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Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2019 shares
Document Information [Line Items]
Document Type	20-F
Amendment Flag	false
Document Period End Date	Dec. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Entity Registrant Name	Qutoutiao Inc.
Entity Central Index Key	0001733298
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Voluntary Filers	No
Entity Interactive Data Current	Yes
Entity File Number	001-38644
Entity Incorporation, State or Country Code	E9
Entity Address, Address Line One	11/F, Block 3
Entity Address, Address Line Two	XingChuang Technology Center
Entity Address, Address Line Three	5005 Shen Jiang Road
Entity Address, City or Town	Pudong New Area
Entity Address, Country	CN
Entity Address, Postal Zip Code	200120
Document Annual Report	true
Document Transition Report	false
Document Shell Company Report	false
Document Registration Statement	false
Document Accounting Standard	U.S. GAAP
Business Contact
Document Information [Line Items]
Contact Personnel Name	Mr. Xiaolu Zhu, Chief Financial Officer
City Area Code	86-21
Local Phone Number	6858-3790
Contact Personnel Email Address	ir@qutoutiao.net
Class A Ordinary Shares
Document Information [Line Items]
Entity Common Stock, Shares Outstanding	39,645,820
Title of each class	Class A Ordinary Shares, par value US$0.0001 per share
Name of each exchange on which registered	NASDAQ
No Trading Symbol Flag	true
Class B Ordinary Shares
Document Information [Line Items]
Entity Common Stock, Shares Outstanding	32,937,193
American Depositary Shares
Document Information [Line Items]
Title of each class	American Depositary Shares, every four representing one Class A ordinary shares
Trading Symbol(s)	QTT
Name of each exchange on which registered	NASDAQ

CONSOLIDATED BALANCE SHEETS

Dec. 31, 2019

CNY (¥)

Dec. 31, 2019

USD ($)

Dec. 31, 2018

CNY (¥)

Current assets:

Cash and cash equivalents

¥ 347,817,093

$ 49,960,799

¥ 2,186,288,246

Restricted cash

27,871,552

4,003,498

Short-term investments

1,276,830,926

183,405,287

115,436,080

Accounts receivable, net

526,822,932

75,673,379

203,984,074

Amounts due from related parties

278,155,878

^[1]

39,954,592

Prepayments and other current assets

234,728,386

33,716,623

120,365,506

Total current assets

2,692,226,767

386,714,178

2,626,073,906

Non-current assets:

Property and equipment, net

24,115,374

3,463,957

13,929,542

Right-of-use assets, net

69,241,754

9,945,956

Intangible assets

88,943,679

12,775,960

94,527,598

Goodwill

7,268,330

1,044,030

7,268,330

Long-term investments

37,589,200

5,399,351

Other non-current assets

20,811,791

2,989,427

10,672,141

Total non-current assets

247,970,128

35,618,681

126,397,611

Total assets

2,940,196,895

422,332,859

2,752,471,517

Current liabilities (including current liabilities of the consolidated variable interest entity(“VIEs”) and its subsidiaries without recourse to the Company amounting to RMB1,022,418,769 and RMB1,792,082,225, as of December 31, 2018 and December 31, 2019, respectively):

Accounts payable (including accounts payable of the consolidated VIEs and VIE’s subsidiaries without recourse to the Company of RMB73,087,671 and RMB313,189,188 as of December 31, 2018 and December 31, 2019, respectively)

328,268,752

47,152,856

131,249,219

Amounts due to a related party (including amount due to a related party of the consolidated VIEs and VIE’s subsidiaries without recourse to the Company of nil and RMB3,330,101 as of December 31, 2018 and 2019, respectively)

3,436,586

^[2],[3]

493,635

Registered users’ loyalty payable (including registered users’ loyalty payable of the consolidated VIEs and VIE’s subsidiaries without recourse to the Company of RMB249, 881,449 and RMB127,253,323 as of December 31, 2018 and December 31, 2019, respectively)

134,145,439

19,268,787

256,661,934

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 152,181,358 and RMB 246,251,382 as of December 31, 2018 and December 31, 2019, respectively)

246,630,128

35,426,201

155,099,317

Salary and welfare payable (including salary and welfare payable of the consolidated VIEs and VIE’s subsidiaries without recourse to the Company of RMB41,665,582 and RMB126,884,752 as of December 31, 2018 and December 31, 2019, respectively)

129,169,734

18,554,071

43,422,202

Tax payable (including tax payable of the consolidated VIEs and VIE’s subsidiaries without recourse to the Company of RMB100,757,561 and RMB93,025,726 as of December 31, 2018 and December 31, 2019, respectively)

118,156,494

16,972,118

101,286,721

Lease liabilities, current (including lease liabilities, current of the consolidated VIEs and VIE’s subsidiaries without recourse to the Company of nil and RMB31,275,663 as of December 31, 2018 and December 31, 2019, respectively)

38,210,188

5,488,550

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 RMB44,133,812 and RMB89,184,947 as of December 31, 2018 and December 31, 2019, respectively)

89,184,947

12,810,616

44,133,812

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 RMB360,711,336 and RMB761,687,143 as of December 31, 2018 and December 31, 2019, respectively)

788,495,442

113,260,284

379,130,559

Total current liabilities

1,875,697,710

269,427,118

1,110,983,764

Non-current liabilities:

Other non-current liabilities

7,212,463

1,036,005

9,686,219

Lease liabilities, non-current

26,651,446

3,828,241

Deferred tax liabilities

21,228,656

3,049,306

23,631,899

Convertible loan

1,218,905,676

175,084,845

Non-current liabilities

1,273,998,241

182,998,397

33,318,118

Total liabilities

3,149,695,951

452,425,515

1,144,301,882

Mezzanine equity:

Redeemable non-controlling interests

495,844,565

71,223,615

96,936,855

Total mezzanine equity

495,844,565

71,223,615

96,936,855

Shareholders’ equity (deficit):

Additional paid-in capital

4,321,100,861

620,687,302

3,684,130,058

Treasury stock (US$0.0001 par value; 9,500,000 and 8,635,420 shares as of December 31, 2018 and December 31, 2019, respectively)

(142,228,779)

(20,429,886)

Accumulated other comprehensive (loss)

(17,934,525)

(2,576,132)

(16,428,875)

Accumulated deficit

(4,862,464,162)

(698,449,275)

(2,153,235,425)

Total Qutoutiao Inc. shareholders’ equity (deficit)

(701,481,954)

(100,761,577)

1,514,507,305

Non-controlling interests

(3,861,667)

(554,694)

(3,274,525)

Total shareholders’ equity (deficit)

(705,343,621)

(101,316,271)

1,511,232,780

Total liabilities, mezzanine equity and shareholders’ equity

2,940,196,895

422,332,859

2,752,471,517

Class A Ordinary Shares

Shareholders’ equity (deficit):

Ordinary shares

20,260

2,910

16,292

Class B Ordinary Shares

Shareholders’ equity (deficit):

Ordinary shares

¥ 24,391

$ 3,504

¥ 25,255

[1]	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).
[2]	For the year ended December 31, 2019, the Group entered into a CPM (cost per impression) arrangement with a media platform under the common control of the founder for the Group’s customer’s advertisement placement. The total service fee charged from the related party amounted to RMB 35.6 million for the year ended December 31, 2019.
[3]	For the year ended December 31, 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 of RMB6.8 million represents the amount paid to the game developing company in relation to the arrangement.

