XChange TEC.INC CORRESP Correspondence with SEC

Q&K International Group Limited

Suite 1607, Building A

No.596 Middle Longhua Road

Xuhui District, Shanghai, 200032

People’s Republic of China

May 23, 2022

VIA EDGAR

Jeffrey Lewis

Shannon Menjivar

Division of Corporation Finance

Office of Real Estate & Construction

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Re:

Q&K INTERNATIONAL GROUP Ltd (the “Company”)

Form 20-F for the fiscal year ended September 30, 2021

Filed February 15, 2022

File No. 001-39111

Dear Mr. Lewis and Ms. Menjivar:

In response to the comments of the staff (the “Staff”) of the Division of Corporation Finance of the Securities and Exchange Commission (the “Commission”), dated May 10, 2022 (the “Comment Letter”) on the Company Form 20-F for the fiscal year ended September 30, 202 filed on February 15, 2022, the Company submits this letter containing its responses to the Comment Letter via EDGAR to the Commission.

For your convenience, the Staff’s comments from the Comment Letter are repeated below in bold, followed by the Company’s responses.

Form 20-F filed February 15, 2022

Item 3. Key Information, page 9

We note your response to comment 6. Please identify the entities that comprise the column, “Consolidate[d] Subsidiaries.” The WFOE that is the primary beneficiary to the VIE should be presented in a separate column, so an investor may gain an understanding of how the WFOE transacts with the VIE and with its parent. Please tell us how this agreement and other pertinent agreements are reflected in the condensed consolidating schedule.

Securities and Exchange Commission

Page 2 of 6

In response to the Staff’s comment, the Company plans to revise the condensed consolidating schedules to present the WFOE in a separate column in future filings. The condensed consolidating schedules include the financial information of the Company, the WOFE, the Consolidated VIE and its subsidiaries, and the Other Consolidated Subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation:


	As of September 30, 2019													As of September 30, 2020													As of September 30, 2021
	The Company		The WFOE		Consolidated VIE and its subsidiaries		Other Consolidated Subsidiaries		Eliminations			Group Consolidated		The Company		The WFOE		Consolidated VIE and its subsidiaries		Other Consolidated Subsidiaries		Eliminations			Group Consolidated		The Company		The WFOE		Consolidated VIE and its subsidiaries		Other Consolidated Subsidiaries		Eliminations			Group Consolidated
	RMB		RMB		RMB		RMB		RMB			RMB		RMB		RMB		RMB		RMB		RMB			RMB		RMB		RMB		RMB		RMB		RMB			RMB
	(thousands)
Cash and cash equivalents		101,157		477		55,926		2,239		—			159,799		6,015		372		15,227		1,265		—			22,879		1,355		7		10,982		3,973		—			16,317
Restricted cash		—		—		91,015		—		—			91,015		—		—		8,887		—		—			8,887		—		—		2,893		42		—			2,935
Accounts receivable		—		—		1,306		—		—			1,306		—		—		1,943		—		—			1,943		—		—		370		—		—			370
Amounts due from related parties		—		—		5,587		—		—			5,587		—		—		168		—		—			168		—		—		—		201		—			201
Prepaid rent and deposit		—		1,117		127,096		—		—			128,213		—		—		51,281		—		—			51,281		—		—		571		—		—			571
Advances to suppliers		—		—		64,028		—		—			64,028		—		—		16,043		—					16,043		—		—		5,323		7,610					12,933
Other current assets		1		242		146,316		—		—			146,559		—		—		44,400		57,403					101,803		—				97,978		45,365					143,343
Property and equipment, net		—		12,439		1,170,446		2,426		—			1,185,311		—		—		358,022		—		—			358,022		—				38,940		—		—			38,940
Intangible assets, net		—		8		1,240		—		—			1,248		—		—		222,123		—		—			222,123		—		—		539		151,925		—			152,464
Land use rights		—		—		10,734		—		—			10,734		—		—		10,448		—		—			10,448		—		—		—		—		—			—
Other assets		—		5,946		—		—		—			5,946		—		109		57,024		—		—			57,133		—		—		108		9,448		—			9,556
Intercompany receivables		522,124		—		—		192,177		(714,301	)		—		1,385,814		—		—		—		(1,385,814	)		—		1,465,312		—						(1,465,312	)		—

Total assets		623,282		20,229		1,673,694		196,842		(714,301	)		1,799,746		1,391,829		481		785,566		58,668		(1,385,814	)		850,730		1,466,667		7		157,704		218,564		(1,465,312	)		377,630

Accounts payable		—		—		277,103		—		—			277,103		—		—		294,469		—		—			294,469		—		—		281,458		38,811		—			320,269
Amounts due to related parties		—		—		3,121		—		—			3,121		—		—		6,594		—		—			6,594		—		—		—		—		—			—
Deferred revenue		—		—		78,540		—		—			78,540		—		—		152,619		—		—			152,619		—		—		1,125		194,511		—			195,636

