000,000 | — | 24,651 | (117,456,701 | ) | — | (108,560,011 | ) | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Share-based compensation expense (Note 17)
|
— | — | 951,626,250 | — | — | — | — | — | — | 951,626,250 | ||||||||||||||||||||||||||||||
|
Distribution to the founder (Note 17)
|
— | — | 6,837,374 | — | — | — | (6,837,374 | ) | — | — | — | |||||||||||||||||||||||||||||
|
Accretion on Series A convertible redeemable preferred shares to redemption value
|
— | — | — | — | — | — | (15,718,213 | ) | — | — | (15,718,213 | ) | ||||||||||||||||||||||||||||
|
Accretion on Series A1 convertible redeemable preferred shares to redemption value
|
— | — | — | — | — | — | (4,840,875 | ) | — | — | (4,840,875 | ) | ||||||||||||||||||||||||||||
|
Accretion on Series B1 convertible redeemable preferred shares to redemption value
|
— | — | — | — | — | — | (37,001,459 | ) | — | — | (37,001,459 | ) | ||||||||||||||||||||||||||||
|
Accretion on Series B2 convertible redeemable preferred shares to redemption value
|
— | — | — | — | — | — | (31,800,587 | ) | — | — | (31,800,587 | ) | ||||||||||||||||||||||||||||
|
Accretion on Series B3 convertible redeemable preferred shares to redemption value
|
— | — | — | — | — | — | (12,312,158 | ) | — | — | (12,312,158 | ) | ||||||||||||||||||||||||||||
|
Accretion on Series C1 convertible redeemable preferred shares to redemption value
|
— | — | — | — | — | — | (133,451 | ) | — | — | (133,451 | ) | ||||||||||||||||||||||||||||
|
Accretion on Series A convertible redeemable preferred shares of a subsidiary
|
— | — | — | — | — | — | (978,201 | ) | — | — | (978,201 | ) | ||||||||||||||||||||||||||||
|
Deemed dividend to preferred shareholders (Note 15)
|
— | — | 1,916,871 | — | — | — | (1,916,871 | ) | — | — | — | |||||||||||||||||||||||||||||
|
Conversion of series A, A1, B1, B2, B3, C1 preferred shares to ordinary shares
|
17,821,248 | 12,217 | 2,123,975,054 | — | — | — | — | — | — | 2,123,987,271 | ||||||||||||||||||||||||||||||
|
Vesting of restricted shares to founders
|
15,937,500 | 10,926 | (10,926 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
|
Gains on repurchase of convertible redeemable preferred shares
|
— | — | — | — | — | — | 18,332,152 | — | — | 18,332,152 | ||||||||||||||||||||||||||||||
|
Issuance of ordinary shares upon Initial Public Offering (“IPO”) and over-allotment option, net of cost of issuance (Note 3)
|
3,450,000 | 2,364 | 590,929,119 | — | — | — | — | — | — | 590,931,483 | ||||||||||||||||||||||||||||||
|
Exercise of share options
|
500,000 | 317 | — | (500,000 | ) | — | — | — | — | — | 317 | |||||||||||||||||||||||||||||
|
Net loss
|
— | — | — | — | — | — | (1,942,571,687 | ) | — | (3,274,525 | ) | (1,945,846,212 | ) | |||||||||||||||||||||||||||
|
Foreign currency translation
|
— | — | — | — | — | (16,453,526 | ) | — | — | — | (16,453,526 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Balance as of December 31, 2018
|
61,771,248 | 41,547 | 3,684,130,058 | 9,500,000 | — | (16,428,875 | ) | (2,153,235,425 | ) | — | (3,274,525 | ) | 1,511,232,780 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Outstanding ordinary
shares
|
Additional
paid-in
capital
|
Treasury stocks
|
Accumulated
other
comprehensive
loss
|
Total
shareholders’
deficit
|
||||||||||||||||||||||||||||||||||||
|
Number of
Shares
|
Amount
|
Number of
Shares
|
Amount
|
Accumulated
deficit
|
Statutory
reserves
|
Non-controlling
interests
|
||||||||||||||||||||||||||||||||||
|
Balance as of January 1, 2019
|
61,771,248 | 41,547 | 3,684,130,058 | 9,500,000 | — | (16,428,875 | ) | (2,153,235,425 | ) | — | (3,274,525 | ) | 1,511,232,780 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Share-based compensation expense (Note 17)
|
— | — | 271,978,493 | — | — | — | — | — | — | 271,978,493 | ||||||||||||||||||||||||||||||
|
Accretion on Series A convertible redeemable preferred shares of a subsidiary
|
— | — | — | — | — | — | (12,171,842 | ) | — | — | (12,171,842 | ) | ||||||||||||||||||||||||||||
|
Accretion on Series B convertible redeemable
preferred shares of a subsidiary
|
— | — | — | — | — | — | (8,376,190 | ) | — | — | (8,376,190 | ) | ||||||||||||||||||||||||||||
|
Issuance of ordinary shares upon
follow-on
offering, net of issuance costs (Note 3)
|
831,967 | 558 | 212,143,015 | — | — | — | — | — | — | 212,143,573 | ||||||||||||||||||||||||||||||
|
Issuance of ordinary shares to the Paper (Note 3)
|
1,480,123 | 1,047 | 152,849,295 | — | — | — | — | — | — | 152,850,342 | ||||||||||||||||||||||||||||||
|
Repurchase of ordinary shares (Note 2z)
|
(1,166,425 | ) | — | — | 1,166,425 | (142,228,779 | ) | — | — | — | — | (142,228,779 | ) | |||||||||||||||||||||||||||
|
Exercise of share options
|
2,197,105 | 1,499 | — | (2,031,005 | ) | — | — | — | — | — | 1,499 | |||||||||||||||||||||||||||||
|
Net loss
|
— | — | — | — | — | — | (2,688,680,705 | ) | — | (587,142 | ) | (2,689,267,847 | ) | |||||||||||||||||||||||||||
|
Foreign currency translation
|
— | — | — | — | — | (1,505,650 | ) | — | — | — | (1,505,650 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Balance as of December 31, 2019
|
65,114,018 | 44,651 | 4,321,100,861 | 8,635,420 | (142,228,779 | ) | (17,934,525 | ) | (4,862,464,162 | ) | — | (3,861,667 | ) | (705,343,621 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Outstanding ordinary
shares
|
Additional
paid-in
capital
|
Treasury stocks
|
Accumulated
other
comprehensive
income/(loss)
|
Total
|
||||||||||||||||||||||||||||||||||||
|
Number of
Shares
|
Amount
|
Number of
Shares
|
Amount
|
Accumulated
deficit
|
Statutory
reserves
|
Non-controlling
interests
|
shareholders’
deficit
|
|||||||||||||||||||||||||||||||||
|
Balance as of January 1, 2020
|
65,114,018 | 44,651 | 4,321,100,861 | 8,635,420 | (142,228,779 | ) | (17,934,525 | ) | (4,862,464,162 | ) | — | (3,861,667 | ) | (705,343,621 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Cumulative effect of adoption of accounting standard
|
— | — | — | — | — | — | (6,888,779 | ) | — | — | (6,888,779 | ) | ||||||||||||||||||||||||||||
|
Share-based compensation expense (Note 17)
|
— | 463,213,874 | — | — | — | — | — | — | 463,213,874 | |||||||||||||||||||||||||||||||
|
Accretion on Series A convertible redeemable preferred shares of a subsidiary
|
— | — | — | — | — | — | (13,509,457 | ) | — | — | (13,509,457 | ) | ||||||||||||||||||||||||||||
|
Accretion on Series B convertible redeemable preferred shares of a subsidiary
|
— | — | — | — | — | — | (33,187,330 | ) | — | — | (33,187,330 | ) | ||||||||||||||||||||||||||||
|
Accretion on Series C convertible redeemable preferred shares of a subsidiary
|
— | — | — | — | — | — | (1,579,984 | ) | — | — | (1,579,984 | ) | ||||||||||||||||||||||||||||
|
Gains on repurchase of Series B convertible redeemable preferred shares of a subsidiary
|
— | — | — | — | — | — | 14,841,680 | — | — | 14,841,680 | ||||||||||||||||||||||||||||||
|
Exercise of share options
|
3,144,786 | 2,166 | — | (1,144,786 | ) | — | — | — | — | — | 2,166 | |||||||||||||||||||||||||||||
|
Net loss
|
— | — | — | — | — | — | (1,104,438,841 | ) | — | (727,591 | ) | (1,105,166,432 | ) | |||||||||||||||||||||||||||
|
Foreign currency translation
|
— | — | — | — | — | 102,254,115 | — | — | — | 102,254,115 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Balance as of December 31, 2020
|
68,258,804 | 46,817 | 4,784,314,735 | 7,490,634 | (142,228,779 | ) | 84,319,590 | (6,007,226,873 | ) | — | (4,589,258 | ) | (1,285,363,768 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Year ended December 31,
|
||||||||||||||||
|
2018
|
2019
|
2020
|
||||||||||||||
|
RMB
|
RMB
|
RMB
|
US$(Note 2(e))
|
|||||||||||||