CONSOLIDATED BALANCE SHEETS (Parenthetical)

Dec. 31, 2019

CNY (¥)

Dec. 31, 2019

USD ($)

$ / shares

Dec. 31, 2018

CNY (¥)

Current liabilities

¥ 1,875,697,710

$ 269,427,118

¥ 1,110,983,764

Accounts payable, current

328,268,752

47,152,856

131,249,219

Amounts due to a related party, current

3,436,586

^[1],[2]

493,635

Loyalty payable, current

134,145,439

19,268,787

256,661,934

Advance from customers and deferred revenue, current

246,630,128

35,426,201

155,099,317

Salary and welfare payable, current

129,169,734

18,554,071

43,422,202

Tax payable, current

118,156,494

16,972,118

101,286,721

Lease liabilities, current

38,210,188

5,488,550

Accrued liabilities, current

89,184,947

12,810,616

44,133,812

Accrued liabilities and other current liabilities

¥ 788,495,442

$ 113,260,284

¥ 379,130,559

Ordinary shares, shares, issued | shares

34,248,442

Treasury stock, par value | $ / shares

$ 0.0001

Treasury stock, shares | shares

8,635,420

9,500,000

Variable Interest Entities

Current liabilities

¥ 1,792,082,225

¥ 1,022,418,769

Accounts payable, current

313,189,188

73,087,671

Amounts due to a related party, current

3,330,101

Loyalty payable, current

127,253,323

249,881,449

Advance from customers and deferred revenue, current

246,251,382

152,181,358

Salary and welfare payable, current

126,884,752

41,665,582

Tax payable, current

93,025,726

100,757,561

Lease liabilities, current

31,275,663

Accrued liabilities, current

89,184,947

44,133,812

Accrued liabilities and other current liabilities

¥ 761,687,143

¥ 360,711,336

Class A Ordinary Shares

Ordinary shares, par value | $ / shares

$ 0.0001

Ordinary shares, shares authorized | shares

50,000,000

Ordinary shares, shares, issued | shares

40,812,245

37,022,806

Ordinary shares, shares, outstanding | shares

32,176,825

27,522,806

Class B Ordinary Shares

Ordinary shares, par value | $ / shares

$ 0.0001

Ordinary shares, shares authorized | shares

34,248,442

Ordinary shares, shares, issued | shares

32,937,193

34,248,442

Ordinary shares, shares, outstanding | shares

32,937,193

34,248,442

[1]	For the year ended December 31, 2019, the Group entered into a CPM (cost per impression) arrangement with a media platform under the common control of the founder for the Group’s customer’s advertisement placement. The total service fee charged from the related party amounted to RMB 35.6 million for the year ended December 31, 2019.
[2]	For the year ended December 31, 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 of RMB6.8 million represents the amount paid to the game developing company in relation to the arrangement.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS	12 Months Ended
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS	Dec. 31, 2019 CNY (¥) ¥ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2018 CNY (¥) ¥ / shares shares	Dec. 31, 2017 CNY (¥) ¥ / shares shares
Net revenues	¥ 5,570,080,604	$ 800,092,017	¥ 3,022,145,785	¥ 517,052,950
Cost of revenues	(1,598,220,452)	(229,570,004)	(497,592,461)	(75,996,476)
Cost of revenues-related parties	(42,411,604)	(6,092,046)	(6,020,268)	(484,019)
Gross profit	3,929,448,548	564,429,967	2,518,533,056	440,572,455
Operating expenses:
Research and development expenses	(926,231,578)	(133,044,842)	(270,107,740)	(15,096,815)
Research and development expenses-related parties				(220,189)
Sales and marketing expenses	(5,486,423,653)	(788,075,448)	(3,226,367,334)	(493,775,027)
Sales and marketing expenses-related parties	(3,284,223)	(471,749)	(23,670,772)	(950,185)
General and administrative expenses	(267,033,100)	(38,356,905)	(980,725,286)	(10,812,869)
General and administrative expenses-related parties				(15,133,767)
Total operating expenses	(6,682,972,554)	(959,948,944)	(4,500,871,132)	(535,988,852)
Other operating income	30,292,356	4,351,225	724,892
Loss from operations	(2,723,231,650)	(391,167,752)	(1,981,613,184)	(95,416,397)
Interest income	48,440,468	6,958,038	27,087,009	673,858
Interest expense	(26,878,316)	(3,860,829)
Foreign exchange related gains, net	1,868,497	268,393	4,133,996
Investment income	6,327,104	908,832	4,214,607	700,000
Other income/(expenses), net	9,048,926	1,299,797	(69,181)	(17,150)
Loss before income taxes	(2,684,424,971)	(385,593,521)	(1,946,246,753)	(94,759,689)
Income tax benefit/ (expense)	(4,842,876)	(695,636)	400,541
Net loss	(2,689,267,847)	(386,289,157)	(1,945,846,212)	(94,759,689)
Net loss attributable to non-controlling interests	587,142	84,338	3,274,525
Net loss attributable to Qutoutiao Inc.	(2,688,680,705)	(386,204,829)	(1,942,571,687)	(94,759,689)
Accretion to convertible redeemable preferred shares redemption value			(101,806,743)	(6,012,783)
Gains on repurchase of convertible redeemable preferred shares			18,332,152
Deemed dividend to preferred shareholders			(1,916,871)
Net loss attributable to Qutoutiao Inc.’s ordinary shareholders	(2,709,228,737)	(389,156,359)	(2,028,941,350)	(100,772,472)
Net loss	(2,689,267,847)	(386,289,157)	(1,945,846,212)	(94,759,689)
Other comprehensive income/ (loss)
Foreign currency translation adjustment, net of nil tax	(1,505,650)	(216,273)	(16,453,526)	24,651
Total comprehensive loss	(2,690,773,497)	(386,505,430)	(1,962,299,738)	(94,735,038)
Comprehensive loss attributable to non-controlling interests	587,142	84,338	3,274,525
Comprehensive loss attributable to Qutoutiao Inc.	¥ (2,690,186,355)	$ (386,421,092)	¥ (1,959,025,213)	¥ (94,735,038)
Net loss per share attributable to Qutoutiao Inc.'s ordinary shareholders
— Basic and diluted \| (per share)	¥ (39.41)	$ (5.66)	¥ (52.69)	¥ (3.95)
Weighted average number of ordinary shares used in per share calculation:
— Basic and Diluted \| shares	68,749,981	68,749,981	38,507,184	25,542,031
Subsidiary
Operating expenses:
Accretion to convertible redeemable preferred shares redemption value	¥ (20,548,032)	$ (2,951,540)	¥ (978,201)
Advertising and Marketing Revenue
Net revenues	4,942,104,752	709,888,930	2,796,810,549	¥ 512,882,481
Advertising And Marketing Revenue Related Parties
Net revenues	473,215,790	67,973,195	17,447,475
Other Revenue
Net revenues	¥ 154,760,062	$ 22,229,892	178,290,618	¥ 4,170,469
Other Revenue Related Parties
Net revenues			¥ 29,597,143

