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United States securities and exchange commission logo
September 23, 2021
Xiang Li
Acting Chief Financial Officer
36Kr Holdings Inc.
5-6/F, Tower A1, Junhao Central Park Plaza
No. 10 South Chaoyang Park Avenue
Chaoyang District, Beijing, People s Republic of China, 100026
Re: 36Kr Holdings Inc.
Form 20-F for
Fiscal Year Ended December 31, 2020
File No. 001-39117
Dear Mr. Li:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 20-F for Fiscal Year Ended December 31, 2020
Part 1
Item 3. Key Information, page 2
1. Please disclose
prominently in this section that you are not a Chinese operating company
but a Cayman Islands
holding company with operations conducted by your subsidiaries
and through contractual
arrangements with a variable interest entity (VIE) based in China
and that this structure
involves unique risks to investors. Explain whether the VIE
structure is used to
replicate foreign investment in Chinese-based companies where
Chinese law prohibits
direct foreign investment in the operating companies, and disclose
that investors may
never directly hold equity interests in the Chinese operating company.
Your disclosure should
acknowledge that Chinese regulatory authorities could disallow
this structure, which
would likely result in a material change in your operations and/or
value of your ADSs,
including that it could cause the value of such securities to
significantly decline
or become worthless. Provide a cross-reference to your detailed
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discussion of risks facing the company and the offering as a result of
this structure.
2. Please provide prominent disclosure about the legal and operational
risks associated with
being based in or having the majority of the company s operations in
China and Hong
Kong. Your disclosure should make clear whether these risks could
result in a material
change in your operations and/or the value of your ADSs or could
significantly limit or
completely hinder your ability to offer or continue to offer
securities to investors and
cause the value of such securities to significantly decline or be
worthless. Your disclosure
should address how recent statements and regulatory actions by China
s government, such
as those related to the use of VIEs and data security or anti-monopoly
concerns, has or
may impact the company s ability to conduct its business, accept
foreign investments, or
list on an U.S. or other foreign exchange.
3. Please clearly disclose how you will refer to the holding company,
subsidiaries, and VIEs
when providing the disclosure throughout the document so that it is
clear to investors
which entity the disclosure is referencing and which subsidiaries or
entities are conducting
the business operations. Disclose clearly the entity (including the
domicile) in which
investors are purchasing their interest.
4. Please disclose clearly that the company uses a structure that
involves a VIE based in
China and what that entails and provide early in the summary a diagram
of the company s
corporate structure, including who the equity ownership interests are
of each entity.
Describe all contracts and arrangements through which you purport to
obtain economic
rights and exercise control that results in consolidation of the VIE
s operations and
financial results into your financial statements. Identify clearly the
entity in which
investors are purchasing their interest and the entity(ies) in which
the company s
operations are conducted. Describe the relevant contractual agreements
between the
entities and how this type of corporate structure may affect investors
and the value of their
investment, including how and why the contractual arrangements may be
less effective
than direct ownership and that the company may incur substantial costs
to enforce the
terms of the arrangements. Disclose the uncertainties regarding the
status of the rights of
the Cayman Islands holding company with respect to its contractual
arrangements with the
VIE, its founders and owners, and the challenges the company may face
enforcing these
contractual agreements due to uncertainties under Chinese law and
jurisdictional limits.
5. In your summary of risk factors, please disclose the risks that your
corporate structure and
being based in or having the majority of the company s operations in
China poses to
investors. In particular, describe the significant regulatory,
liquidity, and enforcement
risks with cross-references to the more detailed discussion of these
risks in the
prospectus. For example, specifically discuss risks arising from the
legal system in China,
including risks and uncertainties regarding the enforcement of laws
and that rules and
regulations in China can change quickly with little advance notice,
and the risk that the
Chinese government may intervene or influence your operations at any
time, or may exert
more control over offerings conducted overseas and/or foreign
investment in China-based
issuers, which could result in a material change in your operations
and/or the value of
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your ADSs. Acknowledge any risks that any actions by the Chinese
government to exert
more oversight and control over offerings that are conducted overseas
and/or foreign
investment in China-based issuers could significantly limit or
completely hinder your
ability to offer or continue to offer securities to investors and
cause the value of such
securities to significantly decline or be worthless.