|
Cash flows from operating activities
|
||||||||||||||||
|
Net loss
|
(1,945,846,212 | ) | (2,689,267,847 | ) | (1,105,166,433 | ) | (169,374,166 | ) | ||||||||
|
Adjustments for:
|
||||||||||||||||
|
Depreciation of property and equipment
|
4,291,284 | 10,003,655 | 12,143,925 | 1,861,138 | ||||||||||||
|
Amortization of intangible assets
|
1,602,163 | 10,555,229 | 13,025,735 | 1,996,281 | ||||||||||||
|
Non-cash
operating lease expense
|
— | 43,513,790 | 41,205,243 | 6,314,980 | ||||||||||||
|
Deferred tax benefit
|
(400,541 | ) | (2,403,243 | ) | (2,403,240 | ) | (368,313 | ) | ||||||||
|
Share-based compensation
|
951,626,250 | 271,978,493 | 463,213,874 | 70,990,632 | ||||||||||||
|
Interest expense
|
— | 26,878,316 | 36,798,148 | 5,639,563 | ||||||||||||
|
Changes in estimate for accrued liabilities related to users’ loyalty programs
|
54,601,750 | 22,687,320 | 8,746,231 | 1,340,419 | ||||||||||||
|
Allowance for doubtful accounts
|
— | — | 79,809,120 | 12,231,283 | ||||||||||||
|
Unrealized gain of publicly traded equity security
|
— | — | (16,665,259 | ) | (2,554,063 | ) | ||||||||||
|
Unrealized loss of
non-marketable
equity securities
|
— | — | 54,403,495 | 8,337,700 | ||||||||||||
|
Loss on disposal of property, plant and equipment
|
— | — | 169,916 | 26,041 | ||||||||||||
|
Changes in assets and liabilities, net of impact of acquisition:
|
||||||||||||||||
|
Accounts receivable
|
(160,733,479 | ) | (322,838,858 | ) | (297,664,140 | ) | (45,619,025 | ) | ||||||||
|
Amount due from related parties
|
— | (278,155,878 | ) | (105,438,482 | ) | (16,159,154 | ) | |||||||||
|
Prepayments and other current assets
|
(74,365,824 | ) | (85,958,956 | ) | 105,748,575 | 16,206,678 | ||||||||||
|
Accounts receivables, noncurrent
|
— | — | (54,638,516 | ) | (8,373,719 | ) | ||||||||||
|
Other
non-current
assets
|
(3,388,147 | ) | (8,979,480 | ) | 13,111,844 | 2,009,478 | ||||||||||
|
Accounts payable
|
115,892,236 | 197,019,533 | 120,574,857 | 18,478,905 | ||||||||||||
|
Amount due to related parties
|
— | 3,436,586 | 5,990,297 | 918,053 | ||||||||||||
|
Registered users’ loyalty payable
|
235,684,796 | (122,516,495 | ) | (61,518,893 | ) | (9,428,183 | ) | |||||||||
|
Salary and welfare payable
|
36,964,404 | 85,747,532 | 20,256,670 | 3,104,470 | ||||||||||||
|
Tax payable
|
70,010,545 | 13,096,995 | (20,963,972 | ) | (3,212,869 | ) | ||||||||||
|
Accrued liabilities related to users’ loyalty programs
|
(197,471,407 | ) | 22,363,815 | 2,156,637 | 330,519 | |||||||||||
|
Accrued liabilities and other current liabilities
|
353,985,756 | 392,071,989 | (28,786,344 | ) | (4,411,700 | ) | ||||||||||
|
Advances from customers and deferred revenue
|
113,095,683 | 91,530,811 | (105,853,778 | ) | (16,222,801 | ) | ||||||||||
|
Operating lease liabilities
|
— | (45,584,621 | ) | (39,073,120 | ) | (5,988,218 | ) | |||||||||
|
Non-current
liabilities
|
9,686,219 | (2,473,756 | ) | (2,956,532 | ) | (453,108 | ) | |||||||||
|
Net cash used in operating activities
|
(434,764,524 | ) | (2,367,295,070 | ) | (863,774,142 | ) | (132,379,179 | ) | ||||||||
|
Cash flows from investing activities:
|
||||||||||||||||
|
Purchase of short-term investments
|
(4,164,032,230 | ) | (2,454,602,495 | ) | (1,271,775,756 | ) | (194,908,162 | ) | ||||||||
|
Purchase of long-term investments
|
— | (37,589,200 | ) | (106,276,500 | ) | (16,287,586 | ) | |||||||||
|
Proceeds from maturity of short-term investments
|
4,189,115,780 | 1,294,361,059 | 2,173,594,307 | 333,117,901 | ||||||||||||
|
Purchase of intangible assets
|
(72,097,321 | ) | (4,971,310 | ) | (3,785,796 | ) | (580,199 | ) | ||||||||
|
Cash paid for acquisitions, net of cash acquired
|
(10,729,825 | ) | — | — | — | |||||||||||
|
Purchase of property and equipment
|
(14,924,590 | ) | (21,349,657 | ) | (6,197,867 | ) | (949,865 | ) | ||||||||
|
Proceeds from disposal of property and equipment
|
175,634 | — | 786,601 | 120,552 | ||||||||||||
|
Prepayment for purchase of intangible asset
|
— | — | (3,800,000 | ) | (582,375 | ) | ||||||||||
|
Net cash provided by/(used in) investing activities
|
(72,492,552 | ) | (1,224,151,603 | ) | 782,544,989 | 119,930,266 | ||||||||||
|
Cash flows from financing activities:
|
||||||||||||||||
|
Proceeds from issuance of Series B1 Convertible redeemable Preferred Shares, net of issuance costs
|
651,736,522 | — | — | — | ||||||||||||
|
Proceeds from issuance of Series B2 Convertible redeemable Preferred Shares, net of issuance costs
|
569,316,830 | — | — | — | ||||||||||||
|
Proceeds from issuance of Series B3 Convertible redeemable Preferred Shares, net of issuance costs
|
282,249,969 | — | — | — | ||||||||||||
|
Proceeds from issuance of Series C1 Convertible redeemable Preferred Shares, net of issuance costs
|
104,947,585 | — | — | — | ||||||||||||
|
Proceeds from issuance of Series A Convertible redeemable Preferred Shares of a subsidiary, net of issuance cost
|
97,147,400 | 27,357,503 | — | — | ||||||||||||
|
Proceeds from issuance of Series B Convertible redeemable Preferred Shares of a subsidiary, net of issuance cost
|
— | 353,337,104 | — | — | ||||||||||||
|
Payment of accrued issuance costs for Series B convertible redeemable preferred shares of a subsidiary
|
— | — | (435,000 | ) | (66,667 | ) | ||||||||||
|
Repurchase of Series B Convertible redeemable Preferred Shares of a subsidiary
|
— | — | (135,744,000 | ) | (20,803,678 | ) | ||||||||||
|
Proceeds from issuance of Series C Convertible redeemable Preferred Shares of a subsidiary, net of issuance costs
|
— | — | 360,569,000 | 55,259,617 | ||||||||||||
|
Proceeds from issuance of ordinary shares upon Initial Public Offering and over-allotment option, net of cost of issuance
|
592,507,394 | — | — | — | ||||||||||||
|
Payment of accrued Initial Public Offering expense
|
— | (1,575,911 | ) | — | — | |||||||||||
|
Proceeds from
follow-on
offering, net of issuance costs
|
— | 212,143,573 | — | — | ||||||||||||
|
Proceeds from issuance of ordinary shares to The Paper
|
144,351,128 | — | — | |||||||||||||
|
Proceeds from Convertible Loan, net of issuance costs
|
— | 1,174,616,692 | — | — | ||||||||||||
|
Payment for repurchase of ordinary shares
|
— | (142,228,779 | ) | — | — | |||||||||||
|
Cash received from other financing activities
|
138,051 | — | — | — | ||||||||||||
|
Proceeds from bank borrowings
|
— | — | 70,000,000 | 10,727,969 | ||||||||||||
|
Proceeds of borrowings from a related party
|
— | — | 13,356,200 | 2,046,927 | ||||||||||||
|
Net cash provided by financing activities
|
2,298,043,751 | 1,768,001,310 | 307,746,200 | 47,164,168 | ||||||||||||
|
Net increase/(decrease) in cash, cash equivalents and restricted cash
|
1,790,786,675 | (1,823,445,363 | ) | 226,517,047 | 34,715,255 | |||||||||||
|
Effect of exchange rate changes on cash, restricted cash and cash equivalents
|
117,043,158 | 12,845,762 | (7,414,861 | ) | (1,136,377 | ) | ||||||||||
|
Cash, cash equivalents and restricted cash at the beginning of year
|
278,458,413 | 2,186,288,246 | 375,688,645 | 57,576,804 | ||||||||||||
|
Cash, cash equivalents and restricted cash at the end of year
|
2,186,288,246 | 375,688,645 | 594,790,831 | 91,155,682 | ||||||||||||
|
Supplemental disclosure of cash flow information:
|
||||||||||||||||
|
Cash paid for interest
|
— | — | 364,444 | 55,853 | ||||||||||||
|
Cash paid for income taxes
|
— | — | 3,267,758 | 500,806 | ||||||||||||
|
Non-cash
financing and investing activities:
|
||||||||||||||||
|
Accrued Initial Public Offering expense
|
1,575,911 | — | — | — | ||||||||||||
|
Accrued Series A and B convertible redeemable preferred shares issuance cost of a subsidiary
|