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical)	12 Months Ended
	Dec. 31, 2019 CNY (¥)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)
Statement Of Income And Comprehensive Income [Abstract]
Foreign currency translation adjustment, tax	¥ 0	$ 0	¥ 0	¥ 0

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)	CNY (¥) shares	USD ($) shares	Series A Convertible Redeemable Preferred Shares CNY (¥)	Series A1 Convertible Redeemable Preferred Shares CNY (¥)	Series B Convertible Redeemable Preferred Shares CNY (¥)	Series B1 Convertible Redeemable Preferred Shares CNY (¥)	Series B2 Convertible Redeemable Preferred Shares CNY (¥)	Series B3 Convertible Redeemable Preferred Shares CNY (¥)	Series C1 Convertible Redeemable Preferred Shares CNY (¥)	Outstanding Ordinary Shares CNY (¥) shares	Additional Paid-In Capital CNY (¥)	Treasury Stocks CNY (¥) shares	Accumulated Other Comprehensive Income/(Loss) CNY (¥)	Accumulated Deficit CNY (¥)	Accumulated Deficit Series A Convertible Redeemable Preferred Shares CNY (¥)	Accumulated Deficit Series A1 Convertible Redeemable Preferred Shares CNY (¥)	Accumulated Deficit Series B Convertible Redeemable Preferred Shares CNY (¥)	Accumulated Deficit Series B1 Convertible Redeemable Preferred Shares CNY (¥)	Accumulated Deficit Series B2 Convertible Redeemable Preferred Shares CNY (¥)	Accumulated Deficit Series B3 Convertible Redeemable Preferred Shares CNY (¥)	Accumulated Deficit Series C1 Convertible Redeemable Preferred Shares CNY (¥)	Non-controlling Interests CNY (¥)
Beginning balance at Dec. 31, 2016	¥ (11,191,017)									¥ 15,723	¥ 1,118,808			¥ (12,325,548)
Beginning balance, shares at Dec. 31, 2016 \| shares										24,062,500		10,000,000
Share-based compensation expense (Note 16)	3,378,827										3,378,827
Distribution to the founder (Note 16)											4,358,681			(4,358,681)
Accretion to convertible redeemable preferred shares redemption value	(6,012,783)		¥ (5,213,802)	¥ (798,981)											¥ (5,213,802)	¥ (798,981)
Net loss for the year	(94,759,689)													(94,759,689)
Foreign currency translation	24,651												¥ 24,651
Ending balance at Dec. 31, 2017	¥ (108,560,011)									¥ 15,723	8,856,316		24,651	(117,456,701)
Ending balance, shares at Dec. 31, 2017 \| shares	40,000,000	40,000,000								24,062,500		10,000,000
Share-based compensation expense (Note 16)	¥ 951,626,250										951,626,250
Distribution to the founder (Note 16)											6,837,374			(6,837,374)
Accretion to convertible redeemable preferred shares redemption value	(101,806,743)		(15,718,213)	¥ (4,840,875)		¥ (37,001,459)	¥ (31,800,587)	¥ (12,312,158)	¥ (133,451)						(15,718,213)	¥ (4,840,875)		¥ (37,001,459)	¥ (31,800,587)	¥ (12,312,158)	¥ (133,451)
Accretion on Series A convertible redeemable preferred shares of a subsidiary			(978,201)												(978,201)
Deemed dividend to preferred shareholders (Note 14)											1,916,871			(1,916,871)
Conversion of series A, A1, B1, B2, B3, C1 preferred shares to ordinary shares, value	2,123,987,271									¥ 12,217	2,123,975,054
Conversion of series A, A1, B1, B2, B3, C1 preferred shares to ordinary shares, shares \| shares										17,821,248
Vesting of restricted shares to founders, value										¥ 10,926	(10,926)
Vesting of restricted shares to founders, shares \| shares										15,937,500
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), value	590,931,483									¥ 2,364	590,929,119
Issuance of ordinary shares upon Initial Public Offering (“IPO”) and over-allotment option, net of cost of issuance(Note 3), shares \| shares										3,450,000
Exercise of share options	¥ 317									¥ 317		¥ (500,000)
Exercise of share options, shares \| shares	500,000	500,000								500,000
Net loss for the year	¥ (1,945,846,212)													(1,942,571,687)								¥ (3,274,525)
Foreign currency translation	(16,453,526)												(16,453,526)
Ending balance at Dec. 31, 2018	1,511,232,780									¥ 41,547	3,684,130,058		(16,428,875)	(2,153,235,425)								(3,274,525)
Ending balance, shares at Dec. 31, 2018 \| shares										61,771,248		9,500,000
Share-based compensation expense (Note 16)	271,978,493										271,978,493
Accretion on Series A convertible redeemable preferred shares of a subsidiary			¥ (12,171,842)		¥ (8,376,190)										¥ (12,171,842)		¥ (8,376,190)
Issuance of ordinary shares upon follow-on offering, net of issuance costs (Note 3), value	212,143,573									¥ 558	212,143,015
Issuance of ordinary shares upon follow-on offering, net of issuance costs (Note 3), shares \| shares										831,967
Issuance of ordinary shares to the Paper (Note 3), value	152,850,342									¥ 1,047	152,849,295
Issuance of ordinary shares to the Paper (Note 3), shares \| shares										1,480,123
Repurchase of ordinary shares (Note 2y), value	(142,228,779)											¥ (142,228,779)
Repurchase of ordinary shares (Note 2y), shares \| shares										(1,166,425)		1,166,425
Exercise of share options	¥ 1,499									¥ 1,499		¥ (2,031,005)
Exercise of share options, shares \| shares	2,197,104	2,197,104								2,197,105
Net loss for the year	¥ (2,689,267,847)													(2,688,680,705)								(587,142)
Foreign currency translation	(1,505,650)												(1,505,650)
Ending balance at Dec. 31, 2019	¥ (705,343,621)	$ (101,316,271)								¥ 44,651	¥ 4,321,100,861	¥ (142,228,779)	¥ (17,934,525)	¥ (4,862,464,162)								¥ (3,861,667)
Ending balance, shares at Dec. 31, 2019 \| shares										65,114,018		8,635,420