Securities and Exchange Commission

Page 3 of 6


	As of September 30, 2019																	As of September 30, 2020																		As of September 30, 2021
	The Company			The WFOE			Consolidated VIE and its subsidiaries			Other Consolidated Subsidiaries		Eliminations			Group Consolidated			The Company			The WFOE			Consolidated VIE and its subsidiaries			Other Consolidated Subsidiaries			Eliminations			Group Consolidated			The Company			The WFOE			Consolidated VIE and its subsidiaries			Other Consolidated Subsidiaries			Eliminations			Group Consolidated
	RMB			RMB			RMB			RMB		RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB
	(thousands)
Short-term debt		—			—			319,103			—		—			319,103			221,328			—			540,808			—			—			762,136			210,776			—			256,773			91,156			—			558,705
Rental installment loans		—			—			756,749			—		—			756,749			—			—			54,505			—			—			54,505			—			—			33			18,061			—			18,094
Deposits from tenants		—			—			163,203			—		—			163,203			—			—			82,191			—			—			82,191			—			—			1,422			64,363			—			65,785
Payable for asset acquisition		—			—			—			—		—			—			—			—			—			165,808			—			165,808			—			—			—			—			—			—
Accrued expenses and other current liabilities		—			2,205			93,908			3,179		—			99,292			12,911			2,160			427,109			1,238						443,418			—			1,653			875,572			147,657			—			1,024,882
Long-term debt		—			—			428,345			—		—			428,345			—			—			464,920			—			—			464,920			—			—			201,041			—			—			201,041
Convertible note, net		—			—						—		—			—			206,466			—			—			—			—			206,466			313,870			—			—			—			—			313,870
Long-term deferred rent		—			—			387,739			—		—			387,739			—			—			212,054			—			—			212,054			—			—			—			—			—			—
Contingent earn-out liabilities		97,417			—			—			—		—			97,417						—			—			—			—			—			164,254			—			—			—			—			164,254
Intercompany payables		—			573,439			140,862			—		(714,301	)		—			2,955,202			536,546			549,666			299,602			(4,341,016	)		—			3,272,273			473,655			642,146			349,511			(4,737,585	)		—
Deficit of investments in subsidiaries and consolidated VIE and VIE’s subsidiaries		1,346,408			—			—			—		(1,346,408	)		—			—			—			—			—			—			—			—			—			—			—			—			—

Total liabilities		1,443,825			575,644			2,648,673			3,179		(2,060,709	)		2,610,612			3,395,907			538,706			2,784,935			466,648			(4,341,016	)		2,845,180			3,961,173			475,308			2,259,570			904,070			(4,737,585	)		2,862,536

Total ,mezzanine equity		1,425,485			—			—			—		—			1,425,485			—			—			—			—			—			—			—			—			—			—			—			—
Total shareholders’ deficit		(2,246,028	)		(555,415	)		(974,979	)		193,663		1,346,408			(2,236,351	)		(2,004,078	)		(538,225	)		(1,999,369	)		(407,980	)		2,955,202			(1,994,450	)		(2,494,506	)		(475,301	)		(2,101,866	)		(685,506	)		3,272,273			(2,484,906	)

Securities and Exchange Commission

Page 4 of 6


	For the year ended September 30, 2019																		For the year ended September 30, 2020																		For the year ended September 30, 2020
	The Company			The WFOE			The Consolidated VIE and its subsidiaries			Other Consolidated Subsidiaries			Eliminations			Group Consolidated			The Company			The WFOE			The Consolidated VIE and its subsidiaries			Other Consolidated Subsidiaries			Eliminations			Group Consolidated			The Company			The WFOE			The Consolidated VIE and its subsidiaries			Other Consolidated Subsidiaries			Eliminations			Group Consolidated
	RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB
(in thousands)
Net revenues		—			—			1,233,770			—			—			1,233,770			—			—			965,093			242,870			—			1,207,963			—			—			173,921			862,285			—			1,036,206
Net (loss) income		(498,337	)		(345,779	)		(177,738	)		(3,094	)		526,611			(498,337	)		(1,533,641	)		(46,387	)		(1,491,565	)		(13,042	)		1,550,994			(1,533,641	)		(569,202	)		(56,746	)		(375,470	)		(6,458	)		438,674			(569,202	)
Net cash provided by (used in) operating activities		(20,149	)		(143,025	)		393,847			3,249			(322,111	)		(88,189	)		(17,452	)		—			72,293			—			—			54,841			(30,664	)		45,804			(108,705	)		(16,096	)		—			(109,661	)
Net cash (used in) provided by investing activities		(460,663	)		(98,511	)		(713,653	)		(338,727	)		1,260,104			(351,450	)		(407,297	)		(246,558	)		(99,172	)		(27,851	)		642,208			(138,670	)		(87,232	)		(50,060	)		—			(5,232	)		136,038			(6,486	)
Net cash provided by (used in) financing activities		530,002			238,600			392,388			346,572			(937,993	)		569,569			329,839			246,453			(95,948	)		26,940			(642,208	)		(134,924	)		113,236			3,891			98,466			22,046			(136,038	)		101,601