126,146 | 435,000 | — | — | ||||||||||||
|
Revenue recognized for
non-monetary
transactions (Note 8)
|
— | (40,000,000 | ) | — | — | |||||||||||
|
Sales and marketing expense recorded for
non-monetary
transactions (Note 8)
|
— | 21,132,075 | — | — | ||||||||||||
|
Incentive payment to customer (Note 13)
|
(22,842,164 | ) | — | — | — | |||||||||||
|
Cooperation service fee to The Paper (Note 3)
|
— | (8,499,574 | ) | — | — | |||||||||||
|
Accretion to Series A preferred shares redemption value
|
15,718,213 | — | — | — | ||||||||||||
|
Accretion to Series A1 preferred shares redemption value
|
4,840,875 | — | — | — | ||||||||||||
|
Accretion to Series B1 preferred shares redemption value
|
37,001,459 | — | — | — | ||||||||||||
|
Accretion to Series B2 preferred shares redemption value
|
31,800,587 | — | — | — | ||||||||||||
|
Accretion to Series B3 preferred shares redemption value
|
12,312,158 | — | — | — | ||||||||||||
|
Accretion to Series C1 preferred shares redemption value
|
133,451 | — | — | — | ||||||||||||
|
Accrued Series C convertible redeemable preferred shares issuance cost of a subsidiary
|
— | — | 3,135,292 | 480,505 | ||||||||||||
|
Deemed dividend to preferred shares shareholders
|
1,916,871 | — | — | — | ||||||||||||
|
Gains on repurchase of convertible redeemable preferred shares
|
(18,332,152 | ) | — | — | — | |||||||||||
|
Gains on repurchase of convertible redeemable preferred shares of a subsidiary
|
— | — | (14,841,680 | ) | (2,274,587 | ) | ||||||||||
|
Accretion to redemption value of Series A, B and C convertible redeemable preferred shares of a subsidiary
|
978,201 | 20,548,032 | 48,276,771 | 7,398,739 | ||||||||||||
|
Content and intangible assets acquired from a third-party investor through the issuance of Series C convertible redeemable preferred shares of a subsidiary (Note 21)
|
— | — | (375,804,780 | ) | (57,594,602 | ) | ||||||||||
|
The below table reconciles cash, cash equivalents, and restricted cash as reported in the consolidated balanace sheets to the total of the same amounts shown in the consolidated statements of cash flows
|
||||||||||||||||
|
Cash and cash equivalents
|
2,186,288,246 | 347,817,093 | 494,474,891 | 75,781,592 | ||||||||||||
|
Restricted cash
|
— | 27,871,552 | 100,315,940 | 15,374,090 | ||||||||||||
|
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows
|
2,186,288,246 | 375,688,645 | 594,790,831 | 91,155,682 |
|
1.
|
Organization and Principal Activities
|
|
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”)
|
August 2017
|
Hong Kong | 100 | % | ||||||||
|
Qtech USA Inc. (“Qtech”)
|
April 2018
|
USA | 100 | % | ||||||||
|
Fun Literature Limited (Cayman) (“Fun Literature”)
|
October 2018 |
Cayman
Islands |
|
78 | % | |||||||
|
Fun Literature (HK) Limited (“Fun Literature HK”)
|
|
|
October 2018
|
|
|
|
Hong Kong
|
|
|
|
100
|
% |
|
Shanghai Quyun Internet Technology Co., Ltd. (“Quyun WFOE”)
|
October 2017 | PRC | 100 | % | ||||||||
|
Shanghai Dianguan Network Technology Co., Ltd. (“Dianguan”)
|
February 2018 | PRC | 100 | % | ||||||||
|
QTT Asia Ltd.(“QTT Asia”)
|
April 2018 |
|
British
Virgin
Islands
|
(“BVI”)
|
100 | % | ||||||
|
Shanghai Zhicao Information Technology Co., Ltd. (“Zhicao WFOE”)
|
December 2018 | PRC | 100 | % | ||||||||
|
Shanghai Chenxing Software Technology Co., Ltd. (“Chenxing”)
|
Januray 2020 | PRC | 100 | % | ||||||||
|
Shanghai Yanmo Software Technology Co., Ltd. (“Yanmo”)
|
October 2019 | PRC | 100 | % | ||||||||
|
Shanghai Shuqin Information Technology Co., Ltd. (“Shuqin”)
|
November 2020 | PRC | 100 | % | ||||||||
|
Shanghai Wennuo Information Technology Co., Ltd. (“Wennuo”)
|
July 2020 | PRC | 100 | % | ||||||||
|
Variable Interest Entity (“VIEs”)
|
||||||||||||
|
Shanghai Jifen Culture Communications Co., Ltd. (“Jifen or Jifen VIE”)
|
January 2012 | PRC | 100 | % | ||||||||
|
Beijing Churun Internet Technology Co., Ltd. (“Churun”)
|
November 2018 | PRC | 100 | % | ||||||||
|
Shanghai Big Rhinoceros Horn Information Technology,
Co., Ltd (“Big Rhinoceros Horn”)
|
November 2018 | PRC | 100 | % | ||||||||
|
Shanghai DragonS Information Technology,
Co., Ltd (“ DragonS Information”)
|
January 2019 | PRC | 100 | % | ||||||||
|
Anhui Zhangduan Internet Technology Co., Ltd. (“Zhangduan”)
|
March 2017 | PRC | 100 | % | ||||||||
|
Hubei Rapid Information Technology Co., Ltd. (“Rapid Information”)
|
March 2019 | PRC | 100 | % | ||||||||
|
Shanghai Tuohuan Information Technology Co., Ltd. (“Tuohuan”)
|
September 2019 | PRC | 100 | % | ||||||||
|
Shanghai Ququanquan Information Technology Co., Ltd. (“Ququanquan”)
|
October 2019 | PRC | 100 | % | ||||||||
|
Shanghai Xiaoqiao Information Technology Co., Ltd. (“Xiaoqiao”)
|
September 2019 | PRC | 100 | % | ||||||||
|
Shanghai Xunkai Information Technology Co., Ltd. (“Xunkai”)
|
October 2019 | PRC | 100 | % | ||||||||
|
Huaian Beixia Information Technology Co., Ltd. (“Beixia”)
|
November 2020 | PRC | 100 | % | ||||||||
|
Shanghai Douzao Internet Technology Co., Ltd. (“Douzao”)
|
July 2020 | PRC | 100 | % | ||||||||
|
Subsidiaries of Variable Interest Entity (“VIE subsidiaries”)
|
||||||||||||
|
Shanghai Xike Information Technology Service Co., Ltd. (“Xike”)
|
July 2016 | PRC | 100 | % | ||||||||
|
Shanghai Tuile Information Technology Service Co., Ltd. (“Tuile”)
|
July 2016 | PRC | 100 | % | ||||||||
|
Beijing Qukandian Internet Technology Co., Ltd. (“Qukandian”)
|
April 2017 | PRC | 100 | % | ||||||||
|
Shanghai Heitu Internet Technology Co., Ltd. (“Heitu”)
|
January 2019 | PRC | 100 | % | ||||||||
|
Shanghai Zheyun Internet Technology Co., Ltd. (“Zheyun”)
|
January 2019 | PRC | 100 | % | ||||||||
|
Beijing Supreme Pole International Sports Development Co., Ltd. (“Supreme Pole International Sports”)
|
January 2019 | PRC | 100 | % | ||||||||
|
Tianjin Quwen Internet Technology Co., Ltd. (“Quwen”)
|
August 2018 | PRC | 100 | % | ||||||||
|
Shanghai Manchuan Information Technology Co., Ltd. (“Manchuan”)
|
March 2020 | PRC | 100 | % | ||||||||
|
Shanghai Yunxi Information Technology Co., Ltd. (“Yunxi”)
|
April 2020 | PRC | 100 | % | ||||||||
|
Hubei Xijie Information Technology Co., Ltd. Shanghai Branch (“Xijie”)
|
January 2020 | PRC | 100 | % | ||||||||
|
Hubei Xijie Information Technology Co., Ltd. (“Xijie”)
|
January 2019 | PRC | 100 | % | ||||||||
|
Hubei Rapid
Information Technology Co., Ltd. Shanghai Branch (“Jietu”)
|
January 2020 | PRC | 100 | % | ||||||||
|
Shanghai Luoshi Software Technology Co., Ltd. (“Luoshi”)
|
Januray 2020 | PRC | 100 | % | ||||||||
|
Shanghai Xiaying Software Technology Co., Ltd. (“Xiaying”)
|
November 2019 | PRC | 100 | % | ||||||||
|
Shanghai Songmang Internet Technology Co., Ltd. (“Songmang”)
|
December 2019 | PRC | 100 | % | ||||||||
|
Shanghai Miaoqu Internet Technology Co., Ltd. (“Miaoqu”)
|
December 2019 | PRC | 100 | % | ||||||||
|
Shanghai Xixia Information Technology Co., Ltd. (“Xixia”)
|
October 2019 | PRC | 100 | % | ||||||||
|
Shanghai Mili Information Technology Co., Ltd. (“Mili”)
|
March 2020 | PRC | 100 | % | ||||||||
|
Shanghai Kunjie Information Technology Co., Ltd. (“Kunjie”)
|
March 2020 | PRC | 100 | % | ||||||||
|
Hubei Qingluo Information Technology Co., Ltd. Shanghai Branch (“Qingluo”)
|
March 2020 | PRC | 100 | % | ||||||||
|
Hubei Qingluo Information Technology Co., Ltd. (“Qingluo”)
|
March 2019 | PRC | 100 | % |
| • |
exercise effective control over Jifen whereby
|
| • |
receive substantially all of the economic benefits and residual returns, and absorb substantially all the risks and expected losses from the Jifen as if it was their sole shareholder; and
|
| • |
have an exclusive option to purchase all of the equity interests in Jifen.