CONSOLIDATED STATEMENTS OF CASH FLOWS	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS	Dec. 31, 2019 CNY (¥)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 CNY (¥)	Dec. 31, 2017 CNY (¥)
Cash flows from operating activities
Net loss	¥ (2,689,267,847)	$ (386,289,157)	¥ (1,945,846,212)	¥ (94,759,689)
Adjustments for:
Depreciation of property and equipment	10,003,655	1,436,935	4,291,284	330,238
Amortization of intangible assets	10,555,229	1,516,164	1,602,163
Non-cash operating lease expense	43,513,790	6,250,365
Deferred tax benefit	(2,403,243)	(345,204)	(400,541)
Share-based compensation	271,978,493	39,067,266	951,626,250	3,378,827
Interest expense	26,878,316	3,860,829
Changes in estimate for accrued liabilities related to users' loyalty programs	22,687,320	3,258,830	54,601,750	(100,382,099)
Changes in assets and liabilities, net of impact of acquisition:
Accounts receivable	(322,838,858)	(46,372,900)	(160,733,479)	(32,099,995)
Amount due from related parties	(278,155,878)	(39,954,592)		5,000,000
Prepayments and other current assets	(85,958,956)	(12,347,231)	(74,365,824)	(13,759,902)
Other non-current assets	(8,979,480)	(1,289,822)	(3,388,147)	(5,758,946)
Accounts payable	197,019,533	28,300,085	115,892,236	7,050,837
Amount due to related parties	3,436,586	493,635		(3,024,000)
Registered users’ loyalty payable	(122,516,495)	(17,598,393)	235,684,796	19,953,908
Salary and welfare payable	85,747,532	12,316,863	36,964,404	5,086,102
Tax payable	13,096,995	1,881,266	70,010,545	19,901,230
Accrued liabilities related to users' loyalty programs	22,363,815	3,212,361	(197,471,407)	262,877,012
Accrued liabilities and other current liabilities	392,071,989	56,317,617	353,985,756	19,297,288
Advances from customers and deferred revenue	91,530,811	13,147,578	113,095,683	39,135,595
Operating lease liabilities	(45,584,621)	(6,547,822)
Non-current liabilities	(2,473,756)	(355,333)	9,686,219
Net cash provided by/(used in) operating activities	(2,367,295,070)	(340,040,660)	(434,764,524)	132,226,406
Cash flows from investing activities:
Purchase of short-term investments	(2,454,602,495)	(352,581,587)	(4,164,032,230)	(539,360,549)
Purchase of equity investments	(37,589,200)	(5,399,351)
Proceeds from maturity of short-term investments	1,294,361,059	185,923,333	4,189,115,780	421,985,200
Purchase of intangible assets	(4,971,310)	(714,084)	(72,097,321)
Cash paid for acquisitions, net of cash acquired			(10,729,825)
Purchase of property and equipment	(21,349,657)	(3,066,686)	(14,924,590)	(4,543,180)
Proceeds from disposal of property and equipment			175,634
Net cash used in investing activities	(1,224,151,603)	(175,838,376)	(72,492,552)	(121,918,529)
Cash flows from financing activities:
Payment of accrued Initial Public Offering expense	(1,575,911)	(226,365)
Proceeds from follow-on offering, net of issuance costs	212,143,573	30,472,518
Proceeds from issuance of ordinary shares to The Paper	144,351,128	20,734,742
Proceeds from Convertible Loan, net of issuance costs	1,174,616,692	168,723,131
Payment for repurchase of ordinary shares	(142,228,779)	(20,429,886)
Cash received from other financing activities			138,051
Net cash provided by financing activities	1,768,001,310	253,957,498	2,298,043,751	272,121,039
Net increase/ (decrease) in cash, cash equivalents and restricted cash	(1,823,445,363)	(261,921,538)	1,790,786,675	282,428,916
Effect of exchange rate changes on cash, restricted cash and cash equivalents	12,845,762	1,845,178	117,043,158	(4,239,131)
Cash, cash equivalents and restricted cash at the beginning of year	2,186,288,246	314,040,657	278,458,413	268,628
Cash, cash equivalents and restricted cash at the end of year	375,688,645	53,964,297	2,186,288,246	278,458,413
Supplemental disclosure of cash flow information:
Accounts payable related to the purchase of property and equipment				263,000
Accrued Initial Public Offering expense			1,575,911
Revenue recognized for non-monetary transactions (Note 7)	(40,000,000)	(5,745,640)
Sales and marketing expense recorded for non-monetary transactions (Note 7)	21,132,075	3,035,433
Incentive payment to customer			(22,842,164)
Cooperation service fee to The Paper (Note 3)	(8,499,574)	(1,220,887)
Deemed dividend to preferred shares shareholders			1,916,871
Gains on repurchase of convertible redeemable preferred shares			(18,332,152)
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	347,817,093	49,960,799	2,186,288,246	278,458,413
Restricted cash	27,871,552	4,003,498
Cash, cash equivalents and restricted cash at the end of year	375,688,645	53,964,297	2,186,288,246	278,458,413
Initial Public Offering And Over Allotment Option
Cash flows from financing activities:
Proceeds from issuance of ordinary shares upon Initial Public Offering and over-allotment option, net of cost of issuance			592,507,394
Series A Convertible Redeemable Preferred Shares
Cash flows from financing activities:
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs	27,357,503	3,929,659	97,147,400	208,490,509
Series A1 Convertible Redeemable Preferred Shares
Cash flows from financing activities:
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs				63,630,530
Series B1 Convertible Redeemable Preferred Shares
Cash flows from financing activities:
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs			651,736,522
Series B2 Convertible Redeemable Preferred Shares
Cash flows from financing activities:
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs			569,316,830
Series B3 Convertible Redeemable Preferred Shares
Cash flows from financing activities:
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs			282,249,969
Series C1 Convertible Redeemable Preferred Shares
Cash flows from financing activities:
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs			104,947,585
Series B Convertible Redeemable Preferred Shares
Cash flows from financing activities:
Proceeds from issuance of convertible redeemable preferred shares, net of issuance costs	353,337,104	50,753,699
Series A Preferred Shares
Supplemental disclosure of cash flow information:
Accretion to preferred shares redemption value			15,718,213
Series A1 Preferred Shares
Supplemental disclosure of cash flow information:
Accretion to preferred shares redemption value			4,840,875	5,213,802
Series B1 Preferred Shares
Supplemental disclosure of cash flow information:
Accretion to preferred shares redemption value			37,001,459	¥ 798,981
Series B2 Preferred Shares
Supplemental disclosure of cash flow information:
Accretion to preferred shares redemption value			31,800,587
Series B3 Preferred Shares
Supplemental disclosure of cash flow information:
Accretion to preferred shares redemption value			12,312,158
Series C1 Preferred Shares
Supplemental disclosure of cash flow information:
Accretion to preferred shares redemption value			133,451
Series A and B Convertible Redeemable Preferred Shares of Subsidiary
Supplemental disclosure of cash flow information:
Accrued Series A and B convertible redeemable preferred shares issuance cost of a subsidiary	435,000	62,484	126,146
Accretion to preferred shares redemption value	¥ 20,548,032	$ 2,951,540	¥ 978,201

Organization and Principal Activities

12 Months Ended

Dec. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Principal Activities

1.	Organization and Principal Activities

(a) Principal activities

Qutoutiao Inc. (the “Company”), an exempted company with limited liability incorporated in the Cayman Islands, (i) its various equity-owned consolidated subsidiaries, (ii) its controlled affiliates, and (iii) the subsidiaries of its controlled affiliates are collectively referred to as the “Group”. The Group’s principal activity is to operate mobile platforms Qutoutiao (“QTT”), Quduopai (QDP) and Midu (“MD”) for the distribution, consumption and sharing of light entertainment content. The Group generates revenue primarily by providing cost-effective and targeted advertising solutions through the mobile platforms in the People’s Republic of China (“PRC”), through its controlled affiliates and their wholly-owned subsidiaries thereof (collectively referred to as the “Affiliated Entities”).