The following table presents the amount due from (due to) the WFOE, the consolidated VIE and its subsidiaries, and other consolidated subsidiaries in FY 2019, FY 2020 and FY 2021:


	As of September 30, 2019											As of September 30, 2020												As of September 30, 2021
Amount due from (due to) WFOE, the consolidated VIE and its subsidiaries and other consolidated subsidiaries	The Company		The WFOE			Consolidated VIE and its subsidiaries			Other Consolidated Subsidiaries			The Company			The WFOE			Consolidated VIE and its subsidiaries			Other Consolidated Subsidiaries			The Company			The WFOE			Consolidated VIE and its subsidiaries			Other Consolidated Subsidiaries
	RMB		RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB			RMB
	(in thousands)											(in thousands)												(in thousands)
Starting Amount		344,580		(381,046	)		37,124			(658	)		522,124			(573,439	)		(140,862	)		192,177			1,385,814			(536,546	)		(549,666	)		(299,602	)
The Company transferred to the VIE		53,047		—			(53,047	)		—			143,314			—			(143,314	)		—			62,033			—			(62,033	)		—
The Company transferred to the WFOE		101,136		(101,136	)		—			—			246,102			(246,102	)		—			—			3,891			(3,891	)		—			—
The consolidated subsidiaries transferred to the VIE		—		—			(201,263	)		201,263			—			—			(7,516	)		7,516			—			—			(37,490	)		37,490
The WFOE transferred to the VIE		—		98,511			(98,511	)		—			—			227,395			(227,395	)		—			—			11,316			(11,316	)		—
Intercompany transactions		—		(165,556	)		174,660			(9,104	)		478,081			32,062			(29,838	)		(480,305	)		—			16,834			9,725			(26,559	)
The Company transferred to the consolidated subsidiaries		—		—			—			—			17,881			—			—			(17,881	)		21,308			—			—			(21,308	)
The consolidated subsidiaries transferred to the WFOE		—		—			—			—			—			(351	)		—			351			—			38,744			—			(38,744	)
Reclassification		—		—			—			—			—			—			—			—			—			—			32			(32	)
Impact of foreign exchange rate		23,361		(24,212	)		175			676			(21,688	)		23,889			(741	)		(1,460	)		(7,734	)		(112	)		8,602			(756	)

Total		522,124		(573,439	)		(140,862	)		192,177			1,385,814			(536,546	)		(549,666	)		(299,602	)		1,465,312			(473,655	)		(642,146	)		(349,511	)

Securities and Exchange Commission

Page 5 of 6

The Company advises the Staff that the “Other Consolidated Subsidiaries” in the condensed consolidating schedules above comprise the following entities:

1.	QK365.com Inc.

2.	Qinke (China) Limited

3.	Qingke (Shanghai) Artificial Intelligence Technology Co., Ltd.

4.	Chengdu Liwu Apartment Management Co., Ltd.

5.	Shanghai Qinke Trade Co., Ltd.

6.	Yaohan(Shanghai) Artificial Intelligence Technology Co., Ltd.

The Company will present the WFOE in a separate column in future Form 20-F filings.

The Company further advise the Staff that the WFOE had a series of contractual arrangements with the VIE, through which the Company carried out certain rental apartment operation business. The WFOE and the VIE, on a consolidated basis, had been loss making. According to the contractual arrangements, the VIE agreed to pay service fees equivalent to no less than 100% of its annual net profit to the WFOE. However, the WOFE had never charged the VIE and the VIE had never paid any service fee to the WFOE under the contractual arrangement as it had been loss making.

Should you have any questions about the responses contained herein, please contact the undersigned at +86-21-6422-8532 or via e-mail at frank@qk365.com or the Company’s U.S. counsel, Ms. Shuang Zhao of Cleary Gottlieb Steen & Hamilton LLP at +852-2532-3783 or via e-mail at szhao@cgsh.com.


Very truly yours,

By:		/s/ Zhichen (Frank) Sun
		Name: Zhichen (Frank) Sun
		Title: Chief Financial Officer

cc:	Mr. Chengcai Qu, Chairman of the board of directors, chief executive officer, chief operating officer and vice president, Q&K International Group Limited

Ms. Shuang Zhao, Partner, Cleary Gottlieb Steen & Hamilton LLP

XChange TEC.INC (XHG) CORRESPCorrespondence with SEC