EX-99.1

EX-99.1 2 d549341dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

The9 Limited Announces Unaudited Financial Information

as of and for the Six Months Ended December 31, 2017

The9 Limited (the “Company”) hereby announces its unaudited consolidated statement of income for the six months ended December 31, 2017 and its unaudited consolidated balance sheet as of December 31, 2017.

THE9 LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION

(Expressed in Renminbi - RMB and US Dollars - US$, except share data)


	Six months ended June 30,			Six months ended December 31,
	2017			2016			2017			2017
	RMB (unaudited)			RMB (unaudited)			RMB (unaudited)			US$ (Note)
Revenues:
Online game services		14,764,789			27,910,283			56,799,234			8,729,882
Other revenues		998,950			5,326,969			645,193			99,164

		15,763,739			33,237,252			57,444,427			8,829,046
Sales taxes		(4,478	)		(24,728	)		(55,132	)		(8,474	)

Total net revenues		15,759,261			33,212,524			57,389,295			8,820,572
Cost of revenues		(10,022,806	)		(20,183,093	)		(13,759,248	)		(2,114,758	)

Gross profit		5,736,455			13,029,431			43,630,047			6,705,814

Operating expenses :
Product development		(24,644,352	)		(34,165,939	)		(20,468,044	)		(3,145,881	)
Sales and marketing		(5,438,769	)		(9,903,014	)		(3,651,200	)		(561,179	)
General and administrative		(67,495,956	)		(86,261,135	)		(41,328,724	)		(6,352,109	)

Total operating expenses		(97,579,077	)		(130,330,088	)		(65,447,968	)		(10,059,169	)
Other operating income		175,880			3,441,107			174,074			26,755

Loss from operations		(91,666,742	)		(113,859,550	)		(21,643,847	)		(3,326,600	)
Impairment on other investment		—			(2,806,439	)		(9,109,312	)		(1,400,076	)
Interest income (expenses), net		(42,754,204	)		(23,236,767	)		(41,137,471	)		(6,322,713	)
Fair value change on warrants liability		3,843,386			10,807,612			8,772,080			1,348,244
Gain (loss) on disposal of equity investee and available-for-sale investment		115,349			(1,217,405	)		—			—
Foreign exchange gain (loss)		5,546,485			(8,835,965	)		13,660,262			2,099,544
Other income (expenses), net		2,028,053			1,101,268			2,641,534			405,996

Loss before income tax expense and share of loss in equity method investments		(122,887,673	)		(138,047,026	)		(46,816,754	)		(7,195,605	)
Income tax benefit		—			6,079,282			—			—
Recovery of equity investment in excess of cost		—			—			60,548,651			9,306,157
Share of loss in equity method investments		(1,472,283	)		(80,579,942	)		(1,464,848	)		(225,143	)

Net income (loss) for the period		(124,359,956	)		(212,547,906	)		12,267,049			1,885,409
Net (loss) gain attributable to noncontrolling interest		(8,122,462	)		(13,307,081	)		12,078,102			1,856,370
Net (loss) gain attributable to redeemable noncontrolling interest		(2,458,427	)		(7,651,793	)		4,575,730			703,277

Net loss attributable to The9 Limited		(113,779,067	)		(191,589,032	)		(4,386,783	)		(674,238	)
Change in redemption value of redeemable noncontrollling interest		(35,759,965	)		(45,026,749	)		(21,366,268	)		(3,283,935	)

Net loss attributable to holders of ordinary shares		(149,539,032	)		(236,615,781	)		(25,753,051	)		(3,958,173	)

Other comprehensive income (loss):
Currency translation adjustments		731,780			(440,220	)		(10,257,541	)		(1,576,555	)

Total comprehensive (loss) income		(123,628,176	)		(212,988,126	)		2,009,508			308,854
Comprehensive (loss) income attributable to:
Noncontrolling interest		(4,221,606	)		(12,439,886	)		17,679,256			2,717,252
Redeemable noncontrolling interest		(2,458,427	)		(7,651,793	)		4,575,730			703,277
The9 Limited		(116,948,143	)		(192,896,447	)		(20,245,478	)		(3,111,675	)
Net loss attributable to holders of ordinary shares per share
- Basic		(6.25	)		(9.89	)		(0.77	)		(0.12	)

- Diluted		(6.25	)		(9.89	)		(0.77	)		(0.12	)

Weighted average number of shares outstanding
- Basic		23,915,501			23,915,501			33,426,448			33,426,448

- Diluted		23,915,501			23,915,501			33,426,448			33,426,448

Note: The United States dollar (“US dollar” or “US$”) amounts disclosed in the accompanying financial statements are presented solely for the convenience of the readers at the rate of US$1.00 =RMB6.5063, representing the noon buying rate in the City of New York for cable transfers of RMB, as certified for customs purposes by the Federal Reserve Bank of New York, on December 31, 2017.