As of December 31, 2019, the Company’s principal subsidiaries and consolidated Affiliated Entities are as follows:

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”)	Established on August 15, 2017	Hong Kong		100	%
Qtech USA Inc. ("Qtech")	Established on April 23, 2018	USA		100	%
Fun Literature Limied (Cayman) ("Fun Literature")	Established on October 19, 2018	Cayman Islands		78	%
Shanghai Quyun Internet Technology Co., Ltd. (“Quyun WFOE”)	Established on October 13, 2017	PRC		100	%
Shanghai Dianguan Network Technology Co., Ltd. (“Dianguan”)	Acquired on February 2, 2018	PRC		100	%
QTT Asia Ltd.(“QTT Asia”)	Established on April 10, 2018	British Virgin Islands(“BVI”)		100	%
Shanghai Zhicao Information Technology Co., Ltd. (“Zhicao WFOE”)	Established on December 4, 2018	PRC		100	%
Variable Interest Entity (“VIEs”)
Shanghai Jifen Culture Communications Co., Ltd. (“Jifen or Jifen VIE”)	Established on January 10, 2012	PRC		100	%
Beijing Churun Internet Technology Co., Ltd. (“Churun VIE”)	Acquired on November 1, 2018	PRC		100	%
Shanghai Big Rhinoceros Horn Information Technology, Co., Ltd (“Big Rhinoceros Horn VIE”)	Established on November 9, 2018	PRC		100	%
Shanghai DragonS Information Technology, Co., Ltd (“ DragonS Information VIE”)	Established on January 1, 2019	PRC		100	%
Anhui Zhangduan Internet Technology Co., Ltd. (“Zhangduan VIE”)	Established on March 31, 2017	PRC		100	%
Hubei Rapid Information Technology Co., Ltd (“Rapid Information VIE”)	Established on March 1, 2019	PRC		100	%
Subsidiaries of Variable Interest Entity (“VIE subsidiaries”)
Shanghai Xike Information Technology Service Co., Ltd. (“Xike”)	Established on July 14, 2016	PRC		100	%
Shanghai Tuile Information Technology Service Co., Ltd. (“Tuile”)	Established on July 14, 2016	PRC		100	%
Beijing Qukandian Internet Technology Co., Ltd (“Qukandian”)	Established on April 13, 2017	PRC		100	%
Shanghai Heitu Internet Technology Co., Ltd (“Heitu”)	Established on January 1, 2019	PRC		100	%
Shanghai Zheyun Internet Technology Co., Ltd (“Zheyun”)	Established on January 1, 2019	PRC		100	%
Beijing Supreme Pole International Sports Development Co., Ltd. (“Supreme Pole International Sports”)	Established on January 1, 2019	PRC		100	%
Tianjin Quwen Internet Technology Co., Ltd ("Quwen")	Established on August 9, 2018	PRC		100	%

(b) Reorganization

Jifen was incorporated in the PRC in 2012 and started the operation of the mobile platforms for distribution, consumption and sharing of light entertainment content (the “principal business”) from 2016.

To facilitate offshore financing, an offshore corporate structure was formed in July 2017 (the “Reorganization”), which was carried out as follows:

On July 17, 2017, the Company was incorporated in the Cayman Islands by the founders.

On August 15, 2017, InfoUniversal was incorporated in Hong Kong with 100% ownership by the Company.

October 13, 2017, Quyun WFOE was incorporated in the PRC with 100% ownership by InfoUniversal.

On October 13, 2017, the Group entered into various arrangements (“VIE Agreements”) as related to its Affiliated Entities or its shareholders in order to comply with PRC laws and regulations on internet business.

By entering the VIE Agreements, Jifen became a VIE whose primary beneficiary is Quyun WFOE and the shareholders of Jifen became the “Nominee Shareholders” of Jifen. Reorganization is accounted for as a common control transaction under the pooling of interest method. Accordingly, the accompanying consolidated financial statements have been prepared as if the current corporate structure had been in existence throughout the periods.

Jifen VIE

The Group has entered into various agreements as related to its Affiliated Entities or its shareholders as follows:

Exclusive Technology Support and Consulting Services Agreement

Under the exclusive technology support and consulting services agreement entered on October 13, 2017 between Jifen VIE and Quyun WFOE, Quyun WFOE has the exclusive right to provide to Jifen technology support, business management consulting, marketing consultation, products research and development and technology services related to all technologies, and business operations needed for its business. Quyun WFOE owns the exclusive intellectual property rights created because of the performance of this agreement. The service fee payable by Jifen to Quyun WFOE is determined by Quyun WFOE based on its services provided including various factors such as Quyun WFOE’s incurred technology support and consulting services fees, performance data and Jifen VIE’s revenues. The term of this agreement will expire in 10 years and may be extended at Quyun WFOE’s request prior to the expiration date. Quyun WFOE is entitled to terminate the agreement at any time by providing 30 days’ prior written notice to Jifen VIE. There was no service fee paid and payable from Jifen VIE to Quyun WFOE for the years ended December 31, 2017, 2018 and 2019 as Jifen, in aggregated, has been incurring losses.

Exclusive Option Agreement

The parties to the exclusive option agreement entered on October 13, 2017 are Jifen VIE, Quyun WFOE and each of the shareholders of Jifen VIE. Under the exclusive option agreement, each of the shareholders of Jifen VIE irrevocably granted Quyun WFOE or its designated representative(s) an exclusive option to purchase, to the extent permitted under PRC law, all or part of his or its equity interests in Jifen VIE and all or part of assets of Jifen VIE. Quyun WFOE or its designated representative(s) have sole discretion as to when to exercise such options, either in part or in full. The exercise price shall be the lowest allowable share purchase amount permitted by the PRC law for the 100% equity interest (or pro-rata if Quyun WFOE decides to purchase part of the equity interest). Additionally, the share purchase amount paid by WFOE to the shareholders should be used to settle the outstanding loan amounts under the loan agreement and/or refund back to Quyun WFOE through the method permitted by the PRC law once received. Without Quyun WFOE’s prior written consent, Jifen VIE’s shareholders shall not sell, transfer, mortgage or otherwise dispose their equity interests in Jifen VIE. The agreement expires upon transfer of all shares or assets of Jifen VIE to Quyun WFOE or its designated representative(s). The term of this agreement will expire in 10 years and may be extended at Quyun WFOE’s request prior to the expiration date. Quyun WFOE is entitled to terminate the agreement at any time by providing 30 days’ prior written notice to Jifen VIE.

Voting Rights Proxy Agreement

The parties to the exclusive option agreement entered on October 13, 2017 are Jifen VIE, Quyun WFOE and each of the shareholders of Jifen VIE, with the exception of The Paper (see below for additional information on The Paper arrangement). Under the agreement, each of the shareholders of Jifen VIE irrevocably granted Quyun WFOE or its designated representative(s) the right to exercise his/her rights as a shareholder of Jifen VIE including hosting board of directors meeting, terminate and nominate board members and senior management of Jifen VIE and other shareholders’ voting rights. During the period that each of Shanghai Quyun and Shanghai Jifen remain in operation, the voting rights proxy agreement shall be irrevocable and continuously effective and valid for ten years from the execution date unless otherwise agreed to by all parties. Upon the expiration of the original term or any renewal term of the voting rights proxy agreement, the agreement shall be automatically renewed for an additional one year period unless, at least 30 days prior to the expiration date, Shanghai Quyun provides notice to the other parties to the voting rights proxy agreement not to renew the agreement.