6. Please disclose each permission that you, your subsidiaries or your
VIEs are required to
obtain from Chinese authorities to operate and issue these securities
to foreign investors.
State whether you, your subsidiaries, or VIEs are covered by
permissions requirements
from the China Securities Regulatory Commission (CSRC), the Cyberspace
Administration of China (CAC), or any other entity that is required to
approve of the
VIE s operations, and state affirmatively whether you have received
all requisite
permissions and whether any permissions have been denied.
7. Please provide a clear description of how cash is transferred through
your organization.
Disclose your intentions to distribute earnings or settle amounts owed
under the VIE
agreements. Quantify any cash flows and transfers of other assets by
type that have
occurred between the holding company, its subsidiaries, and
consolidated VIEs, and
direction of transfer. Quantify any dividends or distributions that a
subsidiary or
consolidated VIE have made to the holding company and which entity
made such transfer,
and their tax consequences. Similarly quantify dividends or
distributions made to U.S.
investors, the source, and their tax consequences. Describe any
restrictions on foreign
exchange and your ability to transfer cash between entities, across
borders, and to U.S.
investors. Describe any restrictions and limitations on your ability
to distribute earnings
from your businesses, including subsidiaries and/or consolidated VIEs,
to the parent
company and U.S. investors as well as the ability to settle amounts
owed under the VIE
agreements.
8. It appears that the consolidated VIEs constitute a material part of
your consolidated
financial statements. Please provide in tabular form condensed
consolidating financial
information as to financial position, cash flows and results of
operations as of the same
dates and for the same periods for which audited consolidated
financial statements are
required. Highlight the financial statement information related to the
variable interest
entity so an investor may evaluate the nature of assets held by, and
the operations of,
entities apart from the variable interest entity, which includes the
cash held and transferred
among entities.
9. Please disclose that trading in your securities may be prohibited
under the Holding
Foreign Companies Accountable Act if the PCAOB determines that it
cannot inspect or
fully investigate your auditor, and that as a result an exchange may
determine to delist
your securities.
3.D. Risk Factors, page 5
10. Please revise your risk factors to acknowledge that if the PRC
government determines that
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36Kr Holdings Inc.
September 23, 2021
Page 4
the contractual arrangements constituting part of your VIE structure
do not comply with
PRC regulations, or if these regulations change or are interpreted
differently in the future,
your shares may decline in value or become worthless if you are unable
to assert your
contractual control rights over the assets of your PRC subsidiaries
that conduct all or
substantially all of your operations.
11. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to separately highlight the risk that the
Chinese government
may intervene or influence your operations at any time, which could
result in a material
change in your operations and/or the value of your ADSs. Also, given
recent statements
by the Chinese government indicating an intent to exert more oversight
and control over
offerings that are conducted overseas and/or foreign investment in
China-based issuers,
acknowledge the risk that any such action could significantly limit or
completely hinder
your ability to offer or continue to offer securities to investors and
cause the value of such
securities to significantly decline or be worthless.
12. In light of recent events indicating greater oversight by the CAC over
data security,
particularly for companies seeking to list on a foreign exchange,
please revise your
disclosure to explain how this oversight impacts your business and to
what extent you
believe that you are compliant with the regulations or policies that
have been issued by the
CAC to date.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Stephen Kim at 202-551-3291 or Doug Jones at
202-551-3309 with any
questions.
FirstName LastNameXiang Li Sincerely,
Comapany Name36Kr Holdings Inc.
Division of
Corporation Finance
September 23, 2021 Page 4 Office of Trade
& Services
FirstName LastName