|
|
2.
|
Principal Accounting Policies
|
|
As of
|
||||||||
|
December 31, 2019
|
December 31, 2020
|
|||||||
|
Assets
|
||||||||
|
Current assets
|
||||||||
|
Cash and cash equivalents
|
7,807,740 | 12,083,788 | ||||||
|
Restricted cash
|
27,871,552 | 64,315,940 | ||||||
|
Short-term investments
|
31,430,000 | 98,350,000 | ||||||
|
Accounts receivable, net
|
526,689,373 | 737,789,173 | ||||||
|
Amount due from subsidiaries of the Company
|
548,857,973 | 1,173,052,601 | ||||||
|
Amount due from related parties
|
262,581,158 | 368,465,174 | ||||||
|
Prepayments and other current assets
|
172,737,341 | 330,887,406 | ||||||
|
|
|
|
|
|||||
|
Total current assets
|
1,577,975,137 | 2,784,944,082 | ||||||
|
|
|
|
|
|||||
|
Non-current
assets
|
||||||||
|
Property and equipment, net
|
23,152,687 | 16,961,356 | ||||||
|
Accounts receivables, non-current
|
— | 54,638,516 | ||||||
|
Long-term investments
|
10,000,000 | 8,000,000 | ||||||
|
Right-of-use
|
61,931,400 | 48,109,166 | ||||||
|
Intangible assets
|
4,029,056 | 7,821,323 | ||||||
|
Other
non-current
assets
|
14,211,365 | 143,824,997 | ||||||
|
|
|
|
|
|||||
|
Total
non-current
assets
|
113,324,508 | 279,355,358 | ||||||
|
|
|
|
|
|||||
|
Total assets
|
1,691,299,645 | 3,064,299,440 | ||||||
|
|
|
|
|
|||||
|
Liabilities
|
||||||||
|
Current liabilities
|
||||||||
|
Short-term borrowing
|
— | 50,000,000 | ||||||
|
Accounts payable
|
313,189,188 | 399,857,773 | ||||||
|
Amount due to subsidiaries of the Company
|
2,734,962,567 | 5,426,800,647 | ||||||
|
Amount due to related parties
|
3,330,101 | 4,294,733 | ||||||
|
Registered users’ loyalty payable
|
127,253,323 | 66,180,291 | ||||||
|
Advance from customers and deferred revenue
|
246,251,382 | 140,776,350 | ||||||
|
Salary and welfare payable
|
126,884,752 | 115,307,402 | ||||||
|
Tax payable
|
93,025,726 | 98,797,489 | ||||||
|
Lease liabilities, current
|
31,275,663 | 20,030,138 | ||||||
|
Accrued liabilities related to users’ loyalty programs
|
89,184,947 | 100,087,815 | ||||||
|
Accrued liabilities and other current liabilities
|
761,687,143 | 607,455,490 | ||||||
|
|
|
|
|
|||||
|
Total current liabilities
|
4,527,044,792 | 7,029,588,128 | ||||||
|
Lease liabilities,
non-current
|
25,279,037 | 23,533,711 | ||||||
|
|
|
|
|
|||||
|
Total liabilities
|
4,552,323,829 | 7,053,121,839 | ||||||
|
|
|
|
|
|||||
|
Year ended December 31,
|
||||||||||||
|
2018
|
2019
|
2020
|
||||||||||
|
Net revenues
|
3,065,573,756 | 5,627,372,568 | 5,283,682,290 | |||||||||
|
Net loss
|
(1,882,747,022 | ) | (2,469,063,768 | ) | (1,096,208,019 | ) | ||||||
|
Year ended December 31,
|
||||||||||||
|
2018
|
2019
|
2020
|
||||||||||
|
Net cash provided used in operating activities
|
(77,218,211 | ) | (2,782,745,243 | ) | (391,006,589 | ) | ||||||
|
Net cash provided by/(used in) investing activities
|
90,767,728 | (60,545,682 | ) | (80,506,432 | ) | |||||||
|
Net cash provided by/ (used in) financing activities
|
(5,402,941 | ) | 2,859,505,971 | 512,233,457 | ||||||||
|
|
|
|
|
|
|
|||||||
|
Net increase in cash and cash equivalents
|
8,146,576 | 16,215,046 | 40,720,436 | |||||||||
|
|
|
|
|
|
|
|||||||
|
As of December 31, 2019
|
Level 1
|
Level 2
|
Level 3
|
Balance at
fair value
|
||||||||||||
|
Assets
|
||||||||||||||||
|
Short-term investments — Wealth management products
|
— | 314,812,946 | — | 314,812,946 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
As of December 31, 2020
|
Level 1
|
Level 2
|
Level 3
|
Balance at
fair value
|
||||||||||||
|
Assets
|
||||||||||||||||
|
Short-term investments — Wealth management products
|
— | 354,847,029 | — | 354,847,029 | ||||||||||||
|
Short-term investments — Equity investment in a publicly traded security
|
36,186,345 | — | — | 36,186,345 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Leasehold improvements
|
Over the shorter of lease term or estimated useful lives of the assets | |
|
Office equipment
|
3
|
|
| • |
Non-marketable
equity securities that do not have readily determinable fair value are measured using the measurement alternative recorded at cost less any impairment, plus or minus changes resulting from
subsequent
qualifying observable price changes.
Any changes in carrying vaue of these equity investments is recorded in the consolidated statements of comprehensive income/loss.
For the Company’s long-term investment in an equity fund, they
Company
elected to apply the net asset value (NAV) practical expedient
per ASC 820 to measure these investments at fair value.
The NAV is the estimated fair value of these investments, and changes in fair value is recorded in the consolidated statements of comprehensive income/loss.
|
| • |
Equity method investments are securities that the Company does not control, but is able to exert significant influence over the investments. These investments are initially records at cost and subsequently recognizes proportionate share of each equity investee’s net income or loss and to reflect the amortization of basis differences in the consolidated statements of comprehensive loss and accordingly adjusts the carrying amount of the investments. An impairment charge is recorded if the carrying amount of the investments exceed their fair value and this condition is determined to be other-than-temporary. When the Company’s share of losses in the equity investee equals or exceeds its interest in the equity investee, the Company does not recognize further losses, unless the Company has incurred obligations or made payments or guarantees on behalf of the equity investe.
|
|
year ended December 31,
|
||||||||||||||||
|
2018
|
2019
|
2020
|
||||||||||||||
|
RMB
|
RMB
|
RMB
|
US$
(Note 2(e)) |
|||||||||||||
|
Major service line
|
||||||||||||||||
|
Advertising service provided to advertising customers, recorded gross (1)
|
2,399,716,518 | 4,339,602,177 | 3,857,233,008 | 591,146,821 | ||||||||||||
|
Advertising service provided to advertising platforms, recorded net
|
414,541,506 | 1,075,718,365 | 1,189,601,725 | 182,314,441 | ||||||||||||
|
Other service
|
||||||||||||||||
|
Agent and platform services
|
203,389,356 | 33,154,982 | 7,904,057 | 1,211,350 | ||||||||||||
|
Live streaming and online games
|
— | 104,445,462 | 193,141,447 | 29,600,222 | ||||||||||||
|
Other revenues
|
4,498,405 | 17,159,618 | 37,314,786 | 5,718,741 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Total Other services
|
207,887,761 | 154,760,062 | 238,360,290 | 36,530,313 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Revenues | 3,022,145,785 | 5,570,080,604 | 5,285,195,023 | 809,991,575 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (1) |
For the years ended December 31, 2018, 2019 and 2020, revenue in advertising services provided to advertising customers which recorded gross include integrated marketing solution services which amounted to nil, RMB381.8 million and RMB 248.2 million.