Loan Agreement

Quyun WFOE has entered into an interest-free loan agreement with Jifen VIE, which may only be used for the purpose of business operations and development of Jifen VIE. Under the terms of the agreement, Quyun WFOE is going to provide unconditional financial support to Jifen VIE and the amount would be agreed between Quyun WFOE and Jifen VIE. Jifen VIE along with its subsidiaries pledge all its shares equity for the outstanding loan. Also, the maturity date of the loan is the earlier of 10 years, the end of Quyun WFOE’s operation period or the end of Jifen VIE’s operation period. Upon maturity, Quyun WFOE or its designated third party may purchase the equity interests in the Jifen VIE at a price equal to the lowest allowable amount for a similar transaction per PRC laws, rules and regulations. Quyun WFOE can also accelerate the payment terms of Jifen VIE to repay the loan using its shares/equity. Additionally, Quyun WFOE should provide unconditional capital support to Jifen VIE.

Equity Interest Pledge Agreement

Pursuant to the equity interest pledge agreement between Quyun WFOE and the shareholders of Jifen VIE, with the exception of The Paper (see below for additional information on The Paper arrangement), the shareholders of Jifen VIE has pledged all of their equity interests in Jifen VIE to Quyun WFOE to guarantee the performance by Jifen VIE and its shareholders’ performance of their respective obligations under the exclusive option agreement, exclusive technology support and business services agreement, voting rights proxy agreement and loan agreement. If Jifen VIE and/or its shareholders breach their contractual obligations under those agreements, Quyun WFOE, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests.

Jifen, under Generally Accepted Accounting Principles in the United States (“US GAAP”), is considered to be a consolidated VIE in which the Company, or its subsidiaries, through contractual arrangements, bears the risks of, and enjoys the rewards normally associated with, ownership of the entity, and therefore the Company or one of its subsidiaries is the primary beneficiary of the entity. Through the aforementioned contractual agreements, the Company has the ability to:

•

exercise effective control over Jifen whereby having the power to direct Jifen’s activities that most significantly drive the economic results of Jifen;

•

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.

Management evaluated the relationships among the Company, Quyun WFOE and Jifen VIE, and concluded that Quyun WFOE is the primary beneficiary of Jifen VIE. As a result, Jifen’s results of operations, assets and liabilities have been included in the Group’s consolidated financial statements for all the presented periods.

Except for Jifen VIE mentioned above, the Group’s other VIEs entered into the VIE Agreements (

Exclusive Technology Support and Consulting Services Agreement, Exclusive Option Agreement, Voting Rights Proxy Agreement, Loan Agreement and Equity Interest Pledge Agreement) which have the same terms as those described in Jifen VIE. As a result, these VIEs’ primary beneficiaries are Quyun WFOE and Zhicao WFOE and their shareholders became the “Nominee Shareholders”.

In September 2019, Jifen VIE issued equity interests representing 1% of its enlarged share capital to Shanghai Dongfang Newspaper Co., Ltd., commonly known as “The Paper” at a nominal price. The Paper has designated one representative to Jifen VIE’s Board of Directors to assist with enhancing the quality of content on the Company’s platform but does not participate in the VIE’s operational decision making. The Paper will not absorb the losses allocation, if any, from the Jifen VIE. The Company believes that its control over the consolidated VIE and its subsidiaries and the economic benefits received from the consolidated VIE will not be affected and will continue to consolidate the VIE. The 1% equity interests held by The Paper represents a non-controlling interest of the Group.

The Group has incurred losses from operations since inception. The Group incurred net losses of RMB94.8 million, RMB1,945.8 and RMB2,689.3 million for the years ended December 31, 2017, 2018 and 2019, respectively. Accumulated deficit amounted to RMB2,153.2 million and RMB4,862.5 million as of December 31, 2018 and 2019, respectively. Net cash generated from operating activities was approximately RMB132.2 million for the year ended December 31, 2017, and net cash used in operating activities was approximately RMB434.8 million and RMB2,367.3 million for the years ended December 31, 2018 and 2019, respectively. As of December 31, 2018 and 2019, the Group’s working capital was RMB1,515.1 million and RMB816.5 million, respectively. As of December 31, 2019, the Group had cash and cash equivalent of RMB347.8 million, restricted cash of RMB27.9 million and short-term investments of RMB1,276.8 million, and total current and long-term liabilities of RMB1,875.7 million and RMB3,149.7 million, respectively.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on the Group’s ability to reduce cash used in operating activities, obtain capital financing from equity or debt investors and adjust the pace of its operation expansion and control of the related expense to fund its general operations and capital expansion needs.

The Group’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plans, which include adjusting the pace of its operation expansion and controlling operating cost and expenses to reduce the cash used in operating cash flows. To implement the plans, the Company will enhance user engagement and retention by offering higher quality and diversified contents while closely control the content costs with more selective content acquisition and better leverage of existing content varieties,and continue to optimize the user loyalty programs and the traffic acquisition strategy to efficiently control and reduce these user related costs. The Company will further preserve liquidity and manage cash flows by reducing discretionary expenditure including advertising expenses and general and administrative expenses.

Management has concluded, after giving consideration to its plans as noted above, that they have alleviated the substantial doubt as to its ability to continue as a going concern and believes the Company has sufficient cash and other financial resources and liquidity to fund its operations for one year from the date of the filing of the consolidated financial statements, and that there is not substantial doubt about the Company’s ability to continue operations as a going concern for that one-year period.

Principal Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Principal Accounting Policies

2.	Principal Accounting Policies

(a) Basis of preparation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

The Reorganization was accounted for as a common control transaction under the pooling of interest method. Accordingly, the accompanying consolidated financial statements have been prepared as if the current corporate structure had been in existence throughout the periods.

Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below.

(b) Use of estimates

The preparation of the Group’s consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from such estimates.

The Company believes that revenue recognition, liabilities related to loyalty programs, consolidation of VIEs, determination of share-based compensation and impairment assessment of long-lived assets reflect more significant judgments and estimates used in the preparation of its consolidated financial statements.

Management bases the estimates on historical experience and on various other assumptions as discussed elsewhere to the consolidated financial statements that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could materially differ from these estimates.

The Group’s consolidated financial statements include the financial statements of the Company, its subsidiaries, its VIEs and a VIEs’ subsidiaries for which the Company or its subsidiary is the primary beneficiary. All transactions and balances among the Company, its subsidiaries, its VIEs have been eliminated upon consolidation.

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the board of directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

A VIE is an entity in which the Company, or its subsidiary, through contractual agreements, bears the risks of, and enjoys the rewards normally associated with ownership of the entity. In determining whether the Company or its subsidiaries are the primary beneficiary, the Company considered whether it has the power to direct activities that are significant to the VIEs’ economic performance, and also the Group’s obligation to absorb losses of the VIEs that could potentially be significant to the VIEs or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. The Company’s WFOEs and ultimately the Company hold all the variable interests of the VIEs and its subsidiaries, and have been determined to be the primary beneficiaries of the VIEs.