THE9 LIMITED

UNAUDITED CONSOLIDATED BALANCE SHEETS INFORMATION

(Expressed in Renminbi - RMB and US Dollars - US$)


	As of December 31, 2016			As of December 31, 2017
	RMB			RMB			US$
	(audited)			(unaudited)			(Note)
Assets
Current Assets:
Cash and cash equivalents		38,878,076			142,624,020			21,920,911
Accounts receivable, net of allowance for doubtful accounts of RMB992,010 and RMB1,039,958 as of December 31, 2016 and 2017, respectively		8,607,120			2,607,568			400,776
Advances to suppliers		9,085,165			8,102,278			1,245,297
Prepayments and other current assets		11,625,716			6,616,297			1,016,906
Amounts due from related parties		19,842,139			2,492,842			383,143
Assets classified as held for sale		—			20,669,377			3,176,825

Total current assets		88,038,216			183,112,382			28,143,858
Investments in equity investees		163,037,501			48,243,558			7,414,899
Property, equipment and software, net		26,765,824			20,721,252			3,184,798
Land use right, net		66,431,476			64,510,566			9,915,092
Other long-lived assets, net		6,618,977			6,521,420			1,002,324

Total Assets		350,891,994			323,109,178			49,660,971

Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity (Deficit)
Current Liabilities:
Short-term borrowing		107,517,367			108,743,369			16,713,550
Accounts payable		37,038,856			37,129,671			5,706,726
Other taxes payable		283,994			1,714,992			263,589
Advances from customers		26,711,967			47,558,542			7,309,614
Amounts due to related parties		107,203,023			88,939,108			13,669,691
Deferred revenue		15,921,873			5,576,269			857,057
Refund of game points		169,998,682			169,998,682			26,128,319
Warrants		16,357,737			3,742,271			575,177
Convertible notes		—			260,563,020			40,047,803
Interest payable		412,626			9,505,843			1,461,021
Accrued expense and other current liabilities		92,302,898			83,700,051			12,864,462
Liabilities directly associated with assets classified as held for sale		—			2,273,532			349,435

Total current liabilities		573,749,023			819,445,350			125,946,444

Long-term borrowing		35,141,459			—			—
Convertible notes		197,284,836			—			—

Total Liabilities		806,175,318			819,445,350			125,946,444

Redeemable Noncontrolling Interest		246,771,133			306,014,668			47,033,593
Shareholders’ Equity (Deficits):
Ordinary shares (US$0.01 par value; 23,915,501 and 44,544,036 shares issued and outstanding as of December 31, 2016 and 2017, respectively)		1,931,642			3,328,852			511,635
Additional paid-in capital		2,525,599,832			2,527,215,315			388,425,882
Statutory reserves		28,071,982			28,071,982			4,314,585
Accumulated other comprehensive income (loss)		2,582,023			(16,445,748	)		(2,527,665	)
Accumulated deficit		(2,897,802,287	)		(3,015,968,137	)		(463,545,816	)

The9 Limited shareholders’ deficit		(339,616,808	)		(473,797,736	)		(72,821,379	)
Noncontrolling interest		(362,437,649	)		(328,553,104	)		(50,497,687	)

Total shareholder’s deficit		(702,054,457	)		(802,350,840	)		(123,319,066	)

Total liabilities, redeemable noncontrolling interest and shareholder’s equity		350,891,994			323,109,178			49,660,971

About The9 Limited

The9 Limited is an Internet company based in China. The9 is stepping into blockchain-related business. The9 also develops and/or operates, directly or through its affiliates, its proprietary mobile games and web games, including the CrossFire New Mobile Game, Audition mobile, Knight Forever and Q Jiang San Guo.