|
|
3.
|
Significant equity transactions and acquisitions
|
|
RMB
|
||||
|
Cash
|
15,000,000 | |||
|
|
|
|||
|
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 | |||
|
|
|
|
4.
|
Risks and Concentration
|
| • |
revoking the business and operating licenses;
|
| • |
levying fines on the Company;
|
| • |
confiscating any of the Company’s income that they deem to be obtained through illegal operations;
|
| • |
shutting down the services;
|
| • |
discontinuing or restricting the operations in China;
|
| • |
imposing conditions or requirements with which the Company may not be able to comply;
|
| • |
requiring the Company to change corporate structure and contractual arrangements;
|
| • |
restricting or prohibiting the use of the proceeds from overseas offering to finance the consolidated VIE’s business and operations; and
|
| • |
taking other regulatory or enforcement actions that could be harmful to the business.
|
|
As of
|
||||||||
|
December 31,
2019
|
December 31,
2020
|
|||||||
|
Customer A — advertising platform
|
16 | % | 13 | % | ||||
|
Customer B — advertising platform
|
11 | % | * | |||||
|
Customer C — advertising and marketing customer (related party – Note 22)
|
28 | % | 23 | % | ||||
| * |
Less than 10%
|
|
5.
|
Cash and cash equivalents
|
|
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, 2019
|
— | 59,438,015 | 7,806,771 | 223,534,731 | 56,358,066 | 969 | 678,541 | — | — | 347,817,093 | ||||||||||||||||||||||||||||||
|
December 31, 2020
|
— | 84,260,552 | 12,083,788 | 361,937,179 | 35,966,024 | — | 227,348 | — | — | 494,474,891 | ||||||||||||||||||||||||||||||
|
6.
|
Investments
|
|
As of
|
||||||||
|
December 31, 2019
|
December 31, 2020
|
|||||||
|
Time deposits (maturity dates between 3 – 12 months)
|
962,017,980 | — | ||||||
|
Wealth management products
|
314,812,946 | 354,847,029 | ||||||
|
Publicly traded equity security
|
— | 36,186,345 | ||||||
|
|
|
|
|
|||||
|
Total short-term investments
|
1,276,830,926 | 391,033,374 | ||||||
|
|
|
|
|
|||||
|
As of
|
||||||||
|
December 31, 2019
|
December 31, 2020
|
|||||||
|
Non-marketable
equity securities
|
10,000,000 | 55,299,509 | ||||||
|
Equity method investments
|
27,589,200 | 27,589,200 | ||||||
|
|
|
|
|
|||||
|
Total long-term equity investments
|
37,589,200 | 82,888,709 | ||||||
|
|
|
|
|
|||||
|
7.
|
Accounts receivable, net
|
|
As of
|
||||||||
|
December 31, 2019
|
December 31, 2020
|
|||||||
|
Accounts receivable, gross – current
|
526,822,932 | 824,487,072 | ||||||
|
Accounts receivable, gross –
non-current
|
— | 54,638,516 | ||||||
|
Less: allowance for credit losses
(1)
|
— | (86,697,899 | ) | |||||
|
|
|
|
|
|||||
|
Accounts receivable, net
|
526,822,932 | 792,427,689 | ||||||
|
|
|
|
|
|||||
|
8.
|
Prepayments and other assets
|
|
As of
|
||||||||
|
December 31,
2019
|
December 31,
2020
|
|||||||
|
Prepayment and other current assets
|
||||||||
|
Value-added tax receivable
|
48,451,205 | 52,411,862 | ||||||
|
Prepayments of advertisement fee
(2)
|
1,456,410 | 23,342,714 | ||||||
|
Deposit to third-party payment service providers
(1)
|
62,240,852 | 19,838,590 | ||||||
|
Deposit to third-party advertising platforms
(4)
|
16,821,962 | 15,144,830 | ||||||
|
Loans and advance to employees
(5)
|
8,723,553 | 11,309,123 | ||||||
|
Lease deposits-current portion
|
4,647,787 | 10,059,017 | ||||||
|
Prepayment for the use of contents
(3)
|
34,361,525 | 224,975,224 | ||||||
|
Prepayments of business insurance
|
3,607,569 | 3,131,906 | ||||||
|
Cooperation service
fee-current
portion (Note 3c)
|
1,676,555 | 1,568,097 | ||||||
|
Prepayments of IT service fee
|
1,110,150 | 419,715 | ||||||
|
Prepayment of office lease
|
93,783 | 43,104 | ||||||
|
Receivable for share option exercises
(7)
|
22,212,500 | — | ||||||
|
Contract assets
(6)
|
18,867,925 | — | ||||||
|
Interest receivables
|
|
|
4,272,559
|
|
|
|
—
|
|
|
Others
|
6,184,051 | 2,864,321 | ||||||
|
|
|
|
|
|||||
| 234,728,386 | 365,108,503 | |||||||
|
|
|
|
|
|||||
|
Non-current
|
||||||||
|
Prepayment for intangible assets (Note 21)
|
— | 136,133,193 | ||||||
|
Long-term cooperation service fee (Note 3c)
|
6,251,505 | 4,266,143 | ||||||
|
Long-term lease deposits
|
7,944,497 | 3,891,804 | ||||||
|
Prepayment for purchase of intangible asset
|
— | 3,800,000 | ||||||
|
Long-term prepayments of advertisement fee
(2)
|
6,615,789 | — | ||||||
|
|
|
|
|
|||||
| Total | 20,811,791 | 148,091,140 | ||||||
|
|
|
|
|
|||||
| (1) |
Deposit to third party payment service providers represent cash prepaid to the Group’s third party
on-line
payment service providers, which will be used to settle the Group’s obligation for outstanding user loyalty payable or content procurement fee to professional third party media companies and freelancers. As of December 31, 2019 and 2020, no
a
llowance 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
|
| (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.
|
| (5) |
Loans to employees mainly represents loans to the employees to meet their personal needs for a period within one year.
|
| (6) |
In June 2019, the Company entered into
one-year
non-monetary
contracts with a third party television content provider. In exchange for the content provider’s selected contents that the Company can use and place on the Company’s platform to attract the users, the Company will provide advertising and marketing services on its platform to the television content provider. The contracts were both executed at a fair value of RMB40.0 million, and the Company recorded a contract asset and a corresponding contract liability at the inception of the transaction. As the Company obtained full access to the contents upon inception, the contract asset is expensed evenly over the contract period, while the contract liability is recognized as revenue when the Company actually provides the advertising and marketing services. For the year ended December 31, 2019, the contract liability of RMB40 million was fully recognized as revenue as the Company has completed its advertising services in 2019. The contract asset of RMB21.1 million and RMB18.9 million of the contract asset was amortized and recorded in sales and marketing expenses for the years ended December 31, 2019 and 2020, respectively.
|
| (7) |
Receivables for share option exercises represent incoming proceeds to be received by the Company on behalf of employees, executives and directors for the sale of the shares as a result of the exercise of share options by these personnel. The gross proceeds will be remitted to the Company by a designated financial institution, which the Company is then obligated to transfer to the relevant personnel once the proceeds are received by the Company.
|
|
9.
|
Property and equipment, net
|
|
As of
|
||||||||
|
December 31,
2019
|
December 31,
2020
|
|||||||
|
Cost:
|
||||||||
|
Office equipment
|
26,203,041 | 24,261,802 | ||||||
|
Leasehold improvements
|
12,575,518 | 17,948,499 | ||||||
|
|
|
|
|
|||||
|
Total cost
|
38,778,559 | 42,210,301 | ||||||
|
Less: Accumulated depreciation
|
(14,663,185 | ) | (24,997,502 | ) | ||||
|
|
|
|
|
|||||
|
Property and equipment, net
|
24,115,374 | 17,212,799 | ||||||
|
|
|
|
|
|||||
|
Year ended December 31,
|
||||||||||||
|
2018
|
2019
|
2020
|
||||||||||
|
Cost of revenues
|
156,725 | 3,182,644 | 3,463,304 | |||||||||
|
Research and development expenses
|
3,238,987 | 5,075,929 | 6,653,321 | |||||||||
|
Sales and marketing expenses
|
417,934 | 959,610 | 973,899 | |||||||||
|
General and administrative expenses
|
477,638 | 785,472 | 1,053,401 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Total
|
4,291,284 | 10,003,655 | 12,143,925 | |||||||||
|
|
|
|
|
|
|
|||||||
|
10.