The following table sets forth the assets, liabilities, results of operations and cash flows of VIEs and its subsidiaries, which are included in the Group’s consolidated financial statements. Transactions between the VIEs and its subsidiaries are eliminated in the balances presented below:

	As of
	December 31, 2018		December 31, 2019
Assets
Current assets
Cash and cash equivalents		19,464,246		7,807,740
Restricted cash		—		27,871,552
Short-term investments		5,000,000		31,430,000
Accounts receivable, net		200,289,537		526,689,373
Amount due from subsidiaries of the Company		291,902,904		548,857,973
Amount due from related parties		—		262,581,158
Prepayments and other current assets		80,565,668		172,737,341
Total current assets		597,222,355		1,577,975,137
Non-current assets
Property and equipment, net		13,376,314		23,152,687
Long-term investments		—		10,000,000
Right-of-use assets		—		61,931,400
Intangible assets		—		4,029,056
Other non-current assets		8,945,774		14,211,365
Total non-current assets		22,322,088		113,324,508
Total assets		619,544,443		1,691,299,645
Liabilities
Current liabilities
Accounts payable		73,087,671		313,189,188
Amount due to subsidiaries of the Company		629,835,620		2,734,962,567
Amount due to related parties		—		3,330,101
Registered users’ loyalty payable		249,881,449		127,253,323
Advance from customers and deferred revenue		152,181,358		246,251,382
Salary and welfare payable		41,665,582		126,884,752
Tax payable		100,757,561		93,025,726
Lease liabilities, current		—		31,275,663
Accrued liabilities related to users’ loyalty programs		44,133,812		89,184,947
Accrued liabilities and other current liabilities		360,711,336		761,687,143
Total current liabilities		1,652,254,389		4,527,044,792
Lease liabilities, non-current		—		25,279,037
Total liabilities		1,652,254,389		4,552,323,829

	Year ended December 31,
	2017			2018			2019
Net revenues		517,052,950			3,065,573,756			5,627,372,568
Net loss		(90,843,873	)		(1,882,747,022	)		(2,469,063,768	)

	Year ended December 31,
	2017			2018			2019
Net cash provided by/(used in) operating activities		132,992,222			(77,218,211	)		(2,782,745,243	)
Net cash provided by/(used in) investing activities		(121,943,180	)		90,767,728			(60,545,682	)
Net cash (used in) financing activities		—			(5,402,941	)		2,859,505,971
Net increase in cash and cash equivalents		11,049,042			8,146,576			16,215,046

In accordance with the aforementioned VIE agreements, the Company has power to direct activities of the VIEs, and can have assets transferred out of VIEs. Therefore the Company considers that there is no asset in VIEs that can be used only to settle obligations of the VIEs, except for registered capital, as of December 31, 2018 and 2019. As the VIEs and their subsidiaries were incorporated as limited liability Company under the PRC Company Law, the creditors do not have recourse to the general credit of the Company for all the liabilities of the VIEs.

There were no pledges or collateralization of the Affiliated Entities’ assets. As the Company is conducting its business mainly through the Affiliated Entities, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss.

There is no VIEs where the Company has variable interest but is not the primary beneficiary.

The Group believes that the contractual arrangements among its shareholders and WFOEs comply with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements and if the shareholders of the VIEs were to reduce their interests in the Company, their interests may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms.

The Company’s ability to control the VIEs also depends on the voting rights proxy and the effect of the share pledge under the Equity Interest Pledge Agreement and the WFOEs have to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Company believes this voting right proxy is legally enforceable but may not be as effective as direct equity ownership.

(d) Functional Currency and Foreign Currency Translation

The Group uses Renminbi (“RMB”) as its reporting currency. The functional currency of the Company and its subsidiaries incorporated outside of PRC is the United States dollar (“US$”), while the functional currency of the PRC entities in the Group is RMB as determined based on the criteria of ASC 830, Foreign Currency Matters.

Transactions denominated in other than the functional currencies are re-measured into the functional currency of the entity at the exchange rates prevailing on the transaction dates. Financial assets and liabilities denominated in other than the functional currency are re-measured at the balance sheet date exchange rate. The resulting exchange differences are recorded in the consolidated statements of comprehensive loss as foreign exchange related gain / loss.

The financial statements of the Group are translated from the functional currency to the reporting currency, RMB. Assets and liabilities of the subsidiaries are translated into RMB using the exchange rate in effect at each balance sheet date. Income and expense items are generally translated at the average exchange rates prevailing during the fiscal year. Foreign currency translation adjustments arising from these are accumulated as a separate component of shareholders’ deficit on the consolidated financial statement. The exchange rates used for translation on December 31, 2018 and December 31, 2019 were US$1.00=RMB6.8632 and RMB6.9762, respectively, representing the index rates stipulated by the People’s Bank of China.

(e) Convenience Translation

Translations of balances in the Group’s consolidated balance sheet, consolidated statement of operations and comprehensive loss and consolidated statement of cash flows from RMB into US$ as of and for the year ended December 31, 2019 are solely for the convenience of the readers and were calculated at the rate of US$1 = RMB6.9618, representing the noon buying rate set forth in the H.10 statistical release of the US Federal Reserve Board on December 31, 2019. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2019, or at any other rate.

(f) Fair value of financial instruments

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The three levels of inputs that may be used to measure fair value include:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Observable, market-based inputs, other than quoted prices, in active markets for identical assets or liabilities.

Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

The Group’s financial instruments consist principally of cash and cash equivalents, short-term investments, accounts receivable, equity securities, accounts payable, advance from advertising customers, registered users’ loyalty payable, other liabilities, and convertible loan.

As of December 31, 2018 and 2019, the carrying values of cash and cash equivalents, short-term investments in time deposits, accounts receivable, accounts payable, advance from customers and deferred revenue, registered users’ loyalty payable and other liabilities approximated their fair values reported in the consolidated balance sheets due to the short-term maturities of these instruments. As of December 31, 2019, the estimated fair value of the long-term convertible loan approximated its carrying amount of RMB1,218.9 million due to the short duration between the issuance and period-end date. The convertible loan would qualify as Level 3 in the fair value hierarchy if it was to be carried at fair value due to the presence of significant unobservable inputs.

On a recurring basis, the Group measures its short-term investments in wealth management products at fair value.

The following table sets forth the Group’s assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:

As of December 2018

Level 1

Level 2

Level 3

Balance at

fair value

Assets

Short-term investments — Wealth management products

—

115,436,080

—

115,436,080

As of December 2019

Level 1

Level 2

Level 3

Balance at

fair value

Assets

Short-term investments — Wealth management products

—

314,812,946

—

314,812,946

The Group values its investments in wealth management products issued by certain banks using quoted subscription/redemption prices published by these banks, and accordingly, the Group classifies the valuation techniques that use these inputs as Level 2.

(g) Cash and Cash Equivalents

Cash and cash equivalents include cash in bank and time deposits placed with banks or other financial institutions, which have original maturities of three months or less at the time of purchase and are readily convertible to known amounts of cash.

(h) Restricted cash

As of December 31, 2019, restricted cash of RMB27.9 million represents the cash balance in Jifen VIE’s bank accounts that were frozen as a result of a pending litigation. Refer to Note 23 – Commitments and Contingencies for additional information.

