United States securities and exchange commission logo
September 13, 2023
Shannon Shen
Chief Financial Officer
Gaotu Techedu Inc.
5F, Gientech Building, 17 East Zone,
10 Xibeiwang East Road
Haidian District, Beijing 100193
People s Republic of China
Re: Gaotu Techedu Inc.
Report of Foreign
Issuer on Form 6-K Filed February 28, 2023
Annual Report on
Form 20-F for the Fiscal Year Ended December 31, 2022
Response Dated July
13, 2023
Dear Shannon Shen:
We have reviewed your July 13, 2023 response to our comment
letter and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
June 13, 2023 letter.
Response Dated July 13, 2023
Cash Flows through Our Organization
1. We note your response
to comment 5 and we reissue it in part. Please provide a cross-
reference to the
condensed consolidating schedule in addition to the consolidated financial
statements.
If the PRC government finds that the agreements that establish the
structure for operating certain
of our operations ...
2. We note your proposed
amended disclosure in response to comment 11, specifically the
portion that states
that "... we could be subject to severe penalties or be forced to
Shannon Shen
Gaotu Techedu Inc.
September 13, 2023
Page 2
relinquish our interests in those operations." Please revise to
replace with the fact
that your securities may decline in value or become worthless if the
determinations,
changes, or interpretations result in your inability to assert
contractual control over the
assets of your PRC subsidiaries or the VIEs that conduct all or
substantially all of your
operations.
Item 3. Key Information
3. We note your proposed amended disclosure in response to comment 3.
Please provide
your proposed amended structure chart that includes dashed lines
without arrows to depict
relationships with the VIE. Additionally, identify here the entity in
which investors are
purchasing their interest and the entity(ies) in which the company's
operations are
conducted. Finally, please confirm that other than the ownership noted
in footnote 1, all
other entities are 100% owned as shown in the structure chart.
Our Holding Company Structure and Contractual Arrangements with the VIE
4. We note your proposed amended disclosure in response to comment 2 and
we reissue it.
Please disclose that the VIE structure provides unique risks to
investors and disclose that
Chinese law prohibits direct foreign investment in the operating
companies. We also note
your proposed statement that "laws and regulations in Chinese mainland
restricts direct
foreign investment." Please tell us whether the characterization of
"restricts" or "prohibits"
is appropriate in the case of your business in the context of the
Negative List.
Permissions Required from the PRC Authorities for Our Operations
5. We note that your proposed disclosure in response to comment 8. Please
state whether
you relied on the opinion of counsel with respect to any permissions
or approvals that are
or may be required by the CSRC, CAC, or any other governmental agency.
If not, please
state as much and explain why such an opinion was not obtained.
Summary of Risk Factors
6. We note your proposed amended disclosure in response to comment 9.
Please revise to
specifically note that the Chinese government may intervene or influence
your operations
at any time. Also, please specifically note that any actions by the
Chinese government to
exert more oversight and control over offerings that are conducted
overseas and/or foreign
FirstName LastNameShannon Shen
investment in China-based issuers could significantly limit or
completely hinder your
Comapany NameGaotu
ability to offer orTechedu
continueInc.
to offer securities to investors and cause
the value of such
securities
September to significantly
13, 2023 Page 2 decline or be worthless.
FirstName LastName
Shannon Shen
FirstName LastNameShannon Shen
Gaotu Techedu Inc.
Comapany 13,
September NameGaotu
2023 Techedu Inc.
September
Page 3 13, 2023 Page 3
FirstName LastName
You may contact Scott Stringer at 202-551-3272 or Joel Parker at
202-551-3651 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Cara Wirth at 202-551-7127 with any other questions.
Sincerely,
Division of
Corporation Finance
Office of Trade &
Services
cc: Yilin Xu, Esq.