|
Intangible assets, net
|
|
As of
|
||||||||
|
December 31,
2019
|
December 31,
2020
|
|||||||
|
Cost:
|
||||||||
|
Acquired right to operate an online audio/video content platform including deferred tax liabilities impact
|
96,129,761 | 96,129,761 | ||||||
|
Computer software
|
4,971,310 | 12,176,338 | ||||||
|
|
|
|
|
|||||
|
Total cost
|
101,101,071 | 108,306,099 | ||||||
|
Less: Accumulated amortization
|
(12,157,392 | ) | (25,183,127 | ) | ||||
|
|
|
|
|
|||||
|
Intangible assets, net
|
88,943,679 | 83,122,972 | ||||||
|
|
|
|
|
|||||
|
Year ended December 31,
|
||||||||||||
|
2018
|
2019
|
2020
|
||||||||||
|
Cost of revenues
|
1,602,163 | 9,612,976 | 9,612,976 | |||||||||
|
General and administrative expenses
|
— | 942,253 | 3,412,759 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Total
|
1,602,163 | 10,555,229 | 13,025,735 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Year ended December 31,
|
Amortization Expense
|
|||
|
2021
|
13,562,123 | |||
|
2022
|
12,635,179 | |||
|
2023
|
10,399,789 | |||
|
2024
|
9,637,359 | |||
|
2025
|
9,637,359 | |||
|
Thereafter
|
27,251,163 | |||
|
|
|
|||
|
Total
|
83,122,972 | |||
|
11.
|
Leases
|
|
Year ended December 31,
|
||||||||
|
2019
|
2020
|
|||||||
|
Lease cost:
|
||||||||
|
Amortization of
right-of-use
|
39,693,063 | 39,371,454 | ||||||
|
Interest of lease liabilities
|
3,820,727 | 1,833,789 | ||||||
|
Expenses for short-term leases within 12 months
|
423,271 | 6,093,217 | ||||||
|
|
|
|
|
|||||
|
Total lease cost
|
43,937,061 | 47,298,460 | ||||||
|
|
|
|
|
|||||
|
Year ended December 31,
|
||||||||
|
2019
|
2020
|
|||||||
|
Other information
|
||||||||
|
Cash paid for amounts included in the measurement of lease liabilities:
|
||||||||
|
Operating lease payments
|
45,584,621 | 39,073,120 | ||||||
|
Right-of-use
|
55,834,552 | 20,448,582 | ||||||
|
Year ended December 31,
|
||||||||
|
2019
|
2020
|
|||||||
|
Operating leases
|
||||||||
|
Operating lease
right-of-use
|
69,241,754 | 50,318,882 | ||||||
|
|
|
|
|
|||||
|
Operating lease liabilities, current
|
(38,210,188 | ) | (20,760,421 | ) | ||||
|
Operating lease liabilities,
non-current
|
(26,651,446 | ) | (23,755,721 | ) | ||||
|
|
|
|
|
|||||
|
Total operating lease liabilities
|
(64,861,634 | ) | (44,516,142 | ) | ||||
|
|
|
|
|
|||||
|
As of December 31,
|
||||||||
|
2019
|
2020
|
|||||||
|
Weighted-average remaining lease term
|
||||||||
|
Operating leases
|
2.2 years | 2.5 years | ||||||
|
Weighted-average discount rate
|
||||||||
|
Operating leases
|
5.7 | % | 5.7 | % | ||||
|
|
|
|
|
|||||
|
As of
December 31, 2020
|
||||
|
2021
|
22,591,187 | |||
|
2022
|
11,815,301 | |||
|
2023
|
8,942,549 | |||
|
2024 and thereafter
|
4,460,436 | |||
|
|
|
|||
|
Total undiscounted lease payments
|
47,809,473 | |||
|
Less: imputed interest
|
(3,293,331 | ) | ||
|
|
|
|||
|
Total lease liabilities
|
44,516,142 | |||
|
|
|
|||
|
As of
December 31, 2020
|
||||
|
2021
|
29,679,352 | |||
|
2022
|
19,570,885 | |||
|
2023
|
10,179,846 | |||
|
2024 and thereafter
|
5,089,923 | |||
|
|
|
|||
| 64,520,006 | ||||
|
|
|
|||
|
12.
|
Tax payable
|
|
As of
|
||||||||
|
December 31, 2019
|
December 31, 2020
|
|||||||
|
Value added tax
|
91,894,179 | 73,804,596 | ||||||
|
Corporate income tax
|
7,246,119 | 5,374,231 | ||||||
|
Individual income tax withholding
|
17,821,617 | 16,516,542 | ||||||
|
Urban maintenance and construction tax
|
697,134 | 712,407 | ||||||
|
Stamp duty
|
497,445 | 735,809 | ||||||
|
|
|
|
|
|||||
|
Total
|
118,156,494 | 97,143,585 | ||||||
|
|
|
|
|
|||||
|
13.
|
Accrued liabilities and other liabilities
|
|
As of
|
||||||||
|
December 31,
2019
|
December 31,
2020
|
|||||||
|
Accrued liabilities and other current liabilities
|
||||||||
|
Accrued advertising and marketing expense
|
624,684,280 | 610,330,541 | ||||||
|
Tax surcharges and other fees
(1)
|
134,003,155 | 134,174,460 | ||||||
|
Accrued professional service fees
|
4,695,155 | 4,381,461 | ||||||
|
Accrued convertible redeemable preferred shares issuance cost of a subsidiary
|
435,000 | 3,135,298 | ||||||
|
Refund from depositary bank
(2)
|
2,640,471 | 2,469,655 | ||||||
|
Payables to employees related to net proceeds from share options exercised
|
18,439,722 | — | ||||||
|
Accrued employee welfare expense
|
1,547,431 | — | ||||||
|
Others
|
2,050,228 | 8,942,857 | ||||||
|
|
|
|
|
|||||
| 788,495,442 | 763,434,272 | |||||||
|
|
|
|
|
|||||
|
Non-current
|
||||||||
|
Non-refundable
incentive payment from depositary bank
(2)
|
7,212,463 | 4,255,931 | ||||||
|
Total
|
795,707,905 | 767,690,203 | ||||||
|
|
|
|
|
|||||
| (1) |
This balance is primarily related to a cultural development fee on the provision of advertising services in the PRC that the Group is subject to. The applicable tax rate was 3% of the net advertising revenues up until June 30, 2019, and was updated to 1.5% effective July 1, 2019. Due to the
COVID-19
pandemic, the Group was exempt from the cultural development fee for 2020.
|
| (2) |
The Company received
non-refundable
incentive payment of USD 1.8 million (RMB 12.5 million) from depositary bank in September 2018, and the amount will be recorded ratably over a 5 year arrangement period. For the years ended December 31, 2019 and 2020, the Company recorded amount of RMB2.6 million each year as a reduction in general and administrative expenses. During the fourth quarter of 2020, the Company received an additional incentive payment of USD0.6 million (RMB4.1 million) from the bank and the payment was recorded as a one time reduction in general and administrative expenses.
|
|
14.
|
Convertible Loan
|
| • |
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;
|
|
15.
|
Convertible redeemable preferred shares
|
| (1) |
The
non-cumulative
dividend rate for Series A, A1 was modified from 8% to 12%;
|
| (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.
|
|
16.
|
Ordinary Share
|
|
17.
|
Share-based compensation
|
|
Number of
options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life
|
Aggregate
Intrinsic
Value
|
Weighted
Average
Grant
Date
Fair
Value |
||||||||||||||||
|
RMB
|
In Years
|
RMB’000
|
RMB
|
|||||||||||||||||
|
Outstanding at January 1, 2018
|
10,000,000 | 0.0007 | 8.7 | 525,086 | 3.89 | |||||||||||||||
|
Granted
|
2,893,020 | 0.0007 | 130.51 | |||||||||||||||||
|
Exercised
|
(500,000 | ) | 0.0007 | |||||||||||||||||
|
Forfeited
|
(217,437 | ) | 0.0007 | |||||||||||||||||
|
Outstanding at December 31, 2018
|
12,175,583 | 0.0007 | 8.1 | 1,939,500 | 33.95 | |||||||||||||||
|
Granted
|
3,538,204 | 0.0007 | 270.11 | |||||||||||||||||
|
Exercised
|
(2,197,104 | ) | 0.0007 | |||||||||||||||||
|
Forfeited
|
(2,170,302 | ) | 0.0007 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Outstanding at December 31, 2019
|
11,346,381 | 0.0007 | 7.7 | 1,079,661 | 96.29 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Granted
|
2,607,249 | 0.0007 | 104.85 | |||||||||||||||||
|
Exercised
|
(3,144,786 | ) | 0.0007 | |||||||||||||||||
|
Forfeited
|
(1,378,694 | ) | 0.0007 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Outstanding at December 31, 2020
|
9,430,150 | 0.0007 | 7.2 | 391,330 | 78.35 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Vested and expected to vest at December 31, 2020
|
8,785,149 | 0.0007 | 7.1 | 364,564 | 70.68 | |||||||||||||||
|
Exercisable at December 31, 2020
|
6,615,731 | 0.0007 | 6.6 | 274,538 | 48.66 | |||||||||||||||
|
Options Granted
in the year ended
December 31,
2018
|
Options Granted
in the year ended
December 31,
2019
|
Options Granted
in the year ended
December 31,
2020
|
||||||||||
|
Expected volatility
|
50.71%~51.25% |
49.92%-50.65%
|
57.77%-58.65% | |||||||||
|
Risk-free interest rate
|
2.83%~3.15% |
1.80%-2.52%
|
0.82%-1.09% | |||||||||
|
Exercise multiple
|
2.8 | 2.8 | 2.8 | |||||||||
|
Expected dividend yield
|
0% | 0% | 0% | |||||||||
|
Contractual term
|
10 | 10 | 10 | |||||||||
|
Expected forfeiture rate (post-vesting)
|
0~20% |
0-20%
|
0-20%
|
|||||||||
|
Fair value of the common share on the date of option grant (RMB)
|
122.52~153.23 |
94.96-310.64
|
41.50-77.78
|
|||||||||
| (i) |
The risk-free interest rate of periods within the contractual life of the share option is based on the market yield of the Chinese sovereign bond/US government bond with a maturity life equal to the expected life to expiration.