(i) Short-term investments

Short-term investments include time deposits placed with original maturities between three months and a year with banks in the PRC and investments in wealth management products issued by certain banks which are redeemable by the Company at any time. As of December 31, 2018 and 2019, the time deposits amounted to nil and RMB962.0 million while the wealth management products amounted to RMB115.4 million and RMB314.8 million respectively. For time deposits with original maturities between three months and a year, its interest income amounted to nil, RMB4.9 million and RMB32.4 million in the consolidated statements of comprehensive loss for the years ended December 31, 2017, 2018 and 2019, respectively. The wealth management products are unsecured with variable interest rates and primarily invested in debt securities issued by the PRC government, corporate debt securities and central bank bills. The Company measures the investments in wealth management products at fair value using the quoted subscription or redemption prices published by these banks. The change in fair value is recorded as investment income amounted to RMB 0.7 million, RMB 4.2 million and RMB 6.3 million in the consolidated statements of comprehensive loss for the years ended December 31, 2017, 2018 and 2019, respectively.

(j) Accounts receivable, net

Accounts receivable are presented net of allowance for doubtful accounts. The Group uses specific identification in providing for bad debts when facts and circumstances indicate that collection is doubtful and based on factors listed in the following paragraph. If the financial conditions of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowance may be required.

The Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance for doubtful accounts on general basis taking into consideration various factors including but not limited to historical collection experience and credit-worthiness of the customers as well as the age of the individual receivables balance. Additionally, the Company makes specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability.

(k) Property and equipment, net

Property and equipment are stated at historical cost less accumulated depreciation and impairment loss, if any. Depreciation is calculated using the straight-line method over their estimated useful lives. The estimated useful lives are as follows:



Leasehold improvements	Over the shorter of lease term or estimated useful lives of the assets
Office equipment	3 – 5 years

Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of comprehensive loss.

(l) Equity investments

The Company’s equity investments are accounted for as follows:

•

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 qualifying observable price changes. As of December 31, 2019, the Company’s investments in non-marketable equity securities primarily consist of small, non-controlling investments in companies for which the Company has equity ownership with preferential rights but cannot exert significant influence. The carrying value of equity securities without readily determinable fair values was nil and RMB10.0 million as of December 31, 2018 and 2019 respectively. There were no fair value changes related to these investments for the years ended December 31, 2018 and 2019.

•

Equity method investments are securities that the Company does not control, but are able to exert significant influence over the investee. These investments are measured at cost less any impairment, plus or minus our share of equity method investee income or loss. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. As of December 31, 2019, the Company’s equity method investment is an investment of RMB27.6 million as a limited partner in a venture fund that has not completed set-up.

The Company monitors its investments for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, the operating performance of the companies including current earnings trends and other company-specific information.

(m) Goodwill and intangible assets

Intangible assets

Intangible assets represent the acquired right to operate an online audio/video content platform(note 9), which is amortized on a straight-line basis over its estimated useful life of 10 years, as well as computer software, which is amortized on a straight-line basis over its estimated useful life of 3-10 years. The estimated life of intangible assets subject to amortization is reassessed if circumstances occur that indicate the life has changed. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. No impairment of intangible assets was recognized for the years ended December 31, 2018 and 2019.

Goodwill

Goodwill represents the excess of the total cost of the acquisition over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed of the acquired entity as a result of the Company’s acquisitions of interests in its subsidiaries and VIEs. Goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that it might be impaired. The Company first assesses qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of the reporting unit is less than its carrying value. In the qualitative assessment, the Company considers primary factors such as industry and market considerations, overall financial performance of the reporting unit and other specific information related to the operations. If the reporting unit does not pass the qualitative assessment, the Company estimates its fair value and compares the fair value with the carrying value of its reporting unit, including goodwill. If the fair value is greater than the carrying value of its reporting unit, no impairment is recorded. If the fair value is less than the carrying value, an impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The impairment charge would be recorded to earnings in the consolidated statements of operations.

Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units, assigning assets, liabilities and goodwill to reporting units and the determination of the fair value of each reporting unit. The Company estimates the fair value of the reporting unit using a discounted cash flow model. This valuation approach considers various assumptions including projections of future cash flows, perpetual growth rates and discount rates. The assumptions about future cash flows and growth rates are based on management’s assessment of a number of factors, including the reporting unit’s recent performance against budget, performance in the market that the reporting unit serves, as well as industry and general economic data from third party sources. Discount rate assumptions reflect an assessment of the risk inherent in those future cash flows. Changes to the underlying businesses could affect the future cash flows, which in turn could affect the fair value of the reporting unit. Management performs its annual goodwill impairment test as of December 31. Each quarter the Company reviews the events and circumstances to determine if there are indicators that goodwill may be impaired.

As of December 31, 2019, there is no event or any circumstance that the Company identified, which indicated that the fair value of the Company’s reporting unit was substantially lower than the respective carrying value. There was no impairment of goodwill for the years ended December 31, 2018 and 2019 and there was no change in goodwill during 2019.

(n) Impairment of long-lived assets other than Goodwill

For other long-lived assets including property and equipment and other non-current assets, the Group evaluates for impairment whenever events or changes (triggering events) indicate that the carrying amount of an asset may no longer be recoverable. The Group assesses the recoverability of the long-lived assets by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to receive from use of the assets and their eventual disposition. Such assets are considered to be impaired if the sum of the expected undiscounted cash flows is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

(o) Leases

Prior to the adoption of ASC 842 on January 1, 2019:

Leases, including leases of office spaces, where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Payments made under operating leases are recognized as an expense on a straight-line basis over the lease term. The Group had no capital leases for any of the years stated herein.

Upon and hereafter the adoption of ASC 842 on January 1, 2019:

The Company determines if an arrangement is a lease or contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liability, and operating lease liability, non-current in the Company’s consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which it calculates based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease.

The Company has elected to adopt the following lease policies in conjunction with the adoption of ASU 2016-02: (i) elect for each lease not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component; (ii) for leases that have lease terms of 12 months or less and does not include a purchase option that is reasonably certain to exercise, the Company elected not to apply ASC 842 recognition requirements; and (iii) the Company elected to apply the package of practical expedients for existing arrangements entered into prior to January 1, 2019 to not reassess (a) whether an arrangement is or contains a lease, (b) the lease classification applied to existing leases, and (c) initial direct costs.

(p) Advances from customers and deferred revenue

Certain third party advertising customers pay in advance to purchase advertising and marketing services. Cash proceeds received from customers are initially recorded as advances from advertising customers and are recognized as revenues when revenue recognition criteria are met.

Advances from customers and deferred revenue also consist of prepayments from users in the form of the purchase of the Group’s virtual currency that can be used for live streaming and online games that are not yet consumed or converted into virtual items, and that upon the consumption or conversion, are recognized as revenue according to the prescribed revenue recognition policies described below.

(q) Revenue recognition

A.	Significant accounting policy

The Group has adopted the new revenue standard, ASC 606, by applying the full retrospective method. Revenues are recognized when or as the control of a good or service is transferred to the customer. Depending on the terms of the contract and the laws that apply to the contract, control of goods and services may be transferred over time or at a point in time. Control of goods and services is transferred over time if the Group’s performance:

•

provides all of the benefits received and consumed simultaneously by the customer;

•

creates and enhances an asset that the customer controls as the Group performs; or

•

does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.

If the control of goods and services transfers over time, revenue is recognized over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time when the customer obtains the control of goods and services.

The progress towards complete satisfaction of the performance obligation is measured based on one of the following methods that best depict the Group’s performance in satisfying the performance obligation:

•

direct measurements of the value transferred by the Group to the customer; or

•