|
| (ii) |
The Company has no history or expectation of paying dividends on its ordinary shares.
|
| (iii) |
Expected volatility is estimated based on the average of historical volatilities of the comparable companies in the same industry as at the valuation dates.
|
|
18.
|
Employee benefits
|
|
19.
|
Income Taxes
|
|
Year ended December 31,
|
||||||||||||
|
2018
|
2019
|
2020
|
||||||||||
|
%
|
%
|
%
|
||||||||||
|
PRC Statutory income tax rates
|
25.0 | % | 25.0 | % | 25.0 | % | ||||||
|
Change in valuation allowance
|
(15.3 | %) | (23.2 | %) | (13.9 | %) | ||||||
|
Permanent book — tax difference
|
(9.9 | %) | (2.0 | %) | (9.2 | %) | ||||||
|
Difference in EIT rates of certain subsidiaries
|
0.2 | % | 0.0 | % | (2.2 | %) | ||||||
|
|
|
|
|
|
|
|||||||
|
Total
|
0.0 | % | (0.2 | %) | (0.3 | %) | ||||||
|
|
|
|
|
|
|
|||||||
|
Year ended December 31,
|
||||||||||||
|
2018
|
2019
|
2020
|
||||||||||
|
Domestic
|
998,299,456 | 2,404,676,422 | 558,656,558 | |||||||||
|
Foreign
|
947,947,297 | 279,748,549 | 547,517,245 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Total
|
1,946,246,753 | 2,684,424,971 | 1,106,173,803 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Year ended December 31,
|
||||||||||||
|
2018
|
2019
|
2020
|
||||||||||
|
Current income tax expense
|
— | 7,246,119 | 1,395,870 | |||||||||
|
Deferred income tax benefit
|
(400,541 | ) | (2,403,243 | ) | (2,403,240 | ) | ||||||
|
|
|
|
|
|
|
|||||||
|
Income tax expense (benefit)
|
(400,541 | ) | 4,842,876 | (1,007,370 | ) | |||||||
|
|
|
|
|
|
|
|||||||
|
As of
|
||||||||
|
December 31,
2019
|
December 31,
2020
|
|||||||
|
Deductible temporary difference to accruals and others
|
442,696,181 | 467,705,757 | ||||||
|
Tax losses carried forward
|
542,743,772 | 588,547,586 | ||||||
|
Less: Valuation allowance
|
(985,439,953 | ) | (1,056,253,343 | ) | ||||
|
|
|
|
|
|||||
|
Total of deferred tax assets
|
— | — | ||||||
|
|
|
|
|
|||||
|
Taxable temporary difference related to acquired right to operate an online
audio/video content platform
|
21,228,656 | 18,825,416 | ||||||
|
|
|
|
|
|||||
|
Total of deferred tax liabilities
|
21,228,656 | 18,825,416 | ||||||
|
|
|
|
|
|||||
|
Year ended December 31,
|
||||||||||||
|
2018
|
2019
|
2020
|
||||||||||
|
Beginning balance
|
27,776,443 | 326,336,233 | 985,439,953 | |||||||||
|
Current year additions
|
298,559,790 | 665,361,186 | 100,629,055 | |||||||||
|
Current year reversals
|
— | (6,257,466 | ) | (29,815,665 | ) | |||||||
|
Ending balance
|
326,336,233 | 985,439,953 | 1,056,253,343 | |||||||||
|
|
|
|
|
|
|
|||||||
|
20.
|
Other Operating Income
|
|
21.
|
Redeemable
non-controlling
interests and
non-controlling
interests
|
|
Year ended December 31,
|
||||||||||||
|
2018
|
2019
|
2020
|
||||||||||
|
Beginning balance
|
— | 96,936,855 | 495,844,565 | |||||||||
|
Issuance of Fun Preferred Shares, net of issuance costs
|
97,019,860 | 380,259,607 | 733,238,486 | |||||||||
|
Foreign exchange impact
|
(1,061,206 | ) | (1,899,929 | ) | (37,374,084 | ) | ||||||
|
Repurchase of Series B Preferred Shares
|
— | — | (146,459,680 | ) | ||||||||
|
Accretion to redemption value of redeemable
non-controlling
interests
|
978,201 | 20,548,032 | 48,276,771 | |||||||||
|
|
|
|
|
|
|
|||||||
|
Ending balance
|
96,936,855 | 495,844,565 | 1,093,526,058 | |||||||||
|
|
|
|
|
|
|
|||||||
|
22.
|
Related Party transactions
|
|
Year ended December 31,
|
||||||||||||
|
2018
|
2019
|
2020
|
||||||||||
|
Services provided by the Group
|
||||||||||||
|
Agent and platform service provided to a related party
(1)
|
29,597,143 | — | — | |||||||||
|
Advertising and marketing service provided to related parties
(2)
|
17,447,475 | 473,215,790 | 250,874,596 | |||||||||
|
Year ended December 31,
|
||||||||||||
|
2018
|
2019
|
2020
|
||||||||||
|
Services received by the Group
|
||||||||||||
|
Advertisement costs charged from a related party
(3)
|
— | 35,605,180 | 29,206,380 | |||||||||
|
Gaming cost sharing charged from a related party
(4)
|
— | 6,806,424 | 1,844,720 | |||||||||
|
Advertising Service fee charged from related parties
(5)
|
15,815,201 | 3,284,223 | 4,192,090 | |||||||||
|
ICloud server and other service fee charged from a related party
(6)
|
13,875,839 | — | — | |||||||||
|
As of
|
||||||||
|
December 31,
2019
|
December 31,
2020
|
|||||||
|
Amount due from related parties
(2)
|
278,155,878 | 383,594,360 | ||||||
|
Amount due to related parties
(3)& (4)
|
3,436,586 | 9,426,883 | ||||||
|
Loan from a related party
(7)
|
— | 13,049,800 | ||||||
| (1) |
The Group provided agent and platform service 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 September 30, 2018.
|
| (2) |
For the year ended December 31, 2018, the service fee charged to related parties consisted of: the advertising and marketing service of RMB 4.5 million provided 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 as of September 30, 2018), and the advertising service of RMB 12.9 million provided to 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).
|
| (3) |
In 2019 the Group entered into CPM (cost per impression) arrangements with media platforms under the common control of the founder for the Group’s customer’s advertisement placement. The total service fee charged from related parties amounted to
RMB35.6 million and RMB29.2 million for the years ended December 31, 2019 and 2020, respectively.
|
| (4) |
In 2019 the Group entered into a game cooperation agreement with a game developing company which the founder’s controlled entity has significant influence over. The Company is the principal in the arrangement. The total service fee represents the amount paid to the game developing company in relation to the arrangement, and amounted to RMB6.8 million and RMB1.8 million for the years ended December 31, 2019 and 2020, respectively.
|
| (5) |
For the year ended December 31, 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 RMB 31.5 million which will be recognized as expense over 3 years. For the year ended December 31, 2018, total service fee recognized as expense amounted to RMB 15.8 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 years ended December 31, 2019 and 2020, the service fee charged from related parties represented the expense charged from a company under common control of the founder which provided the Group advertising and marketing services.
|
| (6) |
The service fee mainly represented cloud 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.
|
| (7) |
The Company borrowed an interest free loan of RMB13.0 million from an entity under common control of the founder in December 2020. The loan was repaid in the first quarter of 2021.
|
|
23.
|
Basic and diluted net loss per share
|
|
Year ended
December 31,
2018
|
Year ended
December 31,
2019
|
Year ended
December 31,
2020
|
||||||||||
|
Numerator:
|
||||||||||||
|
Net loss attributable to Qutoutiao Inc.
|
(1,942,571,687 | ) | (2,688,680,705 | ) | (1,104,438,841 | ) | ||||||
|
Accretion on Series A convertible redeemable preferred shares redemption value
|
(15,718,213 | ) | — | — | ||||||||
|
Accretion on Series A1 convertible redeemable preferred shares redemption value
|
(4,840,875 | ) | — | — | ||||||||
|
Accretion on Series B1 convertible redeemable preferred shares redemption value
|
(37,001,459 | ) | — | — | ||||||||
|
Accretion on Series B2 convertible redeemable preferred shares redemption value
|
(31,800,587 | ) | — | — | ||||||||
|
Accretion on Series B3 convertible redeemable preferred shares redemption value
|
(12,312,158 | ) | — | — | ||||||||
|
Accretion on Series C1 convertible redeemable preferred shares redemption value
|
(133,451 | ) | — | — | ||||||||
|
Deemed dividend to preferred shareholders (Note 15)
|
(1,916,871 | ) | — | — | ||||||||
|
Accretion on redemption value of Series A convertible redeemable preferred shares of a subsidiary (Note 21)
|
(978,201 | ) | (12,171,842 | ) | (13,509,457 | ) | ||||||
|
Accretion on redemption value of Series B convertible redeemable preferred shares of a subsidiary (Note 21)
|
— | (8,376,190 | ) | (33,187,330 | ) | |||||||
|
Accretion on redemption value of Series C convertible redeemable preferred shares of a subsidiary (Note 21)
|
— | — | (1,579,984 | ) | ||||||||
|
Gains on repurchase of convertible redeemable preferred shares (Note 15)
|
18,332,152 | — | — | |||||||||
|
Gains on repurchase of convertible redeemable preferred shares of a subsidiary (Note 21)
|
— | — | 14,841,680 | |||||||||
|
Net loss attributable to ordinary shareholders-Basic and diluted
|
(2,028,941,350 | ) | (2,709,228,737 | ) | (1,137,873,932 | ) | ||||||
|
|
|
|
|
|
|
|||||||
|
Denominator:
|
||||||||||||
|
Denominator for basic and diluted loss per share Weighted- average ordinary shares outstanding
|
||||||||||||
|
Basic and diluted
|
38,507,184 | 68,749,981 | 72,513,077 | |||||||||
|
Basic and diluted loss per share
|
(52.69 | ) | (39.41 | ) | (15.69 | ) | ||||||
|
|
|
|
|
|
|
|||||||
|
Denominator for basic and diluted loss per ADS Weighted-average ADS outstanding
|
||||||||||||
|
Basic and diluted
|
154,028,736 | 274,999,924 | 290,052,308 | |||||||||
|
Basic and diluted loss per ADS
|
(13.17 | ) | (9.85 | ) | (3.92 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| (1) |
As disclosed in Note 17 for restricted shares, a total of 15,937,500 ordinary shares subject to certain vesting restrictions are excluded from the issued and outstanding shares as of December 31, 2017 and are likewise excluded from the weighted average outstanding ordinary shares for basic loss per share calculation until they were vested in September 2018 upon the completion of the IPO.
|
| (2) |
Options exercisable for a minimal exercise price are included in the denominator of basic loss per share calculation once there are no further vesting conditions or contingencies associated with them, as they are considered contingently issuable shares. Accordingly, the weighted average number of shares of 3,506,712 ( 14,026,848 ADSs), 5,329,287 ( 21,317,146 ADSs), and 6,141,679 (24,566,716 ADSs) related to these options, for which the exercise price is RMB 0.0007 per share, are included in the denominator for the computation of basic EPS for the years ended December 31, 2018, 2019 and 2020, respectively.
|
|
Year ended December 31,
|
||||||||||||
|
2018
|
2019
|
2020
|
||||||||||
|
Preferred shares — weighted average
|
10,134,756 | — | — | |||||||||
|
Share options — weighted average
|
6,350,735 | 4,119,918 | 1,353,808 | |||||||||
|
Restricted shares — weighted average
|
6,976,785 | — | — | |||||||||
|
RMB
|
US$ (Note 2(e))
|
|||||||
|
Years Ending December 31,
|
||||||||
|
2021
|
103,289,167 | 15,829,757 | ||||||
|
2022
|
12,862,500 | 1,971,264 | ||||||
|
RMB
|
US$ (Note 2(e))
|
|||||||
|
Years Ending December 31,
|
||||||||
|
2021
|
8,926,000 | 1,367,969 | ||||||
|
202
2
|
94,000 | 14,406 | ||||||
|
2023
|
|
|
188,000
|
|
|
|
28,816
|
|
|
25.
|
Restricted net assets
|
|
26.
|
Subsequent events
|
|
|
|
|
|
|
Year ended
|
|
|
December 31,
|
|
|||||||
|
2018
|
2019
|
2020
|
||||||||||||||
|
RMB
|
|
|
RMB
|
|
|
RMB
|
US$(Note 2 (e))
|
|||||||||
|
Operating expenses:
|
||||||||||||||||
|
General and administrative
|
(959,590,151 | ) | (287,026,788 | ) | (471,730,407 | ) | (72,295,848 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Total operating expenses
|
(959,590,151 | ) | (287,026,788 | ) | (471,730,407 | ) | (72,295,848 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Loss from operations
|
(959,590,151 | ) | (287,026,788 | ) | (471,730,407 | ) | (72,295,848 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Investment income
|
3,098,150 | — | — | — | ||||||||||||
|
Interest income
|
23,805,861 | 44,271,057 | 2,819,127 | 432,050 | ||||||||||||
|
Interest expense
|
— | (26,878,316 | ) | (36,773,704 | ) | (5,635,817 | ) | |||||||||
|
Foreign exchange related gains, net
|
— | — | (6,920 | ) | (1,061 | ) | ||||||||||
|
Other income/(expenses), net
|
— | — | (41,744 | ) | (6,398 | ) | ||||||||||
|
Loss from subsidiaries and VIEs
|
(1,009,885,547 | ) | (2,419,046,658 | ) | (598,705,193 | ) | (91,755,584 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Loss before provision for income taxes
|
(1,942,571,687 | ) | (2,688,680,705 | ) | (1,104,438,841 | ) | (169,262,658 | ) | ||||||||
|
Provision for income taxes
|
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Net loss
|
(1,942,571,687 | ) | (2,688,680,705 | ) | (1,104,438,841 | ) | (169,262,658 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Accretion to convertible redeemable preferred shares redemption value
|
(101,806,743 | ) | — | — | — | |||||||||||
|
Accretion to redemption value of convertible redeemable preferred shares of a subsidiary
|
|
|
(978,201
|
)
|
|
|
(20,548,032
|
)
|
|
|
(48,276,771
|
)
|
|
|
(7,398,739
|
)
|
|
Gains on repurchase of convertible redeemable preferred Shares
|
18,332,152 | — | — | — | ||||||||||||
|
Gains on repurchase of convertible redeemable preferred shares of a subsidiary
|
|
|
—
|
|
|
|
—
|
|
|
|
14,841,680
|
|
|
|
2,274,587
|
|
|
Deemed dividend to preferred shareholders
|
(1,916,871 | ) | — | — | — | |||||||||||
|
Net loss attributable to ordinary shareholders
|
(2,028,941,350 | ) | (2,709,228,737 | ) | (1,137,873,932 | ) | (174,386,810 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Net loss
|
(1,942,571,687 | ) | (2,688,680,705 | ) | (1,104,438,841 | ) | (169,262,658 | ) | ||||||||
|
Foreign currency translation adjustment, net of nil tax
|
(16,453,526 | ) | (1,505,650 | ) | 102,254,115 | 15,671,129 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Comprehensive loss
|
(1,959,025,213 | ) | (2,690,186,355 | ) | (1,002,184,726 | ) | (153,591,529 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
2018
|
2019
|
2020
|
||||||||||||||
|
RMB
|
RMB
|
RMB
|
US$(Note 2 (e))
|
|||||||||||||
|
Cash flows provided by/(used in) operating activities
|
23,710,900 | 39,182,532 | (354,228 | ) | (54,288 | ) | ||||||||||
|
Cash flows used in investing activities
|
(591,572,091 | ) | (3,327,606,050 | ) | (10,007,458 | ) | (15,593,371 | ) | ||||||||
|
Cash flows provided by/(used in) financing activities
|
2,206,005,176 | 1,397,381,828 | (135,744,000 | ) | (1,533,710 | ) | ||||||||||
|
Effect of exchange rate changes on cash
|
118,146,408 | 15,905,018 | (240,705 | ) | (36,890 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
Net increase in cash and cash equivalents
|
1,756,290,393 | (1,875,136,672 | ) | (146,346,391 | ) | (22,428,566 | ) | |||||||||
|
Cash and cash equivalents, beginning of year
|
267,125,417 | 2,023,415,810 | 148,279,138 | 22,724,772 | ||||||||||||
|
|
|
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Cash and cash equivalents, end of year
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2,023,415,810 | 148,279,138 | 1,932,747 | 296,206 | ||||||||||||
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1 Year Qutoutiao Chart |
1 Month Qutoutiao Chart |
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